You've heard of QE, TARF and TARP, but did you know about HARP, the Homeowners Affordable Refinance Program? Got a Fanny or Freddie owned mortgage? Been caught out in the credit crunch? HARP is here to help you, by re-financing up to 125% of the value of your
"If you are current on your mortgage and have been unable to obtain a traditional refinance because the value of your home has declined, you may be eligible to refinance through HARP. HARP is designed to help you refinance into a new affordable, more stable mortgage. The HARP loan is a new loan and will require a loan application and underwriting process. Loan refinance fees will apply."
But be careful!
"Foreclosure rescue and mortgage modification scams are a growing problem. Homeowners must protect themselves so they do not lose money—or their home.
Scammers make promises that they cannot keep, such as guarantees to “save” your home or lower your mortgage, oftentimes for a fee. Scammers may pretend that they have direct contact with your mortgage servicer when they do not.
The Federal government provides free resources to get you the help you need. Homeowners can call the Homeowner’s HOPE™ Hotline at 1-888-995-HOPE (4673) for information about the Making Home Affordable © Program and to speak with a HUD-approved housing counselor. Assistance is available in English and Spanish, and other languages by appointment."
Only in America!
Sunday, 31 July 2011
You've heard of QE, TARF and TARP, but did you know about HARP, the Homeowners Affordable Refinance Program? Got a Fanny or Freddie owned mortgage? Been caught out in the credit crunch? HARP is here to help you, by re-financing up to 125% of the value of your
This week we learned that OFGEM arbitarily fined British Gas £2.5 million for poor customer service. Now it turns out HMRC have been slapped down by MP's for the same crime.
MPs said they found bad management and demoralised staff, and that some levels of service were “unacceptable”...
So what happens now? Do we all get a rebate? Do heads roll? Do our elected representatives simplify the tax code?
Well Simon Jenkins does anyway. He warns his readers "... the government this week sneaked out the most astonishing change to the face of England in half a century. A "national planning policy framework" replaces all previous regulation and encourages building wherever the market takes it.
So what changes in the new Draft National Planning Policy Framework? Do Town Planners stop producing their little 5 year plans? Is the green belt going? Are NIMBY conservation zones to become a thing of the past? The answers are no, no and no.
Each local planning authority should produce a Local Plan for its area ... Local Plans should be aspirational but realistic. They should address the spatial implications of economic, social and environmental change. Local Plans should set out the opportunities for development and clear guidance on what will or will not be permitted and where.
The Government attaches great importance to Green Belts. The fundamental aim of Green Belt policy is to prevent urban sprawl ... The general extent of Green Belts across the country is already established. It should not be necessary to designate new Green Belts except in exceptional circumstances. If proposing a new Green Belt, local planning authorities should ...
Local planning authorities should set out a strategy for the conservation and enjoyment of the historic environment, including heritage assets most at risk through neglect, decay or other threats ... The principles and policies set out in this section apply to the heritage-related consent regimes for which planning authorities are responsible under the Planning (Listed Buildings and Conservation Areas) Act 1990, as well as to plan-making and development management decisions.
I really can't see what Mr Jenkins has his knickers in such a twist about. It doesn't look to me like all that much is changing!
1. Get cosy.
2. Stay cosy.
3. Don't make other people un-cosy.
You can ad-lib other rules, like "Don't wear woollens in bed", if you want. I just wanted to get the ball rolling.
Saturday, 30 July 2011
AK Haart covered this most fascinating topic several weeks ago.
In the meantime, I got round to running a slightly different version of this experiment, as follows:
The Tube wasn't working one morning because of a fire at a station further down the line, the announcements said it would take at least another hour to sort out. A lot of people were hanging around in front of the station, waiting for a 'bus or a taxi to take them to the nearest over ground train station. A few of them were on the mobile phone asking somebody to come and give them a lift.
I stomped back home and asked Her Indoors whether she could give me a lift to said alternative station (she wasn't at work that day), and I suggested that we swing by the station to offer a lift to some of the waverers outside the Tube station, as a gesture of solidarity if nothing else.
We pulled up in front of the crowd, I wound down the passenger window (actually it's all electric nowadays, isn't it, there's no winding involved) and shouted, as loudly as I dared, that my Mrs was taking me to the other station and that we could take three people with us.
It took several seconds for one woman to respond, another tagged along behind her and they both hopped in, followed by an awkward pause, while our two passengers stared as Her Indoors willing her to drive off and I stared at the crowd, willing one of them to move (it was starting to get embarrassing, but i was determined to take three extra passengers).
What was striking was that the third and final person (also a young woman) to walk up to my window broached the topic thusly: "I heard that you offered them [gesturing to the first two in the back seat] a lift, can you take me as well?"
"Sure thing," I said, "Hop in!" and off we drove.
The point was that I hadn't offered the first two a lift in particular; the third woman wasn't tagging along with the first two but had been invited in her own right. But somehow, because of the circumstances, she identified herself with the other two offerees rather than wishing to relate directly to me and the Mrs as offerors. Or something.
Friday, 29 July 2011
The Daily Telegraph propaganda piece then opens with this:
Cash-strapped governments (1) have long wanted to grab a bigger share of the wealth we hold in housing (2), now the Organisation for Economic Co-operation and Development (OECD) says Britain should adopt a Continental European-style property tax.
1) Emotive words there! Whose fault is it they are 'cash strapped'? Primarily the government's, because they are spending too much (heck knows they are taxing us enough, albeit wrongly). But who votes for the government? It appears to be the case that "In general people who were under 34 were less likely to vote than those in older age groups" so it's middle aged and older who have nodded through this over-spend. It's the Baby Boomers and pensioners. It's exactly the people who say that house price rises are good for us.
And I hate to have to point this out, but until 2007, the Labour government was running a deficit of 'only' about 2% or 3% of GDP. They actually managed a surplus between 1999 and 2001 (hence and why I voted for them in 2001) and they only really opened the taps in 2008-09 (when house prices started falling) and hit a deficit of over 10% of GDP, the current lot have every intention of running up a similar deficit as well as having higher taxes on income and output for the foreseeable.
There's a myth doing the rounds that this deficit is because tax receipts collapsed when the recession hit, which is nonsense. Tax receipts as a % of GDP stayed pretty constant throughout, and in cash terms, tax receipts only fell by £14.5 billion between 2007-08 and 2008-09, which only explains away a tenth of the current deficit. To cut a long story - the rather scary annual public sector deficit of around 10% of GDP is purely down to deliberate and calculated overspending, it's not something that just happened.
And what are they spending all that money and all that extra VAT and NIC on? Propping up house prices, perchance, by cutting Council Tax, offering incentives to first time buyers and bailing out banks? Who's to blame for/has benefitted from the accumulated £1 bn public sector debt and accrued £1 bn public sector pensions liabilities, and who's going to have to pay it off?
2) Which makes a mockery of this second contention, which I will look at on Monday.
Thursday, 28 July 2011
Let's chop that Daily Telegraph propaganda down into manageable chunks, starting with the headline:
House prices would be hit by 'revolutionary' property tax proposed by OECD
The use of the word "hit" panders to the notion that "High house prices are good for us", which is patently not true:
1) Best case, the older generation's loss is the younger generation's gain, so it's zero-sum.
2) Most people have children, and nearly all children have parents. Unless parents actually hate their own children, don't they want their children to be able to afford a house?
3) Apparently, a lot of parents try to "help their children onto the housing ladder" by dipping into their savings or even re-mortgaging to be able to give or lend to their adult children a deposit for an over-priced house. No doubt there are some couples somewhere who say "Luckily, our house had gone up in value, so we could remortgage to raise the money for our children to buy a house" but there's no helping people as stupid as that.
4) While the parents might be sitting on a paper capital gain, that's not real money. But the additional money which their children have to borrow to pay the higher prices is real money; it has to be repaid with interest, month in, month out.
5) Excel tells me that the total amount of repayments on a 25-year mortgage at 6.2% APR is double the amount of the initial loan [=PMT(0.062,25,100)*25]. So for every £1 of the parent's paper capital gain, there's a real £2 cost on the children.
