Markets and casinos shouldn't be the same thing

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Here’s a statement that some might be surprised at me making: Markets work. As a way of matching buyers and sellers, or capital with investment opportunities, markets are an effective and efficient method, better than anything else humanity has managed to devise thus far. There are, however, two caveats.

The first is that there is no such thing as a completely ‘free’ market. All markets have rules by which they operate. One of the reasons for that is that the assumptions used by theoretical economists when considering markets – that all participants have equal power and that all have perfect knowledge of what is happening – are blatantly inaccurate. Markets can only work effectively if those (and other defects) are corrected, so we have rules which must be followed. There will always be disagreements about what those rules should be, but the key issues are who makes the rules and in whose interests they operate. Those arguing for completely ‘free’ markets are invariably arguing for markets which are slanted in favour of those with the most power and the most knowledge. No surprise there.

The second caveat is that a real market is about those basics mentioned above, such as matching real buyers with real sellers, exchanging real things. Yet, when it comes to the world’s financial markets, most trading is nothing to do with that; it is, instead about gambling and speculation, with people trying to leverage large trades for very small profit margins on a day-by-day or even hour-by-hour basis. And in some cases, what is being ‘traded’ (i.e. being bet on) isn’t even something with any real existence beyond acting as a gambling chip. Crypto currency is a case in point. It has no real ‘value’ and its price fluctuates wildly. As a means of winning (or losing) a fortune in  short time, it’s ideal, but its value as any sort of ‘investment’ is doubtful, to say the least. Yet, lured by the improbable apparent ‘value’ of these ethereal ‘assets’, some governments are trying to pretend that they are real enough to be treated as investments by the man or woman in the street.

It's perhaps obvious why Trump would wish to do this – he has after all issued his own bit of crypto, from which he’s made a lot of money at the expense of his cult followers. It’s less obvious why the UK Chancellor would be considering anything similar. There’s nothing wrong with seeking to regulate crypto currencies as such (although the whole point of some of them is to set them up in such a way that they are very difficult to regulate effectively, not least in order to facilitate tax evasion), just as other types of gambling are regulated, including for the safety and protection of the punters. Seeking to regulate them as though they were ‘investments’, however (which is what she seems to have in mind) is dangerous, and risks creating the impression that an inherently risky proposition has somehow been rendered safe. It’s a bad message to be giving out.

People are more important than land

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If Donald Trump were to content himself with annexing the southern part of Ontario Province rather than the whole of Canada (initially at least, always reserving the option to return for more at some future date), he would probably see that as being a major concession to Canada. From such a perspective, Putin only seizing 20% of Ukrainian territory also looks like a huge concession. It may look like a strange definition of ‘concession’ to most of us, but it’s easy enough to see how it would look different to someone who believes that the strong and powerful should be free to exercise their strength to get whatever they want. A bully who settles for less than he could take will always see himself as being generous.

That doesn’t alter the fact that the reality remains that, unless other states are willing to commit their own armed forces on the side of Ukraine (and I really hope that they’re not), sooner or later the country will either be swallowed up by Russia or else a negotiated peace settlement will involve the de facto, if not the de jure, surrender of lands, leaving the world with another of those long term frozen territorial disputes around borders. It’s neither fair nor just, but in the absence of any means of compelling the surrender of conquered territory, it’s a hard fact. Encouraging Ukraine to fight on merely adds to the terrible death toll which has already occurred – one of the few things on which I agree with what Trump says.

It's still somewhat depressing that, even recognising that harsh reality, the debate and negotiation all seems to revolve around what land and territory should be ceded to whom, with little consideration for the people living, whether currently or formerly, in those areas. One of Putin’s demands is for Ukraine to respect the rights of Russian-speakers living in Ukraine. (Being a native Russian speaker in Ukraine doesn’t make someone a Russian of course, any more than being a native English speaker in Wales makes someone English, although it's a distinction lost on Putin.) But what about the equivalent rights of Ukrainian speakers in the occupied territories? Or even those living in those territories whose native tongue is Russian but who nevertheless consider themselves Ukrainian? What about the citizens of those territories who have been forcibly removed to remote regions of Russia – to say nothing of the children who have been abducted, adopted, and who Russia has attempted to indoctrinate into hating their own families and nation?

Land and territory are tangible; people can swap maps with different proposals as to where lines should be drawn. But land and territory have always been moved between states, usually by the exercise of force. They are ultimately less important, however, than the lives and wellbeing of people, and the right of those people to choose their own nationality and identity. I’m far from convinced that that relative importance is receiving due attention in any negotiation process, but then neither Trump nor Putin are individuals who particularly care about people.

