Monday, 27 September 2021

Crappy Labour conference proposals

From the BBC:

Labour has promised to spend an extra £28bn a year on making the UK economy more "green" if it wins power. Shadow chancellor Rachel Reeves said the money would go on offshore wind farms, planting trees and developing batteries.

Waste of money.

In her speech to Labour's annual conference in Brighton, she also pledged to phase out business rates to help the Covid-damaged High Street. And she said giant tech firms would pay more tax in future.

By all means cut taxes on businesses and lighten the admin burden for small businesses, High Street or not. Simplify and reduce VAT and NIC. Scrap the 'making tax digital' nonsense. Get rid of the stupid import formalities. Plus tons of other non-tax related crap.

Phasing out Business Rates will achieve absolutely nothing in that regard, it's a straight bung to land owners.

Sure, there are lots of owner-occupier businesses, they have to pay Rates, but they are still at a huge advantage to tenant businesses who have to pay rent and Rates. If they phase out Rates, then rents will just go up to soak up the difference, making the gap even bigger. If you've an eye to helping all businesses, phasing out Rates is the worst way of doing it.

As to giant tech firms, is she totally innumerate? £28 bn for green crapola and £30 bn Business Rates lost = £58 bn.

What are the UK profits of Facebook? Maximum one tenth of global profits of $29 bn, call it £4 billion. I can't be bothered looking up Microsoft and Google and so on. Even if you managed to tax all their UK profits at 100%, that wouldn't cover a quarter of the extra spending and tax breaks for landowners. In practice, it will barely touch the sides.

Saturday, 25 September 2021

"Is 'the worst cold ever' going around?"

From the BBC:

It may not be Covid, but it is linked to what's happened in the past 18 months.

"We've actually been seeing a rise in the number of coughs and colds and viral infections," says Dr Philippa Kaye, a GP based in London.

She says the numbers have been as high as you'd see in a normal winter and the main reason is because of the easing of coronavirus restrictions.

"We are mixing in a way that we haven't been mixing over the past 18 months. During those first lockdowns, we saw numbers of other [non-Covid] infections fall. We think that that was primarily due to the restrictions on meeting up."


As per usual, I have succumbed to this and have felt like crap for the past fortnight, hence very sporadic posting (and I haven't managed to finish a song for a fortnight either), I don't have the energy for that. It's not the worst cold I've ever had, but it just drags on and on and on.

Luckily, the rest of my household seems to be immune, that's a small blessing. Maybe it's because they got out more during the lockdown periods and so their resistance to colds and 'flu didn't wane as much as mine did.

Tuesday, 21 September 2021

Supermarket boss moans about consequences of underpaying staff.

From The Mirror:

Iceland managing director Richard Walker said: "Nationwide, the UK is currently short of at least 100,000 HGV drivers – the truckers we all rely on to keep us supplied with our food and other daily needs. This is due to a combination of factors, including our historic failure to value this essential work correctly..."

Monday, 20 September 2021

Shiney's tiers of government.

I like Shiney's way of categorising things, posted in the comments here:

Isn't this about degree? Govt provides:

Tier 1 - A standing army, police and certainty of contract (rule of law, property rights, justice, whatever)... basically to stop the bad guys, whether domestic or forrin', taking yer stuff.

Tier 2 - #1 plus basic infrastructure like roads, a power grid, sewerage, rubbish collection to 'grease the economic wheels'.

Tier 3 - #1 #2 plus some 'services' as payer/insurer - such as basic education and basic health service, a fire brigade.

Beyond #3 we get into increasing levels of nutty socialism via coercive taxation to the point where the government thinks it can tell me how much fruit to eat, whether I can have me mates around for a barbie, what pronoun I ought to use and how high up the privilege scale I am.... me I get about -500 points being white, male, straight, English, over 50 and from the West Country.

Trouble is... we are where we are... at about level #25 on 'Shiney's measure of nutty socialism' scale.

Back to the original point about NI.... MW is right - roll all the taxes into a flat tax and tell the proles how much all the stuff beyond #3 is actually costing them then see where we get to. And I'd wager that there'd be a lot less nutty stuff than there is now.


When you are debating what the government 'should' do, you can either apply some basic principles - but which principles? - or just ask on a case-by-case basis, are we, all of us as a society, better off if they do it (i.e. do we end up with more of the stuff we want, steady incomes, goods, services, clean air, low crime, all round 'freedom' etc), always asking whether the private sector is helped or hindered?

Everybody will have their own list.