6) One man's expense is another man's income, of course, so who are the real beneficiaries of this - the people getting the big bonuses at banks? The taxpayer who then has to bail out the banks when it all goes wrong? Who?
Wednesday, 27 July 2011
From The Daily Mail:
Tory backbencher Julian Brazier, author of a paper on rising population, said: ‘Late motherhood is one more example of how property prices in Britain are making family life increasingly unattainable.’
Mr Brazier, MP for Canterbury, said: ‘Despite the downturn, we have the highest property prices in the world in relation to incomes.
There is also the effect of immigration, which is responsible for two fifths of housing demand. It is important that the Government succeeds in getting immigration down.’
Well done for pointing out that high house prices are bad for 'family life', something which the Tories claim to support (but don't).
He's a bit off piste with the immigration sideswipe though. It's true that recent immigrants have a slight advantage when it comes to social housing - the IPPR published some research which purported to show they don't, but they were too honest for the own good and the figures they included said otherwise.
What he probably means is that the net number of immigrants per year (presumably divided by two to give number of households) is equivalent to two fifths of the number new houses built per year*. So yes, getting immigration down is one possibility, the other is just allowing more houses to be built.
* Net immigration from 'New Commonwealth and EU8' was about 160,000 a year, divide by 2 = 80,000, for a long time, new construction every year was about 200,000, 80,000/200,000 is two-fifths. Of course, now that the Tories have got in, they have restricted new construction to 100,000, so next year they'll be able to say that immigrants take up four-fifths of housing.
Tuesday, 26 July 2011
From The Metro:
Half of the garden fell 12metres (40ft) into the raging River Eden in Wetheral, Cumbria, including the shed and most of her patio. And she didn’t hear a thing. Mrs Howe, 72, who is a church verger, described what happened: ‘I was reaching to the kitchen sink for a knife and looked through the window – a big part of the garden had gone...As you can see, Mrs Howe's house is now teetering on the edge, and her insurance company is refusing to pay up (rightly or wrongly). Clearly, the value of the bricks and mortar has been destroyed, that's a net loss of wealth to humankind (whether she pays it or whether the insurance company finally caves in [sic] and pays), but what happens to the location value?
A plot directly overlooking a river usually has a much higher value than a plot further back (if we ignore the risk of the river bank collapsing again). The location value of her plot, seen vertically, is now zero, presumably, but assuming Mrs Howe's whole house is declared unsafe and demolished, what happens to the value of the plot behind it that previously had no 'riverside premium' but now does - hasn't the location value of that plot just jumped by the same amount as the location value of Mrs Howe's plot has fallen?
From Get Reading:
Emma Gregory suffered cracked teeth, cuts and bruises during the incident in Loddon Drive on Thursday, July 7, while her nine-year-old golden retriever ‘Skipper’ suffered a broken back and is being treated at St Fitzpartick Animal Hospital in Guildford.
The 16-year old, who lives in Thames Street, Sonning, was riding along a public footpath through the field with Skipper – who was on a lead – when they were chased by a herd of around 30 cows and a bull. She was kicked in the face during the attack, but managed to escape further injury by leaping over a barbed wire fence...
Meanwhile, HSE has been called in to investigate after Mrs Gregory contacted them to complain. She believes the field has inadequate signs warning people of the potential dangers of crossing a field containing cattle and questions whether the herd has been assessed as placid and well behaved...
And so on and so forth. Worth following the link for the splendid close-up picture of her injuries.
From The Brisbane Times:
A man from the Royal Australian Air Force who suffered horrific burns in a portaloo explosion, remains in a serious condition. The man received third-degree burns to his head, face, arms, chest and airways in the incident at the Rockhampton airport about 9.30am yesterday.
The Department of Community Safety said it's believed the man was lighting a cigarette at the time, a spokeswoman said. He was taken to the Rockhampton Hospital but transferred to the burns unit of the Royal Brisbane Hospital overnight. He remains in a serious condition, a defence spokesman told AAP.
Do we file that one under second- or third-hand smoke?
From ABC Western Queensland:
Police have used capsicum spray to subdue a kangaroo that attacked an elderly woman in Charleville in Queensland's south-west... Police officers were called to the house on the old Cunnamulla Road on Sunday after reports that a woman had been knocked to the ground and kicked several times by a kangaroo.
Senior Sergeant Stephen Perkins said he's never heard* of a similar incident. "The officers had to use their O-C spray on the kangaroo to avoid being attacked. Once the kangaroo was sprayed, it left the immediate area. Quite often dogs do attack police officers and we are forced to use capsicum spray on the dog to stop being bitten, but never on a kangaroo," he said.
Mrs Johnson's son, Rob Johnson, said authorities should consider euthanasing the red kangaroo that attacked his elderly mother. The kangaroo was probably someone's pet that's turned aggressive, said Mr Johnson, "It's either got to be put down or penned up in a zoo or something like that."
The article continues in the same merry vein for several paragraphs, well worth a read.
* I note that the Australians are mixing up their past tenses in the same way the English now do. What the reporter should have written is "Senior Sergeant Stephen Perkins said that he had never heard..."
Spotted by John B.
Monday, 25 July 2011
From The Best Guide for the MK11 Area:
At around 8 o'clock last night, Firefighters were called out to rescue a cow that was stuck in the River Great Ouse at the Stony Stratford Nature Reserve. Three appliances and crews from Great Holm attended, along with the Water Safety Unit from Newport Pagnell and Station Manager Jeremy Williams. The cow was released uninjured.
Emailed in by Dick Puddlecote.
Anon, winner of this morning's round, has another bright suggestion:
"UK soap operas sharing names with National Trust properties."
I don't have a clue what the answer(s) is (are), so let's hope that he or she pops back to award the prizes. Else I shall look rather silly.
Thanks to everybody who took part in last week's Fun Online Poll, results as follows:
Who is the cutest Jewish female pop star?
Louise Wener - 23%
Susanna Hoffs - 22%
Rachel Stevens - 20%
Melanie Blatt - 11%
Justine Frischman - 3%
Other - please specify - 8%
Given the tight result and the fact that some people complained about Amy Winehouse not having been entered, I hereby split the "Amy Winehouse Memorial Award for Cutest Living Female Jewish Popstar" three ways as follows:
Louise Wener (1990s)
Susanna Hoffs (1980s)
Rachel Stevens (2000s)
and hopefully that's the end of the matter.
This week's Fun Online Poll, which story do you find most yawnsome, multiple votes allowed, you can vote again every day if you're so minded.
Vote here or use the widget in the sidebar.
It's a very short one, I suspect there is only one item on it: "US soap operas called after a hill in south east Essex"
Sunday, 24 July 2011
Just to show that the idiocy goes right to the top, here are two paragraphs from HM Treasury's "Tax policy making: a new approach" as reported in Hansard:
11. In this inquiry, we received many submissions advocating radical change to the tax system, such as the imposition of a land value tax. (1) The supporters of such a tax consider that it would tax economic rent rather than economic activity and would meet the OECD criterion that recurrent taxes on immovable property were the least harmful tax. However, as the CBI notes, "the OECD acknowledges that it is politically difficult (2) for governments to shift the tax base onto property." (3) The ICAEW warned "Our initial conclusion is that, even if such a move was desirable economically (4) and let alone whether it would be politically acceptable,(5) it would involve a major rebalancing of the UK tax system which would take time to achieve (6) and risks introducing considerable distortions and behavioural changes." (7)
12. Not only are there political difficulties: practical matters, such as the way in which such values would be assessed and the extent to which such a tax should take account of the current or the potential use of land, would also need careful consideration. (8) We also note concerns that "While such a tax system would avoid distortions in economic behaviour, (9) it would be highly unlikely to yield sufficient revenues to fund socially useful expenditure (10) without producing substantial inequity." (11)
1) Oops. I think I missed that one.
