Philip Booth: Ordinary people have suffered under our hate crime rules. Patel is right to change the system.

26 Apr

Philip Booth is Professor of Finance, Public Policy and Ethics at St. Mary’s University.

The Times reports today that Priti Patel is to stop police from recording so-called hate incidents that are not crimes over fears that the policy is harming people’s employment prospects and infringing on free speech.

Currently the police are allowed to keep records on those accused of non-criminal incidents. However, Patel has “expressed concern” that these “can ruin lives when they are disclosed as part of vetting processes such as the Home Office’s disclosure and barring service.”

Some of the problems with hate crime legislation do not just arise from the potential disclosure of incidents in vetting, nor prosecution under the Equality Act 2010, but from police investigations which can easily be triggered. Three cases illustrate the problem.

In the first, a Baptist Church in Norfolk displayed a poster suggesting that, if you did not believe in God, you would go to hell. The bottom of the poster depicted flames. Amusingly, adjacent to the poster was a notice offering people a very warm welcome in the church. 

This is standard Christian teaching for some (though not for all) Christian denominations. Nevertheless, a 20-year-old complained to the police stating that the poster of hell was offensive to non-Christians, and that it was his “understanding that Christianity is inclusive and loving in nature.” The police registered the poster as a “hate incident”. 

The police stated: “National guidance required us to investigate the circumstances and the matter has been recorded as a hate incident. Having spoken to the pastor of the church, it has been agreed the poster will be taken down.”

There seems to be no doubt that the police believed that they were required to register the poster as a hate incident, that they visited the pastor and that the visit caused the poster to be removed.

In the second case, Oluwole Ilesanmi was arrested and questioned by the Metropolitan Police for alleged hate speech crimes while street preaching. He was then released and awarded £2,500 compensation for wrongful arrest and humiliating and distressing treatment.

The third example involves Sarah Phillimore, a barrister, who was reported to the police for a hate incident after she made comments on social media that referred to male offenders who claimed to be transgender and who were housed in women’s prisons as “men”.

In addition to the direct impact of police involvement on free speech in these cases, there will be an indirect effect. Few people wish to go through a police investigation, and citizens will be put off from speaking freely because they are worried about the consequences.

It is interesting to ponder how that doyen of modern-day social liberalism J S Mill would have determined when free speech was legitimate or had to be constrained. He would have said that it was unacceptable for the law to prevent any individual or religious group talking publicly about “eternal damnation” except in very limited circumstances, such as when the term is used as a deliberate part of a process of mental intimidation of an individual. The limited circumstances are an important exception and a legitimate target of the law. And, indeed, the prosecution of hate speech seems to be determined by the right principles.

A hate crime is defined by the Crown Prosecution Service (CPS) in the following way:

“The term ‘hate crime’ can be used to describe a range of criminal behaviour where the perpetrator is motivated by hostility or demonstrates hostility towards the victim’s disability, race, religion, sexual orientation or transgender identity…A hate crime can include verbal abuse, intimidation, threats, harassment, assault and bullying, as well as damage to property.”

This is a reasonable definition. The CPS advice also sets a high hurdle for a successful prosecution.

The problem is not with the concept of hate crimes as such but, as Patel has noted, the recording of hate incidents. Incidents are recorded as hate incidents by the police, and have to be investigated as such, if, in the opinion of the alleged victim or any other person, an incident was motivated by hatred or prejudice based on one of the stated characteristics in the Equality Act. 

This can lead to controversial but reasonable opinions being the basis of a visit from the police or even arrest. Quite ordinary people have suffered from such visits and the recording of hate incidents intimidates citizens into not expressing reasonable views. 

It is easy to see how the threat of the reporting of a hate incident may stifle free speech and debate. Indeed, in two of the aforementioned cases, such action led to the cessation of the activity. 

This was despite the fact that the complainant in the first case was an atheist and was surely not intimidated by the poster. Many people will simply not wish to encounter the police in the course of their daily lives and they should not feel inhibited from speaking freely for fear that they might do so. Patel is right to take action.

Philip Booth: The Government needs to get tough (with itself) on competition policy

17 Dec

Philip Booth is Professor of Finance, Public Policy and Ethics at St. Mary’s University, Twickenham.

There is an old joke along the lines of “why is there only one monopolies’ commission?”. It is so lame, you won’t even see it in your Christmas cracker this year. However, there is an important point to it. When it comes to competition policy, the Government marks its own homework.

The UK’s Competition and Markets Authority (CMA) has immense powers, which it threatens to use with ever more vigour against tech firms. However, the biggest monopolies are in the provision of public services such as health and education.