Personally, I would put fire brigade into #2 - it's not really there for the benefit of the mug whose house catches fire, it's there for the benefit of his immediate neighbours. It's the same with rubbish collection. Responsible people would happily pay on an individual basis to have it taken away. Public refuse collection is for the benefit of the neighbours of the inconsiderate arseholes who would just let it pile high, rot and attract vermin, or do fly-tipping. It's easier for the council just to collect it all than to try and force everybody to sort themselves out.

Also, if the council gets one contractor in to do everybody, there are economies of scale and better bargaining power for residents. It's low-cost compulsory mass insurance which directly adds to land values, so is an ideal candidate for being funded out of LVT.

Tuesday, 14 September 2021

A tax increase to pay for... a tax increase. Brilliant.

From The Mirror:

Almost every person could see their council tax bill rise next year due to the government raising National Insurance to pay for the country's growing social care bill.

The new levy was announced last week, and will see the National Insurance paid by businesses and individuals rise from 12% to 13.25% next April. Councils with directly-employed staff get part of a £2 billion pot from the government to help with this cost. But MPs last night said the issue will really hit councils which outsource services like bin collections to private companies....


This is arrant nonsense of course on an economic level. It's all just the government paying money to itself. If HMRC collects more in NIC from people directly or indirectly employed by the government, they can use some of the revenues to increase block grants to councils and it all nets off. But any old excuse to increase taxes. And of course they should have added the 'social care levy' to Council Tax in the first place.

I've also fixed the banner add for them:

Monday, 13 September 2021

Why are clouds at that particular altitude?

If you round up two-thirds cloud cover to 100% cloud cover and assume they have an albedo of 0.3, then the real reason for the apparent 33 degree Greenhouse Effect is immediately obvious, as I explained a month ago.

The next question to be answered is, why do clouds form so that the average altitude of their upper surface (the surface which absorbs and is warmed by solar radiation) is at about 5 km* (with a resulting sea level temperature of 288K)? Why not 4 km or 10 km? I've struggled with this for the past month, and, much head scratching, calculating, sketching and Bingling later, what it boils down to is as follows:

* Clearly, cloud cover is not 100% at 5 km and clouds don't have an alebdo of 0.3. Cloud cover is about two-thirds; their upper surface is higher than 5 km (call it 7 km); and clouds have an albedo of 0.4. But if you do a weighted average altitude and albedo of 'what the sunshine hits first' it's 5 km and 0.3.

1. The dew point of the water vapour in any 'parcel' of air depends on three variables. For a start let's focus on i. air temperature and ii. air density/pressure. We'll get back to variable iii. Relative Humidity later, You can merge ii. and iii. into one variable called 'partial water vapour pressure', but it's easier to treat them separately:

For a given R.H., in warm air, water vapour is likely to stay as a gas; in cold air it is more likely to condense and fall as rain. There's a narrow range of temperatures where it remains as tiny droplets which remain suspended in the air: 2. For a given R.H., if air has low pressure/density, the water vapour is more likely to remain as vapour. If it's high pressure/density, it is more likely to condense and fall as rain: 3. We can put those two together into a table of all possible temperature/pressure combinations.

Some vapour in the air will condense into tiny droplets, small enough to stay suspended and form clouds. Only those clouds which happen to form at the altitude where that particular temperature-pressure combination is in the white band will remain as clouds. So they could be low and warm or cold and high: 4. But the upper surfaces of clouds tend towards the same temperature because they absorb solar radiation. With an albedo of 0.3, they will reach an average temperature of 255K (average of day and night). So they mainly form at the altitude where the pressure/density is such that they fall into the white 'just right' band. Any higher, they will evaporate again, any lower and they will condense and fall as rain: 5. OK, so some clouds have formed at the 'right' altitude and are stable for now. We know the temperature of their upper surface, and that that temperature plus altitude x lapse rate (also known) determines sea level temperature.

But wouldn't this be positive feedback? Higher clouds = warmer surface = overall warmer atmosphere = atmosphere expands verrtically = higher clouds? For example, the whole tropsphere over the Equator and Tropics is twice as high as over the Poles, with a correspondingly higher 'right' cloud altitude.

