Axe the fat tax

The idea of an extra tax on high-fat foods has been in the news lately, since David Cameron suggested that the idea was worth looking at. Now I've argued before against activism through the tax system. I think most of the time it creates too much administration cost and avenues for avoidance for any good that it does. And I am skeptical of the psychological value of small incentives to do the right thing, which it turns out can often be counterproductive.

In this case the fat tax is intended to tackle the "epidemic" of obesity. But it is not a tax on fat people, but on selected foods deemed to contribute to obesity. Why? I'm pretty sure that it is possible for a thin person to eat doughnuts, and for an obese frame to be maintained with sufficient quantities of muesli and semi skimmed milk. More specifically the argument is precisely that fattening foods are a problem, because it is a problem that people are fat. So a tax on fat people would surely be much more to the point. Yes, there are practical difficulties with a tax on fat people. All that weighing. But let's park that for now and just consider the principle.

The problem is that a tax on fat people would be grossly unfair, offensive and discriminatory. Thus the attempt to levy an extra tax on fat people by proxy, in the hope that we thereby don't notice that the policy is grossly unfair, offensive and discriminatory.

I've had some feedback on this argument from @IanEiloart, @beccaet and @MsNoeticat, which I will address here without attributing particular views to any one person. Thanks for your comments, by the way.

First is the question of whether a fat tax would produce a social benefit by incentivising food manufacturers to change their recipes in a lower fat direction, i.e. to make their regular products more like "diet" products. You know diet coke, diet yoghurt, diet ready meals. All the bulk of the regular product with little of the flavour. There's a reason I don't buy diet products: they are horrid. Making food in general more horrid is not something I would count as a social benefit. Just as starving sailors lost at sea would fill their bellies with sawdust to quell the hunger pangs, the modern body-image conscious person is supposed to fill their belly with a modern food-sciencey equivalent such as cellulose (which may be made from sawdust in fact).

Second is the point that pushing diets in the right direction will benefit everybody. Will it really? Will it benefit people who are underweight? How many borderline anorexics will be pushed over the borderline because they are eating food with more cellulose and less food in it? The problem here is that we are looking at the average person - who may be overweight - and imposing a food policy for everybody, as if everybody was the same as that average person. Many people eat too little fat or too little cholesterol, or too little proper food of any kind. Should they be sacrificed on the altar of the average? Top down, one-size-fits-all policies fit very few.

Finally the suggestion that revenue from a fat tax could be help people who are struggling with weight issues. This is true. And it is fair to say that weight is a very big problem for some people, causing a great deal of distress and poor health outcomes. I do think a fat tax would have to be very high indeed in order to help everybody in this kind of need, which raises the question of why isn't this kind of health support more of a priority anyway? Why should it rely on a hypothecated tax? We don't hypothecate tobacco and alcohol taxes to particular health interventions, and nor should we.

And I would say that a large part of the distress surrounding weight issues is a result of social pressures to conform to a perceived weight ideal. Now what is the fat tax, but another kind of pressure to conform to that same perceived ideal? On the one hand we are campaigning against unrealistic body images in the media; do we really want to turn round and try to impose unrealistic bodies on people through the tax system?

Update: see also freakonomics.

The make-believe world of consultation

Last weekend I was invited, along with 70 odd other random members of the public, to a consultation event with the local PCT over the priorities for future healthcare in Sheffield. As usual I could not refuse an opportunity to put the world to rights. A free lunch and £50 "expenses" was only icing on the cake.

But what did the PCT get for its, er, your money?

After the introductory speeches and getting-to-know-you gubbins, session 1 was on the subject of improving the patient experience.

On my table, the three main issues raised were i) the difficulty of making appointments ii) access to the latest high-tech medicine and iii) cleanliness. Our discussion had to be distilled into a top three, then a top one bullet point, which would be fed to the factilitators to be further distilled, along with summaries from other tables, and then voted on with radio keypad things.

Our demand, to be able to make appointments at all/reasonably soon/without having to argue with receptionists even when the doctor has told us we will need to make an appointment for such and such a symptom - was thus "distilled" into a demand for Saturday surgeries - that none of us had asked for - but was clearly already on the PCT agenda.

