Corporate turnarounds are notoriously difficult. Even when companies become bureaucratic and offer substandard products, some people inside and outside the company still benefit from them being that way. CEOs who succeed in the face of these interests, like Microsoft’s Satya Nadella or Chrysler’s Lee Iacocca, become legendary.

We normally rely on a form of natural selection instead. A startup that is more efficient or offers a better product enters the market and gradually wins customers from the incumbent, which eventually dies. Only 60 of the 500 companies in the S&P 500 in 1980 are still in that index today.

Public policy relies almost entirely on the public sector equivalent of the corporate turnaround. Reformers focus on fixing broken laws or making government agencies work better.

As in the private sector, this rarely works. It is hard to do anything substantial in secret, and the people who lose out from the reforms fight back. Their benefits are too dispersed or immaterial for enough people to fight for them. Mancur Olson feared that only war or revolution could overcome this dynamic. Geniuses like Satya Nadella are just too rare.

Reformers should pay more attention to the other way markets improve: competition and choice. France in the 2000s liberalized childcare not by changing the rules that applied to every childminder, but by creating new, more permissive categories that childminders (and their customers) could opt in to. It worked, in a particularly tricky area of policy.

To deliver new homes, Israel’s government created new mechanisms that allowed apartment residents to bypass existing rules and replace their buildings with bigger, denser ones – but only when the residents of a building explicitly opted in.

Rather than trying to reform the country’s scientific research agencies, Britain’s government set up a new organization run along different principles, ARIA, that coexists with those other agencies. This allows us to see which models work better, and perhaps to make more substantial reforms easier in future.

These approaches have their drawbacks. Multiple organisations are more expensive than one, and different sets of rules can complicate things. New systems may be taken up slowly, especially if their benefits are not concentrated on those who adopt them.

But as a way to replace sclerotic rules and organisations, building new institutions in parallel to the existing ones may be surprisingly effective, avoiding the equal and opposite reaction that end up scuppering many attempts at reform.

We've worked incredibly hard to make it a brilliant reading experience and something that is beautiful enough that you will want to show it off in your home. We are also shifting to a more frequent, bimonthly release cadence, and aim to increase that over time to eventually become a monthly magazine. We want to, some day, be just as significant, widely-read and influential as magazines like The Atlantic or The Economist.

I took a bit of convincing to do this. I think most magazines are either utilitarian and easy to read, or well-designed and beautiful. I didn't want to try making a sort of Vogue knock-off, but nor did I want something that was bare bones and purely functional.

One of the things that I think really sets us apart is that we really, really, really care about design and beauty, in both the things we make ourselves and the world we want to help to create. But what we have made is, as you will see, the best of both worlds. I cannot help but smile when I look at our text, which is in the most pleasing typeface I've ever seen.

Our margins are decorated with illustrations inspired by medieval illuminated manuscripts, and the whole magazine is filled with clever little design Easter Eggs that will please readers as they spot them. Some of these are so clever I have had to convince our designers to explicitly explain them, because I don’t want readers to miss them: we have an article on the battle of the Japanese and Swiss watch industries that uses a hue of red that mixes the different shades of red from the Japanese and Swiss flags. How cool is that?

Our pieces are long and detailed, so it's essential that reading them includes places to take a breather by admiring some beautiful artwork or marginalia. And our datavis is a perfect balance of clear and attractive. I think moving to print has a lot of advantages for us.

Most importantly, it allows our readers to read Works in Progress the way a lot of them have always wanted to. I consume nearly everything through my phone, including long books, but I am weird. I've lost count of the number of people who've asked me for a print version they can subscribe to.

I think unbelievably highly of our readers. I have met many of them, and they are some of the most interesting and thoughtful people I get to meet. They span almost the entire breadth of the political spectrum, and in reading Works in Progress they are, I think, embracing the same intellectual eclecticism and pragmatism that animates all of us writing and editing it.

Being able to build a stronger following among them is very appealing to me, and I am looking forward to the subscriber-only events we'll be holding for them too. One of the main things we asked ourselves throughout the design process of the new magazine was, "Is this good enough for a Works in Progress reader?"

Going to print also elevates the stuff we write. There is a natural prestige to a print magazine that online publishing simply doesn't have. I think our ideas and articles are good and important, and anything that elevates them in people's minds so that they're taken as seriously as possible will help in our goal of actually changing the world with the ideas we believe in.

Relatedly, I think this will make some writers a bit more inclined to want to write for us. If you have your own Substack, especially one with paying subscribers, it's natural to ask why you'd want to write for other publications instead of just publishing directly to your own followers. Our reach certainly helps with that, but I think being able to appear in a print magazine read by, I hope, tens of thousands of people will be an attractive prospect.

There will be some print-only content: columns (the great Virginia Postrel is writing a regular one, as am I), letters, artwork and special features. But we will still publish the bulk of our work online, and we will not be paywalling that.

Our goal is still to discover, develop and popularise the most worthwhile ideas we can find for improving the world, and that means making our online edition as broadly available as possible. If that’s how you want to keep reading our work, nothing will change. But if you want to see the print edition for yourself and come along as we try to grow into one of the world’s most interesting, beautiful, and important magazines, we're excited for you to join us.

Britain’s borrowing costs have surged in recent months. Although much of this is driven by global factors, the UK’s performance has been particularly bad. One way to get borrowing costs down is to improve expectations about future UK growth: if lenders expect us to grow more quickly, they will be less concerned about our ability to repay our debts, and willing to lend to us more cheaply.

The Chancellor, Rachel Reeves, is reported to be preparing to back airport expansions at Heathrow, Gatwick and Luton, approve the Lower Thames Crossing, and use a Special Development Order to approve a Universal Studios theme park. The government has also announced that it will allow developers to offset environmental impacts by paying into a national fund instead of, say, building a £100 million tunnel to protect some bats from speeding trains. This is precisely what one of us recently said they should do to fix this problem.

These are promising moves and, if they happen, they show real seriousness about the situation Britain is in. But they can only be the start of a much bigger package of reforms.

One of the big problems with many ‘wishlists for growth’ is that they either (a) assume away political constraints, and propose ideas that would be politically very costly, without really explaining how a government is meant to be able to do them – or (b) they take political constraints as being so overwhelming that they rule out anything that is remotely controversial, dismissing moves that involve political battles that are winnable, with acceptable costs for their substantial benefits.

Labour is in an interesting position politically: its massive majority means it can probably pass any legislation it wants, but its position in the polls means that it has to be very careful about how voters view what it is doing. Since it likely needs to deliver economic growth for political reasons, we suggest that it should focus on politically low cost win/wins – involving small compromises to share some of the benefits with the people who would otherwise oppose them the most – and fights worth having – ones that take on small political costs, against relatively narrow interest groups, in exchange for large economic rewards that the electorate will eventually reward them for.

Win/wins

Introduce 100% business rates retention for strategic infrastructure

Most business rates – the property tax paid by businesses – go into a central pot in Whitehall and are redistributed outwards. This means that local authorities get little benefit from allowing valuable new developments to be built in their areas. Allowing councils to retain the full business rates bills paid by new infrastructure of specific kinds – we suggest prisons, data centres, and energy infrastructure like pylons – would give them a direct financial benefit from allowing them to be built in their areas. This could make cash-strapped local authorities significantly more willing to approve and fight for these projects: the business rates bill of a large data centre on the scale of Stockley Park would cover the entire adult social care overspend of a council like Havering.1 They should get these rates permanently, and this should not apply to projects that have already been approved or completed. (More.)

Pass the Street Votes secondary legislation

These allow residents of low-density streets to create a plan allowing the street to evolve into “gentle density”-style terraces or mansion blocks, potentially adding hundreds of thousands of new homes to London and other unaffordable towns and cities in Britain. Such a plan could create enormous value for the residents of the street – in many cases over £500,000 per plot. Analogous schemes in other countries have increased housing output by 30%-50%.

The primary legislation for this was passed last year, and the secondary legislation is reportedly all but finished. It just needs one final push from the Secretary of State to be put into effect. This may well be the easiest and highest value item on this whole list. (More.)

Put residents in control of renewal of their housing estates

This allows the tenants of housing estates (most of whom are often social tenants) to vote on redeveloping their estates more densely. These redevelopments add thousands of new homes to centrally-located housing estates, with most being privately-sold or -rented. The revenues from selling or renting the new homes are partially used to pay for new and better homes for the existing tenants.

Many of the housing that would be replaced was built quickly and cheaply by local councils, and need replacing for the sake of safety and basic tenant welfare. But we could use regeneration to make them more energy efficient too. If every council house was replaced by a new home built to the highest energy efficiency standards, it would cut London’s annual carbon footprint by nearly 1 million tonnes – equivalent to taking almost half a million cars off the road. The average billpayer would save almost £800 a year on their gas and electric bills.

So far thirty such ballots have been held, and all have been passed by tenants, often by astonishing margins: one project near Canary Wharf would add 1,252 homes, including an extra 116 properties let at social rents, and was approved by 93% of the vote on a 91% turnout of residents.

Right now, these ballots still face the problem of local authority planning committees blocking them even when residents enthusiastically support them. For example, the aforementioned project was initially blocked by Tower Hamlets council, before being overturned by London Mayor Sadiq Khan. To minimise this risk, the government should set out a clear expectation of planning permission being granted (at Ministerial level if necessary), so long as the projects comply with simple rules it sets out governing the impact these projects may have on neighbouring areas, and as long as they have been endorsed by a majority of residents. Residents should also be able to trigger ballots themselves that would oblige their housing association to look for developers who might be interested in renewing their estates. (More.)

Fights worth having

Clear the infrastructure approval backlog

Since Labour took office six months ago, its ministers have failed to approve major infrastructure projects, delaying development by a collective 1,093 days. These are:

• The Lower Thames Crossing,

• The Luton Airport expansion,

• Hinkley National Rail Freight Interchange,

• West Burton Solar Farm,

• North Lincolnshire Green Energy Park,

• Cambridge Waste Water Treatment Plant.

This list does not include the Aquind Interconnector, a massive power cable to France that would allow us to sell off excess wind power when the wind is blowing and buy French nuclear power when it isn’t. This has been awaiting a decision for almost a year and a half since the previous government’s refusal of permission was overturned by the High Court, and is now being reviewed by the Ministry of Defence.

Ministerial delays should not be seen as a normal part of the planning process. In Labour’s first week in office, Ed Miliband swiftly approved three solar projects delayed by the last government. The lesson is clear – when the political will is there decisions can be made on time. We’re hopeful about reports that the Chancellor plans to endorse some of these – there should be no further delays and approval should be granted at the earliest possible opportunity. (Incidentally, while there are good questions to be asked about how much public money should go to these projects – if at all – the planning system is not the place for them.)

Make nuclear faster and cheaper

Britain’s industrial electricity costs are the highest in the world, and this is making our deindustrialisation much worse than it needs to be. Our chemicals industry has contracted by 37% in the last three years. One of the underlying causes of the British industry’s eye-watering electricity bills is our failure to build new nuclear power stations as we closed our coal and other fossil fuel power plants. Even more importantly, we face a narrow window of opportunity for the UK to build the infrastructure needed to host some of the world’s AI infrastructure, and that requires gigantic amounts of constant, dependable electricity that only nuclear power (or fossil fuels) can provide.

Britain’s one nuclear project under construction, at Hinkley Point C, is set to be the world's most expensive. Sizewell C, the next in the pipeline, will be cheaper but still would be more expensive than any project ever built outside Britain. It doesn’t have to be this way. Nuclear used to be cost-competitive with coal, but excessive regulations based on misinformed fears around radiation have massively pushed up costs.

To cut costs and speed up approvals for new nuclear reactors, the Government should begin with five things:

• First, it should speed up approvals by removing the redundant ‘Regulatory Justification’ requirement, which requires that every single new reactor design has to independently prove that its benefits outweigh its costs. This creates enormous legal costs and delays for new plants – it can take over two years for a decision to be made – and duplicates the already-onerous reviews done by the Generic Design Assessment, environmental permitting, planning system, and the Nuclear Site Licensing process. (All of these should be improved as well, but Regulatory Justification could be gotten rid of tomorrow.)

• Second, it should automatically approve reactor and plant designs that have been classed as safe by regulators in other OECD countries. This would create the prospect of nuclear reactors that are safely in operation in places like South Korea, built for a sixth of the price per MW of our own, being built here. And once a design has been approved, that should be it: a regulator should not be able to require further tweaks unless it can prove that there is a catastrophic risk it has missed. This should reduce the endless tweaking and tinkering that currently goes on that create delays and costs for trivial ‘benefits’.

• Third, it should be possible to have SMRs on a wider set of sites such as former industrial or coal mine sites. They should not be limited to particular locations, and should allow for developers showing that they can be operated safely and suitably on any site.

• Fourth, it should submit existing safety regulations to cost-benefit analysis, and scrap anything whose estimated cost outweighs its benefits. Bafflingly, this has never happened: there has never been an attempt to estimate whether the regulations and rules we impose on nuclear power stations actually generate more benefits for society than the costs they create. The only constraint is a rule of thumb that safety regulations whose costs can be shown to outweigh their benefits by a factor of ten to one are ‘grossly disproportionate’.

• Fifth, it should bring the Office for Nuclear Regulation under the direct supervision of HM Treasury or No 10 Downing Street, with its head reporting directly to the Chancellor or the Prime Minister’s office, not to civil servants. Under the status quo, the regulator reports to the Department for Works and Pensions, which is probably not prioritising rapid approvals and technological progress as much as we want it to. It should be given a new mandate to focus on speed and certainty in its approvals, while maintaining a specified level of safety, not a mandate to increase safety to ever-higher levels. Its performance should be judged by the number, cost and speed of delivery of new nuclear power plants in Britain.

These proposals are only a start: we will need to do much more to make it inexpensive and quick-to-build nuclear in Britain. But they are a start. (More.)

Allow airports to auction off landing slots created by new runways

The government is reported to be planning to approve a major expansion of airport capacity including a proper second runway (the existing one can only be used in emergencies) at Gatwick and a third runway at Heathrow. It is important that the right to use this new capacity is auctioned off, not given away to airlines for free as is the current plan. This is for three reasons:

• The right to take off and land at Heathrow once a week is worth tens of millions of pounds. This scarce resource should go to the most high-value uses, for which there is greatest passenger demand. This will enable greater competition on the most high-demand routes, and ensure that the extra flights that run will be most highly-utilised by passengers, minimising their CO2 emissions. British Airways has 52% of all landing slots at Heathrow, and the airline with the second-most landing slots, Virgin Atlantic, has only 4%; slot auctions may allow competitor airlines to grow and force BA to improve its offering and/or lower its prices.

• The runway expansion should be self-financing. Giving away the landing slots for free (or charging a flat rate for them) hands over what is potentially a highly valuable asset to airlines for less than it is worth. Only an auction can reveal how much the slots are really worth, and may deliver far more returns than expected. The 3G spectrum auctions raised ten times more than was anticipated.

• Heathrow must have a strong incentive both to keep costs down (which it will if it has to pay for the project) and to maximise the value of the project (which it will if it can retain most of the value created). Anything else risks the project repeating the mistakes of HS2, where costs have overrun gigantically because the body delivering the project is not on the hook for the losses it makes, and so has very little incentive not to let them rise and rise.

Incumbent airlines will kick up a fuss at having to pay for something they’ve been getting for free, but their main arguments – that it’s too complicated and would harm smaller airlines – don’t stand up to scrutiny. Small airlines barely get a look in under the status quo where new entrants can only gain slots by buying them on the secondary market (e.g. from their incumbent competitors) or as part of a reserved allocation when new slots become available.

Naturally, there will be some concerns about the climate effects of expanding runway capacity. But many of these flights will pay a carbon price for their emissions. Another good way to address this would be for the government to collect some of the funds raised by the auction and spend them on R&D for technologies that would reduce the CO2 emissions of air travel worldwide. One option here is carbon removal, which, if costs can be brought down enough, would be a way to fully offset the CO2 emissions from air travel (and other industries where fossil fuels will not easily be replaced). The advantage of this approach is that any technological improvements we can contribute towards can be applied to emissions worldwide, even if other countries are less realistic than Britain about the need to avert climate change. (More.)

Roll back anti-development housing regulations

Because the planning system is such a significant barrier to development, we’ve become used to thinking of it as the only thing stopping us from building the homes we need. It’s not.

We have a whole system of other rules that impose huge costs on new housing developments that can end up making some developments unviable, some smaller than they would be otherwise, and some worse quality because so much of the cost has to go on compliance. Even if you get past the planning system, you face these regulations.

• New ‘second staircase’ rules require new buildings over 18 meters tall – about six storeys – to have at least two staircases. Already some developments have been halted as a result, while others have had to undergo drastic redesigns – leading to fewer homes built, because the second staircase takes up so much more of the building’s floor area. The Government’s own impact assessment found the rules are grossly disproportionate, with the costs being 294 times greater than the benefits. These are made worse by other rules, like the London Plan’s ‘dual aspect’ regulation, which requires that new flats have windows that face in more than one direction, which rules out the most common floor plan used in places that already have Second Staircase rules.

• Other building regulations – the rules that dictate the essential things that new buildings must have – have gone way beyond their original intent as providing basic safety and essentials, like grounded electrical wiring and flushing toilets. Now, the guidance has been expanded to mandate all sorts of other policy goals the government has, as well as including wildly excessive new safety rules. Rich developers can sometimes pay hugely expensive consultants to bypass the guidance; but many more marginal projects fail at this stage. Rules to stop people from falling out of windows now drive developers to raise windowsills to 1.1 meters above the floor, which produces small, squat windows that people cannot look out of when they are sitting down; sash windows have been de facto prohibited in the name of ventilation, even though these are extremely effective at ventilating; and limits on ‘glazing ratios’ – the ratio between floor space and window coverage – have been imposed to prevent overheating on sunny days, in the name of reducing air conditioning use. Rules like these now abound in the building regulations, which should be simplified and restored to their original purpose of providing basic levels of safety and customer assurance.

• Biodiversity Net Gain rules, introduced last year, require new developments with 10 or more homes to increase the biodiversity of an area by 10%. The policy has been a mess in practice, pushing up the cost of building and creating mountains of unnecessary paperwork since, unsurprisingly, the concept of “10% more biodiversity” is nebulous. It’s also just not the case that we should want every new development to increase biodiversity: more housing, particularly in the places where improving biodiversity is hardest (e.g. within inner cities) is a good thing and should go ahead even if it won’t increase biodiversity. At the very least, the ability to discharge your BNG obligation by buying ‘credits’ for schemes delivered off-site should become the norm rather than the ‘last resort’ it currently is.

• Unachievably high ‘affordable housing’ mandates. While housing being affordable as a goal is incredibly important, and subsidised housing as a means may be desirable, the current system puts the costs of building those subsidised homes onto new, private sector housing developments, which undermines its own aims by making new private sector housing more expensive to build. The affordable housing requirement is now as high as 40% in many cases – that is, 40% of a new development’s homes have to be given away at below-market rates – and the government says it wants a 50% mandate in some of its New Towns. Sometimes these mandates mean that some developments do not happen at all – so no affordable or private sector housing gets built. Even when developments do go ahead, affordable housing mandates mean fewer homes overall get built. Study after study has found that new homes at the top of the market spark moving chains that eventually free up space at the cheaper end of the market. 40% and 50% mandates are far too high, and counterproductive for the goal of making good quality housing available to all Britons.

All of these rules sound nice, meaning that getting rid of them will be politically painful. They are basically ‘landmines’ left by the previous government, even if they were not intended as such. But here Labour’s political fortunes and the country’s actual needs are identical: we likely cannot build the 1.5 million homes Labour has promised during this Parliament without repealing or neutering them. (More.)

Use Special Development Orders to revitalise Britain’s cities

The Secretary of State for Housing has a little-known, little-used power to issue Special Development Orders that grant permission for certain kinds of buildings in specified areas. These can cut through our existing regulations, like the Town and Country Planning Act, like a hot knife through butter, and could be used in targeted ways to upzone parts of our cities and their surrounding areas. In and around London, for example, we could issue Special Development Orders to allow building up to eight stories within fifteen minutes’ walk of a tube or railway station around London (subject to a design code), to establish the Cambridge New Town and extend other cities like York (again, with design codes), and to densify the cores of cities like Birmingham, where decades of postwar neglect have left parts of those cities derelict and underdeveloped.

Intriguingly, the government is reported to be planning to use a Special Development Order to approve the Universal Studios theme park, which may be testing the waters for broader uses like these – but it should be preparing now to use these powers to their full potential. (More.)

Stop statutory consultees from gumming up the planning system

Developers seeking planning permission are required to consult numerous expert bodies such as the Environment Agency and Historic England, known as Statutory Consultees. The logic is that this could preempt problems that would otherwise cause delays at the eleventh hour.

The problem is that we’ve massively expanded the list of statutory consultees and what we ask of them, which has been compounded by many lacking the resources to respond to every request quickly. The result? Major developments are delayed. In one case, a plan to convert an office block beside a cricket club into apartments has been delayed – because the developer’s risk assessment of the speed of the club’s cricket balls was challenged by Sport England for not being “produced by a qualified consultant.”

To fix this, three things need to happen. One, there needs to be a complete and total shutdown of the creation of new Statutory Consultees. Two, the number of Statutory Consultees should be cut back – Sport England is an obvious candidate for removal. Third, the government should legislate to create a rule of positive silence: a failure of a Statutory Consultee to respond to a request within 21 days should count as consent being given. (More.)

Protect infrastructure projects from spurious legal challenges

The right to challenge the government in court, especially on compulsory purchase orders to protect your property from expropriation, is an important one. But that right must be balanced against the need to prevent people using bogus legal challenges to tie up projects in legal red tape. A number of major road projects, including the £1bn A428 Black Cat to Caxton Gibbet, have faced year-long delays because of unsuccessful and spurious legal challenges. National Highways reports that these legal challenges add between £66 million and £121 million per scheme it undertakes.

One issue is that we give litigants multiple bites at the cherry. They get two opportunities to bring their case to the High Court and another to take it to the Court of Appeal. This is grossly disproportionate and, as the independent Banner Review into inappropriate legal challenges found, unnecessary for justice to be done. And the problems here are compounded by the fact that the Aarhus Convention, to which the UK is a signatory, protects failed litigants from being counter-sued for legal costs. The forthcoming Planning and Infrastructure Bill is an opportunity to change the law so people suing major infrastructure projects only get one bite – allowing us to get spades in the ground faster. (More.)

Streamline copyright for AI development

AI models like ChatGPT and Gemini are developed using massive data sets, and further progress will likely require even more. Legal uncertainty around how and what data can be used to train new AI models threatens to make the UK a deeply unattractive place to build an AI business. This applies as much to smaller sectoral players that we should be trying to foster – in legal services or medicine, for example – as it does to the frontier AI labs like Deepmind and Anthropic.

For over a decade, the UK has exempted non-commercial (e.g. academic) text-and-data mining from copyright so long as the data was accessed legally (e.g. if you train an AI used for non-commercial purposes on Disney Plus, you still need to pay for your subscription). But there is no such exemption for commercial uses, so for-profit AI startups have to obtain licenses from the owners of copyrighted material to train their models on that material.

This rule creates massive ‘transaction costs’ for AI companies. It is not actually the cost of the license that is the problem, but the time spent bargaining and transacting with the hundreds of thousands of different rightsholders. The time and resources put into this are deadweight losses that benefit nobody (though obviously rightsholders prefer this wasteful system to one where they don’t get paid).

The best short-term solution to this is the one proposed in Matt Clifford’s AI Opportunities Action Plan: allow training without a license unless the rightsholder explicitly requires one. This is the EU’s approach, and while we think we should aspire to be better than the EU on tech regulation, it’s a lot better than the status quo. Instead of announcing yet another consultation, as the government has done, it should adopt Clifford’s proposals immediately and, in the medium-term, aim to set up an API standard for contract terms that reduces transaction costs between AI companies and rightsholders, so dealings between them can be fast and inexpensive. (More.)

To be clear, there are many other things we think the government should do to get growth that we haven’t listed here, because we think they’re politically off the cards for this government right now. What we list here are policies we think are just about within the political window of action for this particular government, or sufficiently close to it that it is worth trying to pull it there.

Britain urgently needs a credible plan to get economic growth. This isn’t “just” about people’s living standards or the quality of public services anymore: British government borrowing costs have been rising this year as financial markets have become increasingly pessimistic about the British economy’s prospects (and hence the government’s ability to repay its debts).

Though, of course, we can’t fix this overnight, markets are forward looking. If the government can make a clear and credible commitment to a genuinely pro-growth plan it could rapidly improve the UK’s cost of borrowing, as markets change their expectations of the future of UK growth. And once the policies come into effect, the growth uplift could change the government’s – and the country’s – fortunes for the better.

Further Reading:

• Foundations: Why Britain has stagnated – Sam Bowman, Samuel Hughes, and Ben Southwood

• Back to what we’re good at: A plan to get Britain building again – Britain Remade

I have co-authored a new essay about why Britain’s growth has almost flatlined since the mid-2000s, along with and Samuel Hughes. I think it is the best thing I have ever been involved in writing about Britain’s problems, and I hope you’ll find the time to read it.

Our argument is that Britain’s problems are very simple. We have banned investment in most of the housing, business premises, infrastructure, and energy supply we need. There is no separate mystery about why investment is low – we have banned most investments we need to make. And there is no productivity “puzzle” – productivity growth is low because we do not build the basics that we need to produce more.

For example, electricity prices are now vastly higher than they were twenty years ago:

The essay builds on things I have written like Britain is a developing country and Democracy is the solution to vetocracy, and that Ben and Samuel have written on similar topics. But it also relies on the huge amounts of work done by people like , and Ben Hopkinson of Britain Remade, , the author of In The Sight of the Unwise, , Freddie Poser, Michael Lane, and many others.

Read the whole essay.

1. Praise the new Labour government for its housing policies.

2. Highlight that they are stop-gap measures, at best.

3. Warn about some ways that they might go wrong.

4. Suggest a few ways to fix housing for good in Britain.

First: I’m impressed with what Labour has said on housing so far. Rachel Reeves used her debut speech as Chancellor to say that Britain’s ‘national mission’ is getting economic growth, that building more housing and infrastructure is the best way to do that, and that the planning system is the biggest barrier to that happening. Having this come from the Chancellor, and framing it as a growth issue rather than a cost of living or “young people” issue, is a sign that Labour grasps how important it is to fix housing in Britain. It’s remarkable to see how far YIMBYism has come in such a short space of time.