What sets the upper limit..? 6. The upper limit is set by the third main factor for determining dew point - Relative Humidity. It is chaotic and dynamic but self-correcting. If the clouds are too high, so is sea level temperature, which leads to more evaporation, higher R.H. and higher R.H. means lower clouds again, and vice versa: 7. Some clouds will form at the 'Goldilocks' altitude where the resulting sea level temperature generates enough R.H. to maintain the clouds at that particular altitude. This is arrived at by trial and error, and while the precise calculations are beyond human comprehension, clouds do it for us by simply following basic laws of physics until they 'get it right': 8. Finally, you end up with what you expect to see. Sea level temperature 288K; clear air up to a certain altitude (too warm for clouds to form); a layer of clouds 1 or 2 km thick (the 'Goldilocks altitude'); above that clear air again (the pressure/density is so low that clouds evaporate again). Clearly, this is weather, so these are not exact values. They are all constantly overshooting in both directions, but it all oscillates around some sort of equilibrium and averages out. 9. What other evidence to we have to support this, apart from it matching up to observations and being entirely consistent with basic physics and everything else in the overall theory?

a. All I can think of for now is that areas with higher R.H. tend to have lower clouds (as you would expect. If there's more water vapour it's more likely to condense at a lower altitude) and their sea level temperature tends to be a bit lower (lower cloud altitude means the difference in temperature between upper surface of clouds and sea level is lower, as there are fewer km to multiply by lapse rate) than in drier areas.

b. Higher R.H. and lower clouds also mean a much smaller day-night ('diurnal') temperature range - water vapour is good at holding on to thermal energy and the lower clouds are good at reflecting upwelling IR back down to sea level in the night time. This is also observed in real life.

c. Venus and Mars follow exactly the same pattern, even though their atmospheres are nearly 100% CO2 and other 'greenhouse gases'.

Wednesday, 8 September 2021

Welcome to the new basic rate of tax - it's 42%

Employer has £100 to pay on wages.

New Secondary NIC rate = 13.8% + 1.25% = 15.05%. So the max. gross wage he can pay out = £100 ÷ 1.1505 = £86.92

New Primary NIC rate = 12% + 1.25% = 13.25%, add on official basic rate of tax 20% = 33.25%.

£86.92 less 33.25% = £58.02, an overall tax bill of £42 = 42%.

If you factor in VAT, which takes one-sixth of earnings in the productive economy, it's closer to 52% overall. It's far worse if you also have Student Loan Repayments or Working Tax Credits that are being clawed back.

Tuesday, 7 September 2021

Some Tories have a conscience: shock

From The Metro:

... former minister Jake Berry, leader of the Northern Research Group of Tory MPs, warned against a policy that appeared aimed at elderly voters in affluent southern seats [see below].

Tory former Cabinet minister Sir John Redwood warned against a ‘stupid’ tax rise, "A tax on jobs when you want to promote more and better-paid employment is particularly stupid."

Tory former chancellors Lord Hammond, Lord Clarke and Lord Lamont have all criticised the plan to increase National Insurance, while former prime minister Sir John Major said it was ‘regressive’.


I always said the John Major was the only decent PM in my lifetime, in both senses of the word.

From The Times:

In a sign that the tax rise could split Johnson’s electoral coalition, Jake Berry, a former minister who leads the Northern Research Group and is the MP for Rossendale & Darwen, said that the move would disproportionately benefit older voters in affluent southern seats.

“It doesn’t really seem to me reasonable that people who are going to work in my own constituency in east Lancashire, probably on lower wages than many other areas of the country, will pay tax to support people to keep hold of their houses in other parts of the country where house prices may be much higher."

Berry, 42, formerly a close ally of Johnson and a key backer of his leadership ambitions, told Today on BBC Radio 4 that because national insurance was not paid by retired people, a rise would pose questions of intergenerational fairness.

“It doesn’t seem fair to me — particularly following this pandemic where so many people have taken great sacrifices to keep people safe, it’s particularly hit the youngest, particularly hit those in work — that we then ask those in work to pay for people to have protection in care.”


But of course all this logic was ignored and they went ahead anyway.

Saturday, 4 September 2021

The "backward bending labour supply curve"

From an editorial in The Telegraph which, unsually, makes some good points:

Jeremy Hunt, Britain’s longest-serving health secretary, spent years fretting over health budgets and knows better than most how easily the NHS can swallow up extra funds without patients seeing a jot of difference if the money is badly targeted.

“The one thing the Government must do before it spends any of the money is make sure there is capacity in the NHS for that money to be used for what you want it to achieve. If you allocate £5 billion for extra staff, for example, but those extra staff don’t yet exist, that money will just vanish."

... Rishi Sunak, the Chancellor, allocated £20 billion of emergency funding to the NHS to cover the cost of Covid-19, of which £15 billion was actually spent. But according to the Nuffield Trust, only £2.7 billion of that was spent on staffing costs. Given that 60 to 70 per cent of hospital’s budgets are spent on staffing, questions are being asked about where the rest of the money went.