Understanding what winnng means

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What ‘winning an election means is not as straightforward a question as it might appear. It’s easier to answer in an individual constituency or ward than it is overall: under first-past-the-post, (FPTP) it’s whoever gets the most votes, whether that amounts to an overall majority or not, and under any of the various alternative systems used in different places, the winner(s) is/are the candidate(s) who come out on top after the various rounds of counting. Looking at the situation overall, however, it’s too easy and simplistic, especially for those whose understanding is based primarily on FPTP, to conclude that the party with the highest number of seats or votes is ‘the winner’. It is on that flimsy basis that some polls are suggesting that Reform plc could ‘win’ the next Senedd election.

There is, though, no serious suggestion that Reform plc will win a majority of the seats – and nor will any other party on the basis of any polls taken to date. Though neither party will particularly thank anyone for pointing it out, the likeliest outcome of the next Senedd election is some sort of arrangement between Labour and Plaid, even if they are the second and third placed parties (whichever way round) in terms of seats. Surely, the real ‘winners’ of the election will be the party or parties that form the next government rather than the one with the numerically largest number of seats? The only way that Reform plc can be part of any government in the Senedd is by coming to some arrangement with one or more other parties. And there is only one other party likely to countenance that. It’s not entirely impossible, based on current polling, that Reform plc and the Tories between them might garner enough seats for a majority, but it stll appears vanishingly unlikely. Talk of Reform plc ‘winning’ the election is somewhat overblown in that context.

Whether it’s right that the largest party should be excluded from participating in government purely because they cannot – either alone or by working with others – conjure up a working majority will be perceived (and presented) by some as some sort of affront to democracy, but it really is not. It is an inevitable possible consequence of a more proportional system of voting under which more parties are enabled to have representation for their viewpoints. And the simple fact is that Farage and his crew are unable to command a majority for their views in Wales. The fact that a party representing only a minority viewpoint cannot end up with a majority of the seats is a positive feature of PR, not a flaw or bug. It’s just a pity that England insists on keeping a system which does allow that to happen and imposing it on us when it comes to government at the UK level. It’s a mistake – albeit one made by plenty of political commentators – to allow our thinking to be constrained by English norms into believing that the party with the largest number of seats is always the ’winner’, and talking in such terms only emboldens those who would wish to cry foul.

Waving the people's flag

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Some people have expressed surprise at the support coming from Farage and Reform for the nationalisation of the British Steel plant in Scunthorpe. Based on the premise that nationalisation is a ‘left-wing’ concept, it would indeed be surprising for the most ‘right-wing’ party to be supporting it. The flaw, however, lies in the premise.

It's true that Labour historically (before Blair got his hands on the party’s constitution) called for “the common ownership of the means of production, distribution and exchange”, and that ‘common ownership’ has generally been interpreted as meaning the same as ‘state ownership’ (the two are not necessarily the same thing, but that is an issue for another time). It’s also true that, in pursuit of that goal, the immediate post-war Labour government nationalised the coal and steel industries in the UK. They also nationalised the railways, although the background to that is a bit more complex: in the aftermath of the second world war, the railway system was in a bad way and needed the sort of massive investment which a patchwork of private companies was never likely to be able to provide. By and large, the utilities - gas, water, electricity, communications – were never really nationalised in the sense of being taken out of private ownership and into public ownership. Most of them had grown out of municipal undertakings, and the re-organisation was more to do with a transfer between one part of the public sector and another. Beyond those few examples, where is the evidence for an ideology-based attempt to bring the means of production under public control?

In practice, nationalisation is a tool used by both Labour and the Tories (think Rolls-Royce under Ted Heath, or the banks under Gordon Brown) to bail out failing capitalist enterprises. And it has been largely a temporary measure at that, with the companies sold back into the private sector when they became profitable again. Once we recognise it as a tool to assist capitalists rather than to dispossess them, it becomes entirely natural that the political ‘right’ should espouse it too – if not even more natural. The real question is not why the ‘right’ should be such passionate supporters of nationalising failing businesses, but why the ‘left’ should be so passionate about doing the same thing, rather than, say, taking control of enterprises more likely to have a long term profitable future. Again, though, the flaw is in the premise. Labour has long-since lost any claim to be ‘of the left’.