The actual measures the Chancellor has announced are decent. Hiring more planning officers will rebuild state capacity that the last government left to decay. Approving more important infrastructure projects at ministerial level could get us a lot of high-value stuff built, including projects that have been in limbo for years. Reclassifying damaged green belt land as developable ‘grey belt’ will probably free up land in useful places, and sets a precedent for future releases of green belt land. And bringing back housing targets, and setting them at a high level, signals the government’s commitment to addressing the housing shortage problem. But these are stop-gaps, at best. 

The wrong targets

Housing targets in particular are a bad mechanism for getting houses built. One problem is that local authorities often allocate the land for them far from existing amenities and infrastructure, to reduce the imposition on existing residents.

More importantly, they put houses in the wrong places at the national level. Each area’s target is set to follow the area’s so-called “housing need”, determined by local trend population growth. That means that they do not allow places to grow above their past trend growth. Places that have built too little in the past, and thus had slow population growth, get lower targets in future, which causes them to have lower population growth than they would otherwise, and so on.

If we’re serious about fixing Britain’s growth problem by building more homes, we need some places to be able to grow much more rapidly than they have been growing. During the Industrial Revolution, some cities grew by orders of magnitude as people moved to them from the countryside to find better-paying jobs. Cardiff grew forty times in size between 1821 and 1891. Glasgow grew from 70,000 people in 1800 to over 700,000 in 1900. Most of Britain’s other major cities grew by at least five to ten times during the 19th Century.

High internal migration is normal in rapidly-growing countries. America’s Sun Belt has absorbed tens of millions of people from what we now call the Rust Belt over the past half-century, driven by better jobs and cheaper housing. China’s urban population has risen from 20% in 1980 to over 60% today, driven by and driving the country’s industrialisation over that time.

Something similar should be happening in Britain today, with people moving to prosperous cities like London, Oxford and Cambridge for better jobs and lives. But they can’t, because we don’t build enough in those places.

Since 2016, London has actually underbuilt for its size. London’s is 15.7% of England’s population, but only 10.8% of housebuilding starts and 12.6% of completions in England since 2016 have been in London. Really, it should be building much more than its share of population, so it can grow.

[EDIT, 21 July]: Jim Gleeson, of the Greater London Authority, tells me that this data is wrong. For some reason, and nobody seems to really be sure why, the government’s official data seems to undercount housing supply in London more than the rest of the country. Using other data that Jim says is more reliable, London builds about the same share of housing nationwide as its population share. That doesn’t change my general point that it should be building much more than its share, but I apologise for the error and I have removed a chart based on the government’s bad data.]

This isn’t just stopping us taking advantage of today’s growth, it also draws out the political pain of building houses. Housing targets work through local plans, which have to be written up by local authorities and then approved centrally by the Planning Inspectorate, and updated every five years. This means that they involve a never-ending political battle between central government and local authorities.

Targets are persistently unpopular, and create easy wedges for opposition politicians to campaign against them – something the Lib Dems and Conservatives have both excelled at in the past. Under current plans, Labour will face the same ongoing fights over new housing that have been a feature of the last sixty years of British politics. 

Just say yes to tunnels and interconnectors

Similarly, the plan to call in new infrastructure projects is fine in principle, but in practice will draw out political pain for as long as the government actually uses it to approve things.

It is tempting to think that local objections will have little resonance nationally, but that often isn’t how things go. The Aquind Interconnector in Portsmouth – which would add as much clean electricity to Britain’s grid as a large new nuclear power plant – was already decided centrally in the way the government intends to decide on other projects, and it was blocked by the last government because of local objections. (Amazingly, it doesn’t even seem as if a majority of locals opposed the project, just a vocal minority.)

Even after that was overturned, that government delayed the decision indefinitely, for the next one – ie, the Labour government that has just been elected – to handle. What it decides will be an early test of the new government’s willingness to actually approve these infrastructure projects. To be clear, I expect this government to be much better at this than the last one – last week it approved 1.5 GW of solar projects that the last government had left in limbo, including one that was delayed by more a year.

But the Aquind project’s troubles were not just an exception owing to the unfortunate influence of Portsmouth’s former MP, Penny Mordaunt. Locally controversial projects can quickly catch national attention. The campaign against the project to bury the road near Stonehenge ended up being led by nature campaigners and one of Britain’s leading historians, and it remains in legal limbo.

The decision on the Lower Thames Crossing, which is already the largest planning application in the UK running at 359,000 pages, has been delayed until the 4th October. Unlike the quick action on the solar projects, the Government has issued a consultation letter (the fifth one since the end of its 6 month inquiry process). That project would unlock development potential for local ports, and relieve the Dartford Crossing, providing an avenue for growth. It is Britain’s only remaining transport megaproject after the cancellation of HS2. If, after £800m spent before a shovel has hit the ground, that project doesn’t get consent quickly, Labour’s pro-planning mantra may ring hollow.

Delaying the pain

Both of the measures above – housing targets and approving projects at the national level – have low up-front political costs and high ongoing political costs. It is costless to announce that you’ll decide on major infrastructure projects centrally: the costs come each time you actually have to do it. It is fairly low cost (though not costless) to announce the introduction of ambitious housing targets. Most of the costs come when people find out that that means new housing estates near them.

We don’t yet know enough about the ‘grey belt’ plans to know how frontloaded the political pain will be, but if the government drags out the process instead of doing it quickly, it will be another weight around its neck. Knight Frank has estimated that only about 1% of green belt land might be eligible for release, much of which will not be in very useful places. Tim Leunig has written today on this problem.

Despite its landslide in terms of MPs, Labour only won 35% of the vote. Maybe some of the factors that caused that (like Muslim voters voting for independents focused on the Gaza war) will fade away by the next election. Hopefully, for everyone’s sake, the economy grows quickly, and hopefully for Labour’s sake voters reward them for that. But there is every possibility that things look quite bleak politically for Labour in five year’s time. Will it still feel as bullish on forcing unpopular housing and infrastructure on marginal constituencies then as it does now? What if immigration doesn’t come down as quickly as Labour hopes – could Reform or a resurgent Tory Party sharpen people’s anxieties about that by tying that to the new housing being built near people?

How many houses is a lot?

Even if these plans do succeed, 1.5 million homes is really not that many compared to what we need. On average over the next five years it is 300,000/year – only 20% more than we managed in 2019. I don’t say that to knock it: 2019 was the most we’ve built for many years, and if we really do manage 1.5 million over this Parliament, it will mean we are building more annually towards the end of the Parliament than that.

But we are way behind where any reasonable estimate says we ought to be. In 2004, the Barker Review said the UK needed to build 297,000 homes a year. In practice, we’ve built about 150,000 a year since then – so that’s twenty years of a roughly 150,000 annual shortfall, or 3 million homes, just to catch up with where we “should” be. If you go by the Centre for Cities’s standard of reaching housing parity with Western Europe, we need to be building 442–654,000 homes per year for the next two decades.

And my view is that the UK needs to build vastly more homes than that.

Partially that’s because some parts of the country need to become much bigger than they are: Cambridge and Oxford, as 21st Century Cardiffs and Glasgows, could probably grow by 10-20 times. London might double in population size if we let it. 

Partially, it’s because a lot of the housing we have built, especially since the Second World War, has been small, ugly, poor quality, and sometimes unsafe. That includes both private housing built during the suppressed-demand years of the 1960s and 70s, and the council housing built rapidly and cheaply after the Second World War that ought to be replaced with larger, better-built homes for council tenants.

Housing policy should not just be about keeping our heads above water: it should aim to create the conditions where we can overhaul huge amounts of Britain’s existing housing stock. Everyone – social tenants, private renters, owner-occupiers – should be able to expect a home that is bigger, warmer, safer, more beautiful, and more liveable than most of Britain’s current housing stock.

These are not criticisms of Labour’s plans. If it sees them through, Labour will have done more on housing in one week than the Tories did in fourteen years. But they will not even begin to fix the problem.

A framework for actually fixing British housing

I think the three most important features of permanent fixes to Britain’s housing problems are:

One, they should be demand-led. Unlike housing targets, they should go where prices for new homes are highest, where the best jobs are, where there is the least vacant stock, and where council waiting lists are longest. That means lots more in places like Islington, Westminster, Lambeth, Cambridge, and Oxford – not just in line with their share of Britain’s population (which would still be an increase in many cases), but significantly higher.

Two, they should be scalable. This means that its political costs are frontloaded, with minimal further capital necessary to get stuff built after enacted. This follows the same model that allows software companies like Google and Facebook to build products that the whole world uses: high fixed costs (to develop and implement the products) and low or zero marginal costs from extra people using them.

Three, they should be durable. This means that once in place, it is difficult to reverse them. This normally means either by rewarding certain interest groups (like local authorities) for taking housing and infrastructure near them, or using opt-outs to allow the most passionate opponents to avoid things they don’t want, so they don’t bother campaigning against it nationally and don’t block the whole policy. 

Here are three examples of policies that are demand-led, scalable, and durable.

1. Estate regeneration

This would allow the residents of housing estates (mostly social tenants) to vote on developer proposals to redevelop their estate, adding new private market units and using the proceeds from those to pay for the redevelopment of their own homes. 

There have already been thirty ballots of projects like these around London, of which all have passed, some by incredible margins:

Estates can increase enormously in density: in Tower Hamlets, affordable housing provider One Housing is redeveloping 24 homes into 202, of which 50 percent will be rented at below-market rates. All 24 existing households will get new, higher-quality homes, and 84 percent of residents approved the proposals with 100 percent turnout. In Lambeth, 135 homes are being redeveloped by Riverside Group into 441 larger and higher-quality homes, of which almost half are submarket. This was approved by existing residents at 67 percent with an 87 percent turnout. The development comes with not only new homes, but new amenities like a gym, a community center, cycle parking spaces, and a new communal outdoor space.

Another proposal to replace 330 homes with 1,582 new ones, including 116 new socially rented units (a 45% increase), in an estate 30 minutes’ walk from Canary Wharf passed with 93% of the residents in favour with 91% turnout.

But at the moment the policy is not scalable because it requires the approval of the local council for a project to be voted on, and then the council’s approval again even after residents endorse it. Change the balance of presumptions so that residents can trigger ballots themselves, and the local council cannot block it without clearly defined reasons for doing so, and we could get many projects like this approved rapidly across London and the rest of the country. 

Because the value of the new homes determines how good the offer can be to existing residents, it is demand-led, and because stronger Estate Regeneration powers would create the prospect of better housing for estate residents across the country, it may be durable since these people would lose directly if the powers were scaled back later.

2. Permitted development rights for mansard roofs and upward extensions

A mansard roof is an extra storey added to a terrace house that looks to the outside like a sloped roof. The National Planning Policy Framework already includes recently-added language to favour these. At a minimum, Labour can just preserve this wording, it could go a lot further by clarifying further that any terraced home that wants to a mansard roof is allowed to do so, and the local authority cannot object except on the grounds of safety. (Houses in conservation areas and listed buildings should have to do mansards that are in keeping with the existing neighbourhood and/or property’s design.)

Doing this would be demand-led, because these terraced homes are some of the most valuable properties in Britain; it would be scalable, because it would apply to a huge amount of the existing housing stock; and it would be durable, because every terraced homeowner in the country – 6.93 million homes, 26% of the total housing stock – would gain a valuable right that they would fight to keep.

3. 100% business rates retention for strategic infrastructure

This one isn’t about housing, but it highlights how useful this framework can be. I wrote about this proposal recently with Ben Southwood, but the basic idea is to let local councils keep the full business rates bill from certain kinds of infrastructure projects in their area.

This is demand-led because the payments to councils are larger the more valuable the project is; it’s scalable because it applies to every project of this kind, rather than being done on a case-by-case basis; and it’s durable because local councils that could benefit from it will fight to keep it in place if and when it is introduced, because it benefits them so much. 

Maximum London

None of those three reforms are going to “solve” housing either. At scale, they might add a few hundred thousand extra homes over a single term, and a couple of dozen of billions of pounds of extra infrastructure. Importantly, they would do so in high-value cases. 

The only way to truly fix Britain’s housing market is to repeal or completely overhaul the 1947 Town and Country Planning Act (and its 1990 successor). I’m not convinced that that’s politically possible, and I don’t expect Labour to risk its majority for the sake of doing it. I also doubt it would be durable: I think the temptation for a Tory opposition to pledge to bring it back would be irresistible.

So here’s a second-best suggestion: massively upzone London. The Housing Secretary could do this without primary legislation by making a Special Development Order granting the right to build up to eight stories on residential land within the Greater London Built-Up area and within half a mile of any tube station, London commuter railway station, or Elizabeth Line station outside the Built-Up area.1 Places like Southall, Ilford and Gidea Park along the Elizabeth Line could get huge amounts of extra density. Anya Martin has described a version of this as the 1894 Plan.

They could couple this with new mechanisms for local approval of design codes, decided on by ordinary voters, not planners or architects, so areas have the option to get the sort of dense, beautiful buildings that exist in London’s most popular areas. Let Stockwell, Peckham and Hackney grow to be as beautiful as Bloomsbury, Kensington, and Marylebone.

This approach would meet two of my conditions. It would be demand-led, because London is where there is most demand to live, and within London the most housing would be built in the places where demand is highest. It would be scalable, because it would be a “one and done” rule.

But would it be durable? NZ Labour lost the election after its most ambitious nationwide upzonings. Nobody can ask Britain’s Labour to risk the same thing – and it already has experience of an electoral backlash after attempting an upzoning in Croydon in South London. But in New Zealand the upzoning that backfired applied across the whole country; doing it in Greater London only would limit the risk to a smaller number of seats, and could help Labour outside London if it meant fewer houses being needed elsewhere. 

But that might not be enough. In Houston, a Democrat-led city-wide upzoning was made durable by allowing parts of the city to opt out. Contiguous areas of London (ie, neighbouring blocks and streets) could, similarly, be allowed to opt out if 51 percent of the homeowners signed a petition to do so. This meant that areas where a majority of people wanted to keep things the way they were would be able to do so without obstructing upzoning in the rest of the city. The map above shows how little of Houston actually opted out this way.

As well as being good for growth and housing affordability, this sort of upzoning would complement Labour’s Net Zero plans, since walkable density reduces people’s reliance on cars to drive, and greater in-city density makes more public transport options viable. 

Obviously, this would require a lot more transit infrastructure. Here is one area where “land value capture” could be powerful. Landowners near a new Tube station will enjoy a large windfall in the value of their properties as a result. Taxing that windfall would allow us to capture a lot of the benefit of new Underground lines, and make it possible to pay for new ones altogether. 

The economic effects of this could be huge. I won’t re-do the Housing Theory of Everything any more here, but study after study estimates large wage, economic growth and innovation gains from making it easier for people to move to rich, dense cities. The effect is probably even larger in the UK than the US.

Incidentally, I would let other cities apart from London do these things as well, but leave it up to Metro Mayors to decide how and where to upzone in their areas. London is different: it’s Britain’s preeminent city, and one of the world’s most important cities. It is large enough that densifying it alone would solve a lot of Britain’s housing shortage, but small enough that this could be done without a fatal political backlash.

Don’t settle for half measures

There are two big reasons Labour might not do this. The first is just political: it would be a big move. But I think a significant amount of political pain is unavoidable in building new homes, and this approach has benefits over the slow grind that Labour is currently planning for itself. They might as well do the houses where they’ll produce the most new growth.

The second reason is intellectual – Labour is very interested in capturing some of the land value that arises when land gets planning permission. But unlike, say, a new Crossrail line, planning permission is artificially scarce. In a world where there was no planning barrier to building homes and infrastructure, there would be no land value uplift to capture from grants planning permission. So the better your reform is in terms of ending artificial scarcity, the less land value uplift there is to capture.

On the other hand, land value uplift from genuine improvements would be higher under this plan, because things like new parks and infrastructure, beautiful design codes, safer and cleaner streets, etc, would be enjoyed by more people in any given area. Developing a way to capture that uplift would be a sensible way to pay for more of them.

It is to the new government’s immense credit that it understands the fundamental problem with Britain’s economy. The measures it has announced are decent, but can only be the first step to fixing the housing shortage. The framework I’ve set out might help the government to think about effective smaller improvements to the system, like the 100% business rates retention policy that could make councils happier to take new prisons and data centres. Piecemeal improvements like this are the most likely path to fixing the problem.

But remember how far we are from where we ought to be: we could be as rich and dynamic as America, with a welfare state surpassing that of Denmark or Sweden. That’s what growth gets you, and we all agree that more housing is how to get that growth. So let’s really go for it. Take away the limits on London’s growth, let it become the beautiful, dense, booming global capital that it wants to be, and create a Britain with better, cheaper, and more abundant housing than we’ve had for almost a century.

Overriding local objections will help. But we already use national decision making for a whole range of projects, and these projects are still regularly blocked by the intense opposition of local interests. The £1.35 billion Aquind Interconnector in Portsmouth would add 2,000 megawatts, or 16 terawatt hours a year, to Britain’s electricity supply – about as much as a medium-sized nuclear power station, and enough to power twenty large data centres. The final decision on it was made by the Business Secretary, instead of Portsmouth council, but he still ruled against it because local objections (including from Penny Mordaunt, the local MP) were so strong. (That decision was overturned by a court, but a revised decision still hasn’t been made. Presumably the Conservatives decided to leave it for Labour to handle.)

Even if locals won’t ever welcome something like a new prison near them, we might be able to soften the blow enough to make it politically possible to get national-level approval.

We propose a straightforward way to get more buy-in from locals, on top of what Labour is planning: for the kinds of infrastructure projects deemed to be nationally important, let the local council retain 100% of the project’s business rates bill, permanently, instead of up to 50% that they would retain temporarily under the status quo.

This can be done quickly, doesn’t need new legislation, wouldn’t involve any new spending or borrowing, and could be targeted at the things most urgently in need of building – things like data centres, prisons, nuclear power stations, and other green energy projects. And it would only apply to new projects, so no existing tax revenues would be affected.

Build absolutely nothing anywhere

Everyone knows the UK has a huge problem with building infrastructure of all kinds. 

• Last November, a £2.5 billion data centre project next to the M25 (the motorway that circles London) was blocked on the grounds that it would spoil views from pedestrian bridges over the motorway. 

• Earlier this month, a campaign was started to oppose what would be Europe’s largest data centre project in Havering, though the council is (so far) supportive on the grounds of the tax revenues and jobs it would bring.

• In March, the BBC reported that prison overcrowding has gotten so bad that convicts could be released months earlier just to free up space for new prisoners. They will be released earlier from prison sentences that are often already notably short, even for the most violent criminals, apparently because judges are trying to avoid giving long sentences that exacerbate the overcrowding problem. 

• Britain has not built a new reservoir in thirty years; water shortages are being cited as a reason not to build new homes in Cambridge. Oxford MP Layla Moran has led an tireless campaign against building a new reservoir in Abingdon, just outside Oxford itself, telling the water company to fix leaks to save water before building new reservoirs.

• Britain’s last nuclear power plant was built between 1987 and 1995. Two are in progress, one of which is the most expensive nuclear plant in the world, and they are only expected to come online in 2031 and around 2036.

• The Boris Johnson government repeatedly promised to dual the A1 North of Morpeth, the main road between Scotland and England, repeating a promise David Cameron had made, but not delivered on, in 2014. Consent was finally given in May this year.

• The Lower Thames Crossing – a proposed new tunnel under the Thames, about 10 miles east of the existing Dartford Crossing, where the M25 crosses the river – has cost £267 million just to plan, including producing six consultations and 359,000 pages of documents, largely to defray local objectors and reduce the risk of being judicially reviewed by locals. Norway’s Laerdal tunnel is six times longer and cost only £100 million to plan and build.

  

Much of the time the problem comes down to these projects having benefits that are widespread across the country, and costs that are concentrated in the local area that the project is trying to get built in.

How business rates encourage development

How did projects like these ever get built? In part, because local governments were rewarded for it. Business rates (officially ‘non-domestic rates’) are a tax paid by businesses that have existed in some form since 1601. Today, rates charge companies for the property they occupy, at 51.2 % of their rateable value, an estimate of how much they are worth annually in rent. Heathrow Airport today has a rateable value of £210 million and pays over £100 million in business rates each year, whereas a typical shop on a London high street might pay £1,500 to £3,000 annually.

This system has an obvious downside: businesses pay higher bills if they invest in their property, so there is a tax disincentive to that kind of investment. As both of us have pointed out, this can be an important disincentive to manufacturers investing in new equipment: Tata Steel’s annual rates bill at Port Talbot rose by £400,000 after it rebuilt the steelworks’s blast furnace.

But one important upside of business rates is that local communities get some benefit when valuable investments are made in their area. For example, Brixton Prison has a rateable value of £545,000, meaning it pays £279,040 every year, of which about half is retained by the local authority (Lambeth). Local residents might prefer it wasn’t there, but they do see some benefit from it being near them, since the council can then spend the money on local services like street cleaning, bin collections, upkeep of parks, and social services. Or they can use it to cut council tax.

Between the 1600s and the Second World War, local councils retained 100% of the non-domestic rates paid in their area. They also set the percentage rate it was paid at, whereas today the rates and reliefs are uniform. This meant that the construction of a new prison, shopping centre, or electricity substation, for example, would mean a new revenue stream for the local authority. So while locals would still face the frustrations of living near these projects, they’d also enjoy some of the benefits from them as well. What could be a win/lose was, in some ways, a win/win.

This started to change in 1948, when rates began to be ‘equalised’ between areas, meaning that central government paid for most of local government spending through block grants, giving local governments that raised less money through local rates more money in block grants. This meant that there was less and less point in raising money through rates, because less money raised would be offset by higher block grants. By the time the system was scrapped in 1988, £1 extra in rates tended to mean almost exactly £1 less in central funding. 

The current system was brought in in 1990. Now, councils could not vary the tax rate, and the money raised from business rates went entirely into a central pot, to be redistributed back to councils according to need. Tower Hamlets council has a good explainer of how it works here.

Since 2012 local councils have in theory retained 50% of what they collect, but what could have been a positive step was fatally undermined by making the retention only temporary. The plan was for all uplift gains to be reset in 2020 and returned to central government, meaning that the benefit to councils was tiny. In practice, the Conservatives fumbled it even worse than this: they delayed the reset until 2025/6, meaning that local governments got to keep a few more years of uplift, without having been incentivised by that to accept development in the first place.

This didn’t happen to every council. The City of London got a special deal after 1990, and was allowed to set the details of, and keep a substantial portion of, its own business rates. Outside of development corporations like Canary Wharf (and partly spurred by the competition created after 1988) it has clearly been the most permissive area in London for commercial and office development. 

Other similar mechanisms have also ‘greased the wheel’ of local consent. The Shetland Charitable Trust was set up in 1976 to collect ‘compensation’ paid by oil companies in exchange for the construction of the Sullom Voe Oil Terminal, which receives, stores and exports North Sea oil and gas. Since that time it has given out £320 million to local charities and the 22,990 residents of the islands. 

Getting data centres built

Data centres are clusters of tens of thousands of extremely powerful computers that store and process most of the activity that takes place on the internet. They are now becoming even more important as artificial intelligence grows in power, driven primarily by the amount of computing power available to it (rather than by more sophisticated models). Data centres are also extremely energy-hungry: Brian Potter writes that:

large data centers can require 100 megawatts (100 million watts) of power or more. That’s roughly the power required by 75,000 homes, or needed to melt 150 tons of steel in an electric arc furnace. Power demand is so central, in fact, that data centers are typically measured by how much power they consume rather than by square feet.

The UK cannot grow its domestic AI sector – one of the few reasons for optimism about Britain’s economy – if we do not make it easy to build data centres and the energy supply they rely on. But the same objections that have hamstrung the country’s ability to build housing and other infrastructure are now preventing us from building these as well.

The UK’s biggest existing data centre campus is Virtus, at Stockley Park in Uxbridge. There are four data centres there, with rateable values of £4.4 million, £2.5 million, £4.2 million, and £3.4 million. Together, they will pay about £7.4 million in business rates annually. The 50% share of that going to local authority Hillingdon, or about £3.4 million, is equivalent to the council tax they get from 2,600 band D households with far less of the spillover and infrastructure costs that new housing involves (e.g. little need for new schools and hospitals). 

Our proposal is to allow new projects of certain kinds – data centres, prisons, nuclear power stations, and probably some other types of infrastructure – to have their entire rates bill go to the local authority permanently, not just 50% of it temporarily. 

Rates from existing data centres (and prisons, and other infrastructure included in this policy) would continue to be split between the local council and the centre as usual. Nothing would change for anything that exists right now. But a new data centre or prison would pay its rates entirely to the local council, for as long as it was around. 

This would mean that a local authority that gets a new project of the scale of Stockley Park would collect the entire £7.4 million/year rates bill that it pays, not the £3.7 million it would under the current regime until the reset. In other words, the fiscal reward for accepting it would be twice as large as it is now. 

To put this in context, this would completely cover Havering council’s adult social care overspend if it was built there, and the entire overspend of the average District council.

Under this approach, local councils would have a much higher incentive to accept projects of these kinds. The tax take from them would be at least twice what it is under the current regime, so the compensation to the council – and, hence, the area’s local residents – would be double what it currently is. While this would not eliminate NIMBY objections to these projects, it would weaken them. 

This would create a carrot to go along with the stick Labour is proposing. And, as we suggest, we could extend it to other nationally important infrastructure like prisons and new energy supply. Along with the need for data centres, new prisons are clearly needed to allow us to imprison dangerous and repeat offenders for long enough, and do so in humane conditions. (More modern prisons might also help us to improve rehabilitation, lowering crime that way as well as via incarceration.) As well as the direct need to supply data centres with power, building more nuclear power plants and other low carbon sources of energy is vital if we are to have any hope of achieving Net Zero at all, let alone in a way that involves energy abundance rather than extremely costly demand suppression.

In fact, the national need for these kinds of infrastructure projects is so great that there is a case for greater than 100% rates ‘retention’ – ie, some kind of top-up from the rest of the country to areas that permit essential infrastructure to increase the incentive to accept these projects even more. And there may be a case for contributing to other local governments as well as districts, like neighbourhood forums, parish councils, and city mayors. But this would obviously be more costly to enact than what we’re suggesting here, and we recognise that funds are scarce.

Doing this would be surprisingly easy. It would not need any new primary legislation, other than a line in the next Budget’s finance bill.

 It can be done without changing any existing revenue streams. The only loss in terms of expected future revenues would be for projects that would have happened anyway under the status quo. But if these projects wouldn’t have been built under the current system this cost doesn’t apply. 

