Core Values by John Blundell

WHAT should we learn from the cocktail of comedy and farce that the Assets Recovery Agency (ARA) is costing four times more to run than it harvests? It comes as little surpise that the ARA is yet another failing offspring of the Home Office. Does any bit of that bloated bureaucracy in its swank new Horseferry Road offices work? Its brief got Prime Minister Tony Blair quite excited and we could all applaud the intention – to retrieve from criminals the loot they had stolen. Or should that be swag?

The Agency has been given limitless resources, well, £18m (E26m, $32m) for each year of its three-year existence. It currently confesses, I think that is the apt word, to harvesting only £4.3m to date. The worst fund managers can do far better.

The Assets Recovery Agency’s goofy performance is a fine example of both Murphy’s Law (that things will go awry if they can) plus Parkinson’s Law (that bureaucratic work expands to fill the time available). I offer my own advance in the social sciences – Blundell’s Law which states that all political initiatives achieve the opposite of their declared founding purpose.

The Assets Recovery Agency was not only granted more money than sense but it was also granted more powers than were sensible. The ARA can freeze a crook’s property even if the police have no conviction or any evidence. The politicians, we all understand, wanted to seem hard men against the criminal fraternities. Instead they have created a feast for lawyers who can argue their clients have been found guilty of nothing and so their rights are infringed. Blundell’s Law – a universal, I submit – is proved again.

There is no shortage of greater illustrations of folly. In my view the local authority schools of the UK are mostly a disgrace. Business reports the graduates of these comprehensive efforts are comprehensively unable to read, write or count. The more the Education Secretary of State pours in, the worse schools get. Some schools are little more than child-minding agencies or, even worse, crime training academies.

Do we have any worse example of political waste than Her Majesty’s Prisons? At mounting expense, but laced with cruelty, we train the flawed in our midst to retrain as professional criminals often with drug addiction to add to their BSc in Burglary.

I do wish Anthony Jay and Jonathan Lynn would write further episodes of “Yes, Minister” and “Yes, Prime Minister”. I hug myself with delight every time I see them re-run. The joke is that it is all so near to the reality. Everything Jim Hacker does turns to dross. The Civil Service always wins. They are impervious to costs or results and have no concept of price at all.

Even when every MP is clear what they are voting for they get something else – or rather the next generation does. My favourite example of Blundell’s Law in taxation is death duties or inheritance tax. This was designed to cream from the truly affluent. Instead the wealthy use lawyers and accountants to avoid the tax altogether while humble folk with no assets other than their family home have 40% nicked by Gordon Brown. Note the Treasury’s far greater success at hitting the honest middle classes than the ARA with crooks.

On the employment front, a new law comes in this October which will make it illegal to let staff go just because they reach the age of 65. The intent is as obvious as the result as lots of 60-somethings even 50-somethings are suddenly surprised to find they are not needed.

Even when our political masters are at their genuinely benign best, Blundell’s Law ruins their efforts. Often this is pitiless. I have no doubt of Hilary Benn’s integrity or of Clare Short’s, or all the other dispensers of Overseas Aid. They mean well. Yet as the late Peter Bauer sagely remarked: “Aid is the process by which poor people in rich countries subsidise rich people in poor countries.” Aid goes to the corrupt and inept. Too often it fails to reaches the intended recipients before it is siphoned into Swiss bank accounts.

I do not claim Blundell’s Law works only in the UK but we must be one of the most adept exponents of it. Am I alone in detecting it in what the Pentagon and State Department try to achieve?

After nearly 50 years of trying to topple Fidel Castro he is still snug in Havana. Cascades of treasure and blood were poured into Vietnam. Did it work? It is not to doubt the valour of the soldiers if we can detect the seeds of failure in Iraq and Afghanistan.

My office looks out over a handsome street in Westminster bearing the name of Lord North – George III’s minister who tried to defeat the American colonists. The more he legislated to force New England to trade only with Old England, the more he lost out. The US, I claim with due humility, is an embodiment of Blundell’s Law at work in the 1770s. And the gem we call Lord North Street was built 200 years before planning started.

Enoch Powell once said: “Stupidity has its own entropy.” That was his elegant observation, over a long view of human history, that all states always get it wrong . . . and achieve the opposite of what was intended.

Can you see any exceptions to my universal law? The National Health Service, rich in talent and dedication, turns sour despite huge dollops of extra billions. The welfare state seems to lock people in penury when it was meant to lift them.

This needs some refining. I am not opposed to lawmaking or rule-observing. My prejudice is in Common Law – “discovery procedure” by judges rather than politicised legislation.

We are drunk on new laws. Apart from the steady downpour of petty regulations from the European Commission to which Parliament meekly assents as each Queen’s Speech lists dozens of good intentions expressed as Bills. Since elected in 1997 Blair and his New Labour team have passed 280 primary Acts. And every year there has been roughly 5,000 sets of Statutory Instruments so nearly 50,000 in total. Which ones work ?

I began by mocking the Home Office’s Assets Recovery Agency as a force that fails to stop crooks keeping their ill-gotten gains but look at the Home Office’s wider farce of its efforts to contain immigration. Each successive Immigration Act – I count eight plus diverse Statutory Instruments – opens the doors even wider.

I am not saying politicians are knaves. Most of them believe voting money for various good causes will enhance life for all of us. But they are naive. There is a force in the Cosmos that deflects and derails good intentions funded by other people’s money. I have identified it as Blundell’s Law. Does that make me immortal?

John Blundell is director general of the Institute of Economic Affairs