We need clarity on pension fees

Six years ago I beat my head against a brick wall. Not literally. I did the equivalent in the world of personal finance: I tried to get my occupational pension provider to send me useful annual statements.

The documents that were turning up from Friends Life (since swallowed up by Aviva) were a bad joke.

They told me the value of my pension pot. They told me the value of payments into the "defined contribution" scheme over the past 12 months. There was even a guess about how much the pot might grow over the next three decades. Yet there was no information on the returns on my investments over the past year. Nor was the reanything on the amount I'd paid in charges.

This struck me as pretty important information as far as my retirement planning was concerned. How were my investments doing in absolute terms, or relative to the overall market? How much was I paying in fees for that performance? Should I switch funds? To make those decisions I needed information.

So I asked Friends Life for statements that included it. Sadly, the computer, or rather the bureaucrats in charge of the Friends Life computer, said no. "We have over 5 million customers and we are unable to change our processes and statement information for an individual customer," was the cold response. And that was that. Why didn't I move my pension pot to another provider, one who would provide me with the information I desired? Because then I would forego the monthly contributions that my employer was also making into that Friends Life pot, matching my own.

So I was trapped. Members of defined contribution occupational pension schemes - there are now 13.5 million of us with around £ 400bn invested - are effectively a captive market for pension companies. And we get get the customer service that tends to come with a captive market - that is to say, none at all. Yet could the door of the jail have opened, just a crack? The government has been rolling out automatic enrolment in workplace pensions over the past six years (a good idea by the way) and a review of the system in 2017 looked at the issue of annual statements. "There is a concern amongst providers that the proportion of people who open their annual benefit statements is low; the proportion who read and understand their statement is even lower, and that the proportion who may feel motivated to act upon the information is lower still," it said. Who could have guessed? The review noted, with approval, that a pensions industry group, led by Ruston Smith, head of the Tesco Pension Fund, was looking into reforms. Smith unveiled the results of those efforts last week at the Pensions and Lifetime Savings Association conference. The new model statement is certainly an improvement. It is clear, concise and avoids jargon. It reads like something actually designed with ordinary pension savers in mind. And it includes information on investment returns, unlike those useless Friends Life ones I was sent.

Yet there's something vital missing. There's no information on charges. This is odd because an earlier draft of Smith's statement did include a line on fees paid. So, incidentally, did the example statement given in the government's auto-enrolment review. When I asked Smith about the omission, he said that he did hope that future versions would include some information on fees, but that there was a fear in the industry that a raw charges figure could be potentially misleading and induce people to make bad decisions about fund selection, perhaps to stop saving altogether. "The lowest cost doesn't necessarily mean the best proposition," he said. "Buying pensions isn't commoditised like buying electricity for your home."

This is not a wholly unreasonable argument. One should be wary about unintended consequences of giving bad or context-free information to savers. The new "Key Investor Documents" for mutual funds and investment trusts, mandated recently by poorly designed EU regulation are, as John Kay has pointed out, disastrously misleading, with their automatic extrapolations of recent returns.

Yet the idea that a fee line in statements could be dangerous seems grossly overblown. In an environment when people now have the freedom to cash in their entire retirement pots at once and, as the ex-pensions minister Steve Webb put it, "buy a Lamborghini", it seems a strange priority to be fretting about the potential for people to overreact to a fee figure on a pension statement.

Moreover, those fee figures are simple facts - unlike the projected growth figures for pots which are also included on the model statement. Those are based on assumed returns which may well not materialise.

Arguably, those made-up numbers, even if they are reasonable, represent a far more significant misleading signal to pension savers.

The reality is that the industry is resistant to the inclusion of fees on statements because those fees are source of easy - and extremely large - profits to the asset management industry and it suits them to keep customers in the dark about them. This isn't some conspiracy theory: the head of the Investment Association was sacked in 2015 for attempting to increase transparency on fees. An investigation by Which? in 2016 found that the pension fund versions of popular retail funds sometimes had fees that were twice as high. This is nothing less than the gouging of a particularly uninformed, inert and captive customer base.

We know that pension savers do not understand how fundamentally important it is to keep fees down. In 2012, the Royal Society of Arts, in a project led by David Pitt-Watson, presented a focus group with the maths showing that an annual fee of an innocuous-sounding 1.5 per cent a year will eat up over a third of a pension pot over 25 years.

"They were aghast. They had not understood the mathematics of charges," said the RSA report. "It is simply not made clear to them that a pension provider with a charge of 0.5 per cent will, all else being equal, provide a pension which is a third higher than one which charges 1.5 per cent". And this is before even getting into the question of hidden transaction and trading costs.

Study after study confirms that most expensive actively managed funds, after fees, perform no better than cheap passive index tracker funds. Fees and costs, for the vast majority of pension savers, will matter far more than fund selection. As the RSA rightly concluded, the best way to get people to appreciate this fact is to let them see those fees - in straightforward cash terms - on an annual statement.

Costs are not peripheral to pension empowerment. They are the very heart of the issue. The new pensions statement is an improvement. But people need to see those costs spelled out - and the industry needs to cease its resistance and devote its energy to making it happen.