The other small downside is that there will be a that local councils will be more inclined to support these projects over ones that do not come with full rates retention, if they have to choose between them. We think this is probably very small, since it will only be a problem where a council has to decide between a project like this and another equally or more valuable project – eg, for the same site – but it is still a downside worth acknowledging.

The approach we outline would not solve every problem. Locals often still object to projects with high rateable values. People may not always see or feel the benefits of higher tax revenues going to their local authority, let alone connect the dots between a high profile project, its business rates bill, and funding of the local services they use. We realise that extremely few people see things that way. But local councillors are more likely to understand, and they may decide that the prospect of a larger revenue return from a proposed project is worth the political flak they will take from their constituents if it goes ahead. They may also be able to communicate the benefits to their voters in more tangible terms that assuage their objections enough to get it built.

Getting the delivery right

We think this approach would go well with Labour’s proposals, though we have some concerns about the details of Labour’s plans and suggest they could be modified to work better. Labour is considering applying the 'National Significant Infrastructure Projects' process to more types of development, where development is permitted through a Development Consent Order. This system is slow, and developers often deliberately avoid it to use the normal planning system. There are other options worth considering for some of the projects, like Special Development Orders or just using the Housing Secretary’s existing, nearly unlimited powers to rewrite local plans to permit the strategic development. 

But whatever mechanism Labour picks, it will not fully solve the problem. Local concerns about developments can still be effective at the national level – the campaigns against the A303 Stonehenge Tunnel (which was also granted a DCO) and the Aquind interconnector in Portsmouth are proof of that. One small, easy-to-enact change to business rates could go a long way to helping Britain to build things again.

The ISA is basically the best thing about the UK's tax and savings regime, from my point of view. In a country that gives gigantic tax breaks to investment in one's house – with ruinous effects, since most people are invested in a single asset that shouldn't even really be a financial asset – it is one of the only places you can put your money as a normal person and watch it grow untouched. While extremely wealthy people can avoid tax on a grander scale, in economically wasteful ways, the ISA is available to everyone, and unlike most tax avoidance schemes, it is economically efficient to not have a tax penalty for forgoing consumption to create more output. It also allows you to avoid the hassle of calculating dividends and capital gains, which is a huge pain in the ass if you don’t have an accountant to do it for you.

Full disclosure: I've tried to live semi-frugally over the last decade or so of my life, and have put most of what I've saved into my ISA. My ISA is a big part of my financial planning for my future: I have pursued an unorthodox career path, and having a decent pot of money I can fall back on means I can take more chances without threatening my family's wellbeing.

The broader effects of the ISA are good too. Savings are good generally, since they make people more resilient when times are tough – we don't pay Universal Credit to people with more than £16,000 in savings, for example, because we reckon they can look after themselves until they run those down. And more investment is good, so avoiding taxing it means we get more of it.

This last point is an important part of the case for ISAs, including the fact that, in principle, UK ISA savers are probably making their savings available to British businesses to invest. That is one reason that capping ISAs, as was proposed last year, would be a mistake. So it may be easy to think that we can make ISAs even better for Britain by saying that you can only use them to invest in British firms.

That is what a collection of British investment funds have called for, and Bloomberg reports that the government is considering doing it in its budget next week. If the government does go ahead with this, I think it would be a pretty huge mistake, and one of the worst cases in recent times of corporate lobbying making people worse off. Here is a list of the companies lobbying for it. (Note that this post assumes the government plans to replace the ISA with a “Brit ISA”, as these companies have called for. It’s no big deal if they just create a new allowance on top of existing ones.)

First, understand what's at stake for people who use ISAs to save. Below is a chart showing total returns over the last ten years from investing in different funds that track the US stock market (the orange and yellow lines) versus funds that invest in the UK stock market (the red, white and green lines). This assumes that you re-invested any dividends that were paid out.

The total return from investing in the S&P 500, the most common US stock market index to invest in, was 227.9% over the past ten years. So in other words, if you had £10,000 and invested it back in 2014, you'd have about £32,790 today. 

The total return from investing in the best performing UK index, the FTSE 100, was 23.75% over that time – nearly ten times less than the S&P 500. So if you'd invested in that, you'd have £12,375: about £20,000 less than if you'd gone with the S&P 500. (You’d actually be poorer in real terms.)

So the first problem with the British ISA proposal is pretty straightforward. If the government had done this ten years ago, British savers would be much poorer today. A lot of people probably wouldn’t have bothered saving at all, if the only tax-free option was a real-terms loss in the anaemic FTSE 100.

The second problem relates to the importance of diversification. We should not expect that the next ten years will look like the last, and I am not telling you to invest in the S&P 500. For what it's worth, I am invested in an All-World fund, for maximum diversification across equities. The lesson above is not that we would all have been well-advised to pile into US equities in 2014 – we didn't know what the future would hold. The lesson is that being concentrated in a single country could have been fantastic, or it could have been – in this case, if that country was Britain – catastrophic. 

This goes doubly if you live in that country and it is a small market in global terms. In that case, somewhere between 90 and 99% of your life is already "invested" in that country already. Your salary, your current and future employers' prospects, your state pension, your future tax burden, and the wellbeing of all the public services you rely on are already unavoidably sunk into the UK’s fortunes, along with many other parts of your life.

If Britain does well in the future, as I dearly hope it will, anyone who lives here is already exposed to it well enough. If Britain does badly, however, anyone who lives here will be glad to have hedged by putting some of their liquid savings abroad. 

The third issue is that this doesn't solve any of the problems it's supposed to. The assumption here is that there are loads of UK companies that would grow rapidly if they only had more access to money. But if that's wrong, and returns are low for any other reason, then forcing more money in will do the exact opposite of what is hoped, and just drive returns down even more! It’s a matter of basic supply and demand: if you have more capital in the UK, then, other things being equal, the price of capital in the UK will fall.

Investment is low in Britain because opportunities for profit are scarce. This is because costs are high. There should be enormous amounts of productive investment in the creation of things like houses, railways, roads, airport runways, and energy generation – the high prices of these things is a strong signal of very high demand for more. But there isn't, because the costs of building those things are much higher than they ought to be, and in many cases infinitely high, because they're either incredibly difficult to get permission for, or they’re banned outright. So the cost of these investments is very high, and then the cost of other investments is high because the input costs of labour, transport, premises, and energy are all high as a result as well.

For a long time, we taxed investment returns from investment in physical capital like machinery and buildings more than we taxed spending on wages or pens and paper. That is another reason that investment has been low, and it's very good that we have begun to fix that. 

(There are lots of other reasons the UK isn't a great place to set up a high-growth company too – in my opinion, these reasons include: our interventionist competition authority and policy; a general preoccupation in politics with eliminating risk and harm over encouraging experimentation and progress; our high taxes on high earners; post-Brexit trade barriers with Europe; cultural factors that downplay the virtues of entrepreneurial risk-taking and overplay the virtue of fairness; and probably just the fact that America speaks English, so it’s easy to go there if you’ve got a lot of potential. Some of these, especially as they relate to corporate governance, have apparently been directly responsible for the UK stock market’s poor performance.)

I think a problem we have is an over-focus on the word "investment", and I am as guilty for this as anyone. Yes, investment in the UK is too low. It's good that everyone now agrees about this. But forcing more investment through schemes like this, without tackling the underlying reasons for low returns, is exactly the same as subsidising demand in the housing market instead of building more houses.

One striking thing highlighted by the Resolution Foundation is the finding that, in an accounting sense, UK returns are actually high compared to elsewhere. It might be easy to look at this and think that the problem is investors, not the investments themselves – until we remember the chart of returns at the top of this piece.

So what explains this apparent paradox? The answer is that the returns on investment shown in the Resolution Foundation chart don't factor in things that don't make it off the landing pad to begin with, for regulatory reasons. If you can only build the most profitable solar farm, because the costs of getting permission are so high, then returns on solar farm investments will inevitably look really good, even though we would be much richer if we could build more with a lower return. If we made the bottom 80% of the labour force unemployed, average wages of people in work would be sky-high, but it would not be a productive society overall.

So even though it's great that people want more investment, how we get it matters a great deal. We can try to lower costs for businesses by making it easier to build stuff, and see higher investment from domestic savers and foreign investors as a happy result of the UK being an easier place to build stuff and grow companies. Or we can listen to the British investment funds lobbying to ban people from investing overseas so they're forced, instead, to save their money with – guess who? – them. I’m with John: a windfall tax on the companies proposing this, and similarly naked rent-seeking measures, would give a much bigger boost to UK Plc.

This “Great Stagnation”, as Tyler Cowen dubbed it in his 2011 book, has been the focus of much interest and concern. I have even made and presented a BBC radio documentary looking into it. (For what it’s worth, I think one problem is that we’ve made science more bureaucratic and deferential to authority.)

Last week, I spoke at Civic Future’s conference on the topic, focusing on how it related to the UK. When it came to the UK, I said I thought it was the wrong question.

A slowdown in “frontier growth” and technological progress matters a lot for the United States. But it matters less to Poland or Bangladesh – countries that are still trying to get to the frontier. While technological advances do still benefit them, most of their growth comes from using their existing inputs, like land and labour, in more efficient ways that are not technologically novel, or adding more capital that, again, is not technologically novel – some agrarian developing economies can grow simply by adding more tractors; no developed economy can. 

For these developing countries, the challenge is to catch up with the world’s advanced economies, and they can still have rapid improvements in their living standards without the need for global technological progress at all.

My claim is that the UK is now a lot more like Poland than it is like the United States in terms of the kinds of growth it needs to do – driven by improved use of existing technology and inputs, and accumulation of capital, rather than driven primarily by technological advancement. With the exception of a few sectors like AI, we are so far behind the frontier in terms of economic development that worrying about technological progress doesn’t make much sense, and at worst is a serious distraction. 

Here are some statistics that might put it into perspective how far behind the frontier the UK is.

• By GDP per capita, adjusted for purchasing power, the US ($76,399) is 39% richer than the UK ($54,603). GDP growth since 2010 has been 47% faster – nine percentage points – in the United States (28% growth) than the UK (19% growth), despite being from a much higher level.

• By productivity, or how much we produce per hour worked, the US was 38% more productive than the UK (UK $54.3/hour, USA $73.7/hour) in 2019. France / Germany were much closer to the US than to the UK at $69/hour.

• Between 2010 and 2019, productivity growth was twice as fast in the US (8% growth) as the UK (4% growth).

• Americans could stop working each year on September 22nd and they’d still be richer than Britons working for the whole year.

• Or, as Mike Bird pointed out, a car wash manager at an Alabama Buc-ees, a chain of gas stations and grocery stores, earns more ($125k/year) than THREE median UK salaries.

• The average starting salary for a newly-qualified nurse in the US is over £42,000, compared to only £27,000 in most of England, and the gap only widens as their careers progress.

• UK real disposable incomes are not forecast to return to 2021 levels until 2027.

And many input costs are higher in Britain than America.

• A median square foot of housing in the US is about half the price of the median square foot of housing in the UK (about $225 or £173 in the US, versus £331 in Britain).

• The median industrial price of energy even before the Ukraine war was 7 cents per kWh in the US and 19 cents per kWh in the UK.

• The industrial price of energy tripled in the UK between 2004 and 2021, or doubled relative to other prices.

• Annual energy use per person in the US is 77,000 kWh; in the UK it’s 30,000 kWh. 

• Annual electricity generation per person is 12,700 kWh; in the UK it’s 4,800 kWh.

UK GDP per capita is about to be overtaken by South Korea and Slovenia. If the UK continues with the same rate of growth it has enjoyed over the last decade, then Poland will be richer than Britain in about 12 years’ time.

As exciting as AI and other frontier technologies are, pinning the country’s hopes on them misunderstands how far behind the US we are across the board.1 The US isn’t rich just because it has a big tech sector: every single US state is richer per person than the UK, even places like Mississippi and West Virginia without big tech or advanced manufacturing sectors.

The UK is thinking like a frontier economy when it should be thinking like a developing country. We’re well off by global standards, but poor by the standards of the frontier. And how rich we get mostly won’t be determined by the Great Stagnation, but by more mundane factors like the cost of energy, the supply of housing and infrastructure, and returns on capital investment.

In a way this is optimistic: the UK has a policy problem, not a fundamental scientific one. 

But there is one problem. There is virtually no recognition of how bad things are among British elites. Stefan Dercon, author of Gambling on Development, has a theory about what allows developing countries to experience sustained economic growth: they need their elites to come to an agreement to pursue it. The reforms needed to grow are painful and unpopular in the short-run. Regimes that do them without an “elite bargain” behind them are opening themselves up to being removed. Similarly, when one party in the UK proposes planning liberalisation, almost inevitably the others swing heavily Nimbyish.

In the UK, the preoccupations of the “elite” – by which I mean the people, left and right, in politics, government and media whose views shape those of the country – are with things like Net Zero (above all), inequality, obesity, delivering Brexit, regulating Big Tech, data ethics and privacy, cutting immigration, gender and racial pay gaps, and other priorities that are either unrelated to, or diametrically opposed to, making the country richer. If growth gets mentioned at all it is usually to support some unfunded and poorly targeted tax cut. On the flip side, every proposed tax or spending cut is assessed in terms of its distributional impact, not its effect on growth.

There is no recognition of the UK’s poverty and low growth relative to the frontier, and a lack of seriousness about how important this is.2 Even degrowth is a fashionable idea in some circles.

When we talk about building more housing, which is probably the biggest single fix for the UK economy, elites rightly attack Nimbies a lot. But they also repeat obstructionist memes like embodied carbon, nutrient neutrality, condemnation of “luxury housing” and foreign owners, biodiversity net gain, and even the completely silly idea that housing costs aren’t really high at all, and high prices are a product of low interest rates alone. Oh, and mandatory bee bricks.

These are not serious ideas because Britain’s elites are not serious about anything other than managing public opinion. It is encouraging that Keir Starmer has prioritised housing recently, but I worry that when the rubber hits the road, he will run into the same pettifoggery and opportunism that proposals for new housing usually face.

Energy is no better. Most elites have an uncritical assumption that we will somehow work out the problems with wind and solar before they are such a large share of supply that their intermittency problems – ie, the fact that the wind doesn’t always blow and sun doesn’t always shine when we need it to – really bite.

Few realise that “levelized cost of energy” estimates flatter wind and solar by ignoring most of the costs of intermittency, and that without a deus ex machina of storage that is orders of magnitude cheaper than our current options, more wind turbines mean continued reliance on gas as a back-up, all year-round, or rolling blackouts. I almost wonder if people assume that these problems are so obvious that someone important must have realised and solved them. But they haven’t, and the path we are on is likely to be even more expensive, and less reliable, energy than we have today.

Even marginal improvements we could make to speed up development are off the table. To give one small example, there is zero discussion of, say, the Aarhus Convention, which caps unsuccessful plaintiffs’ legal damages at £10k for failed challenges to huge infrastructure projects, no matter how costly the uncertainty and delays they cause are.3 Indeed, Theresa May’s government expanded this protection to more kinds of legal challenges, and barely anyone noticed or cared. 

So if you buy my two theses – that the UK should focus on catch-up growth, and that elites here aren’t remotely prepared to support what’s needed to achieve that – then those of us who want the UK to be more prosperous have two choices.

Either we try to win over elites, or try to do things that are unambiguously win/win that drive growth and don’t need widespread elite support.  

Lately, I have leaned towards the second approach. I am fond of the idea of street votes, and think we could use this principle of “Coasean democracy” in other areas to bypass opposition and get stuff built, by sharing the benefits with the local veto holders who would otherwise block things. 

Maybe an elite bargain is possible. Labour’s pro-housing stance is encouraging, and even the current government has quietly done a few things to improve things recently. Maybe I’m overestimating the importance of elites and, as Britain Remade believes, maybe you can convince voters directly, who might be more interested in the cost of energy and rent. Or maybe we can “prime the pump” with growth that comes for other reasons, like fixing housing via some of the methods above, and that environment makes it easier to do the other reforms that we need. In any case, the sooner Britain realises that it is a lot poorer than it ought to be, the sooner we can start to change that.

A new proposal to densely redevelop more of the estate would have replaced 330 homes, of which 252 were for social (subsidised) rent, with 1,582 new ones, of which 368 would have been for social and 79 for “intermediate” rent (subsidised, but not as much). So a net gain of 1252 homes, including an extra 116 subsidised properties.

The housing association proposing the scheme put the proposals to a vote of existing residents, which would have guaranteed everyone who was displaced a new home in the redeveloped estate, plus cash compensating them for their trouble. With 91% turnout, 93% of voting residents voted in favour of the plan. 

But the borough’s “strategic planning committee” objected, so the proposals have been put on ice. There’s a good discussion of why here – the reasons range from objecting to repurposing a road for pedestrian and cyclist use to ideological opposition to building privately rented housing among the Labour- and Lutfur Rahman-aligned members of the committee.

Well, whatever. There’s always something. A few years ago, a Tory-led campaign managed to stop 2,000 homes from being built on the site of a petrol station in Mudchute, 20 minutes’ walk from Canary Wharf, because the petrol station was just so important. (There’s another one six minutes’ drive away.)

What intrigues me here is how stark the divide is between the people most directly affected, who overwhelmingly supported the scheme, and the much further removed people who have been able to block it on the basis of not very much.

It’s hard to shake the feeling that the UK is in a bit of a lurch at the moment. That chart of productivity – output per hour worked – just flatlining for the past fifteen years is incredibly bleak, and even when we (surely?) do get a bit of growth sooner or later, we’re so much poorer than we could have been. A lot of the country’s present misery – high inflation, barely-functioning public services, and incredibly difficult lives for way too many people – is the result of this.

It won’t be a surprise to read that I think that supply constraints are the biggest things to blame. The big four, as I see them, are housing, childcare, transport and energy. The first three of these relate to “agglomeration” – the aggregate increases in productivity and innovation we get from letting people live and work near each other. That’s the root principle behind the “housing theory of everything” – a city is greater than the sum of its residents, because being close together lets them specialize and collaborate more deeply, and generate more useful ideas together, than if they were working in smaller towns, or alone.

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In Britain, we have one big, rich, prosperous city that’s very expensive to live in, plus a handful of much smaller rich towns and cities like Oxford and Cambridge, and lots of other much less productive cities and towns. Too little housing makes it harder for people to move to the productive places and take better jobs there, increasing overall productivity through the magic of the division of labour. 

Childcare being expensive means parents have to choose between either working part-time or moving to where childcare is cheaper – it’s £1,700/month per child around where I live in South London, and I have at least one friend considering leaving London altogether to go somewhere more affordable.

Too little transport infrastructure exacerbates these problems by limiting where people can live and work – if you can’t easily commute from somewhere into where certain jobs are, you’re less likely to take jobs in those places. That is one reason that our second-tier cities tend to be so unproductive – the effective size of the city is quite small, because poor transport links make it impractical for people on one side of the city to take jobs one the other side of that city, limiting the amount of agglomeration that can take place.

I tend to think of agglomeration as being the big determinant of the intangible economy – things like finance and software, where intelligent people are the most valuable input. Energy I think of as being the fundamental input into the tangible economy, being a major determinant of how cheaply we can make physical stuff. Ed Conway is doing brilliant work on this, but here are a few charts that may illustrate just how bad things have gotten in the UK.

First (above), the industrial price of energy tripled in the UK between 2004 and 2021, or doubled relative to other prices, and has risen even more brutally again since the Russian invasion of Ukraine. Even if it falls back to “normal” levels, those are still much more expensive than they were less than twenty years ago. (Note that the “relative prices” figure here isn’t really akin to “real terms”, because as we have learned in the past year, the cost of energy itself is a big determinant of inflation, because it affects the price of so many other things we produce. So adjusting the price of energy for inflation may understate how big the rise has truly been.)

Second, from Where Is My Flying Car?, a chart showing the flatlining in energy consumption per capita in the United States from the 1970s onwards (a trend reflective of the wider developed world, including Britain).

Third, total energy use per person for the United States, France, Germany and the UK. As you can see, the UK’s energy use per person has always been way behind that of the United States, flatlined earlier, and fell behind both Germany and France in the post-war era. 

Fourth, electricity generation per person for the US, France, Germany and the UK. This highlights that we are massively behind on electricity generation, which is extremely worrying given the gusto with which we’ve abandoned fossil fuels. We’ve been patting ourselves on the back for our great lead in emissions reductions without providing a cheap alternative source of energy – as we can see, electricity generation has fallen even as we’ve tried to move away from gas and petrol as sources of energy for heating and transport (and, of course, from these and coal as sources of electricity).

Britain’s de-industrialisation looks like less of a surprise when we see the cost of manufacturing’s most vital input, energy. And so far, Britain’s climate change / Net Zero policy seems to be solely about reducing our access to cheap forms of energy, with little being done to create workable alternatives. How are you going to get people to adopt heat pumps instead of gas boilers when per capita supply of electricity has been falling for the past twenty years?

I used to wonder: why is France so rich? Despite its famously restrictive labour market regulations and high taxes, postwar France has consistently been about as rich as the UK, or richer. And it is significantly more productive, even when you adjust for France’s higher unemployment rate (which might flatter the productivity stats, by leaving out less productive workers at the bottom – but note that the linked Piketty piece does a very rough-and-ready adjustment). France gets so much wrong, and yet it still does pretty well on the metrics that actually matter.

I used to think France’s success was a result of its history as the early modern European superpower. Centuries of accumulated wealth and cultural success, on top of one of the most bountiful geographies on earth, meant that it could coast for years on its past glories, in the same way that Victorian infrastructure and buildings still provide a lot of value today in Britain (most of our railroads are Victorian, for instance).

But Ben Southwood has convinced me that France is rich because it gets the big things basically right. Housing supply there is freer: the overall geographic extent of Paris’s metropolitan area roughly tripled between 1945 and today, whereas London’s has grown only a few percent. Infrastructure is better: 29 French cities have trams, versus 11 here (likely one reason its second-tier cities are much more productive than Britain’s). It has nearly 12,000km of motorways versus around 4,000km here – and French motorways tend to be smoother and better kept (and three quarters are tolled, making congestion much less of a problem). Childcare is cheaper: about half the price per month, in part because they require half the staff. Energy is more abundant, as shown above. Because it gets those big four things right, it can afford to get a lot of other things wrong.

So why does the UK get these things so badly wrong? To a significant extent I think it’s because we make them more expensive than they need to be, and don’t allow enough to be built. On the former case, each sector has its own problems. Jack Devanney has done vitally important work on nuclear power costs, and points out that by copying a country like South Korea we could get nuclear power plants that are as much as 80% less expensive than the ones we try to build today.

Childcare is another case – the number of registered childminders in the UK has fallen by 80% since the 1990s (and is still falling), probably driven by increasing requirements for qualifications and “death by a thousand cuts” mini-regulations, like the fact that a childminder today has to register with the Food Standards Agency and keep a legally-required “food diary” recording what food products you have bought, who you bought them from, the quantity and date, and log incidents like having “found a pack of sliced ham out of date in the fridge”.

But a general cause of these things being too expensive is that the UK has become a vetocracy, where a few people can wield a veto on new supply. This is formally the case when it comes to stuff like onshore wind, which we say is “banned” but, in actual fact, is permitted – unless a single local resident objects. It is de facto the case for housing and other property, where local groups influence both local and central government to stop new houses being built near them. I won’t get into the problems with housing again, but note as well that the cost of office space in Birmingham is 44% higher than it is in Manhattan, and that UK cities are desperately short on lab space: London has 90,000 square feet of available lab space, and Manchester 360,000sq ft, whereas New York has 1.36 million sq ft, and Boston 14.6 million sq ft of lab space.

This has the very significant knock-on effect of raising childcare costs by making it harder for people who would work as childcarers to live in cities – this is why childcare costs can vary from £2,615/month in some parts of London to a still-eyewatering £990/month in Lincoln – and of making their premises extremely expensive.

It’s true for energy and transport infrastructure too. Penny Mordaunt, twice runner-up for the Conservative Party leadership over the past year, has led local opposition in Portsmouth to the Aquind Interconnector, a set of electricity cables that would allow us to draw more electricity from France when, for instance, the wind isn’t blowing here (France’s electricity supply mostly comes from nuclear power, which does not have the same intermittency problems that wind power does). That interconnector could supply 5% of UK electricity demand (for context, the nuclear reactor at Sizewell will supply 7%), but it was blocked by Kwasi Kwarteng when he was Business Secretary, perhaps influenced somewhat by Mordaunt, his then-colleague in the Cabinet.

The bureaucrat’s answer to this is consultations where locals can “allow their voices to be heard”, and the project hopefully tweaked to “address their concerns”. They please no-one, because they look like a whitewashing exercise, but still create triggers for judicial review and gum up the process of development. 

Anton Howes has done a good job of documenting some examples of these. The Lower Thames Crossing, a proposed tunnel under the Thames Estuary between Kent and Essex, downstream of the Dartford Crossing, has had five consultations since 2017 and still does not have permission to build. A 10-mile stretch of road between Cambridge and Milton Keynes had four consultations between 2017-20, and even though it was finally given permission in 2022, it has been delayed again by a judicial review. Sizewell C, one of the new (and wildly expensive) nuclear reactors we’re trying to build, held four consultations between 2012 and 2019 before submitting its application, and another three more in 2020 and 2021 while waiting to hear back. 

By the way, there is very little cost to challenging a project you don’t like under judicial review. Thanks to the Aarhus Convention, plaintiffs’ costs are capped at £10,000, so local groups face little risk in challenging huge projects, even if those challenges fail and the delays they’ve caused raise costs by far more than that. (By the way, the government extended these cost caps to more types of challenges in 2017, making it cheaper to challenge planning decisions made by the Secretary of State or the Planning Inspectorate. Seriously.)

The obvious solution to this problem is “take away the vetos”; smash the NIMBYs. It’s obvious, but it doesn’t work in the UK. Ever since the modern planning system itself was set up, there have been efforts by well-intentioned governments to force through housing against the wishes of local residents. (I highly recommend that linked piece.) The Parliamentary system we’ve got makes it very hard, even for a determined government, to brute force through the developments that we need. And when they have tried, they’ve often done so with projects that are so grotesque, like the plan to bulldoze over inner London neighbourhoods with a motorway, that they have lost any benefit of the doubt that people might give them, and made people even more suspicious of developments in future.

