TWO PARTY SYSTEM AGAIN The reputation of the ASI Power Lunches has obviously spread, with members of the cabinet now featuring among the principal guests. On March 31 st it is the turn of John Reid, Secretary of State for Health to hold forth and be grilled by fellow guests in the strictly Chatham House rules exchanges. IT'S ABOUT TIME From out of nowhere the Conservatives seem to have plucked a chance to succeed. A divided party which seemed confused and incompetent faced a well-oiled and ruthless government machine. Then came a week in which everything changed. Suddenly the Conservatives got their act together. Their leadership now looks efficient and dangerous, while the very public spat between the Prime Minister and his Chancellor makes Labour seem divided and their message confused. TIME TO DECIDE When the UK joined what is now the European Union, it was economically weak, and it saw membership as a way of lowering trade barriers with many of its major partners. The arguments which took the UK in no longer apply. Britain's economy is much stronger after the 1980s reforms, and the EU is now a force holding back worldwide moves to free trade. The main EU economies outside Britain are sluggish. High social costs and inflexible labour markets have contributed to low growth rates, while the Common Agricultural Policy is one of the biggest affronts to free trade in the world. END OF THE AFFAIR Something else has ended, as well as the Iraq war. It is the last pretence that consumer services can be provided centrally by the state with acceptable quality and efficiency. Most economists recoiled in dismay when Gordon Brown announced huge tax increases 'to pay for improved public services.' They told him that unless the system itself is changed, the money will largely be wasted. Many of them told him that we will end up with higher taxes and nothing to show for them except weaker economic growth and living standards. BREAKDOWN BRITAIN Good For Nothing Government Nothing seems to work any more. The schools system doesn't work. One quarter of primary school children leave unable to read, write or add up. One in three 14 year-olds fails to meet the expected standards for maths, English and science. The solutions are known, but no-one will exercise the imagination and leadership to implement them. So the breakdown continues. SING SOMETHING SIMPLE Buy One, Get One Free The government has got itself into an amazing mess over pensions. Part of the problem is complexity. The rules are so awesomely complicated that people really do not understand what they have to do to secure a decent retirement income. Furthermore, all kinds of barriers stand in their way if they try. GIVE IT BACK! Putting pensions in order The news is of a 'pensions crisis,' with talk of a shortfall in the savings which will be needed to fund retirement. The figure is put at £29 billion, and causes have been identified. When Beveridge published his report, the average wage-earner in Britain was male, started work at 16, retired at 65, and keeled over in his garden two years later. He worked for the same firm until his retirement. Now there are as many female wage-earners as male ones. Many do not start work until their early 20s; and they might work for several firms in the course of a working life. Crucially, they can expect to live well into their 70s. It is much easier to fund 2 years of retirement than 14. THE DAY BROWN BLEW IT Bad for Britain, bad for Blair Chancellor Gordon Brown has spin doctors who like to present him as "a truly great Chancellor." The reality, which is that he has been a disaster, became evident on April 17th, Budget Day. Huge increases in taxation were announced, forming a major burden on the wealth-creating sector of the economy. The cash is to be spent, allegedly on our behalf, on public services, with the bulk of it going to the National Health Service. BEEN THERE, SEEN THAT, DONE THAT Déjà vu all over again Britons could be forgiven for thinking they had stepped into a time vault. Railway services disrupted for days at a time by militant train guards. London Underground journeys subject to cancellation through strike actions. Postal delays are a commonplace. Militant public sector workers threaten to thwart attempts to liberalize their services. Health Union leaders warn against allowing NHS patients to be treated by the private sector. Ah yes, how does the song go? "It was twenty years ago today…" TORIES RETURN TO IDEAS The Institute's opportunity The new Conservative Party leadership shows every sign of being interested once again in ideas. They have declared as much, and backed this up with the establishment of a Shadow Number Ten Policy Unit, which has a brief to liaise with think tanks in order to develop policy ideas. SOLVING BLAIR'S PROBLEMS ASI shows how to restructure Prime Minister Tony Blair has identified the public services as the key areas of Labour's second term. He recognizes that extra cash by itself will not solve the problems, but that fundamental restructuring is needed. This is correct, and has been identified by many commentators as the urgent priority. Few outside the public sector unions now claim that under-funding has been the root of all problems, and even they do not believe it. CAPTURED BY PRODUCERS Public's agenda ignored The problem of producer capture has long been known in theory. If consumers are forced to accept one supplier, either because there is a monopoly, or because government is buying on their behalf out of taxation, they lose power. Without