In addition, many of the most important impediments to competition in the private sector come from the government in the form of regulations that restrict entry or load costs onto small businesses.

John Penrose MP is currently conducting a review of competition policy. Right at the top of his list should be competition in government-provided services and the way in which government itself, especially through regulation, impedes competition.

When it comes to public services, governments have to have a monopoly of some things – defence, penal systems, some aspects of policing and, it is worth adding in current times, certain genuine public health functions. However, experience in all these areas, especially recent experience in public health, demonstrates the limitations of state monopolies. As such, both Labour and Conservative governments have promoted school choice and also, with no discernible success, tried to promote competition in the provision of healthcare.

Just as governments of the left develop institutions designed to embed their reforms and make them difficult to reverse, supporters of competition and markets should do the same. This is especially so where competition relates to what we might regard as a natural right, such as that of a parent to choose a school for their child. Such a right is so fundamental to those of us who believe in a free society, that it needs protection in the wider political and institutional landscape.

Though most readers of this blog will probably not be supporters of the European Union, its policies in the areas of state aid and competition and public services did have some merit. They provided protection from the worst excesses of monopoly in some aspects of government service provision (though its effect was limited by the various legal exceptions).

There are two actions that the government should take. Firstly, CMA should be given a specific statutory duty to investigate impediments to competition arising from government action, especially in relation to government regulation. Crucially, such investigations should not have to relate to a specific market inquiry. For example, the CMA could examine the effect of land-use planning regulations on competition across a range of markets (education, childcare, retail etc) or the impact of GDPR regulations on the relative cost structure of small and large businesses. Secondly, it should have a like duty to scrutinise state monopolies.

Governments and barriers to entry

Regulation is such an effective bar to competition that it can be deliberately captured by incumbent businesses in order to frustrate market entry. Regulation may also be captured by the regulatory body itself which may discharge its functions by trying to reduce the risk of scandals within markets by writing ever-more regulation.

An uncosted side effect of regulation may well be to raise barriers to entry. Both market incumbents and their regulators are likely to have cognitive biases that lead them to favour regulatory solutions to problems within markets whilst ignoring the effects of competition.

Two examples are worth noting. The Financial Conduct Authority (FCA) has a statutory duty to promote competition and yet its very existence impedes competition. The process of authorisation for a new financial adviser can take six months or more and the FCA regulatory handbook has around 1,000 sections. This kind of regulation creates a significant advantage to incumbents and makes innovation especially difficult.

Although the FCA has a statutory duty to promote competition, its other objectives will always take precedence and the FCA is never held properly to account for its failure to promote competition.

A second example relates to occupational licensing. Currently, occupational licensing and certification covers 40 per cent of all employees. This figure has grown dramatically in recent years and is much higher than equivalent figures in, for example, Sweden and Denmark. There is widespread international evidence that occupational licensing damages consumers, reduces competition, and undermines social mobility.

However, though the CMA may examine a problem such as this as a minor aspect of a particular inquiry in relation to a specific market, the issue as a whole and its cumulative effects are ignored. The CMA therefore needs wide-ranging powers to investigate such government-imposed impediments to competition regardless of whether the investigation is related to a specific market inquiry.

Government monopolies

In addition, the CMA should have a statutory duty to investigate markets where governments are monopoly providers.

The CMA has a statutory duty to “promote competition, both within and outside the UK, for the benefit of consumers”. Its mission is to “make markets work well in the interests of consumers, businesses and the economy”. It’s role and effectiveness in dealing with the impact of monopoly on people’s lives would be much more effective if these statutory duties were expanded to explicitly include the promotion of competition in relation to government-provided services, such as healthcare and education. Though current EU provisions in these areas will remain after Brexit, they will be toothless: the government would be marking its own homework.

Much government policy in recent years has involved the promotion of competition in education. This needs to be reinforced by providing families with the protection of competition law.

To begin with, parents or those establishing free schools in the case of education, or various interested parties in the case of healthcare, should be able to take enforceable action, backed up by competition law, where one government body or a layer of government is acting in a way which subverts the government’s own policy in relation to promoting competition in public services. For example, parents should be able to take action if local authorities obstruct the development of a free school. Such actions, if successful, could come with penalties imposed on the offending body.

There should also be a general obligation on the CMA to investigate situations where the government itself is restricting competition in the provision of services (for example by providing its own service free at the point of use).