At the moment, we mainly try to get stuff built by fighting on a case-by-case basis – using local plans and housing targets to force areas to take housing and other infrastructure that, usually, their local residents don’t want. That system has got some houses built but nowhere near enough: since 1955, we have never managed to equal the rate of housing growth we had in the 1930s, or even the 1820s. But even that has been unpopular enough to get the housing targets abandoned by a weak Conservative government. When a previous Conservative government tried some genuinely radical planning reforms that would have, if they had succeeded, made building easier, they were completely smashed by Tory backbenchers. That was entirely predictable – even I, by no means an expert on politics (I thought Liz Truss was “underestimated” before she became Prime Minister), was able to lay out in detail what would happen before it did.

While I am encouraged by Keir Starmer’s emphasis on housing supply, and wish him the best of luck (and my full support on it, for whatever it’s worth), I suspect that he will stumble in the same way that both Tory and Labour governments have before. His electoral coalition is different, but he will likely still be reliant on marginal constituencies where voters will immediately turf you out if they perceive you to be threatening their local areas, in favour of the Lib Dems or the Tories, both of whom will be only too eager to tell them what they want to hear in exchange for their votes. In Britain today, you don’t smash NIMBYs – NIMBYs smash you.

Bottom line up front: I think the solution is to let small groups of people most directly affected by a new development vote on the development. I think this would make it possible to buy them off, and win the support or compliance of the most motivated opponents of the things we need to build.

Here’s my model. It might be wrong. But I think it’s worth thinking about and experimenting with. It is heavily inspired by the work of John Myers on sharing the benefits of reforms with people who would otherwise oppose them. My goal is to set out a framework for thinking about this for other vetocracy-type problems, based on John’s excellent work and thinking.

My first hypothesis is that, for any given project, some of the NIMBYs objecting are people who are genuinely losing out significantly, and that these people are, understandably, highly motivated to object to the project. And there are some people for whom the opposition is “cheap talk” or, more generously, a rational strategy in a repeated game. If they have the ability to object, they will, either because it slightly inconveniences them or because they think that if project X goes ahead fifty miles from them, it will make it more likely that project Y will go ahead half a mile from them. These people won’t go crazy if you take away their ability to object to project X, provided they know they will retain the ability to object to a project Y that does significantly hurt them. 

I realise that this is a very vague categorisation. Who is to decide what “significant” losing out means here? Bear with me, but ultimately that is what I’m going to suggest is the big, interesting research question for anyone who wants to solve vetocracy.

My second hypothesis is that, in principle, for a development worth doing, it should be possible to pay off most of the people who object and still make the development worthwhile. 

Any new development worth doing must create additional value for the world. Most of this value will be captured by the people who own and make the thing (producer surplus), or the people who use or buy it (consumer surplus). It will also create cost. Some of those costs are borne directly by the developer – the price they have to pay for the materials and labour to make it, for example. Some of the cost is not, and instead is borne by the people around the development, eg in the form of a worsened local environment. This second kind of cost is what’s called an externality by economists, and is similar to the cost people bear when a polluter pumps noxious gases out into the air.

For a project to be worth doing, the benefits should outweigh the costs, including the costs that are borne by society. If we take people who lose from a new housing project via a worsened local neighbourhood, and give them enough money or other value such that, on net, they now benefit overall from the project, the benefits of the project should still be worth doing it, or else it wasn’t worth doing in the first place.

Fortunately, the gap between the cost of building many of the things I’ve mentioned above and the value from selling them or their output is massive – that is, there is plenty of value to go around. New homes in central London sell for vastly more, perhaps even millions more, than the cost of building them. The price signal is clear, and includes a large reward for anyone willing to follow it.

So we might be able to get a bargain between the producers of new housing, transport and energy supply, and the locals who lose out. Why don’t we get this already? My core claim is that the system we’ve got at the moment is not good enough at identifying people who lose out by a lot, and people who cheaply claim to be losing out by a lot, but really only barely are. Consultations can’t do this, and existing local and national democratic mechanisms treat everyone’s vote equally within a much larger catchment area than most new developments significantly affect.

So even if the people immediately surrounding a new development were delighted about it, either because it’s a great development in its own right or because they’ve been given enough compensation to feel that, on balance, it’s worth it, their voices could be drowned out by all the other “cheap talk” objectors. And there may not be enough value going to buy off all these people as well. If people can self-select into the “this hurts me” group, then there won’t be enough surplus value from a new project to go around to buy them all off, and the project won’t go ahead. 

But if we could clearly and strictly demarcate the “true losers” from a project, and allow them to retain their veto, we would perhaps be on the way to making this intractable problem tractable – in principle, we could turn the losers from a new project into winners, and still have enough money left over for the project to be worth doing. It’s also possible that if we did carve out the important objectors, the cheap talk people would never get involved at all because campaigns require some people to invest a lot to get them off the ground, and in this scenario the most motivated people among them have had their mouths stuffed with gold.

But there would be one final problem. How, in practice, would we let people do this sort of bargain? Typically, this sort of thing does happen, but via quite indirect and poorly-targeted mechanisms. A new project is proposed, locals object, and the people doing the project promise to spend some money on new parks, roads, etc in the local area so locals are appeased. As I’ve mentioned, this has the problem that local governments are not only answerable to the people immediately affected by a project, but to lots of other people too.

Instead, if we could clearly demarcate the true “losers” from a project, we could let only them decide, through a vote. We would in effect be saying that we recognise that these people have a de facto right over their local area, since they can already object in the current system. And now we are giving them a formal right to collectively decide how to exercise that right, including by alienating it. You have your veto, but you can choose to give it up if you like.

What I’ve described has been proposed in practice in the Street Votes mechanism I’m fond of. With Street Votes, we’ve determined that the residents of a street are the ones who are the most significant losers from small-scale intensification on existing urban land, and that they should be the ones to decide on changes to the rules that allow these developments to take place. In this case, the “buy off” happens through the fact that all of them benefit from the land value uplift that more liberal rules create – a semi-detatched house in Clapham on a street that votes for “gentle density” development rules could double in value, just from the new permissions to build more densely.

A similar system has also been proposed by Sam Dumitriu for onshore wind: he has suggested that, instead of the current unanimity system, we allow local residents to trigger a vote on a proposed development if a certain percentage of people within sight of the wind farm sign a petition to do so. 

There are examples of this sort of approach working already. In Houston, minimum lot size rules that prevented densification were reduced from 5,000 to 1,400 across the city. Streets and blocks that objected and wanted to retain those rules, to stay low-density, were able to vote to opt-out of the deregulation. John has written on Seoul’s Joint Redevelopment Projects, which allowed new development if 75% of property owners in designated neighbourhoods voted in favour, and even though only a small fraction of the city was ever eligible, at one point more than half of the new condos being built in the city were through the scheme. Tel Aviv did something similar. New York’s tradeable air rights allowed old buildings to be preserved by “trading” their right to build up to other locations. (There’s a great video on this here.)

In these cases, the key is to restrict the ability to vote and trigger a vote to the people who we think are significantly adversely affected by the development. The reason is partially to do with economic efficiency – we want some kind of proxy for the negative externalities – and partially to do with politics – if we tried to remove everyone’s ability to veto, we’d face the same problems that every postwar government that’s tried to liberalise planning has faced. As was once said of taxation, we need to pluck the goose to obtain the most amount of feathers with the minimal amount of hissing – our goal is to exclude the “cheap talk” NIMBYs from the process, while still letting the highly motivated ones take part.

I think this could be a way to end vetocracy in the UK and elsewhere. We say that local residents have a sort of property right over the character of their area, and try to facilitate a bargaining process between them and the people who want a new development to go ahead. I’ve come to think of this as “Coasean democracy”, named for Ronald Coase, who won the Nobel Prize for showing that well-defined property rights, plus the ability to exchange them with others, could allow for more efficient outcomes than if we try to impose a strict rule about whether you can or cannot do something. Bargaining, where possible, allows positive-value activities to go ahead, and stops negative-value ones. Here, we’re trying to harness democracy as a means to bargaining. 

The real challenge, as I’ve suggested, is to figure out who in practice are the “rightsholders”. In certain scenarios it’s easy – people who live on a street, or around a piece of under-used urban land (like a residential car park) that we could build on. Perhaps we could determine that the people most adversely affected by certain new energy projects, like the Aquind Interconnector, are the ones whose views are being spoiled – they bought their homes in expectation that they wouldn’t have to look at an electricity supply terminal, and so it might be understandable that they would object strongly to that changing. Octopus Energy has piloted something called a “Fan club”, where people near new onshore wind farms can get discounts to their energy for years to come if they let the wind farm go ahead. 

Where I suspect this model has the most potential is in cases where there are several viable options for a project, so it’s harder for people to hold out for extremely large amounts of cash – if Portsmouth is the only place in Britain where that interconnector can be built, locals might ask for so much that the project is unprofitable, and vote it down in the hope of more. If there are many other options about where you can build, they have less ability to hold out, and the bargaining process should be, in effect, more competitive. So while I could imagine this working well for the route of a new rail line if it can easily be modified if certain areas along the route object, if the entire line depends on a single section, those locals may try to hold out for more than the project is actually worth. 

But I think this approach has the rare virtue of being politically achievable, because it preserves the power of locals to protect their local area, and scalable, because it creates a general mechanism for overcoming local objections instead of requiring political battle after political battle as our current system does. 

If there is promise in this approach, I think the next steps are to apply it in greater detail to the specific types of project we want to get more of. Who really is “significantly harmed” by a new solar farm or a new airport? Where can we pair this sort of mechanism with new presumptions in favour of development, with votes only held when locals feel strongly enough to trigger one?

For Aberfeldy Village, the plan is straightforward. The “strategic planning committee” shouldn’t get a say; the residents who’d be most directly affected by the project should. Though charging some fees on new developments for new infrastructure in the surrounding area make sense, giving the wider area a veto does not. Let the residents decide what happens to their estate.

We could go much broader than this, though. Housing estates across the country should be empowered to vote themselves into more density, and capture lots of the gains that would come from them. The residents of the council-built estates I’ve lived in in Battersea and Brixton should be treated as having a collective right over their estate, and be empowered to develop it if they want to – Patmore Estate, just south of Battersea Power Station and its new tube station, for example, could host thousands of new homes if its residents approved. They’d be a lot better off – let them capture some of the pent-up demand for new housing in London, and let the rest of us benefit from more supply. 

We could apply a similar principle to get much more lab space in Oxford and Cambridge, and more commercial space in other cities and towns. We could get more cheap cut-and-cover tunnels in cities by letting the businesses and residents who would currently be worst-affected by that construction, because the roads they’re on have to be dug up for years to lay the tunnels, decide on projects, allowing them to capture some of the benefits of the project as compensation. 

We could massively increase the amount of energy generation taking place onshore in the UK by creating a route for local consent that wasn’t based on vetoes; we might even be able to take steps toward a more rational regulation of nuclear, allowing us to get nuclear power costs back to the level of coal costs. Maybe we could even tackle crime by removing barriers to new prisons, by letting nearby residents decide, and hold out for enough compensation to win them over. Figuring out the details here is an exciting frontier for those of us interested in better public policy.

Let’s listen to price signals: they are saying, very clearly, that there’s a lot of life left in the British economy – we just need to build a lot more housing, energy, and infrastructure. The hard bit is actually getting permission to do it. It’s certainly counterintuitive to say that the solution might be to give people more control over their local area, not less. But I think, if he paid a visit to Aberfeldy Village, Ronald Coase would have agreed.

Today you can contribute up to £20,000 a year, and besides that there’s no cap on how large it can get from those deposits and the growth you might hope for from investments. The Resolution Foundation wants to cap the size of the pots at £100,000, whether from investment growth, or from contributions, above which any extra money would be taxed as normal. I think its analysis is short-sighted and forgets the second-order effects that savings and investment have on the rest of the economy.

Capping ISAs would do even more to pump up housing demand

For investments held outside of ISAs, investments in the UK are taxed very heavily. For higher and additional rate taxpayers, dividends are taxed at 33.75% and 39.35% respectively. Capital gains – increases in the value of your shares – are taxed at 20%.

Over the course of, say, a 30-year investment period, this tax can make an enormous difference to the size of your returns: £296,000 invested for 30 years at a 5% real return, with the returns re-invested over that time, will earn about £1,026,452. But if you impose a tax of 33.75%, your return becomes 3.3125%, and your return will be £502,504 – before capital gains tax. Impose the additional rate tax and you’ll make £438,332.

Dividends – distributed profits – have also already been corporation taxed at 25%, which means £100 of profit returns between £49.69 or £45.49 of dividends after both taxes – an effective tax rate of between 50.31% and 54.51% compared to returns from assets that are not taxed by either corporation tax or dividends tax.

I chose £296,000 for a reason: it is the price of the average UK house. Unfortunately, because housing supply is constrained, houses are an investment too, even for people who only own the house they live in. For most people, their house is the biggest savings vehicle they own, and they hope to either be able to draw on some of its value in retirement via equity release, or leave the house to their children to inherit. 

The UK raises relatively high levels of money from property taxes compared to other countries, but the system is extremely favourable to certain forms of home ownership-as-investment. You don’t pay capital gains tax on any value uplift on your own home, and the “return” you get from your investment – the free rent, the pleasure of living in a nicer house, the benefits of accessing a better school nearby, etc – is taxed very leniently.

There’s council tax, but that’s specifically designed not to increase in line with rising house prices – it’s pegged to what a house was worth in 1991, or what a newly built house would have been worth if it had been built in 1991. The total amount raised from council tax is about £42bn, on £8.4 trillion of residential property wealth. Average rental yields are 3.7% in the UK, so that's £310bn of rental values – so council tax is only about an average 12% tax on the annual “return” from owning, whereas income from any other investment source is taxed at 50%+.

Then there’s stamp duty, which is a terrible tax, but because it falls much more on people who move houses a lot, since it is only paid when you buy and sell* (which penalises people for moving for, eg, better jobs or to have more children). It’s not really a tax on investment at all, but rather a tax on transactions – a family that sits in a gigantic mansion for forty years will end up paying much less than one that has to move between much less valuable ones every couple of years for work or other reasons.

So housing in the UK receives extremely favourable tax treatment compared to other investments, and increases in the value of houses have been almost entirely shielded from tax. The aggregate value of UK housing has risen by +75% (£3.6 trillion) over the past decade, little of which will be caught by capital gains tax.

It’s hardly a surprise that the UK’s savings rate is low, when this does not include house “savings”. Nor is it a surprise that people with mortgages don’t have much left over for cash savings or equities investments.

Besides pensions, which aren’t accessible until retirement, ISAs are the only “safe harbour” for savings that receive anything like the same tax treatment as housing.

What the Resolution Foundation is proposing is to curb this safe harbour dramatically – so that housing is left as pretty much the only way you can save money in the UK without facing a large tax penalty for doing so. The consequence would be to shift even more money into “housing as an investment”, inflating the cost of UK housing even more, exposing more people to the risk of being invested in a single asset, and of course making it harder for future governments to let the cost of housing actually… fall.

That’s very bad. It goes in precisely the wrong direction: as well as making it harder for governments to let house prices fall, it makes it harder for them to reform the taxation of housing and property so that it is less advantaged compared to other investments. This is, in fact, something that Resolution has written about previously, so it’s surprising that they would now propose something that would make that task – far more important, by anyone’s measure – even harder than it already is.

*Officially, the buyer pays stamp duty, but the economic incidence falls on both sides of the transaction.

Inflation is doing a lot of the work

The big windfall Resolution sees coming that it wants to tax is higher interest rates leading to higher returns for cash ISAs. But interest rates are only higher because inflation is so high, and in real terms interest rates are still rock-bottom – cash savers are still losing out in real terms, and higher interest rates are just blunting some of the damage from inflation. It seems muddled to treat higher nominal interest rates as a windfall that will “significantly boost savings returns” when it’s in the context of double-digit inflation numbers.

Capping savings is an odd solution to a low savings rate

The £100,000 cap is really low, and the proposal comes after pages and pages outlining just how low the UK’s savings rate is. It seems backwards to spend a report complaining that we don’t save much, and then conclude that we could cap people’s tax-free savings at this very low level because so few people have savings this high! 

To put the £100,000 cap in perspective, if you saved £300 every month and made a 5% annual real return, in eighteen years you’d hit the cap. If you saved £500 every month, you’d reach it after twelve years. To say that this is the limit of the savings we should be encouraging people to do seems very strange at the end of a report bemoaning the country’s low existing savings rates. And these estimates assume that the cap would rise in line with inflation. If it doesn’t – and, come on, it probably wouldn’t – the cap will get lower and lower in real terms over time.

The purpose of these proposals is to raise money to subsidise poorer people’s savings, but you don’t have to pair every proposal for higher spending with a very-closely-related proposal for higher taxes – taxes can come from anywhere, and it seems unlikely that the optimal way of raising new funds to subsidise some people’s savings is to penalise other people’s rather than, idk, taxing carbon or something. If you put a gun to the Resolution Foundation’s heads and asked them to name the least-bad way to raise an extra billion quid, I doubt even they would say this was the best way of doing it. Don’t confuse symmetry for efficiency!

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Rich people saving money is good for non-rich people

One of my constant bugbears about the Resolution Foundation is its complete fixation on static distributional analysis – that is, it will only ever look at the immediate and direct effects of some tax or policy change on various “winners and losers”, and virtually never considers the second-order effects on economic growth or other outcomes that we care about. This is like objecting to an increase in nurses’ salaries on the basis that patients, not nurses, are the ones in need, ignoring that higher salaries for nurses might improve care for people who use the NHS. It’s dumb when right-wingers do it, and it’s dumb when left-wingers do it.

When you buy stocks and shares, you are buying a portion of a publicly traded company that has received money for those shares, and may sell more later for more funds. A higher savings rate in the UK means a higher rate of investment, especially since UK savers tend to be biased towards investing in British companies (“home bias”).

Investing your money in productive and innovative businesses, rather than consuming it (by, eg, spending it on a nice boat or fancy holidays), isn’t just good for you – it’s good for the people who work for those companies and who buy their products.

And unfortunately the UK has a very low investment rate. It’s one of the main reasons we’re so poor: more investment means better equipment, training and machinery for workers, which means they produce more and can demand higher wages. We sometimes flatter ourselves that we’re a research-driven economy, but we spend less of our GDP on R&D than the OECD average and much less than places America or Germany – 2.4% compared to over 3% by them. South Korea spends nearly 5% of its GDP on R&D! (NB, this chart has an out-of-date figure for the UK – we’re at about 2.4% now.)

Here’s capital intensity tracked against labour productivity over the 20th Century. Note the UK’s position.

And check out this map of capital-to-labour ratios across Europe for the services sector, our most important sector.

And here’s the overall capital-to-labour ratio across the whole economy:

Here Britain looks less like France, Germany or the rest of Northern Europe than it does like Greece or Italy – and those have been our economic peers for a while now. Does this look like a country that should be taxing investment more?

Resolution acknowledges that low savings rates might be a cause of low investment and productivity in the UK, but ignores altogether the fact that people may well invest less if you taxed them at 33–39% more on their returns as they propose. But if they did, and responded to these taxes by moving some of their ISA savings away from equity investments and into housing, consumption, or left the country altogether to avoid these new taxes, investment and productivity in the UK would suffer. It is really weird to write a report in a country in the midst of a 15-year productivity crisis without considering this.

Poor people don’t save money because they have bigger problems to prioritise 

The Resolution Foundation wants higher taxes on ISAs in order to use the money to subsidise poorer people’s savings. It is awful, and a huge policy failing, that so many people on low incomes live from hand to mouth and have to go into debt to deal with unexpected expenses. But the lack of savings is a symptom of their much bigger problem – that they are on such low incomes. The fact that they are not putting their scarce incomes into savings reflects that they have higher priorities, like keeping their families warm and their children fed and clothed. (Remember that this is at least partially driven by the UK’s chronically low levels of investment, so if the Resolution Foundation’s proposals reduce aggregate savings and investment in the UK, they will make this situation worse for them.)

Giving poorer people money is a very good way of addressing this, and we should do it more. Giving poorer people money but only on condition that they save their other cash is a terrible way of helping them. They have bigger problems than a lack of savings, and we should let them allocate whatever extra money we can give them however they think will help them best.

“The proposal is terrible – and the revenues are so low!” 

Ben Gardiner pointed out on Twitter that RF has slightly undermined its own numbers by citing the pensions Lifetime Allowance as a precedent. In that case, an extra tax was imposed on pension pot savings above, at the time, £1.5 million. Resolution just wants to do the same for ISAs, and the revenues it says it would raise – £1 billion – are derived from assuming normal taxation of anything above that.

However, as Ben points out, the Lifetime Allowance actually involves the precedent that existing pots would be partially protected from this kind of taxation. People with pots that were already above the threshold were eligible for a higher individual rate that protected their existing pension pots from the new allowance – so it only affected pots that hadn’t yet reached that point. So if that precedent is anything to go by, the Resolution Foundation’s numbers could be way off, and its proposals would actually raise virtually nothing in the short run, and would depend on people continuing to save in taxable ways, rather than putting it into untaxed housing wealth, or consuming it, etc.

So there’s not very much upside in this proposal for anyone. Let’s hope this is the end of it.

Most plans for reducing carbon emissions centre either on raising the cost of fossil fuels (or banning things that use them) or hopes that electric options will become more efficient and attractive to consumers. I think policies that credibly make electricity cheaper in the future are underrated in getting people to change behaviour today.

From a carbon emissions point of view, we want to raise the cost of fossil fuels relative to “green” fuel sources, most of which produce electricity. When people create carbon emissions, the rest of the world bears most of the cost in the form of faster global warming. Making them bear the cost via a carbon tax will give them an incentive to move to lower emission forms of energy.

I’m sceptical that this will be addressed any time soon, though. Raising the cost of energy is really unpopular and affects lots of people. It would be hellish if the government decided to equalise all these taxes now, with energy costs already incredibly high, even if it was good for climate reasons – other things are important too. And the fact that a carbon tax hasn’t happened yet, despite the Treasury’s extreme thirst for tax revenues, suggests that the political costs of trying could be very high, and might mean it doesn’t actually end up happening (a bit like how we don’t get enough houses built, even though it’s obviously in the country’s interest to build them).

There are other, more brute-force proposals to reduce emissions in the UK as well, like a planned ban on gas and oil boilers in new build houses from 2025, and a ban the sale of new petrol cars from 2030. These might happen because they hit fewer people immediately, but still won’t do much about all the petrol cars and gas and oil boilers already out there.

The problem here is that there is a self-fulfilling prophecy in how this affects people’s behaviour. If people expect the government to “get tough” in the future about the cost of gas and other fossil fuels, they will be more inclined to switch away from fossil fuels now. And the more people who have switched away, the easier it will be politically for the government to “get tough”. But conversely if people are sceptical about the government’s determination to raise the cost of gas and petrol, the more they will stay using those, and the harder it will be for the government to do something about them.

Imagine if the government said it was going to ban petrol cars from the road altogether by, say, 2035. If we were all convinced it was going to stick to that, we’d all switch to electric cars between now and then, and it would be easy for the government to go ahead with it in 2035 because very few people would be left driving petrol cars. But if we doubted the government’s commitment or ability to do this ban, we might stick with petrol cars until then, and complain furiously if it actually tried it in 2035, making it harder to do it. Future commitments based on the government saying “No, seriously, we really care about this and will burn huge amounts of popularity to do this” just aren’t very credible, and won’t get people to change behaviour in advance.

I’m more optimistic about electric cars and domestic heat pumps becoming more efficient and hence cheaper to run. Electric cars are already be cheaper to run than petrol cars, though they still cost more up front. But the more efficient you expect these things to become in the near future, the greater the incentive is to hold out and avoid switching now. If those efficiency gains don’t come as quickly as hoped, we might end up in a difficult spot where lots of people are still using fossil fuels. So while I think this probably is the thing that will do most of the work for us, it isn’t guaranteed, and could be risky to rely on too much.

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The third lever that I suggest we focus on more is to give people an expectation that (green) electricity will become a lot cheaper. This is the “carrot” to the anti-fossil fuel “stick” – ultimately, both are about people judging that electricity will be relatively cheaper than fossil fuels, but this approach focuses on making electricity cheaper rather than making fossil fuels pricier. But this does not have the same political pitfalls that the stick has – it’s easier to spend money on things people like than raise taxes on them.

Japan has just announced a plan to jointly spend $1.1 trillion, along with private sector investors, on a new nuclear fleet over the next ten years – the FT says that a new “next generation” nuclear reactor is about $7.3bn in Japan, so this would be enough for 150 of those. If this plan is credible and means significantly cheaper electricity in the next decade or so, then instantly there is a much stronger incentive for people to switch to electric today, because people can expect that the total lifetime cost of the electric device will be a lot lower. This, in turn, should make it easier to raise the price of fossil fuels, because fewer people will object, further shifting the balance in favour of green energy sources. We’ve turned our vicious circle into a virtuous one.

This is possibly all very obvious already, and there are already lots of reasons to want cheap energy. But I occasionally see some people who care about reducing carbon emissions object to things like nuclear because they won’t come “soon enough”. Not only is that poor planning for the future (of the kind that we’re suffering as a result of today), it ignores that cheaper electricity in the future improves incentives to switch to lower carbon electric options today – which, in turn, makes it easier to do the “stick” stuff like introducing a carbon tax.

The obstacles to this sort of policy seem entirely different to the obstacles to, say, banning gas boilers. The latter policy, taken on its own, involves lots of people losing out, which a government might not want to be responsible for. The electricity supply policy is more a problem of political short-termism – a government that isn’t going to reap many rewards from its policy because it will happen in the future, so doesn’t bother doing it. But there are lots of people who care about climate change right now, and it might be possible to inform them of the benefits of an energy roll-out that is ten years away, and hence increase popularity today for governments that do things to make electricity cheaper a decade from now.

PS: Jack Devanney’s new Substack on nuclear power is great. In particular, he argues that nuclear is much more expensive than it needs to be because we re-invest all cost reductions in reducing background radiation more and more, even though it’s already (a) trivially low and (b) not really a big deal in the first place. This, and the fact that we exaggerate the risks of nuclear accidents – which aren’t nearly as dangerous or harmful as most people assume – means we pay much more for nuclear than we should.

Where I don’t think the brand matters I haven’t specified one, but I’ve tried to link to the thing I’ve personally got if possible. There is a slight complication with some items where I paid a lot less than they’re currently being sold for. When I think the item is only worth the price at the lower price I paid, and it seems possible it might fall to that level again, I’ve said so.

As usual, I’ve used Amazon affiliate links where Amazon seems to me to be the best place to buy something. I’ve tried to find US equivalents where possible, too. Last time, I spent most of the money I made on Scotch whisky to drink during the bleak early 2021 lockdown, so thanks to everyone who helped out there.