Trickle-up economics always wins

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There was a story in the i paper yesterday about how some of the UK’s billionaires ‘lost’ huge amounts of money in a single day as a result of the Trump-induced stock market crash. My heart bleeds for them, of course, although I’ve been unable to find a small enough violin to mark the occasion with sad music. The question, though, is ‘where did the money go?’. After all, basic book-keeping tells us that a loss in one place must be balanced by a gain somewhere else: if the money has ‘gone’ it must have ‘gone’ somewhere.

The truth, of course, is that the money hasn’t gone anywhere; it was never there in the first place. At the time of writing the story, those billionaires still own all the assets they owned the previous day – all that changed was the theoretical cash value of those assets if they decided to sell them at a particular point in time. Even if they did suddenly decide to sell them, they won’t have ‘lost’ the difference between one day’s valuation and the next day’s valuation. The amount that they will have ‘lost’ will be the difference between what they paid for the assets and what they receive from them at the point of sale, adjusted for inflation. In most cases, that ‘loss’ will be negative, i.e. they will have made a profit not a loss. It’s just that the profit will be less than the profit that they would have made had they sold them a day earlier. An asset whose price is inherently volatile and bears little relationship to the underlying value of the property concerned is a remarkably poor way of measuring wealth, and the idea that company owners and long-term investors make a profit or loss on a day-by-day basis as the price of shares varies is nonsense.

That’s not to say that there are no winners or losers, however. People who own shares more indirectly – for example in pension funds – and reach a point where they have little option but to sell will certainly find that, even if they’ve still made a net profit over the whole term of their investment, their retirement plans may have to change dramatically as a result of the actions of the madman in the White House, because they will receive less than they were expecting. It is they, rather than the billionaires, who are the real losers. There are people who have profited as well. People who have, or can access, sufficient funds to buy and sell shares on a daily or even hourly basis can take advantage of all those forced to cash in their savings at a low price by buying low and selling when the stock bounces up again. It’s even easier if they have advance warning of Trump’s actions, a hint of which he was kind enough to give them just a few hours before reversing his tariff decision.

The White House itself has released a video apparently showing Trump congratulating some of his billionaire buddies for making a killing on the back of his actions. “He made $2.5 billion today, and he made $900 million. That’s not bad,” said His Orangeness. There were some real winners and some real losers as a result of Trump’s actions, but they weren’t the billionaires highlighted in the story referred to at the outset. The winners were the people in a position to speculate and gamble on the stock markets, and the losers were those who depended on stability and certainty for their retirement. Surprise, surprise, the net result was that money and wealth flowed from the many into the hands of the few. Trickle-up economics always wins through in the end.

Reaching for the Golden Oldies

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If there’s one sure sign that a Prime Minister thinks he or she is sailing in troubled waters, it’s when he or she reaches out for the Golden Oldies. And there are few Oldies quite as Golden as the mantra about ‘more bobbies on the beat’ which is, apparently, Starmer’s topic of the day. It’s a well-played tune, previously deployed by Rishi Sunak, Liz Truss, Boris Johnson, Theresa May, David Cameron, Gordon Brown, Tony Blair, and John Major. I’m pretty sure that I remember it from Thatcher and Callaghan as well, although the online fossil record is harder to follow from such primitive times.

There are another two certainties which follow on from any promise to increase the numbers of police on patrol. The first is that it won’t happen. And the second is that it would make little difference, even if it did. Crime is a complex phenomenon, which has no one simple cause, and whilst seeing more police walking around, preferably armed at least with tasers and big batons, appeals to a certain electoral demographic (a demographic which obviously suffers from a combination of short memory and gullibility), there is no real evidence that it makes a huge difference to the volume of crime – and it may not even be the best way of using any additional resources which can be dedicated to policing. As one anonymous police source put it, “We’d rather take the money with no strings attached and invest in other things”.

One report on Sir Starmer’s anticipated pearls says that the measures are being introduced amid “fears there is a lack of visible police presence which is driving street crime and in turn more serious and violent offences”. It’s utter nonsense, of course. Lack of visible policing doesn’t ‘drive’ crime, it merely makes it marginally easier to commit. The ‘drivers’ of crime are many and varied, but include drug abuse, greed, poverty and desperation, to say nothing of crimes of passion. There was once a politician who promised to be “tough on crime, tough on the causes of crime”, but when he got into office, he discovered that the second was too difficult and would require too much effort, and the first was more easily addressed by empty rhetoric than actual action. Still, empty rhetoric makes for a good chorus line in a golden oldie.

