Who pays when it goes wrong?

The Norman Kember affair has raised an interesting question.  If a citizen of a country takes risks, or otherwise makes decisions that are likely to have expensive consequences, in what circumstances should other people be expected to pick up the bill?

Here are some examples of that problem on which reasonable people might differ:

  • a peace-campaigner who gets kidnapped in Iraq
  • a mountain climber who has to be rescued from a mountain
  • a rich businessman who tries to balloon around the world and needs rescuing
  • an obese person who seeks treatment for medical conditions resulting from obesity
  • a smoker who seeks treatment for medical conditions resulting from smoking
  • a liver transplant patient who continues to drink
  • a person who chooses to have a child but cannot afford to the expense
  • a person who needs expensive fertility treatment to have a child
  • a person who wishes to have significant cosmetic surgery
  • a marathon runner who gets arthritis and needs physiotherapy
  • a car driver who has a road traffic accident

On the one hand, my economic instincts tell me that the economic consequences of our decisions should be visited on us, so that we make decisions that reflect the costs and benefits of our actions.  This is not to say that people should not choose to climb mountains or eat sugar, but that they should only do so if they value the benefits more than those decisions will cost.  On the other hand, I believe that when people are in desperate circumstances (e.g. being held hostage in Iraq, or needing medical treatment), society has an obligation to provide that help.  I am happy to contribute to the treatment of others, knowing that they will contribute if and when I need help.

Part of the solution to this lies in compulsory insurance, either privately or through taxation.  Smokers should be (and are) taxed to reflect the cost of their choice.  Likewise car drivers are taxed – though perhaps not enough to reflect all the social, environmental and health costs of their choices.   This line of reasoning suggests that there might be a case for higher taxes on sugar, mountain climbing boots, running shoes, hot air ballons and other goods or services that on average lead to significant costs for society in the future.  Air tickets to Iraq should certainly bear an ‘SAS premium’, to cover the expected costs of having to provide security to people there or mount rescue operations.  And perhaps car drivers should be required to have medical insurance to cover their treatment in road traffic accidents?

You may be wondering about the distributional consequences of such a policy: won’t this mean that all these activities are then available only to the rich?  Actually, the opposite is true. An increase in the cost of these potentially expensive activities can be made tax-neutral by reducing general taxation such as income tax and VAT which less well-off people pay.  This takes less money out of their pockets which they can use, if they wish, to pay the higher prices on sugar, mountain shoes or whatever other dangerous (and hence potentially expensive) hobbies they wish to pursue, or for some other benefit.  And raising the price will reduce the total  amount of these expensive activities that some people undertake, thereby reducing the overall cost to society and so reducing the total level of taxation for everyone.

So I am glad to have paid for Norman Kember’s release. But I wish he had been forced to buy insurance – either through a tax on air tickets to Iraq, or being required to show he had private insurance for his trip that would pay out if he had to be rescued.  Perhaps then he might have thought twice about going in the first place.

Published by Owen Barder

Owen is Senior Fellow and Director for Europe at the Center for Global Development and a Visiting Professor in Practice at the London School of Economics. Owen was a civil servant for a quarter of a century, working in Number 10, the Treasury and the Department for International Development. Owen hosts the Development Drums podcast, and is the author Running for Fitness, the book and website. Owen is on Twitter and

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8 Comments

  1. Norman Kember is a very bad example for this argument. He had made it very clear and explicit before he went (like all the members of CPT) that, were he to be kidnapped, he did NOT want to be rescued by military force; that would go against everything he believed in and was working for. He  did NOT want to be "rescued" in this fashion.
    Sadly, and predictably, the story is already being spun (both BBC and ITV news tonight) that he is ungrateful to the soldiers for risking their lives to save him and his colleagues. Why should he thank them for doing something he didn’t want?

    Owen replies:  My question is not really about Norman Kember, but about the general principle of who should bear the consequences when we take risks with large costs. 
     

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  3. Owen,

    With respect, the variety of situations you describe is too broad to allow a single, universal solution; for example, the beneficiary of the liver transplant might be subject to genetic and/or cultural pressures which might make it difficult for them to stop drinking, the late George Best perhaps being a good case in point.

    With regard to Kember, let me posit a couple of other scenarios.

    Last year, British people were stranded in New Orleans in the aftermath of Hurricane Katrina. They had elected to holiday in a hurricane zone at the height of the hurricane season. Therefore it was perfectly forseeable that they should have been caught up in a hurricane. Why should those of us who possess neither the means for such holidays nor the desire to so endanger ourselves be required to assist those who do?