My bed setup:

A wool duvet – about £100 / $192

I bought this when I got a super king bed. It’s very warm, but unlike a feather duvet it’s thin, light and has no issues with distribution of feathers, etc, which becomes unwieldy in larger duvets. It does a great job.

A refurb John Ryan by Design mattress – about £650

I did quite a lot of research into mattresses when I was buying one. The first decision I made was to rule out “bed in a box” mattresses (like Emma, Simba, Eve, etc). These are normally made with foam, which gets very warm in the summer. This is a dealbreaker for me. However, if I was on a tighter budget I would consider one, but only bought as a refurb. Most of these services offer a 100-night money back guarantee, and while I’m sure they make it awkward to use it, they do end up with some mattresses being returned that have been barely used. Mostly they have refurb stores on eBay, where you can get them for about 50% off what you’d pay for an “unsoiled” mattress.

Anyway, for myself I decided to get a “traditional” pocket spring mattress, which gives better weight support. I liked John Ryan By Design’s website, which has a ton of info on mattresses, and struck me as a pretty customer-focused company. I ended up getting a refurb from these guys too, which knocked 40% off the price.

The specific mattress I got was an “Origins Pocket 1500 Mattress Outlet”, Grade C. This cost £584. It is by far the nicest thing I’ve ever slept on – much nicer than even the mattresses at the nice hotels I occasionally get to stay at. It needs to be flipped every month, which is a little unwieldy (I’m not sure if I would be able to do it without a second person to help), but makes me think I’ll probably own the mattress for many years. It’s so nice that pretty much every night I feel a sense of relief and joy when I get into bed.

Linen bed sheets (£130) and pillowcases (£30)

This is just a matter of personal preference, but I find linen pleasant to sleep in. It’s a bit cooler in the summer and just feels nice and premium to lie against. 

An electric blanket – £72

In these days of expensive energy, an electric blanket is a great way to stay warm without spending a lot. I think this one uses about 100 watts at full power, so it costs about 3 pence an hour to run, and you don’t really need it on full for more than an hour or so to get the bed really hot. Then you can run it on the coolest setting overnight, which is probably about a penny an hour, if that. Compared to running central heating in the bedroom, it’s a saving (especially if you have awful electric heating like my flat), and I sleep better in a warm bed in a cool room anyway.

Heated throw-over blanket – £70 / $30

I bought this for my girlfriend on the same principle as the electric blanket. Focused, insulated warmth means she can sit on this or wrap it around herself on the couch and feel very warm and cosy, for not very much money to run. She loves it, and it more than pays for itself in lower central heating bills. The current UK price is higher than I paid (£50 in April 2021) but I’d say it’s still worth the money.

Life and travel

Activated charcoal pills – £13.50 for 60 doses / US prices vary

I’m fairly convinced that taking about a gram of activated charcoal after drinking is an effective hangover treatment. For reasons why this might work, there is a good Lesswrong post by Maxwell Peterson here. Activated charcoal seems to be good at soaking up things in your gut: it is already used as a treatment for people suspected of eating poison, and women on birth control pills are advised not to consume it straight after they’ve taken their pills. So it makes sense to me that it might deal with some of the unpleasant by-products of drinking, like formic acid, which is what methanol is metabolized into and seems to be the really bad one, and which charcoal binds to.

Or maybe it’s just a placebo. If so, that’s fine – the feeling of a hangover is mostly the thing I’m trying to avoid. In any case, when I take three 330mg tablets of charcoal after an evening of binge drinking, I wake up feeling less tired and run down than I do when I don’t do that. And it’s so cheap that I don’t mind if it’s not even an effective placebo and, eg, I’m only remembering to take charcoal on times when I’m sober enough that I wouldn’t have had a hangover anyway. Charcoal isn’t perfect – it still doesn’t let me sleep completely soundly – but it makes a noticeable difference.

The main thing to watch out for when ordering charcoal is per-pill dosage. Amazon listings tend to list “serving sizes”, which can be 3-6 pills, so you’ll need to backwards compute from that info to find out how much is in a pill. The one I’ve linked to is about ⅓ of a gram per pill.

0.3mg melatonin – hard to get in the UK / $7

Melatonin is one of the other supplements I use for sleep, but I use it sparingly. It’s the hormone your body produces by itself to sleep. Firstly, I avoid doses over 0.3mg – read this on why this seems to be the “correct” dosage, despite many brands selling it at much higher dosages (up to 10mg, thirty times what I want!). Secondly, I find that if I take melatonin over successive nights, I find it harder to fall asleep naturally. I’m guessing that that’s a homeostatic effect, where my body produces less melatonin itself in response to the extra stuff I’m taking orally.

I find melatonin to be a lot better at keeping me asleep than sending me to sleep. I tend to only take it in three scenarios. One, I’ve been drinking and I want to sleep through the night. Two, I’m travelling to somewhere like San Francisco and want to avoid waking up at 2am feeling like it’s morning. Three, I’m knackered after a disruptive few days and want to “reset” my sleep with a night of deep and long sleep. It works well for all three of these.

Because the British state doesn’t allow adults to decide what chemicals to put into their own bodies, it’s hard to get melatonin at all in the UK. I normally just buy it when I’m in the US.

Benadryl (US) or Nytol (UK), aka diphenhydramine

The final pill I recommend is for sleeping while travelling. I find sleeping on airplanes very difficult, and am not rich enough to fly in the lie-flat beds they have in business and first class. But I travel back and forth from the US quite a lot, and if I don’t sleep at all on the overnight return flight, the entire day after I’ve returned is hellishly exhausting. I am a bit cagey about using sleeping medication in general, but a good friend of mine recommended taking the antihistamine diphenhydramine for this – sold as Benadryl in the US and Nytol in the UK (nb, UK Benadryl is something different). It works really well for me, and I am normally able to get 5-6 hours of decent-ish sleep on the flight now, which is enough to survive the following day, and makes the long, boring flight pass by more quickly. 

TRTL neck pillow – £25 normally / $49

In a previous issue of this, I recommended the J-Pillow for airplane sleep. I still like that, but it’s just too bulky and unwieldy to be viable for frequent travellers. Instead, I’ve started using the TRTL “pillow”. This is a bit of flexible plastic wrapped in a fleece cover that you wrap around your neck, and it props up your head as you sleep. It’s surprisingly good – not perfect, but I’ve found that I prefer it to propping my head against the side of the plane. And if you’re in a middle or aisle seat, it’s worth a try. The current UK price of £45 is too much to be worth gambling on, so wait for it to come down to order unless you really think this will work for you.

Silicone earplugs – £9 for five pairs / $12.40 for six pairs

I think earplugs are essential for sleeping on airplanes, and noise cancelling headphones are not a substitute (too bulky). I’ve gone back and forth on whether wax or silicone earplugs are better over the years, but I think silicone ones ultimately are better. Wax is a bit better for shaping to your ear canal, but I always worry the wax will go too far in. Silicone just plugs up the entire entry point to your ear, and it’s reusable over a week or so, so you only need one pair per trip.

A padded eye mask – £4 / $10

An eye mask is also very important for travel, and for sleeping during the summer if you don’t have great curtains. The number one thing I look out for in an eye mask is for padding around the eyes so that your eyelids aren’t touching anything, which is uncomfortable and unnatural feeling. This mask works well for me, and is invaluable when I’m trying to sleep on a daytime flight.

Packing Cubes (Slim) –  £13 / $27 for four

These help you keep your clothes organised, particularly once you have dirty clothes you need to keep separate from the clean ones, and these ‘slim’ models fit very conveniently into the Osprey backpack. Brand is unimportant but I would recommend the slim design over the more boxy square options – four fit well into a cabin-sized suitcase.

Timeshifter

My final travel sleep tip is to try the app Timeshifter. This is basically useful in two different ways. The first is to use the app as it suggests: tweaking your sleep and light schedules in the days before and after a long-haul flight to “hack” your body clock to adjust to jetlag better. This works OK, and is probably better than doing nothing, but it can be hard to stick to it and live a normal life as well.

The second is much simpler, and it’s to take the best single bit of advice from the app and just do it yourself – on the day of a flight West (eg, to America), don’t drink coffee and avoid light (wearing sunglasses) between waking up and getting on your flight, and then try to sleep on the plane for basically as long as you can. Once you wake up, have some coffee then. I’ve found that this is the single best thing I can do when I fly to America, and it’s pretty easy to manage with the help of a bit of benadryl. You can get the exact schedule in a free trial, which covers one trip, and just copy that in future.

In the kitchen

Kuhn Rikon peelers – £8.35 for three / $14

These peelers are by far the best I’ve ever used for peeling potatoes, other vegetables, and orange peels for cocktails. I’m still using the first of three, which is still remarkably sharp and effective after five years. You might could buy a set of three and give two away as gifts.

Debuyer carbon steel pan – £42 for a 24cm pan

I’m a fan of cast iron pans, especially for things like steak, where the iron’s mass is good for retaining heat after you’ve put the steak onto the pan and getting a good sear. But the downsides of cast iron are that it is heavy and bulky, and that it can be a pain in the ass to use for things like pan sauces because the roughness of the surface of the iron catches a lot of the sauce. Carbon steel pans are a good “sweet spot” between these and more normal steel pans, because they’re lighter and thinner, but very dense and pretty good at retaining heat. My go-to for everything I fry except big steaks, where I still use my cast iron pan. This current price is a bit higher than I spent (I paid £25), but I think this will last my whole life, so the extra price would still be worth it to me.

A cast iron skillet  – £19 / $20

Cast iron skillets are incredibly cheap and incredibly versatile. You can buy an ‘unseasoned’ one for £12. Seasoning isn’t difficult but requires some time — a cold winter Saturday, say — spent at home building up the coating by rubbing a thin layer of oil over it, baking it to polymerise the oil, letting it cool, and repeating a few times. The result is an almost indestructable pan that you can use for frying, roasting (I can fit a small chicken onto mine), etc, for the most part without any sticking. It’s not as good as a very expensive tri-ply pan, but I find myself using this for almost everything — except eggs, which do need a proper teflon non-stick pan in my experience. Seasoning instructions are here, and you can do it while working from home one day.

Meat thermometer with alarm (£17 / $19) plus the reverse sear method for cooking steak

I like to cook steak at home, especially when I can get a big thick one like a rib-eye or sirloin from somewhere like Turner and George or Txuleta. In my opinion, the easiest way to do this really well is to use the “reverse sear” method, where you cook the steak in the oven first, and then sear on a hot pan shortly before serving. If you use a fairly cool oven (100 degrees or so) and a meat thermometer with an alarm, you can stick the steak in and just let it come to the desired internal temperature, and then sear it. It makes the whole process very easy. I like using a thermometer that stays in the meat to avoid having to check on it repeatedly while it’s cooking with a conventional thermometer. I don’t think you need one with an app, etc, unless you’ve got a really big house.

Chef’s Press cooking weight – 13oz is £25 / $25

Weighing food down when cooking is useful for maximising surface area with a hot pan. I find these especially useful for when I’m cooking deboned, skin-on chicken thighs, which I like to cook skin-down at a medium temperature for 10 minutes or so with a weight on top. This crisps up the skin and renders out a lot of the fat. These weights do the job well, but they’re a bit of a luxury purchase, because you can just wrap a tin of tomatoes in foil and use that as a weight instead. It’s up to you.

Butter dish – £9

This iconic butter dish is one of those things that you only realise you needed after you buy it. The irritation of trying to spread cold butter on bread and tearing the bread, or using too much butter when you try to take off a knob and let it melt onto hot toast, is easily worth £3 to never have to deal with again. Put the butter in this, leave it out of the fridge, and you’ll be glad you did.

Monosodium Glutamate – £3.30 / $8

MSG is maligned by people with a latent Calvinism that tells them that there are no easy wins in life and anything enjoyable must be bad for you in some way. It is absolutely delicious, and is a very easy way to make any sauce or braising liquid much more savoury and rich-tasting – I use it mostly in ragu and chillis, as well as many sauce-based Chinese dishes I make (see Every Grain of Rice below). It’s very cheap, you only need a little, and it is an absolute must-have for any chef.

Instant Pot Electric Pressure Cooker  –  £85 / $83

I still love my Instant Pot, especially for making chicken stock – I save up the bones from a few roast chickens, roast them again to brown them, and then pressure cook them for three hours or so. The best thing about that is that the steel inner pot can be removed and placed straight onto the stove, so I can then boil the stock down to a thick, rich reduction that I use for pan sauces. I use my IP for this and other dishes at least once a week, often more than once, to make thick stews and sauces for pasta extremely quickly — in between a third and a fifth of the time it would take to get the same results in an oven or on a stovetop. The Instant Pot is extremely safe, unlike traditional pressure cookers which scare the shit out of me, and has an all-important saute function so you can fry meat, soften onions, etc before cooking and thicken liquids after cooking in a single pot. This model also makes yoghurt.

My favourite recipe to make in it is this Serious Eats ragu bolognese, which ends up being very easy to make and gives me enough food for several meals, so I make it in advance and freeze some portions. The best source for pressure cooker recipes is Serious Eats - here is a rough list of my favourite recipes.

Salter Digital Kitchen Weighing Scales  – £15 / $10

A digital weighing scales is essential for basically anyone who cooks — a scale is essential for following many recipes and a digital one allows you to zero out with a bowl of your choosing on top, so you can be much more precise much more easily than with a mechanical scales. It’s hard for me to imagine how you could follow recipes with any degree of accuracy at all without one of these. A must have.

Silicone mould ice cube trays – £9 for small ones, £12 for big ones

The real consumer surplus is buying bags of ice from a shop, but carrying those home can often be a pain, and I can’t always remember to keep my freezer stocked with them. These silicone ice cube trays are a useful complement – what’s nice about them is that they are very easy to get the ice out of, instead of standard trays that often shatter the cubes. I keep a ziploc bag in the freezer and periodically empty these into it, so I have a reserve of ice whenever I need it. I also use the big ones for drinks like negronis and gin and tonics.

Metal cooking tongs – £10 for two / $10 for two

Along with a wooden spoon or spatula, these are the best utensils for cooking with, especially frying a bit of meat. I really dislike silicone-ended ones (too floppy) and just want plain steel. For that reason, if you don’t mind waiting a few months for delivery, you can safely buy one from AliExpress for about £3. You only need one – the longer the better – so if you buy the Amazon pair, you can give the shorter one to a friend.

OXO Good Grips Large Silicone Flexible Turner  –  £10

Not much to say about this — it’s just the best flipper I’ve used for eggs and other things that need flipping. It’s big and silicone, so it won’t melt at high temperatures. (Never buy plasticky, non-silicone cooking equipment.)

The cheapest non-stick frying pan you can find  – £4.50

Non-stick coatings always break, and usually pretty quickly. Once you’ve had the misery of watching an expensive non-stick pan flake and degrade over time, you’ll understand that you should never splash out on anything with a non-stick coating and should instead think of them as disposable, like paper towels, getting uber-cheap ones. But you need them for eggs — it’s so much simpler to fry and scramble them on non-stick. You can buy them at IKEA for £4.50 each. BTW, I’ve tried the "Blue Diamond” range that is supposed to not break the way Teflon does, and it’s not nearly as non-stick.

Victorinox chef’s knife  (£28 / $54) or Wusthof chef’s knife  ( £92)

The Victorinox is unbeatable at the lower end of the price range, keeps its edge for a long time, and is sturdy enough for anything except cutting through bone. Unless you cook so much that you want to shell out for a knife twice the price, it’s pretty much the only kitchen knife you need. The handle is plasticky and a bit cheap feeling, but it’s a great knife otherwise.

Although I use and like my Victorinox, I cook so much and firmly believe that you only need one knife for 95% of what you do in the kitchen that I treated myself to something more expensive. My Wusthof chef’s knife is a joy to use and has a weight and strength that the Victorinox doesn’t, allowing it to cut through joints and some bones. It is much more expensive though, and I would only recommend it to someone who cooks very often.

A note on sharpening

I’ve previously recommended the Lansky knife sharpening system. I still think this is the best way of sharpening knives at home, and it’s what I use, but it’s a pain to use and I think most other people just aren’t happy with the amount of work and set-up it involves. I’ve started getting the London Sharpening Service to come to my flat to sharpen my knives – for £63 (using the discount code on their site) for eight knifes, it’s decent value if you do it about once a year. I’m happy with the quality of the work they do, it’s pretty quick, and they have a same-day service depending on what time you order.

Sistema Microwave Rice Steamer  – £8 / $18

This is the most popular item I’ve ever recommended. And for good reason – I use this multiple times a week and it’s completely foolproof. Making rice in a saucepan on the hob absolutely sucks. You either do it the ‘correct’ way of not stirring it for ages and risk burning the bottom, or you use not very nice easy cook rice.

This rice steamer works perfectly in the microwave. Just throw 250g of dried rice (any kind seems to work) and twice as much water and let it microwave for thirteen minutes, then stand for another five. It comes out light and fluffy and you can actually leave it standing for a long time (at least half an hour) and it retains the heat, so it eliminates one major cooking headache. And since microwaves are very energy efficient, it’ll save you electricity too. Get the 2.6 litre version, the 4 litre version is too big for most microwaves.

A big sack of Jasmine rice (£7 for 5kg)

To go with the microwave rice steamer, I recommend buying a big sack of Thai jasmine rice from an East Asian supermarket or a big supermarket that stocks them (Sainsbury’s and Asdas near me in Clapham both do). I can get a 5 kilo bag for £7. This is enough for about forty servings, and the rice tastes good.

Wide-surface microplane – £22.50 / $18

Microplanes are good for things like grating cheese, zesting lemons, etc. I prefer a wide one like this because it makes cheese easier to grate. Since cheese’s flavour is maximised by maximising surface area, this is a superior approach for anyone on a diet who still wants cheese on their food – you can get a lot of flavour from a small amount of food.

Tea from Char teas

I like Char teas for loose leaf tea, especially darjeeling, lapsang souchong, jasmine green tea, and their English Breakfast blend. A biggish order (£40 or so) tends to do me for about a year, and I think the quality is better than what I’d get at a supermarket. They usually have some kind of deal that gives you a free bag of tea, etc, which is nice. 

Shop Cuvee wine glasses – £27 for six

This is a matter of personal taste, but I despise large wine glasses – they feel flimsy and unwieldy to drink from. There is a very specific shape of wine glass that I like, which is small, tall and fairly robust. I searched high and low in shops for these, until I eventually found what I wanted at Shop Cuvee. They’re not exactly cheap for wine glasses, but I like drinking out of them and I haven’t broken one yet.

Coupe glasses – £8 each

Again, these glasses are not cheap, but I get a lot of consumer surplus from them. I like making simple cocktails at home (whisky sours, manhattans) and serving them in these makes me feel like I’m at a real-life cocktail bar. Compared to an IKEA glass, these are expensive, but compared to going out and getting a cocktail at a bar, they’re very cheap.

Wooden lemon reamer  –  £6 / $8

If you don’t own one of these you have probably wasted hundreds, maybe thousands, of calories on squeezing lemons and limes over the course of your life. They are £4 each, you only ever need to buy one once in your life, and they get all the juice out easily. Especially good if you like the taste of cocktails but don’t like wasting money on them by going to cocktail bars — with one of these, you can make one of my famous Cuba Libres with ease! One thing, though – if you’re doing a lot of lemons or limes in one go, a squeezer is better, but it’s more to wash-up, so for just a handful the reamer wins.

Instant Read Food Thermometer  –  £8 / $11

Any instant-read food thermometer will do here, but this is one of those things that you don’t realise you need in the kitchen until you have one. It’s good for checking the temperature of roasted meat and oil if you’re deep frying at home without a proper deep fat frier. For the little baking I do, it’s useful to check if a sourdough is ready too.

Cocktail shaker – £9

You can make quite a few very nice cocktails at home with a small number of fairly inexpensive shelf-stable bottles and a shaker like this. My favourites are negronis, boulevardiers, Manhattans and wh

Cookery books: Every Grain of Rice, by Fuchsia Dunlop (£17 / $27) and The Food Lab, by J. Kenji López-Alt (£29 / $28)

These are my desert island recipe books. Every Grain of Rice is recipes from around China (there’s very little of the sort of Cantonese food you’d get from a Chinese takeaway) and makes it astonishingly easy to make delicious and very exotic meals without going nuts buying lots of obscure ingredients that you’ll never use again. In fact, other than a wok (which you can get for a few pounds at many larger Asian supermarkets), there are only about six basic things you need to buy to make half or more of the recipes in the book, all of which can be bought at a standard oriental supermarket. I particularly like the book’s emphasis on vegetable-heavy dishes, which makes the dishes generally inexpensive to make.

The Food Lab is based on the blog of the same name at SeriousEats, and I consider its recipes to be definitive. It’s “American food” in the broad sense, which includes stuff like lasagna and lots of salads as well as stuff like buffalo wings and hamburgers. No other recipe approaches this book’s mac and cheese recipe, which is super easy and amazingly delicious, and almost every other recipe from the book I’ve tried has been a big success too.

For London restaurant recommendations, Cheese and Biscuits by Chris Pople is by far the best guide.

Nespresso machine  and Solimo Nespresso Pods – from £100 and 10p each

Most coffee pods taste pretty much the same to me, and usually in the morning I just want something hot, caffeinated, and fast. I used to swear by Aldi’s pods, at 13.5p a go, but Amazon’s “Solimo” own brand are even cheaper at 10p a pop. Occasionally I indulge myself with some 16p Starbucks pods bought from eBay, but this is me splurging for no real reason. Always get Lungo for the maximum amount of coffee possible, and I top mine up with hot water for an American-style cup – what the Italians call an “Americano”.

On the Nespresso machine front, I’d just try to avoid the “vertuo” range, which uses pods shaped like wide discs that have been designed to prevent third parties producing their own pods. You might need to shop around to find a machine for under £100.

Aeropress – £30 / $39

An Aeropress is good for when you want a cup of coffee that actually tastes very nice, and is vastly cheaper and easier to use and maintain than most other ways of doing that. I don’t bother grinding my own beans – most of the benefit comes from using one of these, and if you like coffee enough to taste the difference with beans you grind yourself, you don’t need my advice here anyway. For everyone else, this is a fantastic little device and pairs nicely with the Nespresso, for when you’ve got a few minutes to spend on a really nice cup. If you’re reading this to find a gift for someone else, this is one of the best items on the list. I recommend brewing using the inverted method.

Potato ricer  – £19 / $24

This device is for mashing potatoes and it works brilliantly. You simply boil them whole, put them into the masher, and squeeze, and you instantly get lighty, fluffy strands that make a perfectly smooth, creamy mash. You can even leave the skins on — it squeezes out the flesh only. It is by far the best and easiest way of making mashed potatoes. I recommend adding some butter, milk or cream, lots of salt and pepper, and some Dijon mustard – mustard is the secret to nice mashed potatoes.

Bathroom and shower

Interprox interdental brushes – £5 for six

These have only started working for me since I got braces that straightened my teeth out – prior to that, my teeth were too tightly packed together for brushes to fit in between them at the base. Now, I find them excellent for getting rid of bits of food, and much less uncomfortable and annoying than flossing. The ones here are shaped at a right angle, which makes them easier to use on molars. You can re-use these for a while, like a toothbrush – just rinse them in between uses. Note that they come in different sizes for different tooth widths – I use pink, red and blue for different teeth.

Silicone toilet brush – £10 / $15

Everyone should have a toilet brush. The main advantage of a silicone brush over a normal plastic brush is that this one retains less solid matter from the toilet, and it’s easier to clean in the toilet water. It does a very good job of cleaning the sides of the toilet. There are lots of options for this on Amazon from various fake Chinese brands, but this is the one I’ve got.

Cillit Bang: Black Mould Remover – £3.60

I hate cleaning the shower but this has made it very straightforward. Really, you just spray this on your tiles, let it sit for a few minutes, and wash away. It does an incredibly good job - the sort of thing you’d usually have to pay someone to achieve.

Nose hair trimmer – £11 / $18

This is one of those things that it’s easy to forget about existing, but it’s good to have for most men over thirty. Most come with attachments to do eyebrows too. The one I have isn’t available anymore, but this looks similar from the same maker.

Adult braces – about £3,000

Getting braces as an adult was a bit of a pain, but I’m very glad I did. Before getting them, my teeth were very crooked, and some teeth accumulated a lot of plaque because they weren’t getting brushed enough. I did a year of wearing train-track type braces, but at least they were tooth-coloured, so they weren’t super-obvious. The whole process was expensive at £3,000, and it was remarkably uncomfortable at times (the braces are uncomfortable, occasionally the process makes your teeth hurt, and having to wear little rubber bands to drag your teeth in certain directions is really annoying). But I think it’s one of the best things I’ve done, and I suspect it’s helped me in the American settings I often work in, where crooked teeth are very unusual. I went to the ABC Smile clinic in London, and was a big fan of the two young dentists who ran it, but I gather that they’re in high demand.

Solimo razor blade cartridges – £17.76 for 16, or £1.11 each

I was a long-time devotee of Gilette’s shaving cartridges (Fusion and Mach 3), which are better than all the other mail-order competitors that have come onto the market in recent years, like Harry’s and Dollar Shave Store. And I think using a safety razor with razor blades is much more trouble and time than it’s worth, especially if you use a badger brush and shaving soap. My goal is to have a shave that is very smooth, that I can do quickly and without paying too much attention (ideally without a mirror in the shower), that doesn’t cost too much money. 

The first brand that has beaten Gilette’s products for me are Amazon’s own-brand Solimo shaving cartridges. They are extremely cheap at about £1.17 per cartridge, each of which is good for at least seven shaves (which is two weeks for me, since I shave every second day), compared to about £2 per Gilette Fusion cartridge. And they work very well – much better than Harry’s, etc. 

Men-U shaving cream – £20 for about 18 month’s worth

Men-U’s shaving cream is just great. It provides a smooth, close shave, and doesn’t have the problem that foam does of covering your face with a huge volume of gunk that makes it difficult to see and clogs up your razor. Because the packaging is very small, it’s easy to travel with. And it lasts forever – each bottle lasts me for about 9 months, and the pack I’ve linked has two.

Nice objects

Muji pens (£2 each)

This is well known already, but I reckon Muji’s pens are the best in the business (better than the popular Pentel G2, in my opinion). I tend to prefer the slightly wider 0.5mm gauge one, but the narrower one is good too. They draw a clean, delicate line.