2) It is only "politically difficult" because the government and the powers that be generally have spent decades brainwashing people into thinking a) that taxing economic activity and wealth creation is a reasonable way of doing things and b) that house price rises are good for us.
3) I wish they'd say "land and buildings" to make it clear what they are talking about. In any event, the CBI ought to be speaking from the point of "British Industry" who are perfectly accustomed to paying Business Rates, which are so close to Land Value Tax as makes no difference.
4) It's "were" not "was" and actually it "is" and they must know that.
5) See (2).
6) Everything takes time, it all depends which taxes you replace first. So let's start by rolling all existing taxes which relate to residential land and buildings or 'wealth' generally into a flat tax on residential land values. The only real constraint on how quickly we did this is how quickly people can be de-brainwashed.
7) No! It's the current system which creates "considerable distortions", the fact that people would behave differently if there were no taxes on economic activity and only taxes on economic rent is an argument in favour of the latter.
8) They already have two models - Business Rates for commercial land and buildings and Domestic Rates in Northern Ireland. All the info we need is already held by HM Land Registry or on the Council Tax register after that it's just a question of bunging in the [current tax rate + a percentage of current selling prices] in each defined area to get a fair approximation of the rental value of land in each area, you tot these up to give you the rental value of all residential land in the UK (the tax base, Y); you then decide a figure for how much tax you want to raise (X), divide X by Y to give you the tax rate, apply X/Y to [the local rate x size of each plot in each area] and we're away.
It'll never be scientifically perfect, but any over- or under-estimates will iron themselves out, but so what anyway? Does the rate of VAT automatically adjust itself down so that marginal businesses are kept afloat, does it automatically adjust itself up on businesses which appear to be making super-profits (banks, from 2000 to 2007 or thereabouts)? I think not. Would it not be better to have a tax which allows 'the markets' to decide the rates in the same way as we currently decide rents and prices?
9) That's not what they said at (4), is it?
10) Wot? Do they not realise the circularity involved?
a) Even under current rules, the residual rental value of UK land is about £150 billion per annum. If we taxed that at 100% instead of just collecting £50 billion in Council Tax and Business Rates we could get rid of VAT and merge income tax and National Insurance into a flat income tax of about 30% with a generous personal allowance. Would that not be "socially useful"?
b) Shifting from taxes on activity to taxes on rents gets rid of the dead weight costs caused by the former, and this extra growth goes £ for £ back into higher rental values, so it's a virtuous circle.
c) Forecast total tax revenues for 2011-12 are £531 billion (excluding booze, fags and fuel duty), that works out at an average £20,000 per household (including taxes borne by 'businesses' which are indirectly borne by households). If the average household no longer has to pay £20,000 in income tax, VAT, NIC etc, there is no reason to assume that they wouldn't be able to pay that much in LVT.
d) Then there is the invisible half of the Laffer Curve which few people talk about. Although income tax revenues would be zero if the income tax rate were zero per cent, by how much would the economy grow? A tenth? A fifth? A quarter? There's only one way to find out! Most of that growth would go into higher land rental values, so in effect, the land value tax would pay for itself, and a household's average net income would increase by something approaching £20,000 per annum.
11) Even if it's only half that, well it's not to be sniffed at, is it? Deliberately depriving every household of £10,000 or £20,000 income every year out of political cowardice seems like "substantial inequity" to me.
Saturday, 23 July 2011
From The Sun:
TRAILER parks have traditionally been seen as home to the dirt-poor living on the poverty line in rundown American suburbs. In the UK, as families struggle in the recession, they are fast emerging as a cheap and cheerful alternative to bricks and mortar.
More than 200,000 Britons - among them the parents of Chelsea star John Terry - now call static caravans home. And experts reckon the numbers are rising every year as more people see trailers as a high-value, low-cost route on to the property ladder. There are now more than 1,000 residential parks nationwide - many so popular they have long waiting lists. They can provide modern, comfortable accommodation - and a sense of real community - at a fraction of the price of traditional homes.
Trailer expert Jon Boston, a consultant for British Holiday & Home Parks Association, said: "Residential parks have the atmosphere of a little village back in the 1950s where everyone knows everyone and you can leave your door unlocked. Most have beautiful surroundings in prime areas with a worry-free living environment. Prices, whether buying or renting, are much lower than in traditional housing. Often a park home costing, say, £50,000 will have similar housing outside the park gate for four or five times as much. Park homes are virtually maintenance free - no worrying about gutters, for example - and almost invariably fall into the lowest band for council tax."
Trailer homes typically start at around £20,000 with most falling in the £30,000 to £80,000 range. An equivalent traditional house just 100 yards away might cost as much as £400,000 depending on the region...
OK, let's call it;
- £35,000 all in per caravan, to include the caravan, roads, utilities, sewers etc.
- 1.6 million households on council house waiting list, most of them claiming Housing Benefit
- total Housing Benefit paid to private landlords £7 billion a year
Why don't we just build enough caravan sites for 1.6 million households, that's a one-off cost of £56 billion, so let's borrow the money and pay it off over eight years using the £7 billion which would otherwise have gone into the pockets of private landlords?
We'd probably need far fewer than 1.6 million static caravans. There'd be fewer tenants competing for each privately owned home, and no subsidy setting a floor under rents, so rents would fall to a level where more people can afford it, they wouldn't need social housing.
Friday, 22 July 2011
Accountancy Age did a brief write up of the Telegraph's brief write up of the OECD's tax simplification proposals.
The comments open with this:
With the majority of the more expensive properties in the UK being owned by people who have or are about to retire(1) (assuming any of us ever do retire that is) a tax based on the market value of a property would hit anyone on a fixed or low income very badly.(2)
Also, when interest rates go up what about people overstretched when times were good and who now find themselves in a negative equity situation.(3) They won’t be able to sell (4) and will probably only just manage to afford the mortgage repayments, how would they cope with a large increase in any form of tax?(5) Would they just hand the keys back before the house was repossessed? With the housing market barely limping along, this idea would probably finish it off.(6)
1) At least she brazenly admits that the Baby Boomers have bagged all the housing for themselves and have no intention of letting young people 'get on the ladder' without paying a massive ransom first.
2) The first paragraph is fairly plain vanilla version of the Poor Widow Bogey (concepts like "Give them exemptions or discounts or just increase the State Pension" are far too complicated for their tiny little minds). The PWB is fundamentally a huge great lie of course: they always wail about the tax hitting 'people' but it's not a tax on people it's a tax on land values, so if you don't want to pay it, you'll just have to live somewhere smaller or cheaper (most people would be able to find something within a few hundred yards of where they live now) etc.
3) The Homeys like to show how kind and caring they are, so they choose diametrically opposed examples [old, low income, expensive house, no mortgage] with [young, high income, smaller house, big mortgage] to illustrate that such a tax would hurt both, which is nonsense, it's like smokers whining that tobacco duty hits non-smokers as well. Crocodile tears.
4) Who says? You can sell anything if the price is right.
5) A sensible borrower budgets for the fact that interest rates might increase by a few per cent in the first few years of the loan. The taxes which the OECD proposed to replace (Council Tax, SDLT, IHT, CGT) would average out at about one per cent of the value of every house, so for a sensible borrower this is no big deal - it's like the interest rate on the mortgage going up by one per cent but OTOH, he no longer has to pay Council Tax. So that's more crocodile tears. And if young people with a big mortgage and possibly young kids can afford the tax, why on earth can't older people - with no mortgage and the kids our of the house - afford it?
6) Does this woman have any idea what 'a market' is? It's where people come together to buy and sell things. Housing transactions have more or less ground to a halt, because what sellers think their houses are worth is about a third more than what FTBs can realistically afford. This is not 'a market'. Turning up the heat a little bit on the smug and complacent Homeys might just give them the nudge to drop their price and sell; the FTB can by definition afford the tax as he will adjust the price he pays up or down accordingly. So more transactions and a more active market, everybody ends up paying as much or as little tax as he wants. The tax would be good for the market.
Spotted by Dick Puddlecote, this is brilliant.
