Sentencing, Lies, Damned Lies and Laffer Curves

Given the focus on pasties as being the big issue of the day, it is easy to forget that the budget last week saw the return of the Laffer Curve to British politics with George Osbourne’s justification for reducing the top rate of tax from 50 to 45%. This caused a bit of excitement in right wing circles.

The basic idea of the Laffer Curve is that there is a nice smooth curve of tax rate and revenue return. At the extremes this makes sense. If you are taxed at 1% then increasing it to 2% isn’t going to make any difference to the amount people work, so the tax take by the government goes up. Clearly, if you tax at 100% and then reduce it, the amount of tax the government gets goes up.

So far, so good. The problem is that then people move to say that there is an ‘optimum tax rate’ ie, that there is level of tax where reducing the tax rate can counter-intuitively increases the tax take. So does it work in real life?

Basically, no. It is rubbish. Martin Gardener did an excellent demolition job on it shortly after it was first thought up, coming up with his ‘Neo-Laffer Curve’. The assumption, that the curve is smooth with one only one peak, is clearly wrong and there are many other factors at play. It also assumes that all people are completely economically rational, and the only thing that they care about is money.

Why am I writing about this when there are plenty of better qualified people to comment on the economic issues of the day?

Well, because the same principles apply in sentencing with the same nonsense being spouted. Whenever there is a particularly sensational or notorious crime, the Daily Mail and its ilk will lead the call for a mandatory minimum sentence or an increase in sentencing powers, or some popular gesture. Two examples from this week were the tragic shooting of Thusha Kamaleswaran and the ‘alternative’ response to the recommendation of the riots from Derrick Campbell (the Government’s adviser who has ignored the very thoughtful official report) who implies that we can cut gang crime with longer sentences.

In both cases, ‘low’ sentences were identified as part of the problem and the view expressed that if only sentences were tougher, this wouldn’t happen.

But is there any evidence to say that increased sentences leads to a decrease in crime? Put shortly, no. The causes of crime, and the fluctuations in crime rates, are impacted on by so many different factors, that to pick one out is hopelessly naive. The idea that is perpetrated by the media that there is a causal link is, simply, rubbish.

As with economics, so with sentencing, this will work on the margins. If you had a mandatory sentence of life imprisonment for driving without a licence, you’d certainly cut the number of people driving without a licence. Similarly, if you made murder non imprisonable, then the murder rate would probably go up. Neither of those would be societies I want to live in however.

It the real-life cases in the middle. In effect, all cases, where the argument breaks down. For example, the 2003 CJA introduced a ‘tough’ new sentencing regime. On 13th December 2003 the new sentences for murder kicked in. For the more serious murders, the starting point of 16 years nearly doubled to 30. What happened the next year? The murder rate went up. Does that mean that if we went back to the old regime, there would be fewer murders? Of course not. It’s just that when David Blunkett says that longer sentences deter crime, he’s wrong – it’s a bit more complicated than that.

But maybe murder is just a bit special? Well, a year and a bit later IPPs and extended sentences came in, leading to far greater sentences for certain offences. The result? Violent offences against the person went up the next year. If I was a Sun columnist I could argue that increased sentences lead to increased crime. Whilst it makes for a good headline, it’s obviously nonsense.

The 2003 Act introduced (for the first time) ‘the purposes of sentencing’. There are five factors, one of which is ‘the reduction of crime (including its reduction by deterrence)’ (s142(b)). The Governments White Paper that lead to the CJA gave an indication that they wanted to approach the matter based on what works – evidence based if you like. This is important, as it costs £47,000 per year to keep someone banged up (if you’re a conservative) as well huge havoc on people subject to it (if you’re a liberal). Is it worth it? Well, it’s worth finding out.

Also, the argument that criminals somehow carefully conduct a cost benefit analysis of the sentencing outcome, relative to the benefit to them of the crime against their background estimate of the likelihood of being caught is ridiculous. Many crimes aren’t planned at all and frankly, if an individual is conducting such an exercise, they are almost certainly too clever to get caught.

It is for politicians to determine rough sentencing levels, subject (probably) to the Courts power to check it’s not cruel or unusual under the Bill of Rights, and that’s fine. If they want to spend more money banging people up then that’s fine. But don’t use some spurious argument that this will reduce crime figures. It may do shortly after, but that will almost certainly be natural fluctuations, regression to the mean, the complications of getting accurate stats, the difficulty in working out how to actually present the stats (it’s very easy to make them say what you want – see above), and various other factors. It may be surprising how many of my clients (or those defendants I prosecute) read Banks on Sentencing and the Times Law Reports – almost none. It’s not a deterrent.

On an ancillary note, if the media were really concerned, they would report sentences accurately. Reading the Daily Mail, you get the impression that no-one goes to prison for anything, when it’s the opposite. We have one of the toughest sentencing regimes in the EU, (yet not the lowest crime rate strangely). All studies show that the public think that sentencing is too low generally, but when faced with a decision, sentence less than the Judges would. Maybe if people knew what sentences were handed out in their name, they wouldn’t be quite so quick to demand blood.


One thought on “Sentencing, Lies, Damned Lies and Laffer Curves

  1. Pingback: Deterrent or exemplary sentences – the rationale | UK Criminal Law Blog

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.