Session 2 was about how to measure patient satisfaction. What sort of surveys should the PCT be sending out to everyone, or should they be listening to complaints instead? Or perhaps clinical follow-up is better. Again our main points - that not everything needs to be measured, and that clinical outcomes are more important than more subjective measures - did not get past distillation. Of course PCT officials know how to interpret a survey whereby a patient reports 'very satisified/satisfied/neither satisfied nor dissatisfied/...' on each aspect of a service. It is something they can do. They don't know how to judge clinical outcomes. They might know how to measure less, but what would that do to the feeling of being in charge of a process you don't understand?

Session 3, after lunch, was probably the worst of the lot with various unrelated issues lumped together under the heading of patient safety! Should we address patient safety with more staff training? (So they don't make mistakes.) Or should we beef up building security? Or put better labels on drugs? Most bizarrely, IT systems were listed as an issue here - because of a potential threat to the safety of patient data - but the IT issue mutated into a rival positive claim for safety dollars.

Positive suggestions from the group: help for people who can't remember whether they've taken their pills or not, and measures to keep infectious swine flu sufferers out of waiting rooms, didn't make it through distillation. Instead we had a pointless debate over whether staff training was more important than properly maintaining the lifts.

The last session was on the criteria for deciding spending priorities. Not, please, anything specific, like mental health, or hip replacements, but general criteria. So we had the usual suggestion that smokers and drug users should be penalised, and that sort of thing. I suggested that clinical effectiveness should be the main criterion, thus cutting funding for chaplains, homoeopathy, ritual circumcisions, etc. I could have but didn't include PCT bureaucracy this time. And I suggested that we probably have too much campaigning for healthy living - that people who haven't got the message by now, probably won't.

This was the most useless distillation of all - it resulted in the following six options, which we then had to vote on:

1. Quality of Life

2. Education/prevention

3. Based on need

4. Improving efficiency

5. The cost of long term care

6. Value for money

What do these mean? Even the facilitator introducing the vote didn't understand quite what a vote for each would mean, although he graciously explained that every £1 spent on education would save £10 later. And so education won 45% of the subsequent vote. Apocryphal as it is, the £1/£10 figure may be right, although it is clearly an average and not a marginal cost - which means that any cuts or increases in education at the edges would have far far less impact.

But frankly every option but education/prevention was so abstract that we had could have no idea quite what would be cut and what would be funded if we supported it. Given one option that seems good, and 5 that don't mean anything concrete, it is not surprising that it scores highly.

The voting on the outcomes of session 2 was also pretty shocking. The idea of measuring less hadn't made it through distillation, and the prime importance of clinical outcomes wasn't offered as a clear option, and instead we had a choice of seven ways of measuring soft outcomes. The faciliator gave a patronising little speech about how you might think this was obvious - if you are treated and get better that is a good outcome - but now you realise there is a lot more to it than that. Next time I will interrupt and demand a vote on hard v soft outcomes.

Not that I'm saying soft outcomes don't matter - they just shouldn't be used to justify much expense or paperwork.

So the session is wound up with speeches telling us how useful this has been. We even voted on whether it was it a good idea to hold this consultation (97% yes) and would you come again (100% yes). We were told by one PCT official that the next time he was in a meeting arguing some corner or other he could say that the people of Sheffield were in agreement with him. Just look at the figures. This is what the PCT gets for your money. Ammunition.

Reinventing the State Chapter 22: Communicating Social Liberalism

The "at least three brains" team of Steve Webb and Jo Holland has made a noble attempt to bring together this disparate collection of essays. As much as I would like to go with the flow I found much of the language and argument grating.

"Relying exclusively on unfettered market mechanisms to deliver a liberal and democratic society is doomed to failure."

This looks like a straw man to me. Markets do not deliver a society, they deliver goods and services. Relying on markets to deliver a cutthroat dog eat dog society would be doomed to failure because it is a society and not a product. Of course I know what Steve and Jo are getting at, that laissez faire is freedom only for the few. But then this is hardly a shocking statement or a distinctive position - even the Tories won't disagree with this, publicly at least.