The manufactured free speech panic

Boris Johnson seems to have forged a career out of saying the unsayable. Recently, the former foreign secretary upset people by suggesting that Muslim women who wear a face veil resemble "bank robbers" and "letter boxes", prompting demands even from fellow Conservatives for him to apologise. Yet Johnson's supporters rapidly presented him as some kind of free speech martyr.

"Boris is offering himself in sacrifice on the altar of freedom of speech," proclaimed the MP Andrea Jenkyns, without irony.

The comedian Rowan Atkinson, now sadly fully transformed from Blackadder to Johnny English, came to the battlements to defend the "freedom to make jokes about religion".

Even the Conservative commentator Matthew Parris, who has described Johnson as "creeping ambition in a jester's cap", wrote of his discomfort about "the language of censorship" in the critical reaction to the former cabinet minister's words.

"There's a broader feeling in society that there are certain issues that are verboten, off-limits, you can't discuss," Claire Fox, a regular panel member on the BBC's Moral Maze, told Newsnight viewers in a discussion about the furore.

* * *

Such claims have become routine. The view that "freedom of speech" is under threat has, in recent years, become one of the primary, perhaps even dominant, convictions of the political right.

Few things exercise conservative intellectuals more than the spread of "no platforming" policies at universities, which are regarded as a manifestation of a virulent and youth-corrupting cultural Marxism.

Government ministers have endorsed the panic. Sam Gyimah, the universities minister, has criticised a "creeping culture of censorship" at British higher education institutions, warning that "people use identity politics as a way of frustrating free speech". A new state regulator for the sector is being given the power to fine universities that fail to safeguard free expression.

Social media is another gushing font of worry for the right. Writers at The Spectator magazine routinely complain about "digital lynch mobs" and the "cry-bully brigade", who supposedly shut down voices that dare to challenge a leftist orthodoxy.

Toby Young, who this year withdrew himself from the board of the new university regulator after a landslide of digital outrage over his appointment, claimed to have been the victim of a "Twitchfork mob".

Here was another fallen hero, along with his old friend Johnson, whose name should be carved on to the free speech martyr memorial wall.

Similar anguished warnings echo across right-leaning media outlets, from The Daily Telegraph and the Daily Mail to The Times and even The Sun. Attempts by activists to pressure companies not to advertise in the Mail on account of its often obnoxious editorial agenda have been presented as an almost totalitarian assault on the "free press".

But is our flame of free speech really at risk of being extinguished by a mob of "snowflake" students, digital barbarians, intolerant "social justice warriors" and craven politicians? Are we in danger of losing a precious liberty? Or could it be that the free speech crisis we're living through is a crisis of understanding rather than substance? * * *

"Give me the liberty to know, to utter, and to argue freely according to conscience, above all liberties," wrote Milton in Areopagitica, his magisterial polemic against government licencing of printers during the English Civil War.

But it was the Victorian John Stuart Mill, two centuries later, who forged the canonical liberal defence of free expression, characterising it not just as a good in itself, but as the very motor of human progress.

"[Man's] errors are corrigible," he wrote in On Liberty. "He is capable of rectifying his mistakes, by discussion and experience. Not by experience alone. There must be discussion, to show how experience is to be interpreted. Very few facts are able to tell their own story, without comments to bring out their meaning."

Amen, say all good liberals. Yet the first thing to emphasise, given the shallowness of contemporary commentary, is that free speech has never been absolute. It's always been qualified.

We may have snapped the chains of state licencing of printing since Milton's day. We have indeed forsworn blasphemy prohibitions, kissed goodbye to obscenity laws. Yet we've retained libel statutes to prevent innocent people from being defamed. We have contempt of court prohibitions to ensure defendants get a fair trial.

And of course we continue to regulate speech in public places to guard public safety, to forestall riot, to prevent panic. "The most stringent protection of free speech would not protect a man falsely shouting fire in a theatre and causing a panic," as Oliver Wendell Holmes most famously put it in his 1919 US Supreme Court judgement.

For a modern analogy, think of neo-Nazis being stopped by the police from screaming antisemitic abuse outside a Jewish school, or Islamist fanatics forbidden from picketing the funeral of a British soldier who died in Afghanistan.

There are, have always been, and always should be limits on speech in even the most libertarian and tolerant of functioning societies.

The serious question is not whether those limits should exist, but how loose the legal fetters should be. A strong bias towards free expression? Any semi-competent reading of history endorses the wisdom of that.

But absolute, unrestrained freedom to say whatever we want, whenever we want, wherever we choose is a childish fantasy; up there with never-ending ice cream and no bedtime.

* * *

For some time now the BBC has been urged to stop inviting representatives of the Institute of Economic Affairs onto its political programmes on the grounds that the think tank, unlike most others, refuses to publish the identities of its funders. Those calls reached a new pitch of intensity recently after its boss was secretly filmed offering a potential donor private access to Conservative politicians.

But the very suggestion is regarded as scandalous in some quarters. The IEA's associate director, Kate Andrews, has suggested that any move in this direction would "undermine" the organisation's freedom of speech. It's a remark that encapsulates how feeble the understanding of what free speech actually means has become in many quarters.

The BBC's charter states that the corporation's mission is to "inform, educate and entertain" audiences.