Primark sunglasses – £2.50

Don’t waste money on a pair of designer shades and spend your life worrying about them. Sunglasses are disposable. You put them down in the park or you accidentally sit on them on the bus, whatever. The point is that you don’t want to waste any more than is absolutely necessary for a pair of sunny-g’s, especially since they all look the same anyway. Primark is a winner here — you can get a couple of pairs for £2.50 each and be sorted for a year. They usually have wayfarer-style pairs that will have your friends thinking you’ve spent a good ten or fifteen pounds more than you actually have.

Uniqlo Airism underwear – £13

Uniqlo’s Airism line of underwear is made with space age fibres that look and feel great, and do well on warm days. I suggest getting one size larger than you normally would.

PitRok Crystal Deodorant  –  £6 / $14

I use this for two reasons: it lasts forever, and it doesn’t create a hardened build-up on my clothes like roll-ons do. I was very sceptical about using a crystal deodorant, but I am confident that it works at least as well as any normal deodorant and a number of people who know me personally (and so are probably decent judges of how well it works) have started using it themselves, also successfully as far as I can tell. Each stick lasts about three years of everyday use.

Anker SoundCore Portable Bluetooth 4.0 Stereo Speaker – £22 / $28

This really is an amazing piece of kit. The sound is loud and handles bass well, the speaker feels very sturdy, but best of all the battery seems impossible to run down. Extremely useful to have, whether you put it in the bathroom to listen to in the shower or bring to the park to annoy people around you.

Popsockets (buy off-brand from AliExpress) – £7

This glues onto the back of your mobile phone or phone case and pops out to act as a little handle for when you’re using your phone one-handed. It sounds stupid and most people hate the little bump the Popsocket makes when it’s not in use… until they try one for themselves. I don’t ever worry about dropping my phone while using it with one hand anymore, and it’s all thanks to this.

Second-hand Herman Miller Mirra 2 chair (£200, if you’re lucky)

Herman Miller chairs are rightly famous for being very comfortable. I like the Mirra 2, which has a plastic back that is very supportive. They’re extremely expensive, but also very durable, so you might have some luck looking for a second hand one being sold on somewhere like eBay. I got mine for £200 from a guy who got given one by his work, and just had to pick it up in an Uber. It’s still going strong four years later. It’s possible that the “Work from Home Revolution” has driven these prices up, though.

Charmast phone battery – £18 / $29

One of the coolest things about Japan is the ubiquity of mobile phone charging batteries in virtually every convenience store, which you can rent with an app for a few pounds and then return to any other convenience store over the next day or two. This basically solves the problem of smartphone batteries being too small for how much people use them. I imagine most people already have a mobile phone battery, but most need you to carry around a charging wire too, which massively increases the amount of advance thought you need to put in to keeping one on you. This one has the charging cable built in and a USB-C input charging port, so you really just need the battery and you can charge it with any Macbook charging cable. It’s not quite as good as Japan, but it’s a decent DIY approximation.

Felt desk mat – £11 / $13

This makes my whole worktop feel much more premium and professional. It also encourages me to keep the area tidy, which helps me focus. A bargain at the price and a must-have for a winter spent working from home.

Cats

I’ve always been a fan of cats, but I was reluctant to get some living in an apartment. But I’m glad I did – they are cute, affectionate, and fun to play with. And they make it much less boring to be at home alone when, eg, you’re working from home. In terms of litter, food and vet / insurance bills, I’d estimate that they cost about £1000 a year for two.

If you’re considering it, I’d make sure that you do have some space for them to run around and play in inside, if they can’t go outside; be OK with not having loud parties too frequently; and be confident that you will be able to give them this kind of environment for the next fifteen years. I’d suggest getting two, because they’ll keep each other company, and I’d strongly advise against taking them from their mother too young (eg, before 12-14 weeks old). This last point is for both your and their sakes – taking them too young means they may not develop psychologically properly, and they may not get litter-trained by their mother. Ours came fully litter trained, and have basically always used the litter tray as you’d hope for. It’s amazing how easy that has been, especially compared to how troublesome dogs can be on that front.

The best cat litter is the kind that clumps around their excretions, so you can pick it up with a little shovel with holes in it that non-clumped litter slips through. This makes that whole side of things very easy. You should also get a bin that comes with a big plastic bag inside that you can dump the clumps into.

Services I recommend

Octopus Energy for energy (£50 sign-up bonus)

Energy is hellishly expensive in the UK right now, so there is not much price benefit in switching companies. Octopus is still by far the best energy company, though – it has innovative tariffs for people with smart meters, that give you very cheap electricity overnight (good for heating your water tank or charging your electric car), it is experimenting with incentives for people to accept new energy generation near them (eg, cheaper electricity for people near wind farms) and even incentives for people who use less electricity during high-demand times of the day. It’s a very good company.

Monzo for banking (£5 sign-up bonus)

What I like about Monzo:

• The instant spending notifications that help me keep track of spending and alert me to any payments being made that I wouldn’t have otherwise been aware of.

• The payments functionality, which makes it extremely quick and easy to send money to friends who use Monzo and split bills.

• The Monzo.me feature which allows people who don’t use Monzo to make a card payment to me, instead of an awkward bank transfer.

• The card replacement speed — when I needed a new card they had one to me the next day, and I was able to immediately freeze my card through the app.

• The fact that customer service is done through text, rather than on the phone, which saves me a lot of time.

• The ability to set up ‘Pots’ of money that separate my money from my main account, allowing me to budget week-to-week by transferring my weekly spending money into my main account every Friday.

• The general fluidness of the app and ease of using it compared to other bank apps which are extremely unpleasant to use, in large part because of all the anti-fraud measures.

Wise for international payments

I’ve saved a huge amount of money using Wise for transferring money to and from the UK. It’s very cheap and much faster than a normal bank, and they don’t hassle you the way lots of other foreign exchange services do. Wise also offers stuff like a bank card you can use abroad, which I don’t use but looks good.

Vanguard for stocks and shares ISAs

I’ve written about how I budget and save money here. I try to put as much of my savings into my stocks and shares ISA as possible, and with these the two key things I aim for are (1) low fees and (2) a broad-based investment. I can get both of these things by investing in Vanguard’s VWRL All-World ETF inside a stocks and shares ISA. I think this is the right move for most other people looking to save money for the long term.

Other stuff that I like

• My Airpods Pro 2 sound great, are good for making calls with, and have very good noise cancelling.

• My Q Acoustics 3020i speakers and Fosi Audio amplifier are a nice, simple home speaker setup that works with Bluetooth.

• My self-build PC is great for gaming, and I’ve been able to upgrade it in a piecemeal way over the years.

• I think the Wine Society is pretty good value for wine, although Lidl is pretty great too.

• They’re not cheap, but Darn Tough socks are comfortable and durable, come with a lifetime guarantee, and are the only socks I’ve ever owned that don’t feel terrible if you have to wear them two days in a row (eg, when travelling).

• The £27/month I pay to The Gym group feels like an absolute bargain for the size of the gym I go to, and the amount of equipment it has that I use. I almost never have to wait for a squat rack.

Boosters say that with better economic policy, we could get a lot richer, pretty quickly. They point to how much of the UK economy is obviously broken. Housing supply is both clearly severely constrained – the cost of purchasing a house in many parts of the country is 5-10 times the cost of building it – and clearly the root cause of high housing costs. If you subscribe to the "housing theory of everything", then this by itself may create a lot of other problems, like people being unable to move for more productive jobs and labour markets being underdeveloped because workers aren't able to move there. Andrea can’t afford to move to Cambridge to get a higher paid job, which makes her produce less, and her would-be employees end up producing and innovating less because they don’t get to work alongside her.

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Lots else is wrong with the British economy in ways that policy seems able to fix, at least in principle. The UK’s corporate tax is one of the most badly structured in the world, ranking 35th out of 36 countries in the OECD in terms of how heavily we tax capital investments made by businesses. There are many other extremely important areas that the UK does pretty badly on – infrastructure, healthcare, policing, regulation, access to capital, immigration and education are all pretty dysfunctional and affect big parts of the economy.

They might also point to the fact that the UK is a lot poorer than many other developed countries. There is a common tendency among Brits to believe that we are as rich as everyone else and think that if US GDP per capita is higher than ours, it's offset in terms of actual living standards by the worse crime, higher health costs and spending, higher levels of inequality, and shorter holidays that Americans have to put up with. But even if we grant that argument (which I think is a cope, but anyway), it still doesn't explain why we're poorer than Canada, Australia, Germany, South Korea (which has rapidly overtaken us over the past decade), and so on. Even France is richer than we are.

Fundamentally, Boosters think growth is really, really important, because it’s the only thing that allows us to overcome zero-sum problems and reduce human misery overall. We don’t have to worry today about children working in mines or people starving in the streets because we have so much money that we can easily provide for them – thanks to growth. And if growth compounds, then small increases today can mean huge gains for our children, grandchildren and older selves. And they’re often frustrated at other people for treating it as a second-tier priority, when in their view it unlocks solutions to almost every other problem we have – and the downside of trying and failing is nothing compared to the upside of succeeding.

These Boosters are people like Anton Howes, Matthew Clifford, Shreya Nanda, Stian Westlake, Aaron Bastani, Aria Babu, Tom Forth, and Tom Westgarth and Andrew Bennett. Note that this cuts across standard left/right divides. Even if these people disagree about how to improve things, their fundamental view is that the UK could be much, much richer if we improved policy.

The second group is much more pessimistic. Let's call them the Doomsters. In their view, the country faces enormous problems that mean we're stuck on low growth for the foreseeable future, unless we happen to get very lucky on things outside of their control. This group highlights that governing involves trade-offs, that policy design is difficult, and that there are no free lunches – for example, many Doomsters believe that the UK could improve growth by improving skills, but that this would require huge amounts of government spending and bear fruit over several decades. They can, I sense, be frustrated at what they see as the freewheeling dilettantism of many boosters who think they have one weird trick to double the UK’s economic growth rate.

I believe a significant influence on this group is the work of Dietrich Vollrath, who argues that the slowdown in global economic growth in recent decades is not that technology is advancing less rapidly (a theory I explored for the BBC recently), but largely shifting demographics caused by an ageing society. I'm simplifying here, but Matt Clancy's review was good. But Vollrath was writing specifically about the US – and less applicable, perhaps, to a country with a GDP per capita that is 32% below America’s.

In this story, the UK is basically locked in to slower growth, because we have fewer young workers and more old people. This creates a bit of a death spiral. Fewer workers means fewer people to act as entrepreneurs and innovators, and also fewer taxpayers to fund the higher spending needed for the extra and longer-lived old people. This means that per capita taxes may have to rise on those who are left working, which slows down growth as well. Even if we could eventually raise the birth rate to counteract this – and the evidence is depressingly thin that government policy can meaningfully encourage people to have more kids – that won't show benefits for decades.

Doomsters also argue that, even if there are gains that might come from better policy, they probably aren't very large (with perhaps one or two exceptions). Giles Wilkes is one of the most challenging and interesting of the Doomsters, and argues that you can't just "unleash growth", because the gains from any realistic public policy reform we could imagine would still be tiny compared to overall GDP. Doomsters also often make this argument about housing supply – even if more housing would be a good thing, they think it's not feasible to build that many more that it would really change much. I think the one policy choice that the Doomsters do think made a big difference was Brexit, which is certainly within our power to reverse in principle, but practically isn't really because of the politics of it. On this point I entirely agree – it was a bad decision that is already visibly making us poorer, with very limited benefits.

Doomsters might also point to the UK's exposure to global economic trends and suggest that a lot of our fortunes are not really in our control, at least in the short run. There's not really very much we can do to deal with a massive rise in energy costs caused by the war in Ukraine, at least in the short run, and the things we can do will take years and cost a lot of money, which means higher taxes and, yes, lower growth. As well as Giles Wilkes, I would suggest that Tim Pitt, Torsten Bell and Rupert Harrison* appear to me to be in this group – all are smart, informed, and have more experience inside government than the majority of the Boosters. (Apologies if any think I’ve mischaracterised them in any way.)

Obviously there are Boosters who worry about the things Doomsters worry about, and Doomsters who want to do some of the things Boosters favour because they can hardly hurt. But often the divide leads to stark differences over, for example, whether the best way of analysing a new budget or policy change is how it affects the distribution of income or how it affects economic growth. Or, as we see in the Tory leadership election, whether it’s a bad idea to raise corporation tax for growth reasons, or if it won’t really do much to growth anyway so reducing the deficit should be the priority.

Institutionally, the Doomster view seems very powerful at the Treasury, and the absence of a more optimistically Boosterish department may be behind some calls to break it up. I don’t really know what either of the candidates for Tory Party leader really believe on the most important issues, so I’m not going to speculate about them. If Janan Ganesh is right that the vibes of “know-it-all” Sunak vs “no-nonsense” Truss will decide which of them makes it to No 10, I think it will be the Booster / Doomster divide among the people they listen to that decides what they actually do there.

* I think I miscategorised Rupert here - sorry!

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Elsewhere…

I helped to bring out Works in Progress’s eighth issue, with great articles by Stewart Brand on sailing and maintenance, Saloni Dattani on fixing peer review, and many more, plus a wonderful documentary about a DIY internet in Cuba.

And I reviewed Nicolas Petit’s Big Tech and the Digital Economy: The Moligopoly Scenario for the History of Economic Ideas journal.

And, by popular demand, I’ll be releasing a new issue of my “Things I Recommend You Buy” post soon. To get it, don’t forget to smash that subscribe button.

Last night I presented a documentary on BBC Radio 4 that asked whether innovation has been slowing down since the late 20th Century, and whether there are things we could do to change that. You can listen here, and it’s also available if you search “The End of Invention” in the BBC Sounds app. The licence fee really is a bargain when you think about it.

I was very happy with it overall – thanks largely to the excellent work of the producer, Jolyon Jenkins, as well as the team at the production company Novel. The process of making it was quite enjoyable. After being recruited to do a show on “stagnation”, on an outline by Novel the BBC had approved, I initially pitched an insane, sprawling “theory of everything” about why the world seems to be getting worse in important ways – with three overlapping theories of technological slowdown due to dysfunctional science, Baumol’s cost disease due, perhaps, to insufficient automation, and institutional sclerosis due to crappy win/lose political mechanisms and rent-seeking.

Obviously, we couldn’t manage this in the 28 minutes we had, so we focused on the first element, it was a struggle to fit even that in. We did hours and hours of interviews, including people we ended up not having space for like Anton Howes (who argued that innovation wasn’t slowing down at all, it was just “diluted” by the fact that our lives are already so complex and rich in choice compared to previous generations) and Samantha Jordan (whose startup aims to do for scientific research what Github has done for software development). It’s quite daunting to try to take the best 2 minutes from an hour-long conversation in a way that also builds up an overall narrative.

For what it’s worth, I think it’s inconclusive whether science and technology are slowing down on aggregate (I suspect they are, but can’t say for sure), but I think it’s pretty clear that scientist productivity – that is, the rate of new discoveries per scientist – is slowing. And fixing that is a no-brainer.

Here are two charts that support this point, from the first two papers linked below:

It’s possible that there is just some kind of hard limit to how much we can learn about the world, no matter how many extra minds we put on the case – which would suggest that we should massively cut science funding, because there’s just no point in spending more – but that is very counterintuitive, semi-nonsensical, and doesn’t really fit with the specific cases of things like chip and drug development, where it’s unlikely that we could just massively dial down the efforts we make to progress and still get the same results.

Or it may be that the low hanging fruit argument really is true, and we’ve discovered all the “easy” things to discover, but as I say in the documentary I suspect a few breakthroughs, in areas we don’t understand at all right now, could give us a flurry of follow on innovation. I definitely don’t think the low hanging fruit argument is intrinsically correct: ideas became easier to find for most of the industrial revolution, so I don’t think it’s obvious that we’ve passed the peak of that now, compared to other causes of the slow down.

I am very taken with the idea that there is a trade-off between accountability and discovery, because accountability breeds conformity and reduces variance. That is the implication of the idea that science progresses one funeral at a time. It seems probable to me that a model that was more random, or based on more competing patronage networks like DARPA, might give us more interesting discoveries than the current one.

Anyway, I had a good time, and I’m grateful for the feedback people have given, and the horror stories some scientists have told me about their own experiences with the dysfunctional system we’ve got. Finally, here are a few of the pieces that influenced my thinking:

• “Are ideas getting harder to find?” by Nicholas Bloom, Charles I. Jones, John van Reenen, and Michael Webb.

• “Is the rate of scientific progress slowing down?” by Ben Southwood and Tyler Cowen.

• Science Fictions by Stuart Ritchie, reviewed by me here.

• “Escaping science’s paradox” by Stuart Buck.

• “The speed of science” by Saloni Dattani and Nathaniel Bechhofer.

• “We don’t know how to fix science” by Jose Luis Ricon.

• “How to avoid borrowed plumes in academia” by Margit Osterloh and Bruno S. Frey.

• Scientific Freedom by Donald Braben.

• The work of the Arc Institute.

You should be able to listen to “The End of Invention” worldwide, but if you have any trouble accessing it, let me know and I’ll try to get that sorted for you.

I think this would be a bad idea for a few reasons.

1. Anonymity is part of a free press - it allows people in sensitive positions to speak publicly, including about abuses of power to act as whistleblowers, in a way that gets seen by journalists and others to get what they’re saying picked up more widely. People in these situations often have no idea who to go to, and instead just tweet anonymously about problems in, eg, their workplaces, that they simply couldn’t if they weren’t anonymous.

An example might be a doctor or nurse at a hospital that’s neglecting patients or otherwise breaching NHS standards - anonymity allows them to speak publicly and sound the alarm without risking their own jobs. Ditto for speaking out about bad and bullying employers, where doing so without anonymity could threaten people’s future job prospects. Could Glassdoor exist if it had a real name policy?

2. Anonymity allows us to learn from people who could not speak openly for mundane professional reasons, but still have useful things to say that the rest of us can learn from. For my own part, I learned a lot during Covid from an anonymous doctor who could not tweet under his own name for professional reasons, but who made me and many others realise early on how bad Covid was going to be – while many in positions of authority were downplaying the risks. This viral piece about the reality of life during the height of Covid helped many people to understand how horrifying the pandemic was – it almost certainly couldn’t have been written if the author was not anonymous.

I follow many others in similar positions – civil servants, journalists and regulators who simply could not speak at all if they had to disclose their names publicly. We would be worse off without access to these people, although I accept the counterargument that knowing someone is a barrister is useful for discounting what they say.

3. Anonymity allows people with politically unpopular views to express their opinions without fear of repercussions. This is particularly important if you hold views that may cause you difficulty at work or university if people find out about them. Anonymous accounts allow students and other young right-wingers to do online activism without the “woke mob” getting them fired or ostracised. Conservative MPs, whose lives have been built on being openly right-wing, may underestimate how costly it can be for people in other walks of life to openly express right-wing opinions.

4. The UK doing it sets a precedent that makes it harder for the world to object when, eg, Russia does it. If social media companies end up complying with the government here, it becomes impossible for them not to comply with authoritarian and undemocratic regimes that ask them to do the same. That strengthens regimes that are hostile to Britain and its values.

5. There is a lot of potential for abuse by future governments. People are already being arrested for, eg, making nasty jokes about Grenfell. In the future it’s perfectly possible that a government could try to classify criticism of, eg, aspects of the transgender movement as “hate speech” and persecute people for what should be protected free speech. Even if this government doesn’t intend to misuse the powers, it ought to imagine what a different one would do.

6. Vulnerable people and groups can use anonymity to find others like them online without fear of reprisals from their family / communities. If someone from a fundamentalist religious background is gay, or if a woman doesn’t want to be forced into an arranged marriage, or if someone needs to flee an abusive relationship, they can use the internet to find support from other people who’ve been in the same situation. Losing anonymity means these people are more likely to be trapped in situations where they may be in danger and not know how to get out.

7. Real name verification doesn’t appear to stop online abuse. Facebook already does a version of it and lots of people just do the abuse and bullying under their real names. Similarly, of the racism directed at the black England football players after the Euros on Twitter, 99% came from real name accounts.

8. One version of banning anonymity involves allowing people to conceal their names but having to verify themselves privately to the companies. This doesn’t solve any of the above problems because data breaches can and do occur, and so the chilling effect on people I’ve described above will still take place, and if a breach does happen the people involved are potentially in big trouble, perhaps even in danger of violence in some cases.

***

I do think there is something the government could do instead. Identity verification online is very costly and difficult, so some services that would like to have a more rigorous verification policy cannot affordably do so. If Twitter, for example, could pretty easily verify any user that wanted to be verified, it could offer a version of the service where you could only see messages from verified accounts. A lot of people who currently receive abuse would probably do this, leaving the rest of us who prefer the version with lots of anonymous accounts, for all the reasons described above, free to use that.

Creating an optional, opt-in digital ID system that actually works – or making it easier for the private sector to provide one – could make this possible. As we’ve already seen, people are happy to be horrible under their real names, so this wouldn’t stop online abuse. But it would achieve most of what the government wants, without taking away an important shield of free speech online.

How income-contingent loans work

In England we give income-contingent loans to allow people to pay for university fees and living costs. This means they don’t pay those loans back unless they earn above a certain income (currently £25,716/year), above which they pay 9% of their earnings in repayments. The loan incurs an annual interest rate equal to an annual measure of inflation plus 3%. Once you have paid off the loan, no more repayments are taken, and any amount still unpaid thirty years after the loan was first taken out is written off.

This is very generous. Under a less generous repayment scheme that was in place until recently, with a lower income threshold for repayment, out of every £1 borrowed by students the long-run cost to the government was 43.3p. That means that there is a de facto subsidy to university education, which may lead to more people going to university than would choose to do so if the system was neutral. That might be reasonable, if university education has positive externalities, or it might be inefficient if it doesn’t, or if it has negative externalities.

One negative externality may be the “arms race” that occurs as more and more people get university degrees. Since part of the value of a university education is demonstrating your talents to future employers (eg, it is hard to get a good degree at a good university without being pretty smart), having more people with university education interferes with this signal. This means people have to compete more intensely for the top places (eg, at Oxford or Cambridge) or go into graduate education that may not be the best use of their time and money.

South Korea, which has the highest share of private spending on education in the world, is an example of where this arms race can lead to:

From a tender age all pupils (and their parents) are fixated on the eight-hour multiple-choice entrance exam for university, to which three-quarters of school-leavers go. Because competition is fierce, parents plough money into private tuition—over 18 trillion won ($15 billion) last year, or more than a tenth of household spending—to improve their children’s chances of getting into the best secondary schools (see chart).

This has led to intense competition even for places in crammers. The most desirable hagwon set their own entrance exams and refuse applicants with a low score. Some of those rejected reapply several times. Hence a new breed of cram schools has emerged that mostly coach students to get into more illustrious ones. They are called sekki (“cub”) hagwon.

It’s not obvious to me that university education has positive net external effects, especially at the margin. Having some graduates is probably good for society, but diminishing returns surely set in at some point, and it’s quite possible that the bad outweighs the good. If more university education is not unambiguously good for society as a whole, creating a big bias in favour of it seems like a bad idea.

It is important to differentiate between this subsidy and the income-contingent element of the loan. The subsidy - the amount that, overall, is never repaid by any student - is what society contributes to give people an incentive to study at university. But the fact that the scheme is income-contingent also means that graduates are subsidising each other. This shares the risks of doing a degree between graduates - doing a degree may give you a chance of having a high-paying career, but a certainty of taking on debt, which may discourage people who are (rationally) loss averse. Making the loan income-contingent means the debt is also dependent on your career success.

Ending the pro-university loans bias

My proposal is to eliminate the bias in favour of university education by allowing any school leaver to access a loan on the same terms as the student loan scheme. This would mean that, in practice, you could borrow £27,000 or more at the age of 18 to spend on whatever you wanted, to be repaid as you started earning more as you got older on the same terms as university loans are repaid

This would give a similar degree of freedom and subsidy to every young person that is currently only available to young people who are somewhat academically gifted, and who choose to use those gifts by going to university. In some parts of the country, where very few people go to university, the policy would mean a major cash transfer that currently only goes to universities and university towns, helping with the government’s aim of ‘levelling up’.

This would allow them to spend the money on things that will genuinely help their lifetime earnings that do not qualify for student loan support right now. A lot of programmers now learn their trade by doing boot camp courses that only take a few months. Apprentices currently earn very little (which is fine, it makes it possible for more places to take them on), so they could use these loans to afford to live where the apprenticeship is, making apprenticeships a more viable option for many people.

The government is moving towards this kind of approach, but by being too timid about letting people decide how to spend the money themselves, it will inevitably involve bureaucracy and box-ticking, and miss out on new innovations in self-improvement that a government agency has not yet approved.

Others will likely use the money to get set up in life: using it as a deposit on a home, buying a car, or moving somewhere with better job opportunities than their hometowns. In many parts of the country, owning a car is absolutely vital to access a bigger job market than your immediate surroundings offers.

Probably a lot of people would spend some (or a lot!) of the money on holidays, boozing and socialising. That’s fine - fun is a significant part of many students’ university experience, and is a good reason to go to university. If the loan allowed people to have more fun without going to university, it would give more people access to one of the key parts of a university education without the time and cost of doing a university degree. It seems bizarre to say that only studious young people should have the ability to get drunk and party on a Wednesday night, but that is what the current system entails.

What this would mean for university students

The best argument against my proposal is that it ends much of the risk-sharing element of the loan. But since the same loan terms are currently offered to students who study medicine or economics as study English or the creative arts, which have wildly different expected returns in terms of lifetime earnings, I question whether this element is really very strong in our current system. Making the money freely available to everyone might actually allow a true risk-sharing mechanism to emerge for those who do go to university (which would likely offer different terms according to subject and institution).

Ending the university bias does not need to involve ending the subsidy for university education. It can also be done by giving the same subsidy to whatever alternatives people would like to choose instead. If the consequence of this is fewer graduates, and perhaps fewer universities, so be it.  No institution has the right to exist at the public’s expense if it is not providing value to the people it serves - if, once the bias was eliminated, some universities could not give students an offer that was worth it without a major subsidy in its favour, they should shut down. 

Pressures like that may force universities to offer better value for money, too - cheaper courses, since students would have more alternative options and could use the remainder of their loans on other things, and a greater focus on improving long-term outcomes for their graduates. It would finally force universities to compete - not just with each other, but with the rest of life’s opportunities too.

Anti-Virus: the Covid FAQ

Along with friends, I’ve put together a site that tries to respond to some misinformation and dodgy claims made about Covid. It also catalogues some of the claims made by some of the most prominent “lockdown sceptics” and “Covid sceptics” (eg, people who claim that there is no pandemic, there are just a lot of false positive Covid tests). It’s called Anti-Virus, and it’ll be updated regularly throughout the pandemic.