We already knew or could have guessed most of this, that's just to set the scene. Here's the interesting bit:

Another of the traps which Mr Blair fell into was in allowing spending increases to be swallowed up by pay rises. While doctors unquestionably deserve high salaries [that's their opinion], the brutal truth is that bumping up GPs’ pay packets does not translate to better patient care.

Almost nine in 10 salaried GPs work less than full time, and there is a danger (accepted in private by those in the health sector) that higher pay will make it financially viable for even more of them to cut their hours without being any worse off. Nor does extra pay across the board incentivise GPs to work in the most deprived communities, which often have the worst access to healthcare, translating into lower life expectancy.


This is an example of the 'backward bending labour curve'. From Lumen Learning, (scroll down to the section on Labour Supply):

To see how changes in wages affect the supply of labor, suppose wages rise. This increases the cost of leisure and causes the supply of labor to rise – this is the substitution effect, which states that as the relative price of one good increases, consumption of that good will decrease. However, there is also an income effect – an increased wage means higher income, and since leisure is a normal good, the quantity of leisure demanded will go up.

In general, at low wage levels the substitution effect dominates the income effect and higher wages cause an increase in the supply of labor.

At high incomes, however, the negative income effect could offset the positive substitution effect and higher wage levels could actually cause labor to decrease. A worker making $800/hour who receives a raise to $1200/hour may not have much use for the extra money and may choose to work less while maintaining the same standard of living, for example. This creates a supply curve that bends backwards, initially increasing with the wage rate but later decreasing.


I'm happy to say that this applies to me. Once I'd finished paying rent fees to private schools, I dropped to a four days a week and started paying in the max. to my pension fund, but I still have more disposable income than when they were at school (and enough to cover my modest lifestyle). That's largely an effect of our insane tax system, but it's nice to be on the winning side of it for once.

Friday, 3 September 2021

It's always "National Insurance", isn't it?

From the BBC:

Social care must be adequately funded, Justice Secretary Robert Buckland has said, amid reports ministers plan to raise national insurance. Downing Street did not deny reports of an increase of at least 1% to improve social care and tackle the NHS backlog.

The justice secretary said he would not "speculate" but said there should be a "grown-up conversation" about how to pay for rising social care costs. "The British public are sensible enough to know that when it comes to the issue of social care we have to find some way in which it will be adequately funded," Mr Buckland told BBC Breakfast.

The move would break a Tory manifesto commitment at the last election. He said that the Conservative Party had also promised at the 2019 election that it would bring forward sustainable proposals to fund social care.

The Daily Telegraph reports that Downing Street favours a 1% rise in the national insurance rate, affecting about 25 million workers and self-employed people, as well as employers. But it says the Treasury is pushing for a 1.25% increase. And the Times adds that Health and Social Care Secretary Sajid Javid wants a bigger rise of 2%.


For the sake of this post, I will assume that the rumours are correct.

"National Insurance" is one of the biggest con-tricks ever. It's just tax, it's a super-tax of over 20% on employment income and a lower super-tax of 9% for people with moderate self-employment income (it's only 1% on high self-employment income).

Social care is the government's responsibility for the simple reason that people seem to assume it is, it is self-fulfilling, so fair enough, and thus it has to be paid for out of taxes (short of the obvious alternative, stop wasting so much money on crap and dishing out billions to ministers' friends and families).

Somehow, National Insurance isn't really seen as a tax (a bit like VAT). In popular myth it only goes towards wholesome stuff like old age pensions, the NHS, unemployment benefit and now social care. On top of that, pensioners genuinely appear to believe that they paid for their own pensions, even though it's actually today's taxpayers who are funding them. If you add up all the things on which people believe National Insurance is spent, it is about double the amount it actually raises.

And people don't seem to mind or even remember. Gordon Brown hiked it by 2% back in 2003/04 and planned to hike it again by 2% in 2010, but he lost he election. The incoming Tories did it anyway. Was there a big outcry? Not that I remember. And they stuck 2.5% on VAT, nobody cared. So the Tories' are likely to pull the same sneaky trick again.

What's even more insane is that when Philip Hammond wanted to up self-employed National Insurance from 9% to 10% (still less than half of what employees bear), there was a huge outcry and he backed down.

Final thought - the additional tax they hope to raise from this appears to be about £3 billion, so why not put a ten percent surcharge on Council Tax and just call it 'National Insurance' and see if people mind?