"There are many areas in society - such as educational or health outcomes - where such inequalities [as arise from unfettered markets] would be totally unacceptable'"

And what about the inequalities we have already? How unacceptable are they? Personally it is not the inequalities I have a problem with. Health and education are good things and nobody deserves less of them, however much they have already. What is unacceptable is how little some people have of each. We all agree that we want more access to health and education, particularly for those who have the least access at the moment. But I am bemused by this emphasis on what seems to be an straw man position: instead we should look at where the country is and consider what direction to move it in.

Anyroad, this is the first part of Steve and Jo's argument: "the failures of unfettered markets".

Markets fail due to a lack of competition. Tim Farron's example of milk suppliers is referred to - although how agriculture can count as unfettered while subject to trade barriers and the CAP, is a mystery.

In part 2 of the argument, markets fail when the price of something does not reflect its true cost. This failure can be corrected by Pigouvian taxes and subsidies "in some cases". Now I am a big fan of Pigouvian taxes, particularly green taxes, yet I find myself disagreeing with the conclusion.

"Whether we are dealing with social costs or social benefits, both need to be fully reflected in market prices if the market is to deliver socially optimal outcomes, and only the state can ensure that this happens."

No... Social benefits are largely unmeasurable. You want to keep post offices open because they have a real social benefit, subsidise them, call it a Pigouvian subsidy if you like because that benefit is real. But it is a political judgement what that benefit is worth, not a matter of number crunching. And it should be a simple formula, not a "full reflection" of the value of a pensioner's opportunity to gossip while buying stamps.

In part 3 of the argument, markets fail because of inequalities in income and wealth. Markets, you see, are only geared up to providing things to people who can pay for them. At least that's how I would have put it, and it might be what the authors are getting at with that stuff about horse races and redistributive taxation, I'm not sure.

Again it is so uncontroversial as to be hardly worth saying that we would rather have a national health service than leave the sick dying in the streets. Why is the point so laboured? I don't know. A real dilemma is almost addressed at one point:

"However, the King's Fund recently found that the middle classes were likely to choose the best hospitals, while those who were less well-educated tended simply to go to the local hospital."

They are right that there is a danger of widening inequality here, but, at the same time, isn't it good that more people use better hospitals? Patients choosing a better hospital are increasing the size of the pie, not taking a larger slice of the same pie. This should be commended not bemoaned.

"While Liberals are instinctively in favour of 'choice' ... these examples clearly demonstrate that unfettered markets can simply lead to a beggar-my-neighbour form of choice, akin to the biggest and strongest barging past other people in the queue."

Er, no they don't. For one health and education are not examples of unfettered markets, they are examples of near state monopoly. There are beggar-my-neighbour forces at work in public services - selection of pupils by schools is one (it should be the other way round) - but this has nothing to do with markets.

"Unfettered markets" here seems to be used to mean so-called "market based reforms" of public services. By all means make that case, and I would probably agree with most of it, but do try to call things by recognisable names. "Unfettered markets" would probably also fail, I guess, but we don't seem to have been talking about that.

Moving on, Steve and Jo make a case for intervention when markets fail. This is the natural follow up to the previous section - anti-trust laws, pigouvian taxes and so on - but noting that such intervention should not be knee jerk: some failures are not as bad as the intervention that would be necessary to correct them. So far so good.

They refer to Duncan Brack's argument on inequality as persuasive. (Er, no).

"...that inequality of outcome in and of itself can undermine society to the detriment of all. This would seem to imply a greater amount of redistribution than we have sometimes advocated."

No, That implication is not sound. It may well be that more redistribution is justified, but saying "X is bad for society" only works as an argument in an all-else-being-equal kind of way, yet putting up taxes makes all else very unequal. Brack's argument would be equally applicable to a society with half as much or twice as much inequality as ours, and this is a sign that it is failing to address the nub of the issue.

Inequality may be bad, but I am pretty sure that poverty is worse. Perhaps I benefit from living in the north and not having swaggering bankers on my doorstep. Or perhaps I have taken the stoicism of Featherstone and Boyle to heart to the point of not being so bothered by other people's status - in which case why didn't I agree with them?

At this point Steve and Jo admit that the foregoing arguments "could also be espoused, to a greater or lesser extent, by a socialist." Or a Social Democrat I suppose. And they are right - socialists love attacking markets, especially straw man positions on markets.

