Tuesday, 26 March 2019

"Legalise cannabis sales to tackle criminal gangs, says Tory MP"

From the Evening Standard:

Crispin Blunt, chairman of the All-Party Parliamentary Group for Drug Policy Reform, is urging the Government to control sales as he claims that 50 years of “prohibition” has failed “lamentably”.

Go Crispin!

Do we benefit from low wages in other countries? Discuss!

TBH had a discussion with X (name escapes me) recently, which raises some interesting topics which we thought might be of interest. It went along the following lines:

X: "It is wrong for developing countries to subsidise their exports and dump cheap goods in developed countries. That hurts the workers in other countries, as they are paying extra taxes to fund the subsidies which benefit exporters and overseas importers; that hurts non-subsidused businesses and their workers."

Non-contentious so far.

"Therefore it is OK for developed countries to impose tariffs on such goods to cancel out the subsidies."

TBH, disagreeing: "Trade is always good, tariffs on trade are always bad. If we can buy cheap steel, cheap cars, short-term that is bad for our domestic steel or car makers and their workers; medium term it means we can move to producing higher value-added things instead, so overall is a win for us. Imposing tariffs does not help the people being oppressed in other countries, it just means that the benefit of the overseas subsidies goes to our government instead of to us as consumers."

In which I would agree with TBH. You can extend X's logic to any cheap imports from low wage countries, so it is clearly wrong. Who's going to make the decision whether
a) goods from a certain country are cheaper because workers are being exploited; or
b) goods from a certain country are cheaper because they are more efficient?
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But something else I have been mulling over is the widely held assumption that we benefit from low wages in developing countries because we can buy cheap stuff. The price of clothing or bog standard new cars has not increased in nominal terms for decades.

Which looks like a very good thing to me. Some go further and 'worry' about the day a few decades hence when wages and prices in e.g. the Far East have risen to Western levels.

Why is that a bad thing? When that day arrives it will be because business and workers in those countries are producing more stuff, either more of the same stuff or more value-added stuff.

So there's more stuff to go round; Westerners will be getting a smaller share of a much larger pie. Overall, people in the new developed countries will be better off (clearly) and people in the old developed countries will also be better off (however marginally).

Therefore, the conclusion must be that while we benefit from low wages in developing countries (first discussion) and shouldn't impede that with tariffs and quotas, we'll benefit even more once their wages have risen to our levels (second train of thought).

Allowing free trade* with developing countries is the main thing we can do to help them develop; once they have developed, even X's weak argument for tariffs and quotas falls away, so it's game set and match for free trade, as far as I can see.
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* "Free trade" does not mean developing countries should be forced to allow Western imperialist capitalists (mainly banks and miners), to steal assets, generally rent seek and wreck developing countries of course, quite the opposite.

Monday, 25 March 2019

Killer Arguments Against LVT, Not (453)

From a recent Evening Standard, for "business rates" read "land value tax":

Labour needs to do more to help get rid of business rates

Rohan Silvas' comment article ("Government's refusal to help small businesses is destroying them", March 15) admirably reinforces the case against persisting with business rates.

In days of physical manufacturing, assessing rates in accordance with the rentable [sic] value of the premises may have had an approximate correspondence with the value of the businesses concerned.

Nowadays, when a hedge fund can operate from the same space as a corner shop, it makes no sense whatever. It is the enemy of the start-up and subsequent rate rises, as Silva illustrates, can suddenly destroy viable enterprises.

It is difficult to understand why Labour has not committed itself to abolishing this tax should it get into office and its replacement with one that is based on turnover and/or profit. Surely these are ostensibly Conservative clothes that are ready to be stolen?

There is a larger point that parliamentary initiatives on such matters should be easier to frame and pass in a way which binds the executive. The Brexit process has revealed how parliamentary scrutiny is trapped in critical mode.

Sue Broadhurst and Neil Harvey.


Reply by Jim Armitage, City Editor:

Dear Sue and Neil

You are right. Business Rates are holding back potentially great businesses.

The latest round of rises in London have [sic] left a clear mark on our high street as the numbers of vacant shops climb. The average business in the capital now has to find £33,000 a year just to cover its rates bill. That really hurts small operations that don't have the deep pockets of national chains.

Meanwhile, online retailers don't pay high-street business rates at all. They pay them on their warehouses but these are in out-of-town areas where charges are lower.

Politicians won't scrap rates because they bring in 4.5 per cent of the UK tax take. We need that cash for schools and hospitals...