Time to embrace the elephant

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There was a time in the 1960s, when Harold Wilson was PM, when the big monthly financial news regularly headlined by the BBC was all about this strange thing called the ‘balance of payments’. It was a crude and simplistic measure of the difference between imports and exports, and the news was invariably bad – the UK was importing more than it was exporting. These days, the numbers are worse – much, much worse – as this chart shows, but no-one is worried about it. The story about how a small imbalance was an existential problem but a huge imbalance is not an issue is a tale for another day. The point, here, is that government at the time, prompted as I remember by tabloids, launched the ‘I’m backing Britrain’ campaign, encouraging consumers to seek out and purchase UK-made goods rather than imports.

The campaign generated a lot of light, in terms of publicity and faux patriotism, but not a lot of heat, in terms of its effectiveness. It’s a precedent worth bearing in mind when considering the calls for a ‘Buy British’ campaign in response to the Trump tariffs. There are, of course, plenty of good reasons for buying goods as locally as possible, keeping the money in the local economy and reducing food miles amongst them. But for a variety of reasons, not all of which are immediately obvious, buying local can sometimes be an expensive option, not one open to everyone. Even assuming that everyone had the choice, and the financial ability to make that choice, of selecting British produce over all others, past history does not suggest that success is guaranteed. Worse still, if we did all choose to buy British, it doesn’t follow that the chief sufferers would be the desired target (i.e. the US); it’s just as likely that producers in other countries, including some of the poorest, would be the main losers.

The desire to strike back at Trump and by extension the US is entirely natural and understandable, but finding the best method of doing so is far from straightforward. If, as most of the experts say (and I believe them on this), the main immediate losers from tariffs are the consumers in the country imposing them, then retaliatory tariffs would do more harm to UK consumers than to anyone else. The second-line losers are the companies and their employees in the country targeted by tariffs, but the relative size of the UK and US economies means that the US economy can tolerate higher tariffs more easily than could the UK economy. Protection of those impacted looks to be a better mitigation than retaliatory tariffs, even if the UK government has been more than a little timid on that front to date.

Possibly the worst possible response is to plead with Trump for a deal which gives the UK some advantage over all the others seeking similar relief. Not only would it involve making unwanted concessions (and not just over things like food regulation – it’s clear that the US also wants to use its economic power to affect social and taxation policy in supplicant countries), the probability is that he’d just bank any concessions made and start again a short while later demanding more concessions. Giving in too easily to a bully merely convinces the bully that he didn’t demand enough in the first place.

That leaves us with the elephant. There is one, and only one, economic entity in the world which is big enough and has a diverse enough economy to be able to stand up to the US on the one hand, whilst developing its own economy internally to reduce or eliminate the need for the US on the other. It is, of course, the EU. Joining forces with the EU, and co-ordinating a joint response, doesn’t even require rejoining, or even the partial rejoining which the single market and the customs union represent. It merely requires a willingness to accept that joint action is better than allowing Trump to divide and rule (making that difficult is precisely why he hates the EU so much). It says a lot about what the Labour Party, founded on the idea of solidarity, has become that the idea of collective action has become such an anathema, and that competition and stealing a march on others is the only option of which they can conceive.

Misreading the signs

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Government spokespersons have been quick to try and spin the fact that the UK has been hit by Trump with a lower tariff than others as a product of Sir Starmer’s genius approach of doing whatever it takes to please Trump – saying ‘yes sir’ in all the right places, offering the shiny bauble of a visit to the King of England, hinting at reducing taxes on US tech companies etc. It’s a form of self-reassurance for a government which doesn’t really know what to do.

I’m not sure that it’s true, though. Trump didn’t get to a policy of charging exorbitant tariffs on non-existent imports from uninhabited islands by considering how nice the penguins were being to him, even if some of them are indeed king penguins. The approach he took was the entirely arbitrary one of counting the number of apples in Tesco, dividing it by the number of oranges in Aldi and halving the difference, or some other equally irrational mathematical approach. The UK has been subjected to exactly the same calculation, based on exactly the same algorithm, as all the other countries; there’s no special treatment involved at all. The tariff on UK goods is low because the UK does not have a trading surplus with the US, which implies a lesser punishment has been meted out because the UK is not particularly good at selling goods to the US.

It might legitimately be counted as a Brexit dividend, though. Had the UK still been part of the EU, the punishment would have been based on the balance of trade between the US and the EU, and because the rest of the EU appears to be rather good at selling more to the US than it buys from them, the UK would have been hit with the same tariffs. I’m not entirely convinced, though, that enabling the UK to be judged on the basis of its own failures rather than on the success of the EU as a whole is a ‘dividend’ about which we should be boasting.

