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"London on course to become next house price bubble fatality, warns UBS"

From The Telegraph:

Soaring house prices in London have fuelled a "bubble-risk" that has left the capital most in danger of a correction out of all major cities in the world, UBS has warned.

The Swiss bank said foreign demand from investors seeking safe-havens, the Government's help to buy scheme and "alluring yields" on buy-to-let investments had all "propelled London house prices to new heights" as demand continued to outstrip supply.

It's a bit late for that, but actually, the report said that it was artificially low interest rates/easy credit  which pushed up prices, which is indisputably true.

Further, The Telegraph completely contradicts itself. If the yields on buy-to-let are "alluring" than that means they are high, or at least higher than mortgage rates. So for a given absolute rent, that means that selling prices are if anything on the low side relative to rents. Which they are not, so it's factually incorrect as well as flawed logic.

And 'lack of supply' has nothing to do with it:

Its real estate bubble index shows London property is now the second-most unaffordable of the 15 cities studied by UBS, behind only Hong Kong.

The next most expensive places are of course Sydney, San Francisco, Vancouver, Amsterdam, Geneva, Zürich and Paris etc.

So we note as an aside that the most expensive five places are in the Anglosphere.

But we also note that most of the cities on the list are also the largest cities in each country or state*. By definition, those are the places with the most supply, so you can increase supply and people keep coming along and living in the new homes, hey presto, the new homes are now too off the market but the city is even larger.

What happens to prices then?

* Zürich and Geneva are the two largest Swiss towns, their populations are only 366,000 and 178,000 but Switzerland is attractive for other reasons. San Francisco is not that big (850,000), but it is just nice and exclusive, and Sydney and San Francisco also have a large premium for being near the coast - even in the UK where nowhere is that far from the coast, there is a massive premium for houses with a sea view.

Killer Arguments Against LVT, Not (374)

Today both @K_Niemietz & @MrRBourne mentioned the state's historic absence. It was never so: https://t.co/9Tzgbgiqth pic.twitter.com/hO7zLK0eP9— Land & Liberty (@Land_Liberty) October 29, 2015

BenJamin's favourite Faux Lib responded:

@Land_Liberty @MrRBourne Oh, your theory that if the state dished out free land, call centre workers would become happy subsistence farmers.>— Kristian Niemietz (@K_Niemietz) October 29, 2015

Your truly responded:

@K_Niemietz @Land_Liberty Instead of being call centre workers struggling to pay the rent, their net disposable income after housing costs would go up 50%! - Mark Wadsworth (@Mark_Wadsworth) October 29, 2015

See also: "If we had LVT, smallholders and subsistence farmers would be wiped out." If the Homeys make two equal and opposite arguments, we know that at least one of them must be incorrect and usually both.

Reader's Letter Of The Day

From today's Evening Standard:

Oliver Healey writes (Letters, 27 October) that "A London income tax could be used to eliminate the in-work poverty that millions of Londoners face because of high living costs".

The dividing line is not between high and low earners. It's between those lucky enough to have bought their own home more than 10 or 15 years ago and private tenants. A long-standing owner-occupier can live quite comfortably on a modest income, but private tenants lose half their income in rent and really struggle, even on above-average salaries.

What would bridge this gap is a London-wide property value tax to be distributed to all Londoners as a universal dividend. An average household in an average value home would break even; owners of "prime London"* would finally start paying for the privilege; and renters/recent purchasers would be able to use their universal dividend to cover half their rent or mortgage, thus reducing their living costs to a tolerable level.

Mark Wadsworth, Young People's Party

* With the benefit of hindsight, I should have included "BTL landlords". Ah well.

"Lord Carter's plans for saving the NHS £5bn a year"

From the BBC:

Lord Patrick Carter, a Labour peer as it happens, is advising Health Secretary Jeremy Hunt on how hospital budgets can be better spent.

In June he said up to £5bn a year could be saved annually by 2020. In his first report then he argued that some of it could be delivered by smarter procurement of hospital supplies and some by better management of staff rosters.

Now he has attempted to put more flesh on the bone, outlining other areas which could contribute to that £5bn figure.

All sounds lovely, but that reminds me of another topic, the notion that organisations have to pay their more senior employees "competitive salaries".

