It does not take much to get committed gold bugs dreaming of a return to the one true currency. But this month, they genuinely have something to get excited about. On 30 November the Swiss will be holding a referendum on a partial return to the gold standard.
If the campaigners are successful – and the polls put them in with a chance – then the Swiss National Bank will have to start buying up the precious metal.
Whether that happens or not remains to be seen. But the way in which Switzerland allows its citizens to have a say on economic policy-making is notable.
Over the last couple of years they have staged referendums on whether the country should limit executive pay, so that the top person in a company could not be paid more than 12 times the lowest-paid person, adopting the highest minimum wage in the world, and reducing immigration. And it is not just the Swiss.
In the American mid-term elections there were a string of economic proposals on state ballots, such as an income-tax cap in Georgia (it passed, and the state tax will be limited at 6%), or a millionaire’s surtax in Illinois (in case you are thinking of moving there, the voters approved a 3% surcharge on incomes over $1m to fund improvements in education).
Five referendums for Britain
Perhaps there is a lesson in this for the UK. Over here, the trend has been to put economic decisions in the hands of remote technocrats. The Bank of England now sets interest rates independently of what anyone in the government thinks, never mind the people.
The Office For Budget Responsibility advises on fiscal policy. A range of quangos determine competition, environmental and transport policies.
However, many of these decisions are not simply technical. They involve difficult choices, with a range of costs and benefits. That means it might well be better to let the people decide. So where might you start? Here are my choices for the first five referendums that Britain should hold.
1. Should we still protect the greenbelt or allow more houses to be built on it? There are good arguments on both sides of the issue. We don’t want to tarmac over the whole country. Against that, with a rising population we need more houses, and bigger and better quality ones as well.
There’s no right or wrong answer to how that trade off should be made. Maybe the green belt should be relaxed around five cities, or London allowed to become a megalopolis, stretching from Cambridge to Oxford to Brighton, with the rest protected?
2. Should we cap the top rate of tax? Politicians are constantly tinkering with tax rates as they try to work out how to attract whatever group of floating voters they are hoping to attract that week. But that just creates uncertainty, and may well deter foreign investors.
Why not agree a limit for the top rate and set it in stone? While we are at it, why not limit the debt to GDP ratio as they do in the Polish constitution – preferably at somewhere less than 100%?
3. Should we price roads and abolish petrol taxes? Everyone would like lots of gleaming, empty motorways, but no one particularly wants to pay for them. At the moment, the government raises vast sums through petrol taxes and car taxes, some of which goes to pay for the roads.
But perhaps it would be better if we paid for the roads directly every time we used them, as is usually the case in France. Again, there is not really a right or wrong answer to that one. You just need to make a decision.
4. Should we pay for health care only through taxes or co-pay through insurance schemes? The British have an almost religious attachment to the NHS, despite the evidence that much of our health care is among the worst in the developed world. Perhaps that is because it is often treated as a political football, with parties trying to score points off one another.
In a referendum debate, we might be able to look at the way health care is paid for in other European countries and decide whether we need to come up with a more rational system.
5. Should we raise interest rates so that we reward saving, even if it risks stalling the recovery? The Bank of England has decided, on our behalf, to conduct a radical experiment in effectively abolishing the concept of meaningful interest rates. Perhaps it would have been nice of them to consult more widely.
The results have been catastrophic for savers, and so far have hardly been stunningly successful for the economy either. True, it would be a high-risk move suddenly to raise interest rates so there was an incentive to save more. But why not let people make up their own minds?
Shaking up the debate
Everyone will have their own list, of course. Lots of people would no doubt like a vote on immigration. Some people will think executive pay should be capped, we should stop bailing out banks, and the minimum wage should be a lot higher.
You can argue for or against any of those positions. But the real point is that economic policy-making in the UK is often stuck in a rut and could use some fresh thinking. Bringing in referendums might be the best way to achieve that.