The social value bait and switch

Plus: Alex Tabarrok on equal value pay, and Starmer's defence blunder

Aug 05, 2026

James Bond’s still got it. Intelligence operatives from around the world have rated MI6 the strongest secret service in Europe, with a talent for infiltrating ruling elites and a taste for dirty tricks. No word on the current generation’s fondness for vodka martinis.

Is Burnham actually cutting red tape? CapX has long criticised social value rules for adding cost and complexity to public sector procurement. Now the Government is promising to pare them back, stripping away old requirements in favour of a tighter focus on higher paying jobs and routes for NEETs into work. That sounds like a step in the right direction – except that on higher-value contracts, the weighting given to social value has actually been doubled, meaning higher costs or lower quality. Either way, we’ll all end up paying. See the piece by Joe Hill below for more.

Julian Jessop@julianHjessop

"UK to strip back procurement rules to focus on job creation, says Louise Haigh" 2️⃣ cheers for this, but not 3️⃣: gov't spending should not prioritise "job creation", which can just mean diverting employment from more productive activities and is less likely to be VFM.

10:30 AM · Aug 5, 2026 · 3.15K Views

9 Replies · 9 Reposts · 35 Likes

Elsewhere, the UK statistics watchdog has said Keir Starmer misled MPs over defence spending when he told a committee that Labour were going to spend ‘£270 billion more on defence than we would otherwise have done’. The actual figure is more like £20bn, and John Healey still has to spend his summer working out how on earth he’s going to pay for that.

Below you’ll find all the latest pieces from CapX, plus what we’re reading from around the web.

Marc Sidwell
Editor, CapX

Today’s Takes

Fresh thinking from CapX

The UK must follow the path to prosperity

Joseph Dinnage

‘Since 2015, the UK’s ranking for economic freedom [on the Legatum Prosperity Index] has declined from 7th to 18th place.’

People in the UK used to feel confident they would be better off in the future than they are now. Unfortunately, as this year’s Legatum Prosperity Index demonstrates, the UK has fallen behind its neighbours thanks to a high-tax, low-growth economy. But the Index points to places, like Switzerland, that can teach us how to become prosperous again. Read More

Free markets are the Gulf's best defence against Iran

Juno Chowla-Song

‘The Middle East’s low productivity is self-inflicted. Restrictive labour laws and nationalistic procurement requirements have slowed down the delivery of oil pipelines across the Gulf.’

Since Iran closed the Strait of Hormuz, regional producers have been losing $1.2 billion a day. There are lots of planned pipeline projects to bypass the Strait, and these countries don’t lack the capital to fund them. The Gulf states’ own labour and procurement laws pose the biggest barrier to securing their economic security. Read More

The Capitalist: Alex Tabarrok on equal pay

Britain’s ‘equal value’ pay rules go well beyond upholding equal pay for the same work, and mean that tribunals have the power to ignore the market and decide that bin men and teaching assistants should, in fact, be paid the same. These rules bankrupted Birmingham City Council, and the big supermarkets are already facing claims worth up to £8 billion for back pay. Now the Government wants to expand the law further, adding race and disability to the list of grounds on which you can bring a claim.

This week on The Capitalist, I sat down with Alex Tabarrok, Professor of Economics at George Mason University and co-founder of the blog Marginal Revolution. He walks through the madness of trying to rule by committee on how to treat apples and oranges the same, and explains why trying to set a just price is like suing the weather.

Best of the Web

Britain has a problem with the rich

James Kanagasooriam, The Times 🔒

‘More than a third of voters (36%) say the UK would be fine, or better off, with fewer millionaires, according to polling by my firm Focaldata. That includes about a quarter of Conservative and Reform voters.’

In a rare piece of good news for Britain's super-rich, Gary Stevenson is stepping back from his weekly demands for a wealth tax. But the mood he tapped is widespread, because too many Britons cannot picture themselves ever joining the wealthy. In America, ordinary trades still make people rich. Why not here too? Read More

We have to fix maternity care

Ruby Dunn, The Critic

‘The NHS spends approximately 3% of its annual budget on maternity care, but over half of its negligence settlement budget is spent on failings there.’

Maternal deaths are at their highest in 20 years, and report after report into avoidable baby deaths reaches the same conclusions about fragmented care. This year, a Royal College of Midwives survey found that 77% of members called their units dangerously understaffed. Nothing changes on a ward, staff say, until someone dies. Read More