Clearly, at lower and middle levels, you have to pay people roughly the same as the competition would pay them or as much as they could earn in similar level jobs in a different kind of business.

But I'm not sure that applies to the higher echelons.

When deciding the salary of all these NHS senior managers on six and seven figure salaries, the only real comparative is how much they - with their particular skills - could earn by doing something else, which in most cases would be four or five figures.

As to doctors, there is no particular need to pay as well as in other countries. Let's assume 3 million qualify worldwide as doctors each year; America wants to take on 1 million new doctors for $200,000 each. Is there any particular need for all other countries to offer $200,000?

Of course not; once those 1 million jobs are taken, the other 2 million will have to take whatever is left. As long as the lowest paying country is still paying enough to make seven years of medical school (or however many years it is) worthwhile, then that is enough. Many European countries recruit doctors and nurses from low-income countries - all they have to offer such people is enough to make sure that they end up slightly better off than they would have been working as a doctor in their own country.

Compare and contrast with footballers' salaries; the top teams have to attract the top players to remain top teams, so wages get bid up in the Premier League, the top football players can thus soak up all the super-profits which top clubs make (i.e. they collect rent). Does that affect wages in the Championship where the super-profits are much lower? No, not really. Why would it? Salaries in the Championship are based on those lower super-profits.

Furthermore, football teams in the same league are directly competing with each other - so Chelsea has to try and outbid Arsenal etc. But one hospital is not really competing against other hospitals in any meaningful sense, and they are certainly not competing across borders.

Just sayin', is all.

Baseless health-scare story of the day

From the Daily Mail:

They are the go-to device for anyone trying to quit smoking - or seeking a lesser evil than cigarettes.

But e-cigarettes could trigger problem drinking, a new study has warned. People who use the devices are significantly more likely to consume more alcohol than those who don't use them, researchers claim.

Moreover, those using e-cigarettes and alcohol together report drinking more. Usually, when people quit smoking they also quit drinking, the researchers said. Therefore, those who use e-cigarettes to quit smoking may miss out on this added benefit of quitting, they said.

The researchers concluded by urging people not to ignore the 'knock on' effects of e-cigarette use.

Not even Dick Puddlecote or Christopher Snowdon in their bitterest full-on satire mode could have dreamed up this level of bullshit.

Trying for a baby

In the context of nothing in particular, it struck me recently that 'trying for a baby' is actually quite weird when you are doing it.

At the risk of generalising, when you first start off, it is purely a pleasure/recreational thing and you both go to a lot of trouble to make sure that it doesn't result in a pregnancy. Males and females do this for a decade or so until they 'settle down and decide to start a family'.

Then for the first few years after you get married, the gloves are off, and all the habits and instincts that you have developed are overturned but initially it seems quite unnatural not to use contraception. You both know deep down that you are playing with powerful forces of nature - for good or bad - far beyond your control.

Then you have all the nerve wracking pregnancy stuff to go through*, two or three cute little babies** arrive until you both decide you've had enough of sleepless nights, dramatic loss of earnings etc, you struggle through the rushing around taking them to different child minders, nurseries - all at huge expense - and schools until it all settles down again.

Five or ten years into the marriage, that's enough kids thank you very much, and you go back to doing it purely for pleasure/recreational reasons, you start 'taking precautions' again, dreading the very thought of the thin blue line, the ingrained instincts kick in again and this seems perfectly natural and normal for the rest of your life.

* My heart goes out to couples who want to have babies but physically can't, that's not the issue here.

** For some reason, your own babies are much cuter than the average baby, everybody says that. Some sort of bias going on, I suspect.

Disclaimer: I've been married twice and my kids are aged between 12 and 26. I'm not doing that again and wouldn't want to. But I'm glad I did/glad to have it over with.

Fun Online Polls: Is it racist & countries smaller than Israel.

The results to last week's Fun Online Poll were as follows:

Is it racist if a black British woman tells a woman in a full-face burka to go back to her own country?

Yes - 40%
No - 60%

A good turnout with 126 votes. Thanks to everybody who took part.

I was with the majority on this one.

It is clear that "Jewish" is both a people/race and a religion, and there is a ninety percent overlap between "Hindus" and "Indians", in which case it would be impossible/futile to say whether criticising members of either group simply for being members of that group would be 'religionist' or 'racist'*, but Islam is not a race. It's not even a religion if you ask me, it's an inferiority complex/massive grudge against 'everybody else'.