There's nothing in the document that says the BBC should, unthinkingly, give a platform to every strand of opinion out there.

The corporation does not, for instance, invite paedophile rights groups to air their theories about how children actually enjoy sex. It doesn't ask David Icke to regale viewers with his thesis as to how an interdimensional race of lizards controls the earth. It doesn't set up David Irving to debate with the chief rabbi about whether or not the holocaust actually happened.

Suffice to say it doesn't "undermine" the right to free speech of Irving, or conspiracy theorists or paedophiles, that they're not given such a platform by the state broadcaster.

It may seem grossly unfair to place the IEA in such company. But the point of those examples is to illustrate a principle: BBC guests and interviewees should be evaluated on their merits, not given a free pass on the basis that they have something novel or distinctive to say. Ethical judgements can and should be deployed.

A far bigger editorial challenge for the BBC and other media organisations than the trivial one of whether to roll out the red carpet for a think tank with opaque funding is how to deal with the likes of Raheem Kassam and Steve Bannon of the Ukip/Breitbart axis, which is more subtle in advancing its increasingly far-right agenda than the old British National Party. Do you give what Margaret Thatcher called "the oxygen of publicity" to people who seem supremely relaxed about taking freedoms away from others? But, again, it is fundamentally an issue of editorial judgement, not free speech.

This is also the appropriate lens through which to contemplate the university issue.

Why should someone with a scientifically meritless, often transparently racist, agenda be given a speaking opportunity at a university? Many intelligent people seem not to appreciate that no platform on a particular campus or campuses does not mean no platform anywhere; simply not at those universities which, after deliberation by students and other interested parties, choose not to allow it.

Consider the case of a hypothetical racist eugenicist called Madam Mengele. Madam Mengele would have every right to hire a room, hall, or even a stadium, to deliver a pseudoscientific lecture to the like-minded.

But Madam Mengele would not have the right to be invited to address geneticists at University College London. That would be as farcical as University College London geneticists claiming the right to be invited to address Mengele's conclave in order to inform them they are all dangerous cranks. Nothing here violates the principle of free speech.

The question of whether students should be so quick to protest against the likes of Germaine Greer or Jacob Rees-Mogg being invited to speak in their lecture halls is another matter. So is the issue of whether "trigger warnings" and "safe spaces" and all the other cultural paraphernalia of modern campus life are actually progressive innovations. It is perfectly reasonable to debate the intellectual openness of our universities - but it should be done on the basis of facts rather than anecdotes. For despite Sam Gyimah's assertions there is actually very little real evidence of an upsurge of intolerance to alternative views among students. Either way - to labour the point - this really isn't a free speech question.

Indeed, this kind of "free speech in peril" rhetoric could be seen as diminishing the plight of genuine victims of oppression. There are places on earth where individuals really can be (and are) locked up and tortured for writing a political pamphlet; where a social media post can result in a door knock from the police; where people get murdered for what they write and say. Think of China. Think of Russia. Think of Sri Lanka. Think of Saudi Arabia. Most recently, think of Myanmar. But don't, unless you've lost all perspective, think of Britain.

* * *

But perhaps this is a straw man. Is the real problem not state oppression but that we have fostered an intellectual climate that discourages people from airing their views freely? Barely a week passes without some public or semi-public figure being pilloried for opinions expressed, not necessarily recently, usually on context-free social media, and sometimes getting fired for it. As Matthew Parris says, isn't there "an ugly intolerance of honest expression afoot in our era"? The first thing to note is that this is a much smaller claim than "censorship". But is this even true? It's certainly not obvious that people are less likely to speak their minds nowadays. On the face of it there is far less inhibition than there used to be. A glance at Twitter and Facebook does not leave the impression that people are biting their tongues. There's no shortage of "honest expression" to be found online, if that's what one wants to call it. Rather we seem to be living through a Cambrian explosion of articulation, much of it not worth hearing. We're told so often that this or that piece of government legislation, or article of regulation, will have a "chilling" effect on free speech that a foreign visitor might assume our public sphere has become a giant, lifeless snowball. In fact, it's more like a boiling sun of clashing opinions.

But aren't many people, nevertheless, being intimidated from saying and writing what they really think for fear of the consequences? From a historical perspective the claim is rather risible.

In 1763, the radical MP John Wilkes was sent to the Tower of London for publishing scandalous allegations about George III's mother in his newspaper, The North Briton. Asked by a French friend how far liberty of the press went in England, he replied: "I cannot tell, but I am trying to find out." That - take note Boris Johnson and Toby Young - is what a genuine free speech martyr looks like. A barrage of unpleasant social media messages and a rescinded invitation to debate at the Durham University students' union doesn't really bear comparison with being arrested on the direct orders of the monarch. One can guess how a scabrous character like Wilkes would have responded to today's precious whines about bullying.

But even if we allow that the opprobrium of social media does make some people, particularly those in the public eye, think twice about airing their opinions, why should this be such an undesirable thing? Bigoted views generally provoke a negative reaction from colleagues, employers, customers and voters. Why is it inappropriate that this reaction be weighed by people before they air them? Yes, one could call this "selfcensorship".