These people are sort of thinking about campaigning against the badger cull, but they're not actually sure one way or another whose side they're on - cow or badger. They went on the safe side and called it the "No to badger campaign", which is delightfully ambiguous - is it the campaign which says "no" to badgers, or are they saying no to the "badger campaign" [i.e. cull]?
So please pop over to their
Fun Online Poll and help them make up their minds.
Thursday, 21 July 2011
Dog bites shark! Plucky pooch rounds up the sea's most fearsome beasts
Shark attacks six-year-old girl in 18 inches of water as horrified parents look on
Just popped out for a bite? Great white shark leaps from the sea and lands... on the deck of a full BOAT
Open wide: The diver who nearly got swallowed by a whale shark
P!nk - Jewish? Cute? Both? You decide:Nominated by John B, who once reckoned that in an ideal world, girls would be genetically engineered to look like Natalie Portman (who is not a pop star and hence excluded from the poll).
From The Daily Telegraph:
Mr Padoan argues he should scrap many VAT exemptions – including food, passenger transport and domestic fuel – and abolish council tax and stamp duty in favour of “a property tax based on market values.”
... Instead of HM Revenue & Customs taxing property via stamp duty land tax (SDLT); inheritance tax (IHT); and – in the case of second homes – capital gains tax (CGT); annual liabilities would be calculated, based on estimations of house prices. But Mr Padoan argues that his reforms would “dampen fluctuations in house prices” and are essential to put the British economy on a more stable long-term footing.
I can't find the actual OECD report, but there's a brief summary of it here.
Jolly good, that list of taxes to be replaced will look familiar to regular readers. And then the Home-Owner-Ist shit storm is unleashed; in quick succession we get "would hit house prices", "unpopular", "tenants would face higher costs", "the need to value every property", the "Poor Widow Bogey" ("Any plans to increase the bands for council tax or introduce wealth tax are always accompanied by an outcry about elderly ladies living in large houses on limited incomes").
Yawn, been there, dealt with those.
Then the Homeys shift up a gear and start gibbering "... the more you tax something, the less you get of it. Taxing people’s homes would discourage home ownership and all the benefits that go with that", merrily ignoring the fact that the Home-Owner-Ist policies (heavy subsidies to and light taxation of owner-occupation or rental income) pursued by the UK government over the last ten years has led to a dramatic fall in the number of owner-occupiers (down from 72% to 69% if my memory serves correctly). The flipside is more buy-to-let landlords, more second homes and more vacant homes - homes which would become owner-occupied again if we had such a tax.
But the fun part is the very first comment, it appears that Homeys suffer from a terrible variant of dyslexia which prevents them from being able to take in the list of Bad Taxes which the OECD said should be replaced, and they launch straight into this:
For F**KS sake! More taxes? We're already massively over taxed. We pay tax from the second we're born to the moment till after we're dead. It's utterly disgusting. I'm sick of this endless BS form the state. It costs a f***ing fortune, provides bugger all and is next to incompetent in the dictionary.
I wonder, do these people go into a shop to buy something, do they just accept the goods and then start effing and blinding when the shopkeeper demands payment? Are their short term memories so bad that they forgot that they have just been given something which they wanted and are now being asked to provide something of equal value in return?
From the BBC:
Scientists in Wales have shed new light on the social lives of otters by studying roadkill found by the public.
Cardiff University Otter Project says it has made new discoveries about how the animal communicates with scent by studying the glands of 150 dead otters. The team identified more than 400 chemicals, including some previously thought not to exist in the species...
The project already knew that otters use scent as their main means of communication, but wanted to learn more about what information was communicated or the social functions of the scent. With otters notoriously hard to find, the team, based at Cardiff's School of Biosciences, appealed to the public to send in any dead otters they came across.
From City AM:
Borrowing was £1.5bn higher in April and May than at the same point last year, knocking the coalition’s plan to reduce the deficit by around £20bn. Spending in the first two months of this financial year was 4.1 per cent higher than the same time in 2010.(1)
Despite the over-spend, Labour last night blamed the UK’s anaemic growth on Osborne’s planned cuts. The deficit reduction "goes too far and too fast", a party spokesperson said,(2) arguing for a reversal of the VAT hike.(3)
The Federation of Small Businesses this week called on the government to temporarily slash VAT for the construction and tourism sectors, in a bid to kick start the economy.(4)
Yet Osborne’s policy of raising VAT while scheduling reductions in business tax was supported by Berenberg Bank economist Holger Schmieding(5): "Cutting business taxes is the strongest signal to send to global firms (6), while other supply side reforms will help boost the economy in the medium-term."
1) But both the big parties are doing plenty of Indian Bicycle Marketing. The Tories are allowing the deficit to increase while claiming that they are reducing it...
2) ... a delusion which Labour are keen to foster.
3) In which, unusually, Labour would be absolutely correct*.
4) As backed up by the FSB, who actually represent small businesses on the ground in the real economy - these people have to fill in their own tax returns and write cheques from their own bank accounts, and know full well that VAT is a tax on business and that they pay five times as much in VAT as they do in corporation tax or income tax on their profits.
5) Banks love the idea of VAT being increased and corporation tax reduced because they are largely exempt, for every extra £1 input VAT they suffer, they save £10 in corporation tax.
6) Banks are global, they can redirect transactions to whichever jurisdiction they choose; a local building firm or pub landlord can't just up sticks and relocate to a country where VAT on construction or catering is lower.
* Reducing VAT to 15% and curtailing exemptions for Business Rates were about the only two really good things they ever did. Along with exempting foreign dividends from UK corporation tax and the Substantial Shareholdings Exemption.
From the IFS press release:
Children born to married parents achieve better cognitive and social outcomes, on average, than children born into other family forms, including cohabiting unions. This report asks why this is so: is it the parents' marital status per se that results in better outcomes for their children, or is it because married and cohabiting couples are different in some other ways, such as their level of education, which also matter for child development?
Differences in outcomes between children whose parents are married and those who cohabit may simply reflect these differences in other characteristics rather than be caused by marriage...
Go on, tell us! Damn, we're going to have to skip right to the end of their report:
Taken together, these findings support the broad conclusions reported in Goodman and Greaves (2010a and 2010b) and suggest that the gaps in cognitive and socio-emotional development between children born to married and cohabiting parents mainly or entirely reflect the fact that different types of people choose to get married (the selection effect), rather than that marriage itself has a direct effect on relationship stability or child development.
On the basis of this evidence, therefore, there does not seem to be a strong reason in terms of child development for policymakers to encourage parents to get married before they bear children. There is, however, good reason for policymakers to continue to try to increase the educational attainment of today’s children (tomorrow’s parents) as a means of improving the outcomes of future generations of children.
Wednesday, 20 July 2011
A list of people's most hatedest Americanisms, complete with 1,267 commentations.
My favourite: 14. I caught myself saying "shopping cart" instead of "shopping trolley" today and was thoroughly disgusted with myself. Graham Nicholson, Glasgow
From The Daily Mail:
The retirement plans of millions are being crippled by pension charges which wipe off up to 40 per cent of the fund’s value, a report warns today.
It sounds the alarm about one of the biggest and most lucrative parts of Britain’s pensions industry – the individual personal pension. Around £230billion of savers’ money is invested in this type of pension, popular with the self-employed and workers who do not have a company pension.
The campaign group Consumer Focus attacks the ‘excessively high costs and charges’ which must be paid by savers to pension firms and financial advisers. Its 60-page report, published today, says there is ‘a baffling array of terms’ for all the pension charges which an ordinary saver has little chance of understanding.
Consumer Focus reserves particular criticism for one of the most controversial charges, known as ‘trail commission’. This is a charge, typically 0.5 per cent of the total pension fund, paid every year by savers to an independent financial adviser until they retire. The adviser may [sic] not do anything after the first year but will receive commission for decades...
We see this all the time, it's called 'tax arbitrage'.
If a particular way of investing in something receives favourable up-front tax treatment (i.e. buying shares via a pension fund rather than buying them directly), then the net return to the 'pensions saver' will always be driven down to the same level as if he were a 'direct investor'. What the 'pensions saver' gains in tax relief/deferral, he loses in fees and charges (and inflexibility).