See how many factual inaccuracies, misleading statements, crass generalisations and faulty leaps of logic you can spot, or the subtle contradictions between the two diatribes!!

Wednesday, 20 March 2019

Make the punishment fit the, er...

From The Daily Mirror:

Helen May, 39, who initially got benefits due to a heart problem she had since the age of 10, failed to tell authorities that her health had improved so much between 2014 and 2017 that she was capable to work in three different places.

The woman was caught cheating the benefit's system when a co-worker at a cafe reported May had recorded 10,000 steps on a single day on her fitness watch.

Appearing at South Cumbria Magistrates Court this week, May was handed a community order and told she must wear an electronic tag for the next 10 weeks.

Sunday, 17 March 2019

Lammy Dodgers

From the Daily Mail

Critics round on MP David Lammy as Comic Relief suffers £8MILLION drop in Red Nose Day donations amid fears public was put off by his bitter 'white saviour' row with Stacey Dooley over Strictly star's trip to Africa

Comic Relief raised a total of £63million - compared to £71.3million in 2018


I don't think so. I think Lammy's an arse and I think most people recognised that in this case.

Here's the real problem

This year's Comic Relief's Red Nose Day show was watched by 600,000 fewer people than in 2017.

Some 5.6 million people tuned in to watch the star-studded telethon on BBC One last night, but last time round the biennial fund-raiser was watched by 6.2 million viewers.

6.2 million down to 5.6 million is a drop of around 10.7%. 71.3 down to 63 is a drop of around 13%. Not an exact correlation, but probably close enough. People are finding something entertaining to watch on a Friday night on Netflix rather than a bunch of old has-beens doing the equivalent of a company Xmas show.

Highway Code question(s)

If you are turning left, you indicate left. If you are pulling in from a slip road, you indicate right.

Q1. Where is the tipping point between them - how small does the angle between the roads have to be before it flips from being 'indicate left' to 'indicate right'?

Q2. Does it make a difference if the road you are turning onto is one-way (i.e. actual one-way road, or half a dual carriageway?).

Here's the diagram I did in Excel:


Thursday, 14 March 2019

Strange thought - maybe Jeremy Corbyn was right all along (on this particular issue)...

I've pretty much ignored Labour's wafflings about Brexit because they are woefully unclear and contradictory, all they do is trot out some gibberish and repeat the mantra "avoiding a damaging Tory Brexit".

In among the waffle however, Jeremy Corbyn himself has been consistent on two matters - he refuses to say how he voted in the Referendum and has always said that he thinks the UK should leave the EU but remain in the Customs Union. This always seemed like a daft idea to me, and I automatically assumed it was wrong because he said it.

This is a perfectly plausible outcome - Turkey is in the Customs Union (actually, it's in a customs union with the Customs Union as this lengthy but informative article explains) but not in the EU.

The (a typical) CU only applies to goods, not services; Turkey is not in CAP or CFP; there's no free movement between EU and Turkey; a lot of EU rules simply don't apply there; Turkey doesn't have to impose VAT; and so on.

At our last YPP meet-up, Mombers (a moderate Remain voter) asked me what was so bad about staying in the Customs Union, given that the average tariffs are only 1.5% (a drop in the ocean compared to the current UK domestic tariff of 20% on most goods and services).

And to be honest, I struggled to think of anything really bad. Even the hard Leaver present (see comments!) couldn't think of any fatal flaws. Which got me thinking. Clearly, it's not a one way bet and there are downsides, but it would fix a lot of actual problems (car manufacturer supply chains) and perceived problems (chlorinated chicken, Irish border).

So not much changes, nothing changes for the better (but those who would gain don't know it so aren't protesting) but nothing changes for the worse either and everybody knows what they are doing. A price worth paying to get out of the EU.

The Week has a nice short article on the pro's and con's of leaving it (so the con's are pro-CU etc).

The advantages (actual or perceived) of staying in the CU make sense to me.

What are the disadvantages of staying in the CU, do they outweigh the advantages?

The first linked article lists some downsides for Turkey of the EU-Turkey deal, but these are individually negotiated and we should be able to do better. Turkey made a lot of concessions being a much weaker partner and seeing this as a first step to full EU membership. The UK is going in the other direction. I've read other articles and all the disadvantages, while real, are fairly minor.

The second article lists the following:

Hard Brexiteers warn that staying in a customs deal with the EU will prevent the UK from negotiating future trade deals.