Alternatively one could call it consideration. Or even social progress.

There's also an irony about people who would normally stand up for the right of organisations to manage their own affairs, based on their own values, complaining when they do so. Don't restaurants, internet companies, trade unions, movie studios and magazines and so on have a right to make decisions on who they employ, provided of course that they act within the law and follow due process? Libertarians are often only libertarians when it suits them.

It's reasonable to lament that there is too little engagement with argument in our online discourse, too much reflexive questioning of motives. Perhaps people are too willing to take offence. Perhaps too much of what we see on social media is taken out of context. Maybe there is an unhealthy obsession with what some on the right dismiss as identity politics. Yet even if all this is true, and some find it off-putting, even intimidating, this isn't about free speech.

And the oversensitivity charge can be made in both directions. People regularly claim that their "free speech rights" have been infringed simply because they have been told their arguments are garbage, or have been "shouted down", almost as if free speech is akin to the right not to be challenged.

The incessant calls for an "open debate" on immigration are another abuse of language. What do people who say this kind of thing want? Surely not an actual debate, because we've been in a rolling national conversation on the costs and benefits of immigration for almost two decades now. This is the kind of clash of views that Mill envisaged when he wrote On Liberty, though he probably hoped for more listening and greater respect for the fact-based arguments.

In fact, moaning about an absence of "debate" can usually be interpreted as a wail of frustration that the government is not keeping foreigners out of the country still more vigorously. Those who say they desire a debate don't really want discussion; they want action. Some are also expressing a yearning to be able to articulate racist and xenophobic sentiments without being called racist and xenophobic by others. What they want is a regression in social attitudes on acceptable language. The "open debate" rhetoric, again, has become a kind of coded signal for the real agenda.

* * *

But one senses that there's more to it. Why do so many on the right turn questions about the civility of online intercourse and the detail of university speaking codes into supposedly existential ones about the very survival of free speech? Why use this kind of hyperbolic and ahistorical rhetoric? Are they deceiving themselves? Some might indeed be confused. There's doubtless a dash of traditional declinism too: newfangled digital platforms are odious and universities were, naturally, much better places in the old days.

But it's surely also about raw power. Only 15 years ago, a columnist like Boris Johnson could merrily vomit up offensive phrases like "piccaninnies" and "watermelon smiles" while writing about Africans in The Telegraph without hearing too much by way of complaint.

That's changed now, thanks not least to social media. Today, the push back against such casual bigotry is immediate and loud. And, in turn, the online backlash becomes a mainstream news story in itself. That shift in the balance of power must feel alarming to many high-profile reactionaries; certainly an encroachment on their once safe spaces.

As William Davies has perceptively written, "the claim that certain people are being silenced is often a convenient spin on the way this messier, less predictable world means that prominent voices have lost authority". That arguably applies particularly to legacy media outlets, which have seen their aura of untouchability steadily contract in the digital era, along with their advertising revenues.

Certainly claims about censorship and threats to free speech emanate almost exclusively from the right.

Jeremy Corbyn supporters gripe about the supposed ability of the Tory press to drive the broader news agenda and the apparent lack of representation of their point of view on the BBC. But they don't tend to moan about freedom of speech. This is because they understand that outlets like Twitter and Facebook, if not quite levelling the media playing field, have amplified once marginalised voices and diminished the relative importance of others.

Not long ago the former Times editor, Guardian columnist, author of countless intensively reviewed books and ubiquitous broadcaster, Simon Jenkins, said: "I do sometimes feel a bit like what it must have been like to be a black person 20 or 30 years ago."

The Republican US senator Lindsey Graham shares Jenkins' pain. "I know I'm a single white male from South Carolina, and I'm told I should shut up, but I will not shut up, if that's OK," proclaimed Graham during recent Supreme Court nomination hearings.

As the saying goes, if you're accustomed to privilege, equality feels like oppression.

* * *

But this leaves something important out. And that's the fact that shrieks about free speech are increasingly made in bad faith. The desire is not for Millian debate to edify humanity but to pour more gasoline on the raging fires of our culture wars; to divide and fear monger for political advantage.

It's easy to see this in the claims by supporters of Tommy Robinson that he was, yes, a "free speech martyr", when the far right rabble rouser was initially found by a judge to have been guilty of contempt of court (a repeat offence) and sent to jail. The same claim has been made of Alex Jones, the far-right US conspiracy theorist who was banned from YouTube and Twitter after apparently threatening to shoot the FBI special prosecutor Robert Mueller.

It is plain that populist provocateurs in the US don't despair at being prevented from speaking at universities - they relish being banned for the publicity it generates and the sometimes violent clashes with the far left their attempted appearances often provoke.

A group of mainly US-based commentators and academics have taken to describing themselves as part of an "intellectual dark web" and "heretics" because of their supposedly iconoclastic views on gender differences, identity politics and Islam.

Objectively, it's a ludicrous stance. Several of them have enormous social media followings and have been contracted by thoroughly mainstream book publishing houses. They must be the most coddled group of heretics in history, summoning to mind the comfy chair of Monty Python's Spanish Inquisition.

Yet this posturing, however ridiculous to people who give it half a thought, serves another purpose too.