The whole notion of 'encouraging people to save by taxing them at higher rates' is an exercise in futility. Would people rather not just pay less in tax on their earnings in the first place and make their own decision on whether to spend or save? Those who would have saved will do so anyway*; those who wouldn't have saved end up slightly better off; and the notion that we have to hurl a £44 billion wall of taxpayers' or pensions savers' money at this every year in order to encourage a small percentage of waverers strikes me, as an outside observer, as completely insane.
There are plenty of other examples, in fact, it's difficult to think of anything to which this does not apply, the same applies to subsidies - they don't make things cheaper either, they make them more expensive etc.
UPDATE, I just spotted this at CityWire:
The Social Market Foundation is recommending a radical rethink of government policy to get those who don’t save interested in putting money away... The report, Saving on a Shoestring, looks at why some people find it hard to save, based on a new analysis of the government Wealth and Assets Survey and the Child Trust Fund administrative data. It found that turning people into habitual savers only works for the proportion of people who are inclined to save anyway...
Tuesday, 19 July 2011
This is pretty niche - you have to be not too old to remember Madonna from way back but not too young to have kids who listen to Lady Gaga - but being exactly the right age, this was the first thing I thought of when I heard "Born this way":
It appears that even the Home-Owner-Ists realise that can't just keep playing the Poor Widow Bogey (or Subsistence Farmer Bogey), so it now appears to be tradition to play the double and contrast them directly with a Hate Figure Du Jour:
So a single millionaire in a one bedroom flat will pay less than a family of 5, on average income, in a four bedroom house. Size of property does not automatically indicate an ability to pay higher taxes. Good to see Unison still in the 19th century mindset of social envy.
Suppose there are four earners in that £100,000 house, all generating masses of rubbish, using the roads heavily and placing a generally high demand on local services? Then suppose there are two independent-minded retired people in the £1m house (which doesn't have to be a palace these days) whose call on council services amounts to little more than emptying their kitchen bin once a fortnight.
Exhibit Three (via Mike R):
It would be rather odd if Rupert Murdock could own a 1/4 acre lot like my landlady and both would pay the same in taxes. Murdock's income shows he in benefiting 100x as much from Society as she does, I would suppose, and should therefore owe Society more.
Try explaining to the electorate that under your new scheme Lakshmi Mittal is tens of millions better off, and Granny is going to lose out. Not going to go down well I suspect.
A couple on £500k living in an apartment would pay little tax as they occupy very little land. A couple on £50k in a house with a decent sized garden - where they could grow vegetables and let the kids kick a ball about - would be heavily taxed. What's fair about that?
I look forward to seeing other wealthy Hate Figures Du Jour being used as an argument against LVT, I'd like to suggest: love rat Ashley Cole; tax evader Philip Green; bank 'rupting Sir Fred Goodwin; pint sized Bernie Ecclestone; the conspiracy theorist Mohammed Al Fayed; polluter of children's minds J K Rowling; telly bore Sir Alan Sugar; Russian oligarch Roman Abramovich, Baby P neglecting Sharon Shoesmith etc etc.
You'll notice of course that these people's income is largely a result of successful rent-seeking, for example, if Boris Yeltsin had introduced LVT instead of privatising everything, Roman Abramovitch would still just be a senior manager in an ooil company somewhere; of course civil servants like Sharon Shoesmith are vastly overpaid - out of taxpayers' money; Sir Fred Goodwin and other bankers could only make so much money because the government wanted them to etc etc.
From The Metro:
Ecuador has temporarily banned alcohol as an emergency measure after 12 people died drinking contaminated bootleg liquor. (1)
Initially the ban was restricted to the coastal municipality of Urdaneta in Los Rios province, where over 100 people have been treated for intoxication (2) from drinking adulterated alcohol.
A 72-hour nationwide dry law prohibiting the sale or consumption (3) of alcohol was subsequently introduced yesterday, after alcohol poisoning cases were detected in at least four other areas across the country. (4)
1) High duties on spirits -> bootlegging, see Pub Curmudgeon for a lengthier exposé. As VFTS points out in the comments, ban on sale of alcohol -> increase in sale of bootleg alcohol.
2) Isn't that the whole point? To get intoxicated?
3) There's nothing to suggest that beer or wine is similarly contaminated, but they've banned the 'consumption' of all alcohol in people's houses? So I can't finish off the last few cans from a multi-pack or a bottle of wine which so far hasn't killed me? How are they going to enforce that, then?
4) Could they not just publish the brand names used by the bootleggers and leave it to people to decide for themselves?
The BBC has been criticised by some for misleading reporting, but this is beyond the pale:
But overall, self-build saves money, supporters argue. The average new build home costs £189,940 compared to a self-build cost of £84,000 if you do the work yourself or £146,000 if you employ tradesmen to do it for you.
The difference between £189,940 and £84,000 is largely the cost of a plot of land with planning permission (minus a bit for builder's profit margin and the value of your own labour). The difference between £189,940 and £146,000 is because a speculative builder takes risks and has to make a profit margin on top of his actual costs.
In any event, it's not clear whether the £146,000 figure includes the land cost, as it seems wildly over-stated. My next-door neighbour had himself a massive semi-detached house built (in his side garden) with all mod cons. He told me it cost about £120,000 all-in; a basic house would have been about £80,000 but he got a bit carried away.
Lynda Williams was given a plot of land in mid Wales by her father. She didn't have the money to hire a project manager so ended up building it herself from a timber frame. It took eight months and meant putting it together in the evening after work. The main motivation was getting value for money. Her mortgage was £110,000 but it is now valued at £260,000.
Let's assume that the mortgage paid for the construction costs, the balancing figure of £150,000 is the (largely artificial) scarcity value of a plot of land with planning permission.
From the BBC:
Passive smoking nearly doubles a teenager's risk of hearing loss, research reveals.
Investigators say the findings, from a study of over 1,500 US teens aged 12 to 19, suggest that secondhand tobacco smoke directly damages young ears. And the greater the exposure the greater the damage. Often it was enough to impair a teen's ability to understand speech, Archives of Otolaryngology - Head & Neck Surgery reports.
It is still unclear how much exposure could be harmful and when the damage might occur. Experts already know that smoke increases the risk of middle ear infections. And they believe it may also harm the delicate blood supply to the ear causing "subtle yet serious" changes. For these reasons, as well as other smoke-related health risks, they say the best advice is to avoid any exposure to tobacco smoke as far as is feasible.
I suppose this is a gift to teenagers who ignore their parents though, 21% of them will have a Right-On excuse.
Monday, 18 July 2011
You are a surprisingly unbloodthirsty lot. The results to last week's Fun Online Show Trial By Internet were as follows:
News Of The World: Who deserves to go to prison? (multiple answers allowed)
Rebekah Brooks - 77 votes
Andy Coulson - 64 votes
James Murdoch - 53 votes
Rupert Murdoch - 51 votes
Les Hinton - 32 votes
Other - please specify - 20 votes
They are all entirely innocent - 34 votes
Total 130 voters
I'll accept majority verdicts, so it looks like only Brooksy is going down for this. Thanks to everybody who voted and for all the comments over at the poll - those people who chose 'other' nominated mainly policemen on the take, MPs in general and G Brown, T Blair and J Prescott in particular (which seems fair enough, but we could put them in the dock for plenty of other stuff as well).
And lo, there was some dispute as to whether P!nk counts as a "Female Jewish pop star who is extremely cute" (two for, one against, so i couldn't use my casting vote) so let's throw it open to the floor.
Deadline for nominations (same thread) is now closed, this week's Fun Online Poll is "Who is the cutest female Jewish pop star?", whereby "Jewish", "cute" and "pop star" are all highly subjective.
Vote here or use the widget in the sidebar.