I’ve also written about the eight biggest Covid myths, based on that site, for the New Statesman, which you can read here.

Every month when I get paid, I use Monzo pots to divide my income between bills, savings, and normal spending for the month. For those who use a bank with “pots” (which are little sub-accounts for dividing money between), I’ve outlined my budgeting method at the end.

How I manage my savings

I try to keep only a small amount of money in cash – a bit more than a month’s worth of expenses (including rent). I don’t keep months in cash as an “emergency fund”, as some advise: in a downturn, even a major one, I can sell investments to cover my emergency expenses, and in my view the cost of drawing down investments in a downturn is less than the cost of keeping a large sum of money in cash over time, as this post argues.

To me, keeping savings in cash is like setting fire to it. It earns so little interest that inflation means it is eaten away bit by bit every day. Consumer price inflation in the UK has averaged 1.9% since 2010, meaning that £1,000 kept in cash from 2010 would have lost about £180 in purchasing power by now. Cash savings could also have earned a return if they were invested, so the “opportunity cost” is even greater.

Instead, I invest in Vanguard’s FTSE Global All Cap Index Fund (Accumulation). This means I am invested in 100% equities (stocks), spread across the world’s publicly traded companies in proportion to their valuation, and any profits paid out (dividends) are automatically reinvested. This is a broad, diversified and passive fund, and means I am not trying to “beat the market” – I am just following it.

Because I’m far from retirement and my salary is my main source of income, I’m happy to take the added volatility and increased expected return that being fully invested in equities gives.

The main alternative – bonds, which is basically investing in loans to businesses and governments – tends to be less volatile, but give a smaller return. The chart above shows the performance of equities versus bonds between 1900 and 2017 – in my view, because I’m willing to live with the higher volatility and risk, 100% equities makes sense for me. (Ben Todd gives a counter-argument here, for what it’s worth.)

If you invest in equities, be prepared for some very unpleasant years, even though the average annual return may be positive. The chart above shows the S&P 500’s performance since 1980. I expect to live through a few major market drops, where I could lose as much as half of my savings or perhaps even more (the S&P 500, the main American stock tracker, lost 49% of its value in 2007-08). Even in good years I expect my savings to lose 20% of their value at some point, but I also expect that over the long term the extra returns will make those worth having lived through. I will probably move some of my savings into bonds as I get closer to retirement and am less able to “ride out” short-term drops in the market. Note: asset valuations are very high now, so don’t expect the same high returns we’ve had historically.

Vanguard’s Global All Cap Index Fund is the fund that I invest in. I own this share of the fund, and have chosen this instead of, eg, buying individual shares in Apple, the FTSE 100, or buying property. I pay a fee for this fund which pays the people who manage it. That fee is 0.23%, and is a charge on the total investment, not on the returns I make – so every year, I pay 0.23% of what I have invested, no matter how well or badly it performs. That means that what looks like a small fee can be very important: if you make a 1% return, a 0.23% fee eats nearly a quarter of your entire income from your investment. Thankfully, Vanguard’s 0.23% is very low compared to many other funds.

As well as choosing the fund I have also had to choose the platform to buy it on. If the fund is like the TV I buy, the platform is like the website I buy it from – Amazon, Currys, etc. Platforms also have their own fees.

I have chosen to use Vanguard’s platform, which costs another 0.15%, capped at £375 a year (meaning investments over £250,000 are effectively fee-free). So, in total, I pay 0.38% annually to invest. Other platforms are available, on which you can buy the fund I choose above and other funds on them too. (Confusingly, Vanguard is both a platform and has a range of funds.) There’s a comparison of platforms here.

These fees compare well with similar offerings from high street banks. Until recently, for example, Natwest charged a maximum of 0.35% in platform fees and 0.60% in fund fees for its stocks and shares ISA, making it over twice as expensive as my Vanguard choice. They’ve cut those fees a bit, so they’re now just under twice as expensive. Like I say, these fees might look small, but they’re best thought of as a percentage of your returns – if you expect to make 4% per year in real terms, a 0.95% total fee is a 24% charge on your returns, while a 0.38% fee is a 10% charge. Over the long term, this adds up.

I do all this through an ISA, which means that gains I make on these investments are not taxed. In the UK you can contribute up to £20,000 a year to your ISAs, which includes cash ISAs and ISAs for buying a house. Cash ISAs are pointless – you will not earn enough interest to pay tax on it – and I don’t plan on buying a house in the near future, so these are irrelevant to me.

I admit that I do “invest” a tiny amount of money in individual stocks, which I consider to be a form of gambling. I use Freetrade for this, which doesn’t have any fees for normal trading. I mostly own CRISPR-related stocks, but it’s less than 1% of my savings. Here’s a referral link to sign up – if you do, we’ll each get a “free share” worth about a fiver.

Managing my own pension

I self-manage my pension through a SIPP (Self-Invested Personal Pension). This is almost identical to the stocks and shares ISA I have above, and similarly is entirely in Vanguard’s FTSE Global All Cap Index Fund and invested on Vanguard’s site. It has the same fund and platform fees as Vanguard – some pensions have combined fees of 1% or higher, which over the lifetime of your pension can mean tens of thousands of pounds wasted. 

Most pensions that people are opted into by their employers are either expensive and/or timid in how they invest. NEST is a public corporation in the UK that serves as the “default” pension fund for many employers. It was set up when autoenrollment was introduced, requiring workplaces to enroll their employees into a pension, and it has a range of different funds according to people’s expected retirement dates, risk tolerances, and ethical preferences. Since 2015, as spotted by Michael Lane, by far the best performing fund has been its Sharia fund:

So if you’d invested £100 in a NEST fund at the start of 2015, you would have about £170 if you’d gone for its Higher Risk Fund, and £246 if you’d gone for the Sharia fund, as of September 2020. You’d be even worse off if you’d gone with its default 2040 retirement fund!

This is because the Sharia fund is 100% equities, while the higher risk fund is only 70% equities and the default fund is 60% equities. Obviously, this reflects the excess risk that equities come with, but for me, this is not the sort of portfolio I want for a pension I will not be touching for another thirty years at least.

If I was in a normal pension, my first move would be to check the equity share of the investment and the pension fees, and compare them to alternatives. I have zero confidence in a pension fund manager’s ability to “beat the market” and so I do not believe in paying them to pick stocks for me. I want as diversified, passive and cheap a portfolio as possible, and a 100% equities investment to maximise long-term growth.

That’s not to say that employer pensions are bad: if your employer will match your contributions, that’s free money. When I had an employer that did that, I increased my contributions to get as much employer contribution as possible.

It’s pretty easy to move pensions – I moved two into Vanguard when I set up my SIPP. If I had an employer that refused to deal with my SIPP, I would maximise my contributions to their pension to get as much employer contribution as possible, and then move it out as soon as I’d moved to a new job.

NB: Pensions are not always good value in the first place, especially if you’re a basic rate taxpayer, because you get taxed on money you withdraw from them. Employer matching aside, if I was a basic rate taxpayer I would often prefer to contribute to my ISA (paying 20% on the way in, and then nothing on withdrawals) than to my pension (paying nothing on the way in, and 20% on withdrawals), because of the ability to access my ISA savings whenever I want, not just after I retire. 

So, in summary: virtually all my long-term savings are held in equities in an all-world fund managed by Vanguard. I am focused on keeping my investments broad and cheap. I manage my own pension to do this too.

Why I don’t plan on buying a house

I am not planning on buying a house any time in the near future. 

1. I don’t think it’s any cheaper than renting, when you account for the opportunity cost of investing the money you would have spent on the house. Buying a house involves both paying for the rent up front and investing in a house – I’d prefer to pay the rent on a monthly basis and invest my money elsewhere.

2. I think the transaction costs of buying and selling houses are enormous (stamp duty, the cost of finding a good place, and the risks involved with buying a house that has problems you don’t know about), so if I ever do buy a house I will want to do it as few times as possible. 

3. I don’t expect to want to live in the same place when I have children as I do now that I don’t have any.

4. I am relatively optimistic and knowledgeable about the prospects of planning reform in the UK (which would lower the long-run expected path of house price rises), compared to the market as a whole, so I think in this I potentially can “beat the market” by waiting until my friends have succeeded in making houses cheaper.

I don’t think it’s stupid to buy a house that you expect to live in for a long time, because the benefits of being able to make it your own and put down roots somewhere without having a landlord who can force you to move might be significant. But it’s not for me right now. (I would probably never buy a flat, though, because you’re too much at risk of getting stuck with bad/noisy neighbours). There’s a good short podcast on the “buy or rent” debate here.

Budgeting with Monzo

Every month when I get paid, I use Monzo pots to divide my income between the following – the first three are each pots, separate from my main balance, and the fourth goes straight to Vanguard:

1. Rent and bills

2. Discretionary spending

3. Short-term savings

4. Long-term savings

Rent and bills don’t change month to month, so that’s easy – all of that comes out of a dedicated Monzo pot, so I just make sure to put the same amount in each month. 

Then I put a month’s worth of other spending money into a “discretionary spending” pot – this includes all other day to day spending, including groceries and transport. Once a week, I move a week’s worth of spending from that pot into my main account. That is my total balance for the week and I can only add to it in exceptional circumstances. I do this on a Friday so I can have fun over the weekend and tighten my belt during the remaining weekdays – it’s a lot less miserable to be broke on a Wednesday than a Saturday.

I put a fixed amount into long-term savings, which I describe above – that goes into Vanguard. And then I put the rest into short-term savings, which is basically a slush fund for large and “long-term” expenses like holidays, clothes, electronics, etc. This also acts as my “emergency fund”, but as discussed above, this is very small – less than a month’s income, and equivalent to about a month’s expenses. If it gets too large, I put the excess into long-term savings.

This method means I am committing most of my money in advance, and replicates the “envelope method” to portion out spending across a month. The only flaw in this is if there is a special event I’m going to, like a birthday party, where I’ll end up spending more in a given week than usual. In those cases, I usually take from my short-term savings slush fund.

Summary

I try to apportion my money fairly rigidly each month for short-term budgeting. I keep a small amount of short-term savings in cash, and I invest virtually all the rest in a low-cost index fund. I hope this has helped you think about what may be best for your money – don’t just follow what I do, but look into it yourself. It’s daunting but it’s actually not very complex, and you could make yourself much better off in the long run than if you just sit on cash or whatever default investment fund or pension your bank or employer has given you.

Thanks to friends who helped me with this, especially Michael Lane.

Here is a list of products that I get a lot of consumer surplus from. I recommend any and all of these. The list spans cooking and kitchen equipment, through “work from home” products (a new 2020 category), to things I use when I go travelling (in normal times, I travel quite often for both work and pleasure). I usually do a lot of research before making any big purchase and I return things to Amazon that I don’t like, so I think I am a fairly reliable source.

This is the third edition of my “Things I recommend you buy” series, and is comprehensive – anything from old editions that is not included is no longer recommended. As a special bonus to my American followers, I now include links for Amazon US when I can find the same product on there (or virtually the same). As usual, all links are monetized because I am greedy and like money.

Kitchen

Butter dish – £3

This iconic butter dish is one of those things that you only realise you needed after you buy it. The irritation of trying to spread cold butter on bread and tearing the bread, or using too much butter when you try to take off a knob and let it melt onto hot toast, is easily worth £3 to never have to deal with again. Put the butter in this, leave it out of the fridge, and you’ll be glad you did.

Monosodium Glutamate – £4.25

MSG is maligned by people with a latent Calvinism that tells them that there are no easy wins in life and anything enjoyable must be bad for you in some way. It is absolutely delicious, and is a very easy way to make any sauce or braising liquid much more savoury and rich-tasting – I use it mostly in ragu and chillis, as well as many sauce-based Chinese dishes I make (see Every Grain of Rice below). It’s very cheap, you only need a little, and it is an absolute must-have for any chef.

Instant Pot Duo V2 7-in-1 Electric Pressure Cooker  –  £85 / $99

I still love my Instant Pot, especially for making chicken stock – I save up the bones from a few roast chickens, roast them again to brown them, and then pressure cook them for three hours or so. The best thing about that is that the steel inner pot can be removed and placed straight onto the stove, so I can then boil the stock down to a thick, rich reduction that I use for pan sauces. I use my IP for this and other dishes at least once a week, often more than once, to make thick stews and sauces for pasta extremely quickly — in between a third and a fifth of the time it would take to get the same results in an oven or on a stovetop. The Instant Pot is extremely safe, unlike traditional pressure cookers which scare the shit out of me, and has an all-important saute function so you can fry meat, soften onions, etc before cooking and thicken liquids after cooking in a single pot. This model also makes yoghurt.

My favourite recipe to make in it is this Serious Eats ragu bolognese, which ends up being very easy to make and gives me enough food for several meals, so I make it in advance and freeze some portions. The best source for pressure cooker recipes is Serious Eats - here is a rough list of my favourite recipes. NB: At time of writing this was on sale for £60 or $70 in the US.

Salter Digital Kitchen Weighing Scales  –  £13

A digital weighing scales is essential for basically anyone who cooks — a scale is essential for following many recipes and a digital one allows you to zero out with a bowl of your choosing on top, so you can be much more precise much more easily than with a mechanical scales. It’s hard for me to imagine how you could follow recipes with any degree of accuracy at all without one of these. A must have.

Brita Water Jug and AmazonBasics filters – £16 and £22 for six

I don’t care about water impurities and most tap water tastes pretty delicious to me as is. But you simply cannot beat a glass of cold water straight from the fridge, especially on a hot day, and these jugs are narrow enough to fit in the door of most fridges. The Brita jugs seem to be about the same price as the AmazonBasics ones, but obviously they are identical in every important way, so I would just buy whatever’s cheapest at the time. AmazonBasics filters are considerably cheaper than Brita’s though, but like most people I use each filter for about six months before remembering that I “should” switch. (Some people like to fill their kettles with this water to avoid limescale, but I don’t bother.)

Silicone mould ice cube trays – £7 / $9

The real consumer surplus is buying bags of ice from a shop, but carrying those home can often be a pain, and I can’t always remember to keep my freezer stocked with them. These silicone ice cube trays are a useful complement – what’s nice about them is that they are very easy to get the ice out of, instead of standard trays that often shatter the cubes. I keep a ziploc bag in the freezer and periodically empty these into it, so I have a reserve of ice whenever I need it.

Metal cooking tongs – £10 for two / $7 for two

Along with a wooden spoon or spatula, these are the best utensils for cooking with, especially frying a bit of meat. I really dislike silicone-ended ones (too floppy) and just want plain steel. For that reason, if you don’t mind waiting a few months for delivery, you can safely buy one from AliExpress for about £3. You only need one – the longer the better – so if you buy the Amazon pair, you can give the shorter one to a friend.

OXO Good Grips Large Silicone Flexible Turner  –  £8

Not much to say about this — it’s just the best flipper I’ve used for eggs and other things that need flipping. It’s big and silicone, so it won’t melt at high temperatures. (Never buy plasticky, non-silicone cooking equipment.)

Silicone pot scraper – £9

An amazingly useful counterpart to the flipper. This is excellent at scraping down the sides of bowls and pots when some of your sauce is clinging to it. Does an important job well.

The cheapest non-stick frying pan you can find  – from £3

Non-stick coatings always break, and usually pretty quickly. Once you’ve had the misery of watching an expensive non-stick pan flake and degrade over time, you’ll understand that you should never splash out on anything with a non-stick coating and should instead think of them as disposable, like paper towels, getting uber-cheap ones. But you need them for eggs — it’s so much simpler to fry and scramble them on non-stick. You can buy them at IKEA for £3 each. (Disclaimer: If there’s some health problem with using non-stick pans that you’re concerned about, just don’t use them. I haven’t looked into that.)

Hario 4-cup Glass Teapot  –  £20 / $18

This isn’t an essential by any means, but it’s an aesthetically lovely and well-designed tea pot that I enjoy drinking loose leaf tea from. Unlike most loose leaf teapots I’ve used, the basket in this is very large, so there’s lots of room for the tea to move around once it’s absorbed a lot of the water, and it’s easy to remove once your tea has brewed enough. It’s very elegant and a pleasure to drink from. Be warned, though – these can break pretty easily if you’re not careful with them. I buy tea from Char Tea, which is not exactly cheap, but lasts me for ages.

Victorinox chef’s knife  – £25 / $37 or Wusthof chef’s knife — £67

The Victorinox is unbeatable at the lower end of the price range, keeps its edge for a long time, and is sturdy enough for anything except cutting through bone. Unless you cook so much that you want to shell out for a knife twice the price, it’s pretty much the only kitchen knife you need. The handle is plasticky and cheap feeling, though.

Although I use and like my Victorinox, I cook so much and firmly believe that you only need one knife for 95% of what you do in the kitchen that I treated myself to something more expensive. My Wusthof chef’s knife is a joy to use and has a weight and strength that the Victorinox doesn’t, allowing it to cut through joints and some bones. It is double the price though, and I would only recommend it to someone who cooks very often. (NB: At time of writing, the Wusthof is an eye-watering £90, which is too expensive for me to recommend, but I expect the price will fall.)

Lansky Knife Sharpening System  –  £32 / $35

Sharpening knives is a huge pain in the ass. Most people use a honing rod, which isn’t even meant for sharpening knives (but because people don’t realise that they think there’s a technique they just haven’t been able to master). I tried using a whetstone for ages, because it’s the most ‘authentic’ method, but that’s tiring and takes ages. I suspect most people just live with blunt knives until they eventually give up and buy new ones, which sucks. Cooking with a blunt knife is a horrible experience, and dangerous — blunt knives, surprisingly, tend in my experience to lead to more cuts than sharp ones, because you have much less control over them and have to exert much more force to cut through things.

While not perfect, this ‘knife sharpening system’ is vastly superior to any other method I’ve tried. It has a clamp that you use to grip the knife and a set of sharpening hones that slot into the clamp at pre-set angles, which you just run over the blade of the knife in sequence to get it sharper and sharper. It’s pretty easy, although the grip could be better, and I’ve used it to bring all my knives back to being as sharp as they were when I first bought them. This is quite a nice thing to have to help out family and friends too, because you can loan it to them or sharpen their knives for them as a favour. I also have this mount, which makes it a little easier to use.

Sistema Microwave Rice Steamer  – £8

This is the most popular item I’ve ever recommended. And for good reason. Making rice in a saucepan on the hob absolutely sucks. You either do it the ‘correct’ way of not stirring it for ages and risk burning the bottom, or you use easy cook rice that’s kind of gross. (And, as with any sub-par method of doing something, there are macho eejits who think they’re impressive for doing it the stupid way.)

This rice steamer works perfectly in the microwave. Just throw 250g of dried rice (any kind seems to work, I like jasmine mostly — you can buy 5kg sacks very cheaply in any oriental supermarket) and about a pint of water and let it microwave for twelve minutes, then stand for another five. It comes out light and fluffy and you can actually leave it standing for a long time (at least half an hour) and it retains the heat, so it eliminates one major cooking headache. And since microwaves are very energy efficient, it’ll save you electricity too! Get the 2.6 litre version, the 4 litre version is too big for most microwaves.

A big sack of Jasmine Rice  –  £5-7

The brand doesn’t matter, as far as I know, but having one of these on hand, 5kg or so, is such a useful thing to have around the house. With the above steamer you’ll always have a quick and easy side dish for most meals. You can increasingly buy these bags in mainstream supermarkets, but any oriental supermarket will have them if not.

Wooden lemon reamer  –  £4 / $7

If you don’t own one of these you have probably wasted hundreds, maybe thousands, of calories on squeezing lemons and limes over the course of your life. They are £4 each, you only ever need to buy one once in your life, and they get all the juice out easily. Especially good if you like the taste of cocktails but don’t like wasting money on them by going to cocktail bars — with one of these, you can make one of my famous Cuba Libres with ease! One thing, though – if you’re doing a lot of lemons or limes in one go, a squeezer is better, but it’s more to wash-up, so for just a handful the reamer wins.

A cast iron skillet  – £15 / $15

Cast iron skillets are incredibly cheap and incredibly versatile. You can buy an ‘unseasoned’ one for £12. Seasoning isn’t difficult but requires some time — a cold winter Saturday, say — spent at home building up the coating by rubbing a thin layer of oil over it, baking it to polymerise the oil, letting it cool, and repeating a few times. The result is an almost indestructable pan that you can use for frying, roasting (I can fit a small chicken onto mine), etc, for the most part without any sticking. It’s not as good as a very expensive tri-ply pan, but I find myself using this for almost everything — except eggs, which do need a proper teflon non-stick pan in my experience. Seasoning instructions are here, and you can do it while working from home one day.

Instant Read Food Thermometer  –  £8 / $17

Any instant-read food thermometer will do here, but this is one of those things that you don’t realise you need in the kitchen until you have one. It’s good for checking the temperature of roasted meat and oil if you’re deep frying at home without a proper deep fat frier. For the little baking I do, it’s useful to check if a sourdough is ready too. This also allows you do to do the reverse sear method of cooking steak, which for thick steaks is the best and easiest method I've tried.

Cookery books: Every Grain of Rice, by Fuchsia Dunlop (£17 / $27) and The Food Lab, by J. Kenji López-Alt (£29 / $31)

These are my desert island recipe books. Every Grain of Rice is recipes from around China (there’s very little of the sort of Cantonese food you’d get from a Chinese takeaway) and makes it astonishingly easy to make delicious and very exotic meals without going nuts buying lots of obscure ingredients that you’ll never use again. In fact, other than a wok, there are only about six basic things you need to buy to make half or more of the recipes in the book, all of which can be bought at a standard oriental supermarket. I particularly like the book’s emphasis on vegetable-heavy dishes, which makes the dishes generally inexpensive to make.

The Food Lab is based on the blog of the same name at SeriousEats, and I consider its recipes to be definitive. It’s “American food” in the broad sense, which includes stuff like lasagna and lots of salads as well as stuff like buffalo wings and hamburgers. No other recipe approaches this book’s mac and cheese recipe, which is super easy and amazingly delicious, and almost every other recipe from the book I’ve tried has been a big success too.

For London restaurant recommendations, Cheese and Biscuits by Chris Pople is by far the best guide.

Nespresso machine  and Solimo Nespresso Pods – £70 and 10p each

All coffee pods taste pretty much the same to me, and usually in the morning I just want something hot, caffeinated, and fast. I used to swear by Aldi’s pods, at 13.5p a go, but Amazon’s “Solimo” own brand are even cheaper at 10p a pop (I’ve tried other brands at the same price level but many do not work properly, not letting enough water through the pod). Always get Lungo for the maximum amount of coffee possible, and I top mine up with hot water for an American-style cup – what the Italians call an “Americano”.

Aeropress – £26 / $32

An Aeropress is good for when you want a cup of coffee that actually tastes very nice, and is vastly cheaper and easier to use and maintain than most other ways of doing that. I don’t bother grinding my own beans – most of the benefit comes from using one of these, and if you like coffee enough to taste the difference with beans you grind yourself, you don’t need my advice here anyway. For everyone else, this is a fantastic little device and pairs nicely with the Nespresso, for when you’ve got a few minutes to spend on a really nice cup. If you’re reading this to find a gift for someone else, this is one of the best items on the list. I recommend brewing using the inverted method.

Potato ricer  – £17 / $18

This device is for mashing potatoes and it works brilliantly. You simply boil them whole, put them into the masher, and squeeze, and you instantly get lighty, fluffy strands that make a perfectly smooth, creamy mash. You can even leave the skins on — it squeezes out the flesh only. It is by far the best and easiest way of making mashed potatoes. I recommend adding some butter, milk or cream, lots of salt and pepper, and some Dijon mustard – mustard is the secret to nice mashed potatoes.

(Working from) Home

Felt desk mat – £15-20 / $13

This has been the best addition to my home office setup since lockdown began. It’s really inexpensive but makes my whole worktop feel much more premium and professional. It also encourages me to keep the area tidy, which helps me focus. A bargain at the price and a must-have for a winter spent working from home.

Sin&Mi Desk Lamp – £11

I have been doing a lot of calls this year on a Macbook with a very bad webcam. In general, I look terrible. The only solution I have found is a bright LED light. This one is cheap, bright and much lighter than any of the circular ‘influencer lights’ I have seen others using. I shine it directly at my face, which might be bad for my eyes, but makes me look great.

Mekeet Silicone Toilet Brush – £11 / $11

Traditional toilet brushes with stiff plastic bristles are disgusting: they get dirty, can splash toilet water back onto your face as you use them, and carry dirty water back into their holders. Ugh. This one is much better: it has thick, soft bristles made of silicone that carry less water and dirt and do a better job of cleaning.

Cillit Bang: Black Mould Remover – £2

I hate cleaning the shower but this has made it very straightforward. Really, you just spray this on your tiles, let it sit for a few minutes, and wash away. It does an incredibly good job - the sort of thing you’d usually have to pay someone to achieve.

Travel and personal items

HOMMINI Sleep Mask –  £10

If you ‘get off the beaten track’ when you travel, like me, you might find yourself in bedrooms with bad curtains that let a lot of light in. If you’re jetlagged at all, then it’s even worse. Most eyemasks, in my experience, are terrible — flimsy and letting in loads of light around the sides, and often putting an uncomfortable amount of pressure on your eyelids. This one is the only one I’ve ever used that actually works, thanks to two enormous eyepads that keep all light out from around each eye and keeping the area in front of your eyelids raised for comfort. This is a travel essential for me.

Osprey Farpoint 40 Rucksack  –  £80

I’ve used this for long trips in China and Sri Lanka, and it does a good job after coming highly recommended from “one bag” travelers online. It distributes weight well across your back and doesn’t get too sweaty. This is the right size for most non-business travel I’ll be doing once I’m vaccinated. There is also a women’s version, the Fairview 40, which my girlfriend has and which she recommends. It’s the only backpack she has tried where the waist straps sit at the right part on her waist.

Packing Cubes (Slim) –  £11 / $20

I invested in a set of these after reading people rave about them on travel forums. I was sceptical about them but they really are useful. They help you keep your clothes organised, particularly once you have dirty clothes you need to keep separate from the clean ones, and these ‘slim’ models fit very conveniently into the Osprey backpack. Brand is unimportant but I would recommend the slim design over the more boxy square options.