* Unless somebody could show that he dislikes all Indians equally, be they Hindu, Sikh, Christian or Muslim. That would just be racist but at least no religious prejudice involved.
----------------------
Just for fun, this week let's have a geography/general knowledge quiz: "Which of the following has a smaller surface area than Israel?".

Vote here or use the widget in the sidebar.

You can't making an omelette without...

... the ingredients.

From The Evening Standard:

Police in London are urging shopkeepers to refuse to sell eggs and flour to under-16s in the run-up to Halloween in case they use them to target the homes of elderly and vulnerable residents.

The crackdown has been launched in King's Cross, where police said in previous years youngsters had mixed the ingredients to rustle up mischief.

In a letter, pinned up to a shop front in King's Cross, officers from the area's Safer Neighbourhood Team (SNT) asked shopkeepers to volunteer not to sell the household staples to under-16s in the week before Halloween.

There's an LVT message here...

This from Guido.

Seems like those that want the work and wealth creation want the expansion. Those that don't need that work or wealth, or have other objections, don't want the expansion.

Surely a bit of tax rate differentiation would help resolve this?

This House of Lords/Working Tax Credit thing...

... reminds me of something that happened three years ago.

From the BBC:

MPs have overturned a series of defeats inflicted on the government's welfare reform bill in the House of Lords.

The coalition won seven key votes in the Commons, rejecting amendments made by peers and reinstating their original proposals into the legislation. These include plans for a £26,000 annual limit on total household benefits, including child benefit.

Ministers say they will use a rule known as "financial privilege" to ensure Parliament approves the cap... The measure, which the government says it will also apply to Lords amendments on employment and support allowance (ESA), relates to the principle that the Lords cannot oppose tax and spending decisions agreed by the Commons.

So surely the same principle applies to the reductions in Working Tax Credits..?

Regarding October

October is a difficult time for supermarkets. They have to juggle Halloween, fireworks, Xmas, Diwali and Hannukah.

— Mark Wadsworth (@Mark_Wadsworth) October 26, 2015

Very true.

They are all rather similar (except Christmas) as this table points out

Festival	Festival of Light?	Fireworks?	Sweet things?	Savoury things?	Costumes?
Halloween	Yes	No	Yes	No	Yes
Diwali	Yes	Yes	Yes	No	No
Hannukah	Yes	No	Yes	Yes	No
Guy Fawkes	No	Yes	No	Yes	No

But everyone has different sweets and savouries so it is a bit of a pain

Generic drugs and barriers to entry

From Fiercepharma:

... a compounding pharmacy has stepped up with its own alternative to the med--at about $1 per pill, a tiny fraction of the cost of Turing Pharmaceuticals' brand, which runs $750 per tablet after a widely publicized 5000%-plus price increase.

Imprimis will have its work cut out for it to market the compounded meds, however. After the meningitis outbreak linked to the New England Compounding Center, new regulations tightened up on distribution of compounded drugs, which aren't specifically approved by the FDA. Compounded meds can only be dispensed on specific prescriptions for specific patients, rather than distributed in bulk as FDA-approved products are.

The company's pyrimethamine-plus-leucovorin combination can be ordered directly, an Imprimis spokesman said, with a physicians' prescription. Imprimis Cares is designed to streamline that process.

There's the hook - without FDA approval you are still on the back foot.

As we know, the corporatist EU loves licensing stuff, "in the interests of consumer safety and to ensure high uniform high standards" no doubt, because it is so expensive getting approval it shuts the little guys out of the market.

Headline Of The Day

From City AM:

Dido - I will not raise white flag

Problem is, they have used this hilarious reference to the song "White Flag" by Dido at least once before, four years ago.

The internet never forgets.

Killer Arguments Against LVT, Not (373)

From Hacker News via Georgist Rapid Response Squad:

There's an ongoing discussion in Poland about land-value tax. The problem here is that such tax is seen as a form of asset forfeiture. Why? Because of the communist times legacy.

In 1970s and 1980s there were a lot of apartments built by communist government, most of which were given to average citizens either for free, or for some insignificant amount of money. Now almost 40 years passed and we ended up with millions of people still living in those apartments, which they got back then, or inherited.