Playing the victim appeals to and stokes the increasingly paranoid world view of a large part of the right's natural base, both in the US and the UK. And it's profitable. As William Davies has pointed out, as a means of self-promotion it's remarkably effective to market yourself as a dangerous dissident, even if there's no substance in it. There's money in free speech martyrdom.

* * *

So where does that leave us? How should we think about free speech in an environment when the concept is so dimly understood, routinely abused and increasingly weaponised for political purposes? Perhaps it is better to learn to define it in the negative; to wise up to what it is not. To that end, here are some constructive suggestions.

First, let's recognise that not being invited onto a national public service broadcaster might be irritating, heartbreaking even, but it is not an attack on anyone's freedom of speech. Second, let's accept that to be "no platformed" by a university might seem unreasonable but it does not constitute an infringement of someone's intellectual liberty. Third, let's agree that if your words happen to be scrutinised, found wanting and even cruelly ridiculed online, that does not mean you've been "silenced", "censored" or "howled down". And, finally, being criticised for saying or writing something that people find offensive makes you neither a persecuted heretic nor a martyr.

These, then, are some truths to cling on to, like a floating wreckage, as we bob in this swelling sea of confusion, cynicism and manufactured free-speech panic. May the rescue boat arrive soon.

Beware bad celebrity advice on prostate cancer testing

"The Turnbull and Fry effect" sounds like something you might find in the footnotes of a Wikipedia page on quantum physics or cell biology.

In fact, it turns out to be something to do with celebrities talking about their harrowing experience of prostate cancer and encouraging other men to get tested for it by their doctors.

Since Stephen Fry and the former BBC Breakfast TV presenter Bill Turnbull revealed their diagnoses earlier this year there's apparently been a surge in clicks on the NHS's prostate cancer information pages and an almost 40 per cent annual increase in treatment. The pair have been rather forceful in their advice to others. Fry urged all "men of a certain age" to get tested. "For heaven's sake get tested," says Turnbull.

Many men have seemingly acted on this advice. And the NHS is pleased. "The Turnbull and Fry effect could help save lives," enthused the NHS England chief executive Simon Stevens last week.

Yes it could. But, as we shall see, far fewer lives than most people think, or would be led to believe by the advocacy of Fry, Turnbull and Stevens. And, more important, a surge of testing is very likely also to cause a great deal of pain and unnecessary discomfort to many more men.

The standard test for prostate cancer is the "prostate-specific antigen" (PSA) blood test. But it's not a failsafe test. The PSA throws out a high percentage of false alarms. Worse, a positive PSA result does not tell the doctor the precise location of a cancer. This can lead to multiple needle biopsies in search of a tumour which may, or may not, be there. These biopsies can leave men incontinent and impotent. And some die shortly after the full-blown prostate removal surgery that can follow.

There's another serious deficiency of the PSA test. Most prostate tumours are extremely slow growing and will not kill the patient. Autopsies indicate that around four out of five men who survive into their eighties will have prostate cancer but not notice it or die from it. The PSA, and indeed a biopsy, cannot distinguish between the benign and the dangerously aggressive types. Many men could get invasive and damaging treatment that they simply did not need.

Let's consider some outcome numbers. A comprehensive analysis of treatment studies by the Harding Centre for Risk Literacy found the following. Of a sample of 1,000 men aged over 50 without prostate cancer screening, around seven will generally die from prostate cancer and 210 will die from any cause. Of a sample of 1,000 equivalent men with screening around seven will generally die from prostate cancer and 210 will die from any cause. That's correct: no statistical difference at all.

However, of those 1,000 men with screening around 160 would have a false alarm and a painful biopsy and 20 would generally have a benign, non-progressive, cancer and yet undergo unnecessary surgery. As Gerd Gigerenzer, a German academic and who has been highlighting this problem for years, says in his book Risk Savvy: "Prostate cancer screening has no proven mortality reduction, only proven harm."

It's not impossible that early screening might be beneficial in a small number of cases. It may have helped Fry and Turnbull. But the data is clear that, on average, it will not help and mass screening for "men of a certain age" will do more harm than good - at least until medical science develops a far superior test to the crude PSA.

Prostate cancer is an example of how our media's obsession with eye-catching personal testimony, rather than empirical data, leads us badly astray, especially when it comes to medicine; it's also an example of the foolishness of looking to uninformed celebrities for health advice.

The health authorities should, of course, be trying to combat this tendency, not reinforcing it, as Stevens has done. Responsible physicians should be stressing the potential harm of testing and treatment, not simply gushing about the (exaggerated) benefits. The £10m of investment Stevens promised last week to ensure men are "tested and treated" quickly would arguably be much better spent on anti-cancer public health prevention initiatives, such as advice on diet and lifestyle.

We have a particular problem in the UK. A Europe-wide survey conducted by Gigerenzer and his colleagues a decade ago found that 99 per cent of British men overestimated the benefits of PSA screening, turning in a worse performance than every other country studied.

A fifth of British men mistakenly believed that 200 out of 1,000 men would be saved by screening, rather than, the reality of virtually none. With this year's "Turnbull and Fry effect" who would bet that the situation has improved?"

