Magazine article The Spectator

One Law to Rule Them All

Magazine article The Spectator

One Law to Rule Them All

Article excerpt

When will our legislators realise that they can't repeal the Law of Unintended Consequencesss

Last week, the European Commission voted to ban three pesticides which are said to harm bees. Everyone loves bees, so perhaps we should all be rejoicing?

Well, I'm afraid my reaction was not joy, but to think: here we go again, this is bound to mean more dead bees. It's inevitable: whether it's a ban, an order or a reform, it doesn't matter. When governments act they almost always forget the golden rule of public policy: the Law of Unintended Consequences.

And guess what? Just a few days after the vote, scientists are pointing out that the ban will mean farmers using older chemicals that are even more harmful to bees. For good measure, the alternative pesticides are more expensive to use and not as good at protecting crops.

Most of the time, governments do not set out to do harm. Politicians and bureaucrats think that, with the stroke of a pen or the passing of a bill, they can change the world for the better. But the Law of Unintended Consequences means that the opposite usually happens.

Take 'no win, no fee' arrangements for lawyers. Introduced to make the legal system accessible to those who couldn't afford to pay a lawyer upfront, it did just that, but in a way no one in government expected. More than a thousand people a day now hire a 'no win, no fee' lawyer and claim compensation for whiplash from a car accident. Since everyone else does - pushing up insurance premiums by 80 per cent in the past five years - the rational response to a crash is indeed to make a claim. That's certainly opening up the legal system to everyone.

The most obvious recent example of the Law of Unintended Consequences is the 50p tax rate. Introduced by Gordon Brown in 2010 to cheers from those keen to see 'the rich' pay more tax, its effect was to send nearly two thirds of the nation's highest earners - that is, biggest taxpayers - out of the country or deeper into the arms of the tax avoidance industry. In 2009-10, more than 16,000 people declared more than £1 million in income. After the 50p rate was introduced, the number fell to 6,000. You can, of course, learn from the Law and act accordingly.

Since the announcement that the top rate would be cut to 45p, the number of people declaring an annual income of more than £1 million has risen to 10,000. …

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