the ability to take their money elsewhere, they forfeit the ability to influence the output of the goods or services in question. With no need to defer to the wishes of consumers, power drifts into the hands of producers. OUTSOURCING THE NHS Public "ready for reform." Britain's NHS was once widely admired. It was regularly described as "second to none," or even "the envy of mankind." People continued to believe this long after it had ceased to be true, and because they believed it, they made it hard for reform to be implemented. All political parties had to promise to "protect" the NHS, and to compete with each other in giving it more money. HALF WAY TO PARADISE ASI moves up in the world The ASI had to move offices during the summer while a new mezzanine boardroom was built in its offices at Great Smith Street. Visitors to the ASI have often been surprised, not only by the youth of the ASI's staff, but also by the small space in which they worked. This has changed. LOOKING AHEAD Attitudes to the future The Adam Smith Institute has just launched the fourth in its series of polls conducted by MORI to discover how people approach life, and what they expect from government. The aim of the series is to provide a snapshot of people's values and aspirations, so that political leaders, as well as the ASI itself, will take them into account in the formulation of policy. POWER LAUNCH OF NHS REFORM Changing healthcare provision After last winter there has been a sharp decline, if not in waiting lists, then in the numbers of those who complacently describe Britain's NHS as "the envy of the world." It has become apparent to the press, and to large sections of the public, that the NHS is in very poor shape. The rush by the government to pour extra funds should be viewed with some cynicism. THE BIG TURN-OFF Young people on government, citizenship & community The ASI has just completed the third in its series of surveys of young people and their views. Done in association with MORI, the international polling and research agency, the Institute has examined the attitudes and aspirations of people in the 15-24 age bracket. The new survey concerns their approach to government, citizenship and community, and does not make pleasant reading for those involved in the political process. GREEDY GORDON! Rule change hits entrepreneurs Known as the Stealth Chancellor for his propensity to increase taxes in ways which do not show, Gordon Brown has increased the burden on small business even further. This time his target is the independent service companies which feature large numbers of self-employed people working under contract. INDEPENDENCE FOR UNIVERSITIES? The Adam Smith Institute is about to launch a series of initiatives designed to bring about greater independence from government for the universities. As the first step, the ASI has asked MORI to perform a nationwide poll of students. The poll asks them what it is like to be a student in Britain today. It probes the allocation of their financial resources, and asks them what factors have influenced their career choices. TWO EXTRA DAYS HARD LABOUR Tax Freedom Day is May 27th Claims that Labour is a tax-cutting, business-friendly government were given short shrift by the Adam Smith Institute in its 1999 publication of Tax Freedom Day. Swedish economist Gabriel Stein, who calculates the annual burden on taxpayers for the Institute, shows that the average Briton now has to work two extra days for the government because of Gordon Brown's budgets. OVER 200 AT RECORD SEMINAR Sixth form event is biggest ever The Institute's Independent Seminar on the Open Society (ISOS) held in December, attracted a record 210 registered students. The event, which started life at Cambridge 22 years ago, takes the form of a two day seminar intended for sixth formers, and held in London. HAYEK "MAN OF THE CENTURY" Most influential, most benign He was, more than any other single person, responsible for the final defeat of totalitarian collectivism, and the triumph of the liberal economic order. NEW PROJECT TARGETS URBAN CONGESTION Making road pricing work The Adam Smith Institute has launched its biggest ever assault on road congestion. Working with the Smith Group, experts on the application of information technology, the ASI has established The Trafficflow Project. Its purpose is to "write the manual" on the social, political, commercial and technical deliverability of urban road pricing. TAKE IT EASY! Institute Proposes Bench-Marked Pensions The Adam Smith Institute has stepped up its campaign to bring low-cost savings and pensions within reach of the vast majority of citizens. The government is swinging gradually into line by means of its Individual Savings Accounts and its proposed Stakeholder Pensions, but it still has a great deal to learn. NEW LABOUR SCORES TWO OUT OF THREE 100 initiatives assessed The new government scored an astonishing two out of three when the Adam Smith Institute rated its performance over the first 200 days. The ASI publication, New Labour's 200 Days - a hundred ideas in action, rated each initiative with 1-5 stars or 1-5 bombs, according to its likely effectiveness and acceptability. DEREGULATION WORKS ASI finds the evidence from a decade of choice: Although the deregulation of the bus industry in Britain has been controversial throughout its ten years, a new ASI study makes it clear that it has brought immense improvement both to the industry and to the travelling public.

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