Site menu:

Site search

Get Updates

Enter your email address to hear about new posts. (You can view my privacy policy here.)


RSS Recent Posts

Archives (month)


Constitution nil, Clegg & Coase won

I have written before about Coase’s Theorem – whenever the law creates or imposes an inefficient rule, people will bargain or contract around it – named after Nobel laureate, Ronald Coase. It seems that Coase’s theorem works just as well for our constitution.

For weeks, if not months, we have been told that, if the General Election resulted in a hung parliament, the incumbent Prime Minister had first go at forming a government. Well, it took just one sentence from Nick Clegg at 10.30 am on the morning after the night before (“I’m talking to Dave”) and Gordon Brown was left high and dry for as long as Nick Clegg wanted it that way.

Roll the clock forward 24 hours and, with the public (allegedly) clamouring for Brown to resign, the constitutionalists and commentators told us that he couldn’t do so until there was a new PM ready to take over. Technically correct. But as soon as the Labour Party saw a political advantage in Brown declaring that he would not be staying on, he announced exactly that. If Brown had wanted to make the announcement earlier, he could have done so.

Has anyone learned from this? We are now being told that this parliament will last for five years and that there will be legislation to make that into law. But if the current coalition Government were to break apart and no other grouping could command a majority, what then? If an Act of Parliament can fix the date of the next General Election, another Act can change it.

See also:  You mean we're NOT supposed to avoid tax?

Does that worry me? Coase not.

Sign up for updates by Email, Twitter or RSS Feed.

Related articles on this website
Tax avoidance has become a hot topic. The Times newspaper has recently unmasked a scheme in which income tax is avoided by the ludicrously simple means of saying the salary ...
Read the complete article
Until a few days ago, I had never heard the expression: "When you hear hoofbeats, think of horses not zebras". A visiting US professor used it in conversation with me. ...
Read the complete article
Regular readers of this blog must be sick to death by now of me repeating how much damage accounting standards are doing to pension schemes (here, here, here and, even ...
Read the complete article
A friend writes to tell me that she has been appointed to the Future of Banking Commission set up by Which?. Which reminds me that I have yet to return ...
Read the complete article
You mean we’re NOT supposed to avoid tax?
A horse. A zebra. Or maybe it’s a fish?
Accountants in a tangle with Webb
Banking on it