The difference is that the state should do as little as possible, as locally as possible and as accountably as possible. While I agree that this is a difference I don't think it is quite good enough. Many socialists will support localism and democracy quite sincerely. Socialism may naturally tend to paternalism and centralism, often in ways I fear this anti-market so-called social liberalism may also do so. If social liberalism is just localist social democracy, why not call it localist social democracy and we can all understand each other better. I don't take the view that something must be called liberalism to be worth supporting, rather I will listen to arguments for any -ism, and be suspicious of anybody trying to shift the meaning of an existing -ism to include what they don't want to bother arguing for.

This is a little unfair of me because Steve and Jo do say that the state should only what needs to be done and no more, although that is the one point of the three they don't expand on. Personally, I support a few things the state does that don't strictly need to be done, so perhaps I am not so extreme a classical liberal as they are. Yet even this principle is empty if it is not proved by example: the state should stop doing this, or that.

Localism too, while I agree we could do with a great deal more of it, is an argument with problems. The same abstract arguments would apply in a country ten times as decentralised already which again suggests that the arguments are missing the nub of the issue. State intervention must be "as local as possible", we are told. But why? This is just dogma. It would be possible, but pointless, to set VAT rates street by street. Surely what we should be saying is that the optimal level for much if not most state activity is more local than the present level.

The chapter and book concludes with a section on communicating this idea of social liberalism. Having not really got the idea myself I have little to say on how to communicate it. But I will have a go at explaining what I mean by social liberalism and how I might communicate it in a later post.

Looking back on the whole book (or rather the Brack-Featherstone-Holmes-Farron-Webb-Holland thread within it) perhaps it works better as a vehicle for communicating liberalism to socialists and social democrats; for saying to them: we share your concerns, come admire our values. A noble project worth a few cheap pot shots at markets. Clearly it is an attempted response to the Orange Book, although it has many of the same authors. I might draw together some of this if I can remember how it started - I started this review in September.

Still, it has been fun. Buy the book, and read the chapters I have said are good. Or better still pass off my views on it as your own to seem better read than you are. Better again, continue the argument. We may yet reinvent the state.

Reinventing the State Chapter 17: Reforming the NHS - a Local and Democratic Voice

Richard Grayson helpfully summarises his own argument:

Without [a democratic authority], it will always be possible for everyone to blame somebody else without taking responsibility. Ministers can blame local bureaucrats, when those ministers have give the bureaucrats very little independence. Health care bureaucrats can point to rigid central controls, but can also blame the public for making supposedly unrealistic demands, when the bureaucrats have little incentive to engage with the public. The public can blame 'them' - usually the government or bureaucrats - despite the fact that the system allows the public to make demand after demand for high levels of local service without ever having to face their real cost.

The suggested solution is local democratic accountability.

Crucially, these elected local people need to have the power to raise [or lower] funds for the NHS so that any demand made by the public for higher quality [or lower taxes] can have a real price attached.

I have been a little mischeivous with my additions there. But I am not clear to what extent Richard is arguing that local accountability will make higher taxes more palateable. This is not such a useful line at the moment, when the NHS has just seen a massive cash input, much of which has not led to noticeable improvements. It would seem sensible to pursue efficiency gains to at least pre-splurge levels before seeking higher funding.

Anyway, Richard is at this point about to launch into an advocacy of adopting something like the radically decentralised Danish health system. However, it turns out that the Danish system has only just been reformed - January 2007 - and is now somewhat less decentralised than it was, although still one of the most decentralised systems around.

I must say that for me this leaves something of a question mark over the proposal. Shouldn't we give a new system some years to bed in before we praise it or emulate it? And why did the Danes centralise, even if only a little? But this is just a question mark.

The idea is to turn PCT duties over to county/city/unitary councils or elected health boards covering the same boundaries. Small authorities might choose to set up joint health boards. This seems sound enough.

I am a little puzzled still, because in the section on funding, Richard talks about a new tax - the NHS contribution - almost identical to, and partially replacing Income Tax, which would, along with NICs comprise NHS funding. Suddenly there is no mention of the locally raised share of NHS funding. This along with my loathing of hypothecation and of extra complexity in the tax system, made this a very disappointing conclusion to a good chapter.