Discounting a future of global warming

It's safe to assume that when Theresa May decided to announce yet another freeze in fuel duty last week she was thinking of her own political survival rather than the survival of the white lemuroid ringtail possum, or the thousands of other animal species on the planet which are facing extinction due to fossil-fuel driven global warming.

It seems reasonable to speculate that her own political welfare loomed somewhat larger in her calculations than the economic welfare of as yet unborn generations of Britons. Depressing it may be but such shorttermism is hardly unusual. It's innate to our species. As humans we place a higher value on jam today than jam tomorrow. We generally value our own welfare more highly than that of generations to come. We "discount" the future.

The more mature among us moderate our discounting, understanding that we will, probably, be around to live with the consequences of spending like Liberace in 2018. Most of us care about the living standards of our children and their children. But the reality is that we all discount.

Should we expect something different from policymakers? Shouldn't we expect them to take the long view, or at least to give the impression of doing so? The answer is yes, but not an unqualified one.

In 2006 a landmark UK government-commissioned report into the economics of climate change by Nicholas Stern used a (virtually) zero discount rate to put a price on the future economic damage threatened by a warming planet. Stern's cost-benefit analysis yielded the firm conclusion that urgent action to reduce emissions was warranted, even if it entailed a sizeable short-term economic cost in terms of investment in low-carbon technology and taxes on fossil-fuel pollution.

Yet William Nordhaus, who was awarded the Nobel economic gong by the Swedish Academy of Sciences on Monday for his pioneering modelling of climate feedback effects on the global economy, was unhappy with Stern's discount rates. He suggested that using a zero discount rate implied that we would take vastly expensive action today to forestall a negative economic event in 200 years' time - even though, assuming humanity survives that long, our descendants will probably be far wealthier than us.

Stern, said Nordhaus, "would justify reducing per capita consumption for one year today from $10,000 (£7,600) to $4,400 in order to prevent a reduction of consumption from $130,000 to $129,870 starting two centuries hence and continuing at that rate forever after." Which sounds like lunacy. But two can play that game of using assumptions to yield ridiculous-sounding conclusions. As Stern has countered, if one uses a discount rate of just 2 per cent "a life starting 35 years later, but otherwise the same, would have half the value of a life starting now".

Economics can't tell us the answer of what discount rate to choose when setting up a cost-benefit analysis of a policy like climate change mitigation. How highly we should value the welfare of future generations is a philosophical question.

So are we stuck? Thankfully, no. Since the Stern review was published 12 years ago the estimates of the potential economic damage of climate change have been revised upwards. We know more about potential "tipping points", after which things get very bad very quickly. The costs of action have also fallen as the cost of renewable energy generation, particular solar power, have come down. Even applying somewhat higher discount rates does not undermine the case for action today. Nordhaus has revised up his estimates of the damage from carbon pollution significantly in recent years.

Nordhaus recommends a straightforward uniform global carbon tax to curb emissions. Other economists prefer a cap and trade system of pollution permits. But provided the cap is set at an appropriately low level - and provided its coverage is sufficiently global - this should have the same impact as a tax. The key is action to make sure that businesses and households internalise the cost of pollution and change their behaviour. Think about the Conservatives' irresponsible nine years of frozen fuel duty in this context.

The climate science points in one direction, as this week's updated warning from the United Nations' Intergovernmental Panel on Climate Change. So does the economics, thanks to the work of the likes of Nordhaus and Stern. The blockage is politics.

Autocracies are fragile - however sophisticated they may seem

It's a tale of two autocracies. Last week we laughed at the apparent primitiveness of the Russian intelligence services and simultaneously trembled at the sophistication of their Chinese counterparts.

Bloomberg Businessweek magazine reported that China's military has managed to implant a microchip no bigger than a grain of rice in US computer mother boards, as they were being assembled in China, effectively giving Beijing a secret back door into giant American firms including Amazon and Apple.

It was seen as a jaw-dropping technical feat. "Like witnessing a unicorn jumping over a rainbow," one hardware expert commented.

The Russian security services, meanwhile, were exposed as low-tech bungling amateurs. Western governments revealed that earlier this year Dutch police had apprehended four Russian agents as they attempted to hack into the investigation into the Salisbury novichok poisonings at a chemical weapons watchdog facility in the Netherlands.

They were sitting in the facility's car park in a rented car with a coat over their equipment. One of the spies even had a taxi receipt on his person, showing that they had been picked up at the Moscow headquarters of the GRU military intelligence service. An examination of the men's laptops and phones confirmed that they had been involved in a host of other notorious computer hacks on western targets.

And it got worse. Using the personal information on the agents released by the western authorities, the investigative website Bellingcat was seemingly able to produce a database of the names of a further 300 GRU operatives, including their mobile phone numbers.

No unicorns or rainbows there. So why are the Chinese so good at the spying game and the Russians so hopeless? One explanation offered was that the skills of the once formidable Russian intelligence services have degraded since Soviet days.

Alexander Gabuev, of the Carnegie Moscow Centre think tank, suspects they registered their private cars and names with the Russian Traffic Authority, using the GRU address, in order to access special road privileges, such as not being stopped by the police, immunity from drink driving fines and exemption from car tax. Did someone at the notoriously corrupt Russian Traffic Authority sell this list? "[The] root cause of [the] largest intelligence failure in modern Russian history is a combination of wrecked values system in parts of the Russian society, notorious incompetence and, well, banal corruption," Gabuev concludes.