The worst aspect about assuming that  a lower tariff is some sort of success, however, is that it provides Sir Starmer with a self-justification for a policy of continuing to appease His Orangeness. When what is needed is a collective approach, seeking to obtain and maintain an individual advantage over what used to be called our partners doesn’t look like the approach most likely to bring about any change.

How real is paper wealth?

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‘The markets’ have reacted fairly predictably to Trump’s puerile attempt at a conjuring trick by registering some dramatic drops. The analysts tell us that this reflects their pessimism about inflation, interest rates, and economic growth, all of which are likely to be adversely affected by the trade war which Trump has kicked off. Whilst I don’t doubt that economists (most of them, anyway – there are always some who’ll take a different view) do indeed see Trump’s actions as a threat to economic prosperity, I wonder if that’s what ‘the markets’ are really reacting to. It probably would be the case if markets were doing what classical economics says that they do, which is matching capital with investment opportunities in expectation of future profits. But if those same markets are actually more about gambling and speculation, which is probably the reality behind most trading, then what really drives them is an attempt to second guess what other players will do in response to tariffs in the hope of turning a profit by making a better guess than those other players.

It underlines that share prices an extremely poor indicator of economic value; they often bear little relation to the value of the underlying economic assets which they nominally represent. And their volatility makes them a poor measure of the wealth of their owners. To take just one simple but current example, the share price of Tesla has plummeted since Musk got involved with Trump’s administration. He’s still a very wealthy man, on paper, but his total wealth is apparently a lot less now than it was a few months ago. In his case, the scale of things means that it makes little practical difference, but the question is whether ‘paper wealth’ is a sound basis for assessing anything.

That’s relevant in the context of the increasingly strident calls for a wealth tax here in the UK. Whilst the idea appeals to many of us, assessing the amount of wealth owned by an individual is not a simple or straightforward task, especially if the value of a significant component of that wealth can vary from day to day – or even hour to hour. And non-paper wealth – property, land etc. – is not easily realisable or assessable without being realised. What is easier to assess, albeit still difficult when the tax system is complicated and people can afford to pay expensive advisers (although both of those obstacles could be overcome by a government intent on fairness), is the income generated by that wealth including, of course, any increase in value from the date of acquisition to the date of disposal of any asset. We certainly should do more to tax the wealthy, but taxing the wealthy isn’t necessarily the same thing as taxing their wealth. Their income is a lot easier to get at.

Sir Billy No-Mates

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It’s unclear exactly what Trump is hoping to achieve by imposing tariffs on all good imported to the US. Sometimes he implies that it’s a temporary move to restore what he calls 'fairness', whilst at other times, he implies that it’s intended to be a long term replacement for income tax – a way, in effect, of transferring taxation from the income of the richest to the expenditure of the poorest. He either doesn’t understand, or is pretending not to understand, what tariffs are or how they work. My money’s on the former; partly because it’s the simplest explanation and Occam’s Razor applies, and partly because anyone who thinks that tariffs can be applied to smuggled fentanyl is clearly demonstrating his lack of understanding. Whilst the idea that smugglers would stop at the border to fill in forms and pay the tariff is attractive, its relationship to reality is somewhat distant.

The underlying statistics on which the tariffs are based are also questionable: the idea than an island group only inhabited by penguins and seals is exporting quantities of “machinery and electrical” goods to the US is fanciful at best. Whoever produced the figures for his show yesterday clearly didn’t apply any sort of ‘sense check’ to the numbers before letting His Orangeness loose to announce them. The calculation of the total value of tariff and non-tariff barriers is opaque, to say the least, but then basing decisions on arbitrary figures pulled out of thin air is his normal modus operandi.

However flimsy the factual basis, however arbitrary the decisions taken as a result, the fact is that the tariffs are going to be in force (until he changes his mind, which could be tomorrow - or even later today - based on experience to date), and the question is about how to respond. The main losers, in the immediate short term at least, will be US consumers. Even if the companies importing goods from elsewhere succeed in ‘persuading’ their suppliers to drop prices, or themselves decide to somehow ‘absorb’ part of the increase, the bottom line is that, for US consumers, prices of imported goods will rise. That isn’t a bug, it’s a feature; intended to encourage more domestic production. It might even work, but not on a large scale in the timescale of the current Trump presidency. Investment decisions required to build domestic capacity to replace imports aren’t going to happen overnight. To the extent that US demand for their products reduces or they feel obliged to reduce their pre-tariff prices, companies in all of the countries hit by tariffs, as well as their employees, will also be losers although, again, the timescale of that happening depends on how inelastic the demand for their products is.