There's been an outbreak of common sense at the Federation of Small Businesses. From the BBC:
The FSB is urging VAT be cut to 5% in the construction and tourism sectors. "Consumer demand is a key barrier to economic growth so such a cut would encourage people to spend in these areas," the FSB said in its Voices of Small Business Report.
The FSB said: "Evidence from other EU countries shows that any lost revenue to the Exchequer by making VAT cuts will be met by earnings from additional demand, jobs and the wider economic activity."
Although the basic EU rule is that the standard rate of VAT has to be at least 15%, it appears that countries can reduce the rate on specific sectors, which is what Ireland seems to have done recently. So far so good. The depressing bit is right at the end of the article:
A Treasury spokesperson said: "Reduced VAT rates of the kind suggested would make a significant impact on revenue. Any claim that a boost to foreign tourism or construction would outweigh these effects would need to be looked at very carefully indeed."
In other words, they didn't give these secondary effects any thought whatsoever when they hiked VAT from 15% to 17.5% to 20%, did they? Even Ed Balls seems to have finally grasped that you cannot keep merrily increasing VAT and expecting overall tax receipts to keep going up, for crying out loud.
For several years, the Vested Interests have been gleefully talking about "pent up demand" (which is merely the flip side of articifially restricted supply, of course) keeping house prices permanently high, and somehow or other, pushing these high prices up a little bit more every year in perpetuity.
Ahem. According to the latest report/survey by Rightmove:
Seven in 10 properties put on the market so far this year have yet to find a buyer. This has helped push the average number of homes registered with estate agents up to 78 - the highest ever for the time of year.
So many sellers are struggling to sell their homes partly because mortgage approvals are running at about half the rate they were before the financial crisis, while some buyers are staying away, fearing that prices have further to drop.
Cheered me up, anyway.
Sunday, 17 July 2011
Sobers, who has the attention span of a rather annoying child, played the car-d for the umpteenth time. He refuses to address the difference between how cars come into existence and how land comes into existence and then waffles on endlessly about 'ownership', having stared out of the window and picked his nose while teacher was explaining it the last umpteen times, but for those who weren't paying attention, the Homey or Faux Lib typically re-opens the debate as follows:
"Everything only has value because others can be excluding from having/possessing it. If I cannot enforce ownership of my car what use is it to me, or anyone else?"
The patient Georgist then has to remind the Homey or Faux Lib of how things work in the real world:
"We have covered cars a dozen times, and I do wonder sometimes whether you don't understand or simply don't want to - to recap briefly.
1. A car has to be manufactured, individuals have to invest their own skills, time and money into making it. If demand increases, the price does not go up - all that happens is that more cars are made.
2. They exchange the car for the equivalent value of somebody else's output.
3. A car depreciates over time. Its value does not depend on where it is parked. I cannot increase the value of a car by buying one in Newcastle and parking it in Sandbanks, Poole, Dorset.
4. A car is not created 'by the community', title is not created by fencing off a pre-existing car and getting the force of the government on my side.
5. Possession of a car is largely a physical thing. A car with good security, locks etc is worth more than one which can be easily stolen. If your car gets nicked, there is little that the police can do to recover it.
6. And yes, there are areas where the police is quite good at recovering stolen cars and deterring car crime - land values in these areas are higher.
7. As a matter of fact, car owners/users pay full whack £55 billion a year in taxes on depreciating assets worth £350 billion - what they are really paying for is the right to use UK roads. If you take your car abroad, its value is unchanged (barring the LHD RHD debacle) and you pay a commensurate amount of tax elsewhere.
8. If taxes were levied on land and buildings at the same rate as taxes on cars, that'd be enough to replace all other taxes.
"The idea that land is somehow uniquely guaranteed by the existence of society is nonsense."
Try telling that to an olive grower in the West Bank when the Israeli Defence Force marches in, turfs him out and builds a new Jewish settlement. If he sees them coming, he can flee and take his goats, car, TV, steel ingots, whatever, with him. It is now up to the Israelis to decide who 'owns' the land."
The bored child having stared out of the window while teacher was explaining it then re-sets the clock to where they were five or ten minutes earlier and starts again...
I'm not talking about the in and outs of how cars are made, whether they appreciate or depreciate in value etc etc ...Ownership of land is EXACTLY the same in this way, as ownership of anything. If you can't admit as much there's no point even continuing to reason with you.
If we want to drag legal concepts or man-made law into this, there is a certain hierarchy of 'ownership'. If somebody has just created something with his own hands and somebody else grabs it and runs away with it, then by the standards of a young child, an animal or the most primitive society, the first person 'owns' it and the other person is 'a thief'. If that somebody else comes along with a lot of his big and tough mates and they grab it, they are still thieves.
But if people bumble around doing their best, creating stuff with their own efforts, and then somebody else comes along and grabs half of it because he has the bigger and tougher mates (which is how income tax works, or how rents are collected), claiming that he has the law on his side, then to whom does that 'stuff' belong? The people who made it or the people who took it? Who's the 'owner' and who's the 'thief' in this scenario?
From an old Evening Standard I found again while tidying up my study.Yet another example from real life how the actions of "the community" create land values - something which the estate agents refer to as "Location, location, location".
London (or any other town, for that matter) has to be there first, and London is only the sum total of people who live and work there, and all the amenities or opportunities they provide. The total number of people who can live and work somewhere in turn depends on how good transport infrastructure is (roads and cars are fine for smaller towns; but above a certain population density, only public transport will do).
Very few people are happy to commute more than ninety minutes each way, so if a house is more than ninety minutes away, it's "time from London" value is £nil; sixty minutes away (i.e. thirty minutes closer) and £39,000 of its potential selling price is TfL value; half an hour away and it's £78,000 and the very fact that a house (or flat) is in London itself is worth £117,000.
Over at HPC, Shipbuilder explained the logic behind LVT thusly:
... ownership of land needs to be enforced by the state, so clearly it is in no way natural. This is the entire crux of your argument and it falls flat on its face. Think of two scenarios involving a plot of land and group of people - in one, the group agree to split the land up and use it amongst themselves. In another, one or two people stick a fence around the land, claim ownership and tell the rest they want to be paid for it. Which is more likely to involve jackboots and armies?
Your argument involves nothing more substantial than repeating that I'm a communist and wrong - you haven't presented any counter logic and you haven't answered any of my other points on the free market. As I've stated, my point on the moral basis ownership of property is widely acknowledged - [faux] libertarians and others extend it to land, whereas others such as socialists, anarchists and Georgists, don't, they claim land must be treated separately. It's all there in the writings of Adam Smith, John Locke, Murray Rothbard, Henry George and so on, so your 'property is theft' jibe is simply weak.
I'm sure you can do better than simply repeating the same hollow appeals to authority and jibes about communism. And just to clear things up, the definition of communism involves abolition of all forms of private property. My view is that private ownership of property is defined by producing something, or paying the producer a price for it. Just to clear up any confusion that may be perpetuated in any further posts.
Uncle Tom then does the usual Home-Owner-Ist/Faux Libertarian trick of mixing lies with facts and then drawing the wrong conclusion anyway:
Let's start with the first sentence:
"ownership of property is established by producing something, or paying the producer"
How do you work that out? Ownership of land entails being the legally recognised custodian - no payment or production is demanded. If you own a gold coin, it also makes nothing and pays nothing, but it belongs to you...
To which I responded:
1. What do gold coins have to do with it? Somebody produces the gold coin and you obtain ownership by paying the producer. That fits in entirely with Shipbuilder's position. Gold is not land. Neither are cars, paintings or lawn mowers. Land values are the only values which arise purely as a result of actions of 'the community". Gold coins, cars etc do not appear out of thin air or at the stroke of a bureaucrat's pen.
2. "Ownership of land entails being the legally recognised custodian...", in other words, it requires the force of the state to back it up, which is also what Shipbuilder said at comment 15.
3. "... no payment or production is demanded." Agreed, under current rules on most countries, the government demands very little in payment in return from the current owner (apart from Domestic Rates, Business Rates, Council Tax and their equivalents in other countries). And land is not produced, it merely requires somebody to stick a fence round it and to have the force of government on his side.