Summary

Current government and CMA competition policy looks at the splinter in the private sector’s eye whilst ignoring the beam in the state’s eye. The Government needs to have a more robust policy and enforcement regime. This will counter-balance the tendency towards monopoly, protectionism and regulation that pervades governments and will ensure that a reforming government can embed its reforms more deeply in the institutional landscape.

It can ensure that we can benefit from competition where monopoly is most deeply embedded – in areas of the economy protected by government regulation and in the provision of government services.

Philip Booth: The BBC should be owned by subscribers

29 Aug

Philip Booth is Professor of Finance, Public Policy and Ethics at St Mary’s University, Twickenham, and Senior Academic Fellow at the Institute of Economic Affairs.

The BBC has come under severe criticism recently for the way in which it seems to be ditching the nation’s history, apparently because many of the party pieces at the Last Night of the Proms are anachronistic.

As many people who understand the origin of the words of “Rule, Britannia!” and similar songs have pointed out, the BBC seems to be totally misguided. However, there is a deeper irony here. The BBC itself is a living, walking, talking anachronism.

The BBC has been financed by a hypothecated tax levied on television sets since 1946. The link between television sets and watching mainstream television no longer has any meaning.

In the UK, 18-34-year-olds watch seven times as much Netflix and YouTube as BBC1 content, and spend more time watching Netflix and YouTube than all other public service channels put together. The average time spent by all adults watching Netflix and YouTube is greater than the amount of time spent watching BBC1. Interestingly, most non-broadcast content is now watched on a television set.

The idea of linking the funding of a television channel to the ownership of a television set does not belong in the 21st century. Collecting licence fees in relation to the use of other devices is unenforceable.

The BBC tells us that compulsory licence fee funding is appropriate because the channel brings the nation together. But, not only are young people not sitting in front of the fire with their parents watching The Generation Game any more, they are enjoying their own ‘shared experiences’, without the BBC. Amongst young people, the proportion of shared viewing of content is increasing dramatically, and the length of viewing sessions is increasing.

The economic case for licence fee funding and compulsory funding of the BBC has evaporated, and the BBC no longer makes such a case. The case it makes is basically cultural. But broadcasting has become like publishing became in the 18th and 19th century, and nobody argues that a state-owned publisher, funded by a tax on books, would add to culture.

Around 200 years ago, in the publishing industry, technology improved, raw material costs fell in real terms and real incomes rose. As a result, publishing blossomed.

A similar phenomenon is happening in relation to broadcasting and content provision today.

In both broadcasting and streaming, there is a huge variety of genres, delivered in different ways through different platforms and responding to different tastes and by different organisations. This is similar to how bookshops, libraries, pamphlets, novels and newspapers all proliferated in the nineteenth century: in 1898 there were around 400 publishers in Britain and Ireland alone. The growth in publishing both encouraged and was encouraged by a growth in literacy. Good quality literature was read and literature from the period is still read today. We did not need a state-funded publisher to produce great books.

The parallels between publishing and broadcasting continue almost down to fine details. In publishing, as well as a variety of formats (magazine, newspapers, serialisations, books and pamphlets) there was also a variety of payment mechanisms (subscriptions to series or serials, pay-per-chapter, pay-per-book and subscription to lending libraries, which would allow readers to read as much as they wished in return for the subscription).

Surely the BBC should be funded by subscription by those who wish to avail themselves of its services. There is no justification in the modern world for requiring people to pay for television services they do not wish to watch. But this leads to the question of the ownership of the BBC. If it remains a state-owned corporation it will surely become an irrelevance.

Even if politicians thought a commercial sale of the BBC desirable, surely that is not on the table (though this should be pursued for Channel 4). Perhaps we should consider something else. In a thriving free economy we see a wide variety of ownership arrangements. And, in the field of culture and education, mutual, co-operative and similar forms of ownership are very common.

There is a strong case for turning BBC subscribers into owner-members so that the BBC would become a subscriber-owned mutual. In fact, this was the Peacock review’s preferred model. It would be very difficult for a subscriber-owned mutual BBC to be captured by closely connected political and commercial interests as its ownership would be dispersed. But it would be possible for it to expand into the 95 per cent of the English-speaking world that lives outside our shores through joint ventures and wholly-owned subsidiaries.

We should not pretend that a subscriber-owned BBC will not remain a participant in the left-dominated culture wars. The executives will not necessarily reflect the views of the members (as we have seen with the National Trust). However, we should be able to choose whether we support the BBC with our wallets.

Whatever the economic and cultural arguments for compulsory licence fee funding (and they are very weak), there is no moral case for requiring people to finance the BBC if they have no interest in its services.