For all the same reasons, it follows that the main losers when countries impose retaliatory tariffs will, in the short term, be the consumers in those countries; the process is a reciprocal one. For that reason, and despite all the natural desire to hit back at the person and country responsible, the immediate reaction of Sir Starmer (which is that he should not react immediately) is probably sensible as far as it goes. If and when it becomes clear that Trump’s approach is giving some US companies either individually or by sector an advantage over UK companies, that is the time to respond forcefully. Protectionism can also be reciprocal, another of those unfortunate facts which Trump seems incapable of understanding.

The bigger concern with Sir Starmer’s response is about whether trying to ingratiate himself and the UK with His Orangeness is the best way to deal with a bully. Being best mates with a bully might buy some relief in the short term, but it facilitates the bullying of others and, in the long term, the bully will always come back for more. Sir Starmer’s apparent unwillingness to collaborate with others rather than seek advantage over them is unhelpful, and fails to acknowledge that, however important the UK might have thought itself to be in the past, the future of these islands is inevitably linked to that of the rest of Europe. His reluctance to accept that a choice has to be made is itself making the default choice of sucking up to the bully. Talk of a reset of the relationship between the UK and the EU is just hot air when the government is seeking to negotiate an advantage for itself over the EU partners. Pretending to be everyone’s best friend is the best way to end up friendless.

Following the money

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He might twist and turn a little on the issue, but there’s no real doubt that Farage wants to move from an NHS funded out of taxes to one funded more by insurance. He knows, though, that the NHS ideal of services being free at the point at which they are required is popular, and he’s obviously finding it difficult to find a form of words which means that would still be true as well as meaning that those who can afford to pay for insurance will do so. 

It isn’t just a Farage thing, either. There are plenty of Tories as well as an increasing number of Labour politicians who seem to be thinking along similar lines, with they key phrase always being about ‘those who can afford to…’. A system of health care based on the most well-off paying more than the poorest sounds hard to argue against – but what advocates of such an approach want us to forget is that that’s exactly what we have now. Health care is free for all, funded by tax and National Insurance, and those who earn the most pay the most. In principle, there’s no necessary difference between the two models. In principle, it shouldn’t matter which model we use, so why are they so keen to change?

Ultimately, there are several reasons, none of which they are particularly explicit about.

The first two are purely ideological: they have an almost pathological hatred of taxation, the state, and the whole idea that the state should be doing anything. Handing over the NHS to the management of a network of private providers and private insurance companies is, in their eyes, axiomatically better. That leads us on to the second reason, which is almost a corollary: they believe that all economic activity (and whilst ‘economic activity’ isn’t the first description of the NHS which springs to mind for many of us, the NHS is actually a significant part of the UK economy) should be profit-generating.

There are also two probable consequences of an insurance-based system along the lines that they are suggesting. They are both features rather than bugs. The first is that the target group for paying more is rather larger than the wealthy few who might be more easily targeted by a more progressive tax system. What might be called the ‘middle earners’ are the ones who would end up paying more. They might be ‘able’ to afford it, although it is always and inevitably the case that people paying more for one thing end up with less disposable income to spend on other things. That is the price they would pay for having a more reliable and available health service. The second is that we would end up with a two-tier health system. The UK, allegedly, cannot afford to improve the NHS for all, but a system of private providers available only to those paying for insurance would provide a better service than the residual NHS which would continue to exist to serve those who could not afford, or choose not, to pay for insurance. It is, after all, that belief that they will get a better or faster service that drives many to pay for private insurance currently.

The ‘winners’ from the alternative system would be those owning the shares in the companies guaranteed to make a handsome profit; there is a group in the middle who would lose financially but probably gain in terms of an improved service; the ‘losers’ will be those who are thrown back on an inadequate public NHS, getting a second-class service – typically, the poorest and the lowest earners. It’s obvious why the first of those three groups would see this as being in their personal interest. They will be a reliable source of donations for any party promoting such a policy. Those in the second group would have to weigh up the pros and cons rather more carefully; some would favour it, others less so. But the target electoral group for Farage and his gang is actually the third group. His reluctance to spell things out starts to look entirely rational.