So how different is China? Less different than this week - and the general tone of western commentating on China - might have led people to believe. For corruption is also an advanced cancer in that society too.

The China scholar Minxin Pei, in his recent book China's Crony Capitalism describes how "local governments penetrated by these elites unavoidably experience degradation in their capacity for providing public goods" and "corruption networks, consisting of officials, businessmen, and gangsters, seize control of these jurisdictions and turn them into local mafia states".

In 2015 Ma Jian, a senior official at the Ministry of State Security (MSS), China's equivalent of the GRU, was arrested in a corruption scandal. Ma was revealed to have put the MSS's spying capabilities at the service of a real estate tycoon in exchange for bribes. He had six mistresses and two illegitimate children.

Xi Jinping has ostensibly cracked down on corruption by Communist Party officials in recent years. But in the absence of any transition towards government transparency or the rule of law this feels more like the consolidation of political power by Xi, crushing rival factions, than a genuine attempt to clean up China's rotten public realm.

China's rapid economic growth of the past decade, a period over which the developed world has struggled, has led to something of a panic in the west, a crisis of confidence not only in our liberal economic model but our liberal democratic institutions.

This was magnificently symbolised when The Times recently carried a piece by David Cameron's exspeech writer, Clare Foges, imploring us to learn lessons from the world's new generation of "strongmen", including China's Xi Jinping.

But all autocracies are inherently fragile, however slick and impregnable they may look from the outside and from a distance of several thousand miles. For all their surveillance, the information feedback channels, which all governments need to be effective, tend to be calamitously defective. Reform-blocking vested interests are much harder to override in an environment of collusive corruption than they are in democracies with a free media and the rule of law.

As Minxin Pei puts it: "Instead of institutional resilience [China suffers from] pervasive institutional decay - degeneration of norms, disloyalty to the regime and subordination of the regime's corporate interests to the private interests of members of corruption networks".

Overestimating the competence of the autocrats of Beijing might be as dangerous as underestimating the thugs of Moscow.

All autocracies are inherently fragile, however slick and impregnable they may look from the outside and from a distance of several thousand miles

Another pointless "crackdown" on middle class drug use

The last time a senior Tory announced a crackdown on middle class drug use at a Conservative Party conference it turned into a rather bad trip.

Eighteen years ago the shadow home secretary Ann Widdecombe proposed £100 fixed penalties for anyone caught possessing “just one joint” of cannabis. “No more getting away with just a caution, no more hoping that a blind eye will be turned,” she thundered to delegates in Bournemouth. “Parents want it. Schools need it. Our future demands it. The next Conservative government will do it.”

But it turned out her colleagues weren’t so keen. Eight shadow cabinet ministers subsequently cheerfully relayed to newspapers that they’d smoked marijuana while at university, leaving Widdecombe’s policy and her political credibility looking more wrecked than Hunter S Thompson’s hotel room.

Back in 2000, Sajid Javid was a fresh-faced investment banker at Deutsche Bank. But today he seems to have got a case of the Widdecombes.

Cocaine use at ‘middle class parties’ helping to fuel gang violence on London streets, Sadiq Khan warns

“We need to make people understand that if you are a middle class drug user and you sort of think, ‘Well, I’m not doing any damage, I know what I’m doing,’ well, there’s a whole supply chain that goes into that,” the home secretary told the Daily Mail, citing the repellent“county lines”drugs trade, and associated exploitation of vulnerable children by criminal gangs.

“You are not innocent – no one is innocent if they are taking illegal drugs.”

We’re promised a Home Office “review” in which even “professionals” will be targeted.

When one is talking about any market, illegal drugs included, one does indeed have to consider the forces of supply and demand. Javid’s right about that. QCs and surgeons sniffing cocaine in the toilets of posh London clubs create demand just as surely as heroin addicts on a Bristol council estate or homeless spiceheads roaming around Manchester’s Piccadilly station. And the demand stimulates a lucrative and often violent black market supply industry.

So curb the demand and kill the supply? Once again we are reminded that a little bit of economics is a dangerous thing. The question is not whether demand drives supply – it clearly does – but how amenable demand, from all sections of society, will be to the kind of crackdown Widdecombe and now, apparently, Javid envisage. How “elastic” is consumption to new sanctions and enforcement?

The evidence suggests not very. The US government’s hardline “war on drugs” over the past 40 years has done nothing to reduce rates of substance abuse among the American public. Rather this inordinately expensive policy of prohibition has delivered mass incarceration and political destabilisation for countries like Colombia and Mexico.And there are other ways to reduce the social harm done by drug abuse, other ways to curb demand.

Not long after Widdecombe’s humiliation, the government in Lisbon embarked on an experiment. Rather than “cracking down”, in 2001 Portugal became the first country to decriminalise the personal use and possession of illicit drugs. The results are not entirely conclusive  –but they are pretty encouraging. Drug use among the Portuguese population, which had been in the grip of a heroin addiction epidemic, seems to have been in decline over the past decade, according to the European Monitoring Centre for Drugs and Drug Addiction.