And while localism is a big idea and a good idea, I don't think it is as big or as good as the expectation we have of it. Many people will be unimpressed with a policy that doesn't on the face of it change anything. What do we expect the different bunch of politicians to do differently? Are there no more ideas? Richard's pamphlet with Nick Clegg on education (pdf) was full of ideas.

This is a good retort to the Orange Book simply by opposing social insurance. And yet could not a local health board choose social insurance? It is pretty half-baked localism if it can't.

Science and Politics

What do the following have in common:

• The belief that global warming is a myth
• The belief that we are not descended from the same ancestors as chimpanzees and gorillas, but were, as a species, created by God, more or less as we are
• The belief that vaccines are dangerous and do more harm than good
• The belief that animal experiments are inimical to good science, producing more misleading results than good results
• The belief that genetically modified food is inherently dangerous (i.e. dangerous by virtue of being GM)
• Belief in the clinical efficacy of a whole range of alternative and complementary therapies - that they frequently work as well as or better than scientific medicine, but somehow need to be judged by different standards (i.e. randomised controlled trials do not apply here)
• Belief in the possibility of perpetual motion
• Belief that a gyroscope correctly inclined will generate lift and hence be able to power effectively free flight
  
• ...
  

The common factor is that they all dispute mainstream science, they all require belief in a conspiracy of scientists, or at the very least blinkered groupthink among scientists. And in every case, the debate is taken to the public sphere, scientists are denounced, and appeals are made to trust some other authority.

Now while I would dismiss all the beliefs that I have listed, there is a problem here. What are you supposed to do if you do honestly disagree with the scientific consensus, and you think that consensus is leading to bad policy decisions? I will criticise the likes of Durkin, (yes I am linking to Monbiot, although he probably believes half the anti-science above) and the creationists, for bypassing the difficult science and making shallow arguments to the public. But I recognise that they don't have a lot of choice. Our laypersons understanding of the scientific position is also fairly shallow. Of course I am not equating shallow truths with shallow lies, but the fact remains that many believers are sincere, and we can hardly damn them for lying.

Few of these anti-science lobbies have the resources to do any research of their own - global warming deniers are perhaps an exception - and even if they did, they may publish a few papers, which would go as unnoticed as almost all scientific papers are.

But it is entirely possible that science will get things wrong from time to time, and that there will be brave souls battling the groupthink. It is possible, say, that the second event theory, is true. It predicts higher cancer risks than normally recognised from particular radio-isotopes, and hence a greater risk from nuclear industry emissions compared with background radiation. It looks unlikely, but it is good that it has its advocates plugging away.

The question is how we conduct the public debate. How do we make informed democratic decisions, given that most of us would struggle to understand all the science, and that those of us who could understand it probably don't have the time. This is not really a new problem - we are also mostly not economists, not clinicians, not teachers, not police, not manufacturers, not retailers, not politicians. Yet in a democracy we have to make judgements about the work of professionals in all these fields - at least those in the public sector.

How do we do it? I guess we muddle through. We judge success and failure rather than effort, and, hopefully thereby incentivise effort. We punish dishonesty when we see it. What I would like to suggest is that the evidential standards of science are our friends in this attempt to muddle through. We would be wrong to let doctrine trump evidence. We would be right to change our minds when the evidence demands it. We would be right to be suspicious of anyone, Mr Blair, who seems to regard their personal sense of conviction as a kind of evidence. We would do well to recognise that our desires and values colour our evaluation of evidence, and that this can progressively suck an intelligent person into fringe crackpot theories, religious cults and so on.

And so how should we evaluate the work of scientists - and the work of those who accuse scientists of groupthink? By the same standards. Are they being honest? Are they doing the hard work or are they playing to the gallery? Are they paying attention to the evidence? Are they making claims that are falsifiable?

