What politicians should be doing...nothing

“Doing nothing is a full-time job. Don’t imagine that laissez-faire means putting your feet up. All officials want to extend their powers; all bureaucracies will grow if they can. To stop it happening you need to be at your desk before the civil servants come in and still be there when they go home.”

Quote is from Sir John Cowperthwaite, than man who let Hong Kong get rich by doing nothing (lifted from Samizdata).

As politicians we should learn from him not play the more common game of indulging lobbies in the manner retiring California governor Gerry Brown describes:

"I did rein in spending. I did—and then that took fortitude against the tendency of the Democratic Party to spend on almost anything that somebody comes up with that, you know, that satisfies all of the key constituencies."

Hardly a day passes without some well-meant lobby rolling out another proposal for new rules, new powers and new taxes to fund the administrators of those rules and powers. And, almost always, those new rules and new powers just feed bureaucratic growth and weaken the liberties of local communities, individuals and families.

Our job as representatives of the people isn't to know better, let alone act as agents of bureaucracy,  but to stop the powerful from extending their power over those people we represent. To do nothing as Sir John put it.

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Cash for Bags!

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I just love this:

In a city driven by consumers' voracious appetite for the newest and latest luxury products, handbag-driven loans are a lucrative business. Yes Lady takes a purse and lends clients 80% of the bag's value. Customers get the bag back by repaying the same loan with 4% monthly interest, within four months. Classic purses and special-edition handbags often retain much of their retail price.

One wonders what Stella Creasey might think of it!

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Density and intensity...about the modern city.

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This is Shanghai from Rob Whitworth on Vimeo.

OK it's a great video intended to show the City at its best, it doesn't include the dark side, the bad buildings, the deprivation, the people without papers living on the fringes of developments. But it shows a city that's alive - buzzing with activity and opportunity (often despite the preferences of the stifling People's Republic bureaucracy).

Contrast this with the images we see of Detroit - emptyness, dereliction, inactivity and a poverty of spirit that seems to scream out; "there is no hope."

Whatever we do to make our cities work, it's clear that density and intensity are essential. And that this doesn't come from the managerialism of government, from licenses, controls and taxes. As one observer points out about Detroit:

[The] per capita tax burden on City residents is the highest in Michigan. This tax burden is particularly severe because it is imposed on a population that has relatively low levels of per capita income.

The City’s income tax… is the highest in Michigan.

Detroit residents pay the highest total property tax rates (inclusive of property taxes paid to all overlapping jurisdictions; e.g., the City, the State, Wayne County) of those paid by residents of Michigan cities having a population over 50,000.

Detroit is the only city in Michigan that levies an excise tax on utility users (at a rate of 5%). 

The answer - or perhaps something that just gives cities a chance to succeed - is to allow them to chop taxes, to tear up regulations and to prefer that crowded wonder of the market to deliver growth. The secret lies in allowing people to do things rather than finding reasons to stop them. To let people have the fruits of their own success to spend, to invest, to play with. And to eschew the planning and second-guessing that municipal authorities so love.

In Shanghai there's a fantastic model of the city showing how it will be in the future. However, almost from the moment of its completion this half-acre model was out of dat - no maglev, no new city and a seemingly endless parade of identical tower blocks. Shanghai show that, even with planning, a city can fight back and deliver growth, change, innovation and excitement.

The most frightening thing here is that we see pride, excitement, dynamism and change in China - a communist state - and dereliction, destruction, depression and decay in the land of the free. And that should be a wake up call to us all.

However much we wish to pretend otherwise, too much of our 'regeneration' does not work.

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Business location, tax and the cost of making a political point

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Business location decisions - in a world where the added value comes from creativity and brainpower rather than proximity to raw materials - have to be driven by the desires of those clever people who add that value. Which is why the 50p tax is a daft idea. Here's Richard Longden the boss of Aveva:

"They should drop the 50p tax," he said. "The UK is already an expensive place to live and work and if we ask overseas employees whether they want to come to work in the UK they say: 'No thanks. I don't want to pay 50pc tax'.

"It's frustrating. We feel we're not helped by the Government. Here we are bringing money into the UK, with our employees travelling all over the world in quite stressful situations and they are not rewarded for that. They are penalised."

I know that many of you don't want to believe this but what is worse is that people like Nick Clegg, Vince Cable and the entire Labour Party know full well that the 50p tax doesn't raise an extra farthing in tax and makes it less likely that successful, brainpower-led businesses will base themselves in Britain.

Aveva might not take themselves to Hong Kong but we shouldn't be taking this sort of risk - just to make a political point. Making that point is costing us dear - people who a few years ago might have chosen Britain will opt instead for somewhere else, somewhere with lower personal taxes.

It really is that simple. It's not about corporate taxes, infrastructure or business rates. It's not even about 'red tape' - it's about where your key employees want to live. And for very high skilled, high paid people who can live anywhere that means low taxes.

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