Drug use rates among 15- to 34-year-olds are now low relative to those in other European countries. The numbers of people seeking heroin and cocaine addiction treatment have slumped (although they have risen in the case of cannabis).

Overdose deaths have fallen. The drug-induced death rate in Portugal is now around three per million,five times lower than the EU average rate and 15 times lower than the rate here in the UK. There has been no upsurge in drug-related crime.

Widdecombe’s zero tolerance speech won “loud applause” from that Bournemouth conference hall 18 years ago. If Javid wants a better legacy than hers on drugs he should follow the evidence rather than the ideology.

Food for thought for Brexiteers

One could tell a surprisingly comprehensive history of the Brexit project by simply talking about food.

From curved bananas to non-recyclable teabags, Eurosceptics have long relied on myths and scurrilous half-truths about groceries to stoke public resentment over the supposed red-tape lunacy of the European Union.

More recently, Brexiteers have taken up the (mostly false) idea that the EU discriminates intensely against African smallholders in order to protect its own inefficient farmers. The pro-Brexit Tory MP Daniel Kawczynski posed sombrely in front of a tray of supermarket lemons this month in order to lambast "the EU protectionist racket".

But it's not just Africans who will benefit from Brexit. The Sun informs us that after we leave the EU the Great British shopper will all be able to save 40p on a pack of butter and 31p on a punnet of strawberries and much else besides thanks to the tariff-torching free trade deals we will inevitably sign with other countries.

Brexiteers seem to believe that a way to a Briton's support is through his or her stomach. Taking control is framed as taking control, above all else, of our grocery basket.

But it's not all one way. The Brexit food fight is a symmetrical one. US "chlorinated" chicken has become the spectre at the feast, a symbol of what the powerful US agricultural lobby will ram down our throats as the price of an inevitably unequal American trade deal. And few of the no-deal consequence warnings cut through to the public quite as effectively as the threat of a sandwich shortage.

They sometimes try to conceal it, but the agenda of some Brexiteers is plainly deregulatory. One of the reasons the forecasts produced by a small band of pro-Brexit economists show long-term gains for the UK, when every other credible study shows precisely the opposite, is that their models assume we will in future shed all our domestic product standards, including on food imports, and trade on what are known as "world prices".

But the lines between ideological fantasy and reality are becoming blurred. UK ministers insist there will be no compromising of high food standards after Brexit. They also say that in the event of a no-deal Brexit they would waive customs and standards checks on trucks delivering produce from the EU in order to mitigate transport bottlenecks and supermarket shortages. They have not said what, in those circumstances, is to stop some criminal group importing unsafe produce to the UK. Perhaps they believe it's a risk worth taking.

Regulation 1168 of the European Council, from 2011, is just the sort of Brussels red tape that Brexiteers love to hate. It lays out a host of requirements for food manufacturers, from providing detail on the geographical origin of produce to its nutritional content.

But it also says that packaging should warn buyers about ingredients that can cause a dangerous allergic reaction. Fifteen-year-old Natasha Ednan-Laerouse from Fulham died in 2016 after eating a baguette from Pret A Manger which did not list traces of sesame, to which she was allergic, on its packaging.

This was not, in fact, a requirement under the EU regulation because it was a fresh handmade product, although many people, in light of this tragedy, believe this is a regulatory loophole that urgently needs to be closed. The coroner in the case said last week that he would be writing to the government to raise concerns about "inadequate" food labelling regulation.

Brexiteers will argue that this extremely sad incident has no bearing on the issue of EU membership. And in one sense they're correct. There's no reason why the UK post-Brexit shouldn't have new domestic regulations on food labelling that are even tighter in some specific areas.

Yet this, of course, is at odds with their deregulatory impulses and the dream of importing food at world prices. Moreover, it highlights a huge and still unrecognised blind spot on trade. For it is pan-European regulatory harmonisation, regardless of whether those regulations are well-designed or not, that helps UK food exporters to tap into a significant market in the EU. It is this harmonisation that dismantles what Margaret Thatcher once called the "insidious" trade barriers of "different national standards".

Assuming that the rest of the world does not join us post-Brexit in a bonfire of food standards – and there is no reason to expect that they will – our producers will have to conform to the standards of other countries if we wish to sell into their markets. Taking back control from the EU will simply mean submitting to the authority of others jurisdictions, whether that’s the US, Canada, India or wherever. And to sell into the EU we would still have to conform to the single market’s food regulations, even if we are out of it.

Yes, there are costs from regulation. It's onerous to perform tests, to fill in paperwork, print labels and all the rest. But there are vast economic benefits too.

It was 30 years ago this month that Margaret Thatcher made her speech in Bruges, seen by eurosceptics as the lighting of the torch of national resistance to Brussels. Yet earlier in 1988 the prime minister had made another speech on the urgency of completing the single market.

"There was a tendency in Europe to talk in lofty tones of European Union," she said on the subject of regulatory harmonisation. "That may be good for the soul. But the body - Europe's firms and organisations and the people who work in them - needs something more nourishing."

 Food for thought for Brexiteers today.