Now, especially after Poland joined EU, market price of those apartments skyrocketed, while owners income levels stayed pretty low. So, if government introduced land-value tax most of those people would not be able to afford paying it, effectively forcing them to sell their apartments.

1. Whatever selling prices are now, proper LVT is based on current rental values. If tenants can afford to pay the rent, then owner-occupiers can afford the LVT, which will always be less than the rent.

2. As usual, the 'affordability' argument completely ignores absolute amounts. LVT does not have to be 100% of rental values on day one. Everybody would be able to afford a low level LVT of a couple of per cent of rental values (or whatever is necessary to replace whatever property taxes Poland already has).

3. Above and beyond that, if LVT is used to replace bad taxes/regressive taxes such as 29.97% of wages being paid in social security contributions or VAT at a standard rate of 23% of spending then again, just about everybody would be able to afford to pay it.

4. What is the moral difference between 'asset forfeiture' and 'income forfeiture'? Why do the Homeys think that the latter is acceptable but the former is beyond the pale? If you are a young worker in Poland and everything has been given away to/seized by the older generation, then you yourself have suffered 'asset forfeiture' already, and having half your earnings seized in tax and half of what is left in rent or mortgage repayments is just adding insult to injury.

5. Pigeons will always come home to roost. Who has lost most here, somebody who got their home for free from the government or inherited it forty years ago and has lived there rent free ever since, or some poor sod starting out in life who has always been paying privately collected LVT to those lucky people? What about 'equality of opportunity', which IMHO is far more important that 'equality of outcomes'?

I don't know how such tax would work in different setting, but here in Poland only visible effect would be rich people taking over properties for discount prices.

Another fine piece of triangulation by the Homeys. It is primarily rich i.e. land rich people who oppose LVT because introducing it would lead to much greater net income equality. If LVT really were in there interests, how come they are not campaigning for it?

It is quite possible that some low income people would sell up to higher earners, in which case, higher earners would still end up paying most of the tax, and low earners, taking all low earners together, current landowners and tenants alike, would end up paying least/gaining most. How is that a bad thing?

More Problems from the War on Drugs

From the BBC

A senior paramedic has warned that so-called legal highs are leaving ambulance services baffled when it comes to treating casualties.

Sarah Harrison said the complex make-up of the substances is leaving staff playing "catch-up" in the battle to develop effective treatments.

Legal highs exist because of the war on drugs. A drug is made illegal because of the chemical composition. By slightly changing the chemical composition, it's now legal. But mostly has the same effects. Then the authorities discover that drug, make it illegal, and the producers just modify the drug again.

And one result of that is that there's little knowledge of what's being produced. Which means that paramedics don't have a clue about what to do with particular drugs, and can't keep up, and there's no information because it's all rather secretive. And people suffer and die. Because of the war on drugs.

So, let's imagine a different scenario: we tear down the drug laws that exist. We have licensed retailers and producers. You can sell cannabis, ecstacy, cocaine, with all sorts of controls on what you can sell. We have a body like the MHRA, but for getting off your face. And then with the range of products available, we can train paramedics in how to deal with the effects of certain drugs. "Legal highs" would disappear because there would be no demand for them if you can just buy an ounce of weed in Aldi or Waitrose.

The man from Deutsche Bank gets it wrong, and right.

In an Australian publication, Sahil Mahtani of the Deutsche Bank sounds a warning note about London's property market.

Every £1 invested in London property in 1990 is now worth £5, double the performance of the FTSE 100.

Conservative estimates put average London house prices at 13 times average gross incomes.

London residential mortgage debt amounts to a quarter of the country’s total.

London’s housing market is huge, expensive, and hot. It’s not hard to find stories of property insanity in the capital and popular opinion holds that its a flood of foreign investors buying up homes and leaving them empty to accumulate value that has sparked the boom.

Mahtani says it’s simple supply and demand — the supply of homes has failed to keep pace with demand from buyers, be they foreign or otherwise.

But crucially Mahtani sees a second, overlooked factor for spiraling prices — buyers believe house prices will keep going up. People are willing to pay silly prices on the expectation prices will keep rising and they can cash in themselves later. That in turn bids up prices.

On the first point, he almost immediately contradicts himself:

He points to the Hong Kong property crash of 1997, when prices dropped 40% in just over a year, as evidence for what happens when the wind changes direction on public opinion.