Gillette Fusion Razors and own brand baby oil – £17 for ten and £2

There’s a lot of posturing and misinformation on the internet about “the best way to shave”. The main culprits are subscription services, like Dollar Shave Club, and “manly” forum posters who advocate using a safety razor and blade. Personally, I disagree with both – I’ve tried every subscription shave service’s offering and all are bad, and all end up being about the same price as just buying a brand name’s blades. Subscription services are almost never actually cheaper than the alternative. The safety razor gang expect a huge amount of extra investment and work, since they demand you whip up a lather with a badger hair brush every time you want to shave, and it doesn’t even work well – it’s rarely as smooth as just using a multi-blade brand-name razor and some baby oil.

Gillette Fusion Blades are the most popular brand for a reason. You can shave with them in the shower without looking at what you’re doing, and they usually last a couple of weeks before they need replacing. Baby oil is my “shaving foam” of choice, I just use the cheapest I can find. I’m going to try Amazon’s alternative, on the advice of a trusted friend, but I haven’t yet.

Primark sunglasses – £1.50-£2

Unless for some reason you want to waste money on a pair of designer shades and spend your life worrying about them, sunglasses are disposable. You put them down in the park or you accidentally sit on them on the bus, whatever. The point is that you don’t want to waste any more than is absolutely necessary for a pair of sunny-g’s, especially since they all look the same anyway. Primark is a winner here — you can get a pair for £1.50 and they usually have wayfarer-style pairs that will have your friends thinking you’ve spent a good ten or fifteen pounds more than you actually have.

Uniqlo Airism underwear – £10

Uniqlo’s Airism line of underwear is made with space age fibres that look and feel great, and do well on warm days. I suggest getting one size larger than you normally would.

PitRok Crystal Deodorant  –  £6 / $15

I use this for two reasons: it lasts forever, and it doesn’t create a hardened build-up on my clothes like roll-ons do. I was very sceptical about using a crystal deodorant, but I am confident that it works at least as well as any normal deodorant and a number of people who know me personally (and so are probably decent judges of how well it works) have started using it themselves, also successfully as far as I can tell. Each stick lasts about three years of everyday use.

Philips Series 3000 Nose, Ear & Eyebrow Trimmer – £20 / $12

As many people get older they will find that their nose hairs start to get longer than they would like, occasionally poking out of a nostril for others to see. This is unpleasant-looking and inconsiderate of others (just as, for example, not wearing deodorant is). This Philips nose hair trimmer is a very easy to use and effective solution to this, and extremely cheap for the quality of the built — others I’ve seen for just a pound or two less feel badly made and much less nice to use. This also comes with attachments to trim your eyebrows, and can do ear hair as well, if those are things you need to do.

J-pillow travel pillow – £16 / $19

I really hate flying overnight because I can never sleep. The J-pillow doesn’t really change that, but it’s the closest I can come to sleeping while sitting upright, and it’s astonishingly comfortable compared either to the crappy pillows they give you on those flights or the U-shaped pillows that most people use. The “J” is an extra arm that goes under your neck, so you can lean your head naturally to the side and forward with some support. The pillow is firm enough to support the weight of a large male head.

Melatonin (must be 0.3mg) – £7

Almost all melatonin is massively overdosed — the optimal dosage is about 0.3mg. This is a good post that discusses the benefits and science behind it. It doesn’t really send me to sleep, but it does well at keeping me asleep. I use it irregularly, especially after I have been drinking alcohol, which would otherwise wake me up at 4 or 5 am.

Quies earplugs – £4 / $11

I’ve found Quies’s wax earplugs to be the best earplugs I’ve used. They’re disposable, but can be reused quite a few times before you throw them away. Since I am deaf in my right ear, I get twice as much use out of a box as most people, but they’re still good value even accounting for that. My thanks to Geoffrey Gray for the recommendation.

TePe Interdental Brushes – £2 a pack

Faster and less unpleasant than flossing, these do a great job but you need to get the right size for your teeth. I use the red kind now, but my teeth are fairly close together. It’s worth getting a mixed pack first to see which is right for you.

Electronics

Cambridge Audio Melomania 1 earbuds – £80 / $80

I forewarn you that I’m severely deaf in one ear so my earbud recommendations may be insufficient for ‘audiophiles’, but I listen to music all the time. I have had both these and the Airpods Pro (as well as the Sony WF-1000XM3s and a bunch of other wireless earbuds I bought, tried and returned for not being right for my needs). These are an absolute bargain for what they are – they are small, well-designed and sound great. At £80 nothing else comes close. The one flaw, and the reason I got the Airpods Pro instead, is that they are useless for phone calls. If you’re only looking for earbuds for music, these are pretty much unbeatable. If you use earbuds for calls all day, the Airpods Pro are pretty much the only option you’ve got (all other wireless earbuds I’ve tried sound awful in calls), but at £200 are not exactly consumer surplus.

Panasonic RP-HJE125E-K Ergo Fit In-Ear Headphone – £7

I no longer use wired earbuds, but for those who do, these are the best – they’re really comfortable and sound good, and so cheap you don’t mind losing them.

Anker SoundCore Portable Bluetooth 4.0 Stereo Speaker – £22 / $22

This really is an amazing piece of kit. The sound is loud and handles bass well, the speaker feels very sturdy, but best of all the battery seems impossible to run down. Extremely useful to have, whether you put it in the bathroom to listen to in the shower or bring to the park to annoy people around you.

Popsockets (buy off-brand, there are loads) – £3

This glues onto the back of your mobile phone or phone case and pops out to act as a little handle for when you’re using your phone one-handed. It sounds stupid and most people hate the little bump the popsocket makes when it’s not in use… until they try one for themselves. I don’t ever worry about dropping my phone while using it with one hand anymore, and it’s all thanks to this. What a smart little invention.

TeckNet Classic Wireless Mouse – £6 / $12

Not much to say about this other than it’s a comfortable, portable bluetooth mouse for £6. It’s the equal of Logitech mice that sell for forty pounds or so, and generally just works when you plug it in without needing extra software. The side buttons (which you might use to go forward or backwards on a web browser, for example) don’t work on macOS, unfortunately.

ELECOM Paper-Feel Screen iPad Screen Protector – £11 / $18

This is much cheaper than the leading brand and, to me, just as good. I much prefer using my iPad and Pencil with this on, even for normal tasks, and it doesn’t mess up the picture quality as I had feared. It also applies very well – I had a few bubbles after putting it on that disappeared overnight, which other reviewers report as well.

AliExpress Silicone iPhone cases – £2

AliExpress is great for certain things, and no-name electronics peripherals are a good example. The downside is that they can take months to arrive, especially in the year of Covid, but they are so cheap that you might not mind the wait.

Services and utilities

Energy

I used to recommend Bulb or Octopus, but the current price spike and wave of energy company bankruptcies means that it’s unlikely to be in your interest to switch energy provider at all right now.

Banking: Monzo

I strongly prefer the ‘challenger banks’ to incumbents, and Monzo is the one I use, but I’ve heard good things about Starling too. What I like about Monzo:

• The instant spending notifications that help me keep track of spending and alert me to any payments being made that I wouldn’t have otherwise been aware of.

• The payments functionality, which makes it extremely quick and easy to send money to friends who use Monzo and split bills.

• The Monzo.me feature which allows people who don’t use Monzo to make a card payment to me, instead of an awkward bank transfer.

• The card replacement speed — when I needed a new card they had one to me the next day, and I was able to immediately freeze my card through the app.

• The fact that customer service is done through text, rather than on the phone, which saves me a lot of time.

• The ability to set up ‘Pots’ of money that separate my money from my main account, allowing me to budget week-to-week by transferring my weekly spending money into my main account every Friday.

• The general fluidness of the app and ease of using it compared to other bank apps which are extremely unpleasant to use, in large part because of all the anti-fraud measures.

Betting: Smarkets

I enjoy betting on politics, where I have a decent track record – I made a nice profit betting on various aspects of the US election this year. I used to use Betfair, but unfortunately Betfair has embroiled itself in a scandal by refusing to pay out on Biden’s win. Instead, I now use Smarkets, which is a much better-designed site, takes a smaller commission than Betfair, and paid out on its US election markets promptly.

Investing: Vanguard

If you want to save for the long term then investing makes sense. The best thing to do, I believe, is to find a passive investment fund that tracks the market as a whole — then you aren’t trying to beat the market (which is not possible to do consistently). You want to look for low fees — fees are a fixed percent of your capital, and can be quite a large fraction of your returns. The best platform I’ve found for this, which offers a (tax free) stocks and shares ISA, is Vanguard. I use their All-World fund but the Lifestrategy fund looks fine too. Please do this instead of using your bank’s default stocks and shares ISA – you may be able to save thousands of pounds, or even tens of thousands, over your life if you do. Vanguard is owned by its shareholders too, which is nice if (unlike me) you regard the profit motive as something sinister.

Currency exchange: Transferwise

Transferwise is very fast and very cheap for exchanging money, and unlike other currency exchange services I’ve looked into they don’t phone you up constantly telling you about their “great new rate”. The actual system is very elegant, and the company has not served me wrong so far, and since I am paid in dollars I make a lot of currency exchanges every year.

Healthcare: Babylon

Babylon is an app that allows you to speak to a doctor or other healthcare professional over a video call and be diagnosed, and get a prescription, over the call. If you register with them to be your GP, as I have, it’s free under the NHS. It’s excellent and vastly better than a real GP for what I have used it for – I have usually been seen within fifteen minutes of needing an appointment, and last time I needed a prescription I had it in my hands thirty minutes after first making the appointment. Please check that the downsides – the in-person clinics you need to go to for some things – suit your needs before you switch.

Video management: Plex

If you store a lot of movie files on your computer, Plex does a great job of acting like a Netflix-style interface to cast them to your TV, allowing you to browse them with correct titles, movie covers, cast lists, etc, just like you’d get with a movie streaming service’s app. Works great if you’ve ripped a lot of your old DVD collection to your hard drive.

Other software and services you might like to try:

• Spotify – for music streaming and podcasts

• Spark – for email on macOS and iOS

• Google Photos – for online photo backup and search

• Things – my favourite iOS to-do list

• Citymapper – the best public transport mapping app

• OneTab – for saving all your Chrome tabs at the end of the day.

• Bitwarden – a password manager (I highly recommend using one). LastPass is also good.

• The Camelizer – for showing you historical prices on Amazon.

Some things I like, but aren’t exactly a bargain

• My pizza steel, which I use as a griddle pan for making smashburgers.

• My Q Acoustics speakers (actually, at the £120 they are right now, that is a bargain, but they’re usually more expensive) and Fosi Audio amplifier.

• My Denby coffee cup.

• My Bose QC25 wired noise cancelling headphones – I’m not sure if you can buy these anymore, but I use them a lot, especially when flying.

• My Dyson fan / air purifier, which was given to me by my friend Ned.

Apart from things, my favourite way to spend my money is on food. Here are my and my friend Ben’s top 21 restaurants in London.

Some other good “Things I recommend you buy” lists:

• Robert Wiblin – I agree especially with his fan and McDonald’s coffee recommendations.

• Daniel Frank.

Thanks for reading – Sam.

England* is about to go into a second lockdown, along with lots of other European countries. It’s possible that the second wave of Covid infections we’re experiencing was inevitable, but we didn’t really try to avoid it either. 

First, remember that many people over the summer believed that Covid was done with, and undoubtedly influenced the government into a more permissive position via backbench Conservative MPs.

In June, Toby Young wrote:

I’m going to go out on a limb and predict there will be no “second spike” – not now, and not in the autumn either. The virus has melted into thin air. It’s time to get back to normal.

Then in September, Young wrote that “We know from experience what doesn’t happen next. The other novel coronaviruses this millennium have *not* produced second waves.”

Alistair Haimes, an investment manager who has written extensively on Covid from an anti-lockdown perspective, wrote in August that Covid deaths had fallen to zero in England, and that “it’s over”; then in September that there was “no second wave” after pubs and bars had been reopened (although cases had begun to rise by then). 

Ivor Cummins, a low carb diet guru, recorded a widely shared video in September that argued that we had reached herd immunity already:

So around 80% are already de facto immune through cross-immunity, T-cells, prior coronaviruses. Around 1 in 5 people will be less immune, they're the ones it has to go through... Then the virus stumbles over immune people.

Sunetra Gupta, one of the leaders of the “Great Barrington Declaration” anti-lockdown movement, has repeatedly claimed since the beginning of the year that we may have reached herd immunity. In March, she and her team released a paper that suggested that more than half the UK’s population had already had Covid, which she has continued to defend since. 

In May she gave an interview to Unherd claiming that “Covid is on the way out”:

I think that the epidemic has largely come and is on its way out in this country so I think [the Infection Fatality Rate] would be definitely less than 1 in 1000 and probably closer to 1 in 10,000. That would be somewhere between 0.1% and 0.01%.

By this point, 36,000 had died of Covid in the UK. If 100% of the UK’s population had had Covid by then, the UK would have had to have a population of 360 million people for her low-end IFR estimate to be right. (She did, after being challenged by the interviewer, then change this to 0.05%. This would mean a population of 120 million at a herd immunity level of 60%, which Gupta actually claims may be much higher than the true level.) 

She continued to argue over the summer that we may already have herd immunity. In August, Karol Sikora, another Great Barrington leader, said that: 

The gloom and doomsters are predicting another wave of it. Where’s that going to come from? I just don’t believe it. Epidemiologists love doom, because that’s what sells them. It doesn’t sell to say, you’re going to be OK.

And just today, Peter Hitchens tweeted a graph showing that there is actually no second wave. The only problem is that the graph is from September:

Some of these people are just cranks, but the government often acted as if it agreed with them. During the summer, it made a series of decisions that looked foolish at the time and now look absolutely catastrophic. 

It allowed mass travel for summer holidays, and it seems very likely that travellers returning from Spain brought more Covid home with them. It subsidised people to go to restaurants, which a study this week suggested may have increased cases by 8-17%, based on comparisons of areas with rain during the scheme with similar areas without. 

It reopened universities, and most universities have required indoor, in-person teaching, often in poorly ventilated rooms. It floated a “go back to the office or lose your job” campaign. It tried to wind down furlough, before extending it this week, meaning that many businesses have already laid off staff they could now be furloughing.

It also reopened schools, which I continue to believe was a serious error, although I think this is the most debatable, since young children missing a lot of school is probably costly to them. But it is likely that children spread the disease to a significant extent, according to multiple studies. Whether we should have reopened the schools depends on a few questions, but it is essential that people think of it as a trade-off - that the cost of kids missing a year of school was greater than the cost of a second lockdown, weighed by the role of schools in contributing towards that.

These were unforced errors. But just as bad were the things the government didn’t do. Most people focus on the lack of a working test and trace system, but it’s now obvious the UK lacks the sort of state effectiveness that would allow it to pull a project like that off in a short space of time. It’s annoying, but the UK is not alone in this.

But there were loads of things we could have done to slow down the rate of new infections that might have kept the rate of spread near or below one. A few weeks ago I tweeted some ideas for things we could have done to slow the spread of the virus. It’s too late for that now, but after this second lockdown ends, we may be ready to think more creatively to avoid a third one. Here are some things we can do:

• Move to outdoor drinking and dining. We should turn over roads and parking spaces to pubs, cafes and restaurants by default. If you have a second lane or parking space outside your venue, the law assumes that you can use it for serving customers until further notice, as long as you keep it ventilated. Give over parks and other public spaces to restaurants and bars, and suspend normal rules on outside dining and drinking. More noise for neighbours is a bearable cost.

• Grants for businesses moving outside and making indoors safer. You get very little reward as a business for improving your premises to be safer indoors, especially since shutdowns affect all businesses of a certain kind, not just risky ones. There should be matching grants and subsidies for any business that invests in better ventilation or other measures that reduce the rate of spread indoors. We could also consider allowing businesses to reopen according to measures of ventilation indoors there. Along with giving space to businesses outside, wcould subsidise outdoor heaters and tables to set these places up for the winter, instead of subsidising people to eat indoors in August. Still, at least we didn’t ban outdoor heaters like France did.

• A public information campaign about how not to catch Covid. The biggest public health push so far this year was over hand-washing, but it now seems likely that the virus is spread via respiratory droplets and aerosols. Most people in the UK do not seem aware of this. Japan’s government has warned people about the Three C’s - Closed Spaces, Crowded Places and Close-Contact Settings - since the outbreak began, and this may have something to do with that country’s success in controlling the disease. 

• Proper enforcement of mask-wearing. The Tube is filled with people not bothering, or pulling theirs down to chat with other people, as have been a lot of shops. We should have made this a much bigger priority, with fines for businesses that did not enforce mask-wearing on their staff and customers, and with proper enforcement on public transport. The rule should be that if you can’t smoke in there, you’re breaking the law if you don’t wear a mask. And this would make a good public information ad campaign: "It's OK to politely tell someone to wear a mask."

• Support for people self-isolating with sanctions for employers who don’t cooperate and free isolation for those who need it. Tens of thousands of hotel rooms around the country are empty right now.

• Mandatory quarantining for international travellers entering the UK, except in exceptional circumstances, to take advantage of the fact that we are an island, and mandatory testing at the border for all travellers.

• Home teaching “pods” for schoolchildren. One compromise between reopening the schools and keeping them closed could be to create miniature groups of kids who can learn in the same space together under adult supervision, either at a parent’s house or in an office that isn’t being used. This is obviously not as good as school, but it’s not as risky either, and means that entire classrooms don’t need to be shut down after one kid tests positive. This could also be a good way to employ recent graduates in a difficult labour market.

• Perma-furlough until a vaccine is available. The purpose of furloughing was to keep businesses and their employees on life support for as long as necessary while the economy is facing the pandemic. Winding it down before the pandemic is over is pointless, and will probably exacerbate the spread of the disease (by forcing people back into work) and lead to unnecessary unemployment and bankruptcies.

A lot of this costs money. Fine. Borrowing is extremely cheap right now, and we can borrow on longer terms if we are worried about the cost of borrowing rising. The costs of further lockdowns, and of further avoidable deaths, are vastly higher. Of all the mistakes we can make right now, spending too much money is the lowest-risk one.

We’re going into a second lockdown without ever having tried to avoid it. The people who say they oppose lockdowns the most did the least to come up with ways of preventing us from needing another one. The government did virtually nothing until it was far too late, after a series of mistakes that made things worse, and it repeatedly failed to appreciate the costs and risks of its choices. Once this lockdown is over, we’ll have a choice again: whether we twiddle our thumbs while we wait for a third lockdown, or to think creatively about suppressing the virus until a vaccine arrives.

*This originally said the UK. Whoops.

Other things I’ve written recently

• Why we should pay people to get vaccinated, with Ryan Bourne for The Times and CapX.

• Why treating digital platforms as utilities is a bad idea, for The Hill.

• I wrote for the Telegraph arguing that Covid is a collective action problem, so we can’t leave it to individuals to decide how to act. Unlike freedom of speech or the freedom to eat, my freedom to do what I want really does affect your freedom to do what you want.

Things I recommend you buy

Cillit Bang Black Mould Remover (£2). I detest cleaning the shower but this has made it very straightforward. Really, you just spray this on your tiles, let it sit for a few minutes, and wash away. It does an incredibly good job - the sort of thing you’d usually have to pay someone to achieve.

Felt desk mat (£10-14). This has been the best addition to my home office setup since lockdown began. It’s really inexpensive but makes my whole worktop feel much more premium and professional. It also encourages me to keep the area tidy, which helps me focus. An absolute bargain at the price and a must-have for a winter spent working from home.

Libertarianism in the UK has had a pretty bad epidemic. Many of the most prominent self-declared libertarians and classical liberals like James Delingpole and Toby Young are now full-time Covid deniers. Even think tanks associated with libertarianism such as the Institute of Economic Affairs seem to have gone full “lockdown skeptic”. So has the American Institute for Economic Research in the US, so it may not be an exclusively British problem.

I think these positions are deeply misguided. They cannot even be justified on the grounds of individual liberty because they largely ignore both the externalities that a healthy person carrying Covid imposes on other people and the benefits of collective action during an epidemic, where a concerted effort by everyone can reduce prevalence to very low levels. If Sweden is their model, with one of the worst death rates in the world, Taiwan, with 7 deaths this year so far, is mine.

On the other hand, most self-described “neoliberals” have been fairly supportive of government measures to control the spread, while being critical of measures imposed that seem to have little basis in what we know about the disease: the 10pm curfew, shutting down beaches and parks, etc. Suppress the virus while we improve testing, tracing and treatment, and eventually eliminate it altogether with a vaccine.

The underlying difference between libertarians and neoliberals here reflects a key political division of the internet age: extreme, at times pathological, skepticism of authority information sources on the fringes of both the left and right. This kind of extreme skepticism is often useful—authority information sources are often basically just making things up, as we saw with early public health advice against wearing masks and, in the US, we continue to see with advice against vaping. But when you only apply skepticism to authority information sources and allow conspiracy theories and quacks to pass through your filter without any scrutiny, you’re in trouble.

It’s four years since I wrote a post called “I’m a Neoliberal, Maybe You Are Too” where I sketched out a picture of the sort of person I considered to be a “neoliberal”. At the time I focused on the combination of “free markets and redistribution”, which I continue to believe is the core economic policy mix of a significant group of people who can most clearly be described as “neoliberals”. 

But I also perceived libertarianism to be coming apart internally, as more and more libertarians seemed to be drifting towards nationalist, conspiratorial ways of thinking. More and more seemed to be utterly disgusted with the status quo in the developed world which, to my eyes, looked pretty good: a global liberal order that allowed for quite a lot of migration and free trade, and whose political disputes were usually managerial rather than revolutionary.

It was the reaction against that status quo, involving things like Brexit and Trump’s election victory (I wrote my piece in August 2016, in between the two), and the embrace by many libertarians of those two things, that made me want to differentiate myself and like-minded people from those people. If libertarianism meant right-wing Jacobinism in practice, I didn’t want to be part of it.

Since then, other people have done amazing work in their own right to give the concept more of an identity and profile, most notably the excellent and tireless Colin Mortimer, now at the Progressive Policy Institute. 

Inevitably, because the word ‘neoliberal’ has different connotations in the US to the UK, it has meant different things to different people. In the US, most people seem to think of the word “neoliberal” as a New Democrat, Bill Clintonite term, whereas in the UK it connotes a sort of globalist Thatcherism. Sometimes that can lead to confusion, but I’ve always thought of neoliberalism as straddling left and right and aiming to preserve or restore the old pre-2016 order.

If Milton Friedman, Tony Blair, Emmanuel Macron, Bill Clinton and 1990s-era Paul Krugman aren’t all neoliberals the word doesn’t really make sense. And if Corbynites, Bernie Bros, Trumpites and Brexiteers were the Jacobins of the modern left and right, neoliberals are the liberal anti-Jacobins opposing them. Don’t think of this as centrism, but as liberalism trying to hold on to what it won in the 20th Century.

But defense of the status quo is not enough, since there is a reason that enough people objected to the status quo to try to overhaul it. Neoliberalism can’t just be an aesthetic. But an attempt to define an expansive party-like policy platform (“this is what Neoliberalism stands for”) is a waste of time and guaranteed to alienate more people than it attracts, especially if it ends up being too much on the left or the right or too specific to one country. And the most important policy priorities for neoliberals also happen to be the ones on which there is the most agreement between neoliberals of all stripes.

So the three policies I propose to define the “neoliberal agenda” for the 2020s are YIMBYism, support for more immigration, and support for a carbon tax:

1. YIMBYism – “Yes In My Back Yard”-ism – is the belief that nearly all Western countries need much more housing supply in places where housing costs are high, and the main barriers to this are zoning and land-use planning laws. In the US and UK this is places like the Bay Area, New York and London. This does not mean supporting a free for all, which would be politically counterproductive and potentially inefficient, since new developments can often impose some negative externalities on existing residents. My favourite proposal is letting individual streets vote on their own density and design rules, so bargaining can take place between existing residents and would-be new residents to “internalize the externalities” – the ones who create the costs have to bear them.

This is probably the most important policy priority of all because high housing costs cause so many other problems the West is suffering from: low productivity growth, low rates of entrepreneurship, inequality, low fertility, poor health including during Covid, low social capital (maybe), and above all, a feeling of economic despair: the fear that you are no better off than your parents and that your children may be no better off than you. Fix housing and you begin to solve loads of other problems too.

2. Support for immigration because migration is simultaneously the best tool we have for allowing talented people to make the most of their abilities and the best tool we have for reducing extreme poverty in the short- and medium-run. Liberal democracies are extremely good at absorbing and integrating immigrants, and most people’s objection to immigration is on the mistaken belief that immigrants lower native wages or job opportunities.

Since it is remarkably difficult to raise the trend growth rate – the rate at which we are coming up with new inventions and business ideas – immigration that attracts highly skilled people is particularly good for global growth if the alternative is those people being stuck in countries where they cannot come up with and disseminate good new ideas as easily as they could in somewhere like Sydney or Paris. How many Sergey Brins, Shantanu Narayens, and Tobias Lütkes have the world missed out on because they could not move to a country where they could combine their talents with the right other people? (Note that I don’t say “open borders” or anything like that – this is about moving the dial in a more liberal direction. The biggest trap you can fall into is letting someone who wants more restrictions on immigration frame the debate as restrictions vs open borders – it’s a common tactic and an easy trap to fall into.)

3. A carbon tax because man-made global warming is real, important and potentially extremely costly, and is ultimately a problem of uncaptured externalities. A carbon tax is extremely desirable for four reasons: one, it allows markets to figure out what the best ways of curbing carbon emissions are; two, it can be made politically durable by using the revenues it raises to fund a progressive cash payment to a country’s residents, which may create a political constituency that stops it from being reversed; three, it can be border-adjusted, so countries that adopt it can impose it on imports from countries that do not, reducing the free rider problem that many carbon reducing polities have; and four, it is a permanent solution to climate change that avoids the massive expansion of the state in ways unrelated to carbon emissions that proposals like the Green New Deal involve. The biggest problem here is correctly pricing carbon, but this – adequately estimating the expected long-run costs of global warming – is a fundamental problem that any policy here has, including inaction, since inaction involves the judgement that the costs are tolerable and mitigable.

A “neoliberal agenda” focused on these things would be a club, not a party: you can be a neoliberal Republican, a neoliberal Labourite, a neoliberal priest, a neoliberal Green, or whatever. There are loads of other issues that I think are incredibly important that don’t fit here, but these three policy priorities would get you a huge amount of the potential economic and social progress we can make with public policy besides those. Not only are these, in my view, the core of what modern neoliberals really do care about, they are some of the most powerful of all possible policies we could enact to improve the lives of people around the world. First we beat Covid, and then we get on to the real work.