That is true, but we've not done very well so far, in two-and-a-half years, we've managed an FTA with Switzerland and that's it (which we'd have in the CU anyway). I'd rather have free trade with Europe than with America anyway.

May herself has been vehement in her desire for Brexit Britain to be a “global leader in free trade”, arguing in her Mansion House speech that it would be a “betrayal of the British people” to stymie its potential by joining a customs union.

Ignore the grandstanding crap about "global leader in free trade". What does that even mean? We should be doing things for our own benefit, not to impress or influence other people. The deal which May (a Remain fifth columnist) is pushing really is a "betrayal of the British people", so she can shut up.

Environment Secretary Michael Gove has tweeted that “the referendum vote was clear - we need to take back control of trade - that means leaving the protectionist customs union”.

The vote was to leave the EU, full stop. Everybody had their own reason why they voted Leave. I doubt that many Leave voters put "take back control of trade" right at the top of their list of reasons.

Arch Brexiteer and chair of the European Research Group Jacob Rees-Mogg has argued that staying within a customs union would leave the UK paying Brussels huge sums each year while having no say on rules and regulations imposed on business and commerce.

He can f--- right off. The first part is either a lie or evidence that he knows nothing about it. If we were in the Customs Union, we would have to impose EU mandated tariffs (about £3 - £4 billion a year) but would not need to hand them over to the EU any more, pretty much the opposite of what he said.

True, the EU will no doubt stiff us for an 'access fee', but such is life, it depends on the numbers. As long as it's less than £10 billion a year (or whatever our net payments are now), that's a win.

It is also true that the UK would have no say over the rules, but:
a) EU rules on quality of food and goods seem fair enough to me
b) the UK is a fairly typical European country. Measures that 'protect' French farmers would also 'protect' UK farmers; measures that harm UK potteries would also harm German potteries etc. The EU would have to pretty devious to think up things which only harm UK producers or consumers while benefiting them in EU Member States.
c) UK services would be entirely outside the system anyway.

Rees-Mogg believes that, after leaving the union, the UK should phase out all tariffs in order to reduce consumer prices and stimulate competition.

Oh does he now? The average EU tariff is only 1.5% for crying out loud, that is the least of our worries. I bet he loves VAT though.

Nobody move or the estate agents get hurt!

From the BBC:

Some 77% of members asked by the Royal Institution of Chartered Surveyors (RICS) said that the Brexit impasse was holding back activity.

New buyer enquiries, sales, and homes being put on the market all fell in February, the survey said.

This would mean a "challenging spring" for housing and the economy, it said.

Tuesday, 12 March 2019

Nobody move or lower ranked NHS managers will throw more sickies!

From The Daily Mirror:

Almost 11,000 doctors, nurses and support staff were off work daily with stress, anxiety and ­depression, the latest NHS Digital figures reveal.

The biggest proportion of sick days triggered by stress was among lower ranked managers for whom it was one in three.

Across the NHS stress now accounts for 24% of all days lost to sickness. Five years ago it was 19%.

Sara Gorton, of Unison, said: “The huge shortage of staff is the biggest problem and Brexit uncertainty isn’t helping."

France not entirely daft - shock

from Ecommerce News Europe:

The French Minister of Finance told newspaper Le Parisien that the proposed tax is aimed at companies with worldwide digital revenue of at least 750 million euros and a French revenue of more than 25 million euros.

He wants to target commission-based online platforms, like Amazon or Booking.com. Companies that sell their products on their own websites, like French ecommerce company Darty, wouldn’t be targeted.


Good start - the point about these platform/intermediary companies is that their value is in network effects aka rent, and rent is the main thing that governments should be taxing. You have to be able to distinguish it from true earnings, which is why companies like Darty are exempted. People only use Facebook, Twitter etc because everybody else does.

In total, there are about 30 companies that would be affected if the tax plan gets greenlighted. These companies are mostly American, but also German, Spanish and British, as well as one French company (Criteo) and several companies that are originally from France but have been bought by foreign players.

According to Le Maire, a taxation system for the 21st century has to be built on what has value today. “And that’s data”, he said. The minister also added it’s a matter of fiscal justice, with these companies paying some 14 percentage points less tax than small- and medium sized enterprises in Europe.


He misses two points. It's not so much control and ownership of "data" in itself that indicates a rentier status (some companies store lots of their own data, and good luck to them, that's not rent, that's good record-keeping), it's "other people's data" aka network effect etc. And how much tax other companies pay is irrelevant, if they are earned profits in a competitive market, then they should be taxed at lower rates (or not at all). But never mind.