Are they using ad-hoc hypotheses to defend a bad position? Of course one man's ad hoc hypothesis is another's refinement of a good theory, and there is no substitute for good judgement. Suppose you want to argue that solar wind causes clouds causes global cooling, and that this effect has not been recognised leading to errors in climate modelling. There has to be something going for this theory other than that it allows you to claim the climate models are wrong. If that's all there is, you are clearly just pursuing an agenda, but if the theory explains other evidence as well then it may be a useful refinement. But it is always going to be possible to come up with theories like that, that can be used to attack a rival position, but which don't add any value. As philosophers occasionally like to point out, we can't prove that the whole world wasn't made 10 minutes ago complete with our memories and evidence of the past. But the defendant who tried to argue along these lines "no I didn't rob the bank last week, the universe was only created 10 minutes ago", would not be very successful, and rightly so.

Science will still make mistakes of varying degrees. This is unaviodable. But anybody who argues that because scientists can make mistakes we should instead believe that they are right and the scientists are wrong is not making a credible argument. What distinguishes the sciences is that they have all these tools for finding and correcting errors. What distinguishes crackpots is that they have thrown all these tools away.

The Orange Booker Slur, part 6

Chapter 7: UK Health Services: a Liberal agenda for reform and renewal by David Laws.

So far I have been more or less defending the Orange Book, chapter by chapter. Not so with chapter 7. I find it quite indefensible. Laws starts out with a reasonable enough analysis of the problems and challenges faced by the NHS. He then seems to pull out of a hat, the rabbit of a National Health Insurance Scheme. One with defects not seen on the continent.

The scheme works as follows:

• Insurers include the NHS and may be private or non-profit, and may supply clinical services or buy them in.
• All insurers charge the same fee, paid by the state.
• All insurers provide the same range of clinical services.
• Citizens are entitled to change insurers not more than once per year.

The private sector is made efficient by competition. But what competition do we see here? Price? No. Range of treatments? No - this is even more uniform and uncompetitive than at present. The quality of clinical services? Perhaps. But in what sense is this 'insurance' if it doesn't compete on price or assess risk?

With no price variation, the fiercest competition would be for fit young customers who would incur below average health costs. An insurer recruiting more than its share of such people through clever marketing (free iPods) will make a huge windfall profit on the year, leaving the rest of the population's health care underfunded and struggling worse than ever. Sure, at the year end, they can all switch to the overfunded insurer which will then have to cut quality and increase waiting times in turn.

If the insurers were all non-profit, at least the windfall would be reinvested. But that isn't the proposal. If private sector dynamism were really in operation we would expect new treatments to be promoted all the time, but this scheme virtually prohibits them.

This is a mockery of free enterprise and a mockery of public service. Not socially liberal or economically liberal. And it promises a huge diversion of funds from healthcare to pay for rolexes for insurance salesmen and cocaine for marketing droids. At best there will be a new army of doorstep pests offering discounts on electricity if you buy healthcare from the gas board.

Market based reforms in healthcare have had mixed results because they are very difficult to achieve. Markets are most efficient when dealing in commodities because a commodity has a known quality, and comparisons between suppliers are clear and brutal. Healthcare is at the furthest remove from this. Measuring quality is very difficult. A true market would communicate comsumer preferences on quality to suppliers. But the problem here is not so much communicating the preferences, but measuring the quality in the first place. And focussing on a few marketable quality indicators would be as damaging as the present target culture.

Maybe there are responses to some of these concerns, but if so, why weren't they put? Perhaps there are figures which demonstrate the benefits of an insurance based system, but where are they? Weighing up the costs and benefits of a policy is always appropriate, but Laws doesn't even seem to recognise the costs. No mention is made of the effect on the morale and motivation of the many public sector workers who believe in public service and would rather their work contributed to the common good than a profit margin.

Healthcare is a field of insatiable demand and inevitable rationing. Perhaps it is time somebody admitted this fact. Standards will slip if you cut corners trying to do too much. And if you do too little you will be damned for refusing people life-saving treatment. This is not an argument against reform. Reforms may bring us more healthcare, but cannot end rationing. To highlight problems around rationing and claim a particular reform, market-based or otherwise, will solve them is disingenuous.

I think Laws has made a big mistake here, the reasons for which I hope to explore in the conclusion to this series. But he hardly seems to have put a case for his healthcare proposals; they appear to be more based on dogma. Verdict: Guilty.