4. But the point is, thanks to their state protected, heavily subsidised and lightly taxed privilege, the current owner of land can demand payments from others who wish to occupy it, which might be quite modest in the case of forests or grouse moors in Scotland, all the way up to £500 per square foot per year on Bond Street in London.
To sum up, the Land Value Taxers say it is perfectly reasonable for the current owner or occupant of any bit of land to pay the government for the value of what he is getting in terms of legal protection, backed up with force of the state. Similarly, it is quite unreasonable for the government to demand a proportion of people's earned income or profits (i.e. where individuals are creating value with their own efforts), so income tax, VAT etc should be abolished.
12.1 As background, it is useful to compare the relative figures for private and public sector state provision...
• The Government are deliberately understating the liabilities of unfunded Public Sector pensions schemes. As at March 2005, the government estimated the liabilities (the ‘discounted net present value’) of accrued public sector pensions - which in future cash terms will amount to around £3,762 billion - at £530 bn. Using more realistic assumptions, Neil Record calculated the liabilities to be £1,025 billion, which is now widely accepted as the best estimate...
12.3 There also needs to be proper accounting for public sector pensions liabilities. Although this will not ‘solve’ the issue, it will at least highlight it. A reasonable suggestion is that public sector pension schemes liabilities be calculated under normal accounting standards and accounted for as such in public sector accounts. This would prevent a future government hiding the cost of current promises.
Landmark documents published today show that the government’s liabilities for public service pensions are more than £1.13 trillion.
The figures, which also show Private Finance Initiative liabilities of more than £40bn, are included in the first set of Whole of Government Accounts, published by Chancellor George Osborne and the Office for Budget Responsibility’s first report on the sustainability of the public finances.
Saturday, 16 July 2011
As I said a while back, "... under the Lib-Cons fakeprivatecompanies and industry-lobby-groups-masquerading-as-charities ('ILGMACs') will take the place of the much loved fakecharities in setting the agenda (i.e. dictating 'regulation and legislation') and/or directing how taxpayers' money is to be spent."
Adam Collyer describes the machinations of a specific ILGMAC here. Worth reading in full.
The last short list was: "Countries which have never devalued their currency; 'restructured' or defaulted on their national debt; taken a bridging loan from the IMF; accepted soft loans/grants under Lend/Lease, Marshall Plan, or from World Bank or EU; received overseas aid; nationalised foreign-owned assets etc."
The following countries appear to qualify:
Bhutan (submitted by Bayard)
Australia (Adam Collyer)
Mike W and Steve_L, who've actually read a book about it, seemed to think that there is no such country.
This week's Short List: "Female Jewish pop stars who are very cute". I can only think of two (not Dana International or Amy Winehouse!), but there may be a few more.
I've noticed quite often that lefties can be quite astute at describing concisely, what things actually are like. But when it comes to identifying the root cause and especially when it comes to fixing it, they get it completely fucking wrong.Here.
Friday, 15 July 2011
I've gave up doing the weekly slot because I ran out of new material, so here's one from the archives: "In your room" by The Bangles, fronted by the doe-eyed Susanna Hoffs, who is on the short list of "Jewish pop stars who are really cute" (hey - there's an idea for a Short List. I haven't done one of those for a couple of weeks either). Up a semi-tone at 1 minute 43 seconds:
From The Evening Standard:
Mothers, stay at home for a safer, cheaper birth
There's a secret ritual a couple of weeks after having a baby: you sit down with your NCT group and compare notes on the birth.
My session last year was in a Crouch End coffee shop where six shell-shocked new mothers relived various birthing battles. Most of the salient details were hair-raisingly similar: chaotic, rude midwifery, lots of drugs and medical intervention, shoddy aftercare. Three of us ended up having emergency C-sections.
But one tale stood out - the home birth. Sure there were hairy [sic] moments, but these were comedic rather than life-threatening... Other friends who delivered their offspring at home have similar tales: very few stitches, barely any drugs and midwives treating them with respect.
Unless all those emergency Caesarians were entirely unnecessary, I'd say hats off to the NHS for identifying the potentially riskier births, wouldn't you? If those three mothers who ended up having a Caesarian had insisted on a home-birth, heck knows what would have happened.
From The Daily Mail:
Motorists could face prosecution for smoking while their children are in the car, under new proposals.
The move, outlined in the Welsh Assembly, could see Wales becoming the first country in Europe to impose the ban. It would mean drivers who light up at the wheel in England would be breaking the law if they continue as they cross the border...
Tory MP David Davies*, whose constituency in Monmouth sits on the border, also hit out at the move: "I don't condone smoking and everyone knows it is bad for health and can kill people. But this move by the Welsh Government is reaching the stage where smokers are being victimised and that can't be right."
* Not to be confused with David Davis, which has led to all manner of hilarity!
Uncle Tom, responding to Drewster over at HPC:
You're suffering from a bad case wadsworthitis - LVT theory hinges on a set of childish notions that don't bear close scrutiny, and there are very good reasons why it will never happen - so get better and come back to the real world... It's trite little phrases like: "Of course LVT would sort this out in no time" (see above) that are so childish. Anyone who thinks you can re-order the UK tax collection system overnight is living in la-la land.
As per usual, the Homeys are deliberately taking things out of context and seeing contradictions where there are none, not to mention behaving like spoiled little girls and resorting to name-calling.
No Land Value Taxer I have ever met has suggested we replace all other taxes with LVT "overnight"*. Drewster had not suggested this either. He merely pointed out that land and buildings would be put to their optimum use (bringing vacant ones into use, converting from commercial to residential use, or vice versa) "in no time" if commercial and residential land/buildings were taxed at the same rates. As things stand, developers have every inventive to convert commercial to residential because in most areas, Council Tax is much, much lower than Business Rates, giving them a handsome windfall gain (the capitalised value of the tax saving).
(Local councils also have a perverse inventive to allow this, as they can keep the Council Tax but have to hand over Business Rates to central government, so we'd also have to make sure that local councils keep the same proportion of each tax - the precise proportion is pretty irrelevant).
It would be quite unnecessary to have full-on LVT to achieve this - it is quite sufficient to align the tax rates on commercial and residential land/buildings; for example, Business Rates could be halved and Domestic Rates (or LVT, or whatever you want to call it) set at about 2% per annum of the current selling prices of housing. This would raise about £100 billion a year, which would allow us to replace COuncil Tax etc (see below) as well as cutting VAT to 10% (for example).
* For my part, I have always suggested rolling Council Tax less Council Tax Benefit, Stamp Duty, Capital Gains Tax, Inheritance Tax, Insurance Premium Tax and TV licence fee into an annual LVT on residential land and buildings of about 1% per annum on current selling prices (in Northern Ireland, Domestic Rates are already calculated as 0.7% per annum on 2005 selling prices, so for them it would be no particular upheaval).
By and large, few people would pay more or less over their lifetime than they do now, and only a quarter would pay noticeably more on a year-by-year basis - the increase being the annualised amount of one-off taxes such as CGT, IHT and SDLT which they no longer have to pay. Of course, CGT and IHT would be scrapped on everything - land, buildings, shares, other investments - so that there is no tax advantage or disadvantage to investing in some things rather than in others.
Together with Business Rates, this would mean about £65 - £70 billion a year is raised from land taxes, which is only about a fifth of the total amount needed to replace all the Bad Taxes (VAT, National Insurance, income tax and corporation tax), but at least it's a step in the right direction. In Year Two we then increase the "about 1%" rate and reduce Bad Taxes a bit, and so on and so forth, the whole process would take five to ten years at its very fastest.
Back in 2009, there was much bleating and wailing about the Business Rates revaluations, for example this from the Evening Standard:
The Government is revaluing the amount companies will have to pay in each region of England. The changes will mean while most regions will pay less, London will pay an average 10 per cent more before rebates are taken into account, with offices hardest hit with a 19 per cent hike.