    To ratchet up the argument slightly, last year another group of British holidaymakers were affected by a suicide bombing at Sharm al Shaykh. SaS is in a country in which tourists have been targeted by terrorists since at least 1997 – whilst one obviously feels the deepest sympathy for anyone who was killed, bereaved or injured, why should I be compelled to underwrite the risks those people took voluntarily? Or to compensate them when it all goes wrong?
    After all, nobody actually goes to SaS under duress – so why should others be subjected to the financial duress of taxation to bail out those who freely take the risk?
    And with whom we share only the most fleeting connection?

    Kember went to Iraq of his own free will, presumably with full knowledge of the risks. His case is not like those of Terry Waite (internationally respected envoy at the time of his capture) or John McCarthy (journalist reporting on a matter of public interest). Professor Kember is a dilettante by comparison.

    I don’t believe that airlines should carry an SAS premium for flying to Iraq. That merely turns the airlines into tax collectors. What could be done to prevent this happening again would be that persons seeking visas to travel to any country in respect which the FCO has issued advice not to travel be required to display evidence of insurance before the visa is issued; and that the person seeking it should be required to sign a disclaimer that they are travelling of their own accord, with full knowledge of the risks and that they do not expect the government to ride to their rescue.
    That might seem ungenerous, but it would at least be fair to the rest of us.

  4. A rather petty and specific point on the mountain rescue issue, I used to share a house with a couple of guys on a rescue team, and they used to get mighty pissed off every time someone floated the idea of compulsory insurance.  Mountain Rescue teams are staffed by volunteers, and funded by donations and voluntary fund raising.  They work with the RAF, and it is the use of helicopters and RAF teams that usually triggers the calls for walkers/climbers to be insured, the implication being that the tax payer shouldn’t fund this part of getting someone of the hill.  The thing is, the RAF can’t get enough of being part of Mountain Rescue operations, because it is a constant source of ‘real life’ training. 

    Simulations are all well and good, but it is through regular  operations in foul weather with real casualties on the end of the winch line  that the RAF teams hone their experience. Surely the inherent value in that training and experience outweighs the financial cost of taking part in these operations?

    I don’t think these tings always break down to be a cost benefit analysis, before you work out who should pay, you need to work out who benefits re Norman Kember, I would agree with the analysis that he was more than a ‘bit silly’ in going there in the way he did. 

    But isn’t it ironic that many vocal supporters of the war [I’m not referring to your post here] are now condemming someone for visiting Iraq, as 3 years after liberation, it is so dangerous and the risks of needing the UK government/military to bail you out are unreasonably high… 

  5. While we’re at it, why not have a quick gander through the other end of the telescope?
    There are people who blame most, or even all, the financial problems of our health service on "health tourism."
    If they’re right there’s an economic case for refusing entry to visitors to this country unless they can show they’re medically insured.
    This might not be too popular with the the tourist industry, so the self-interested voter – economic man – will presumably ponder which course is likely to leave him better off.
    Though of course there might still be one or two well-heeled, bleeding-heart, bed-wetting liberals who think that we can probably afford to continue to treat other people’s people the way we always have.

  6. If Norman Kember is good enough to pick up the tab for his rescue, then perhaps Blair could cough up the billions of taxpayers’ money he has spent on the project that has turned Iraq into such a dangerous hellhole.

    I do quite like your idea of a disclaimer, but I don’t agree with compulsory insurance. Norman Kember appears to have been fully aware of the risks, but profoundly believed that it was his moral duty to go anyway.

    If he had been forced to pay insurance at a realistic level – which I suspect would have been tens if not hundreds of thousands, then he would may well have been prevented from going by us forcing him to pay for a rescue, which he wished to opt out of for pacifist reasons anyway.

  7. I’ve heard it said or seen it written that in some circumstances mountain rescue teams in the Alps (and possibly elsewhere) already do charge stranded hikers or climbers for helicopter running costs. If memory serves me rightly, this would typically be if a person goes out despite specific severe weather warnings being issued. Can anyone confirm or refute this?

  8. Re the question raised by Mark, it may be relevant to recall that, in the sixties, if you wanted to fly a light aircraft from France across the channel you had to undertake to reimburse the French authorities if you had to be rescued; I don’t know if this is still true.
    Everyone I know just blithely used to sign, and, as far as I know, they all got away with it.

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