Politicians and business leaders are alarmed that the capital's firms face a “triple whammy” of increased charges from next April, when the revaluation takes effect. Westminster council has calculated this could add up to 25 per cent to bills in central London, once a new levy being imposed by Boris Johnson to help pay for Crossrail and an annual inflation-linked rise in business rates are included.
Businesses with offices in central London, such as Google, Diageo, Apple, Marks & Spencer and the John Lewis Partnership, could be hardest hit. The council fears jobs could be at risk if firms are forced to cut costs or consider relocation. But business rates in the South East outside the capital are due to fall five per cent, by seven per cent in the West Midlands and 10 per cent in the East Midlands.
As any fule kno, Business Rates is pretty close to Land Value Tax (especially in London, where the location rent is a huge proportion of the total rent payable), thus there's no reason to assume that it harms the economy, and if anything has a modest stimulating effect.
And the outcome?
According to Colliers in July 2011:
... it was found that increased competition for Grade A office space is likely to ensure a high take up rate in London. In the first half of 2011, 1.8 million square feet of office space was let, with the West End seeing its fastest rate of occupancy since the second half of 2005. The occupancy rate of West End office space is now 94 percent with availability declining by 55 percent.
Central London availability of Grade A space has also fallen to a 30-month low of 17 percent. It is expected that the take-up of top-quality premises has reached a peak at its current level due to few new commercial properties becoming available. The lack of available space is leading to higher rents, with some locations seeing increases in the double digits so far in 2011.
And they are still constantly building new office buildings in London, it's not as if supply is decreasing or anthing.
Thursday, 14 July 2011
From Business Recorder:
The euro zone may be starting to get to grips with the Greek crisis. The idea of bond buybacks by the European bailout fund is back on the table. The European Financial Stability Facility could lend to Greece to buy its own debt back... The idea isn't entirely new: it was mooted last year before being shouted down by Germany, which saw the plan as a backdoor way of making other countries take on Greek debt...
A buyback could genuinely bring down Greece's debt. It could be done in conjunction with lower interest rates on Greece's bailout loans, and some form of extension of bond maturities. This three-way formula could pave the way for compromise between the ECB and euro governments.
Greek debt is trading, on average, at about 55 cents on the euro. A buyback of all the country's debt at that price would cut the country's debt load to 87 percent of GDP, lower than Portugal or Ireland.
I have been told that it is considered very ungentlemanly for a country to buy back its own debt at a discount to face value, but needs must.
To do it properly would require a lot of connivance and cloak and dagger stuff and saying one thing and doing another (in which Greece are past masters). Ideally what Greece would do is openly go out an borrow another €175 billion from the ECB or IMF (or whomever), pushing its nominal debt-to-GDP to something silly like 250% of annual GDP. While ostensibly pissing this money up the wall, as per usual, they would actually squirrel it away somewhere safe.
Let's assume the market value of the old outstanding debts falls even further to half its nominal value of €350 billion. Greece would then, very carefully and using lots of nominees, buy up all the outstanding debt which comes on the market, taking care not to push up the price again. It can easily keep the market value down by publishing horrendously bad figures for unemployment, deficits, fall in GDP, allowing a couple of its banks to go bankrupt and so on.
Once it has bought back most of its old bonds, it can merrily shred and burn them, hey presto, old debts exitinguished and it now only owes the €175 billion figure mentioned above.
From moneyextra.com: "According to the English Housing Survey, only 11 per cent of those who own a house are under the age of 35."
According to the ONS Population Pyramid, there are 12.7 million people in the UK aged 20 to 34, according to the English Housing Survey itself, there are 14.5 million owner-occupier households in England, which equates to about 17.3 for the whole of the UK.
17.3 million x 11 per cent = 1.9 million households, let's assume it's half single people and half couples who own jointly, so that's 2.9 million people, 2.9 million divided by 12.7 million = 0.23, i.e. only about 23% of under-35s own their own home, and as they probably have staggeringly large mortgages, in reality they own nothing at all. Nice to see all that wealth cascading up the generations!
From The Metro:
Schoolgirl Aimee Bowen suffered severe sunburn during a sports day because her school has banned bottles of suncream.
Aimee, 10, returned home bright red and covered in blisters after the event. Her parents, Andrew and Victoria, said they were told pupils weren’t allowed to bring in sunblock in case other children had an allergic reaction to it.
Pennard Primary School, near Swansea, south Wales, said it followed sun safety guidelines and parents could go to school during the lunch break to reapply cream.
Wednesday, 13 July 2011
The growth in demand for rented property was also seen last week in the findings of the English Housing Survey, published by the Department of Communities and Local Government (DCLG). It revealed that between 2005 and 2009-10 the number of people renting homes privately in England had risen by 1 million to 3.4 million - a rise of 40% in that time.
The Council of Mortgage Lenders (CML) said: "Private renting had grown to account for 16% of households, while 17% rented from social landlords."
The insane Home-Owner-ist belief that house prices can only go up - and that rising house prices makes us wealthier - runs counter to the claim that Home-Owner-Ism is about 'encouraging owner-occupation' (which I think we are broadly agreed is A Good Thing).
Home-Owner-Ism is really about increasing the amount of mortgage debt sloshing around (if you have a big mortgage, you don't really own it, you're just renting from the bank) and when all else fails, it's about increasing the number of tenants, i.e. reducing the number of owner-occupiers.
More than one in eight Yorkshire homeowners have not reported crimes since online crime maps were introduced for fear of putting off prospective buyers or tenants, a survey suggests today... Ministers have hailed the scheme as a way of holding police to account, but some residents fear it will sully their local area’s reputation and devalue their homes.
Thirteen per cent of Yorkshire residents surveyed by insurer Direct Line said they had witnessed a crime since February but had decided not to report it. The survey’s nationwide results indicate an even more worrying trend. Of those respondents who had not reported a crime, 11 per cent had either been the victim of, or witnessed, a violent assault. Three-quarters of respondents said they would use an online crime map to research a new home and would be deterred by a high number of offences.
I suppose the Lib-Cons' real reason for putting the crime map online was exactly this - to discourage people from reporting crimes, as a result of which reported crime goes down, which they can hail as a success of their law'n'order policies.
What sort of a f-ed up world do we live in, where people worry more about keeping housing as expensive as possible than they worry about crime?
Spotted by dill at HPC.
From yesterday's FT:
Sir, In Screws’ death is final shock horror story (July 8), Matthew Engel states that the News of the World has been walking the fine line between half-truth and lies for 168 years.
That is indeed an acute observation and characterises accurately the kind of reporting employed by the tabloid press when it comes to the European Union. For far too long tabloid papers have been allowed to misreport the EU and the effect of its policies. Newspaper owners and editors, for their own reasons, have gone on misinforming the public with headlines full of myths and sometimes outright lies.
In some cases they have gone as far as to influence government attitudes towards the EU, and the admission from the UK prime minister and the leader of the opposition of the extent to which some papers were allowed to have a stronghold on political classes speaks volumes.
For that reason it is paramount that the inquiry into press industry standards looks, among other things, at the way the press reports on something as important as the UK’s membership of the EU. If we are to clean the press in Britain we may as well rid it of its obsession for euromyths.
Petros Fassoulas, European Movement, London EC1, UK.
Tabloid refers to the paper size, so strictly speaking all English newspapers are now tabloids, except the Telegraph and the FT (IIRC).
Anyway, I quite agree with him, if all newspapers reported accurately what the EU was really like, we'd be out by the end of the year, whether the politicians wish us to stay in or not.* Of course there are good things about the EU, but if it's 20% good and 80% bad, and we can keep most of the good bits and avoid nearly all the bad bits by leaving (at the small cost of the French trying to impose a few new bad bits on us), well what's the problem?
* The Ian B theory is that UK politicians in general and Whitehall civil servants in particular absolutely love the UK being a member state of the EU, because they can use the EU as a Trojan horse to impose their own 'vision' on the great British public using the excuse that it's all about EU harmonisation. He's quite possibly correct, but that's still an argument for leaving, isn't it? As he points out himself, we'd be doing all the other member states a huge favour into the bargain. Win-win!