Here’s Mahtani:

A shift in expectations about future supply was much more instrumental in bringing about the downturn. The post-handover government had made it known that it would welcome a decline in property prices and would increase supply by 85,000 units a year. In retrospect, at no point during the next five years did housing completions reach 35,000 annually. Yet because the decision had credibility, it changed expectations and the 85,000 figure is still cited today as a reason for the market decline. The government announcement precipitated a change in psychology that diminished the speculative increment in the market.

It didn’t matter that supply increased nowhere near as much as promised — the “psychology” had changed and that was enough to send buyers running.

In other words, the supply of housing did not change, but public perceptions did, which tends to suggest that the fall was all to do with psychology and nothing to do with supply and demand. Ricardo, in his Law of Rent, recognised that land prices are driven by public sentiment and there is ample historical evidence that this is so.

Whilst there is also evidence that supply and demand affect land prices locally, within London the "bubble" effect is so strong and demand is so ramped up by it, that there is simply not the physical space to increase supply enough to have any effect on price.

Those with large landholdings around the capital, hungry for for the windfall gains that change of use permission would bring, would like us to believe that the only way of controlling the price of land is to by controlling the supply. As Mr Mahtani points out, it is much more effective to control the demand.

Heads it's natural variations, tails it's global warming.

From The Washington Post:

“This modeled Antarctic sea ice decrease in the last three decades is at odds with observations, which show a small yet statistically significant increase in sea ice extent,” says the study, led by Colorado State University atmospheric scientist Elizabeth Barnes.

A recent study by Lorenzo Polvani and Karen Smith of Columbia University says the model-defying sea ice increase may just reflect natural variability.

If the increase in ice is due to natural variability, Zhang says, warming from manmade greenhouse gases should eventually overcome it and cause the ice to begin retreating.

No Sympathy

From the Guardian

“My dad’s detention has been a total nightmare for all the family,” Foroughi’s son, Kamran, told the Guardian. “My dad has always strenuously maintained his innocence and we believe him. We are not aware of any evidence that justifies the espionage charge. My daughters have lived half their lives without seeing Grandpa and keep asking when he is coming home. All I can do is give them a hug.”

Foroughi’s consultancy role at Petronas included arranging and participating in meetings with senior Iranian oil and gas officials and facilitating scholarships for Iranian students on a government bursary to study in Malaysia. 

It is not clear on what evidence Iran convicted him on spying charges but Foroughi holds both British and Iranian citizenships. Iran’s intelligence apparatus view dual nationals with deep suspicion and have arrested a number of them in recent years, including the Iranian-American journalist Jason Rezaian, who is currently facing similar charges.

Just to get this straight. You got out of Iran at sometime, a repressive, undemocratic country with a reputation for human rights abuses, and then willingly went back there, and now you're complaining about the treatment you got?

The way I avoid being detained by a bunch of bastards in Iran is simple: I don't go to Iran. It's very simple. And if my employers asked me to, I'd tell them to piss off.

I have no sympathy for these people. They're doing high paid jobs including a risk premium for going to dangerous places. And the risk didn't pay off.

"Fears housing market could slow from completely insane to utterly absurd"

The Daily Mash on top form:

In August of this year, the average price of a two bedroom hole in South London was £450,000, but there are now fears this figure could drop to as low as £430,000.

Norman Steele, a mortgage broker, said: “It’s the difference between a young couple staring in an estate agent’s window and saying, ‘This is ridiculous, we’re going to have to live in a kennel or move to Middlesbrough’ to ‘This is ridiculous, we’re going to have to live in a shed or move to Stoke’.”

"Chief Constable condemns lack of black members of Conservative cabinet"

From the BBC:

The Conservative cabinet does not represent the country it serves and must increase ethnic diversity, a chief constable has said.

The proportion of blacks and Asians at the most senior government level is "simply not good enough", Durham Chief Constable Terry March said, adding that welfare cuts and lifting the inheritance tax threshold "must continue".

David Cameron disputed figures quoted by Mr March, pointing out that the Business Secretary was "a darkie, which is one more darkie than Labour ever had in the Cabinet. He makes an excellent tea..." Mr March hit back, pointing out that Sajid Javid was actually "a coconut".

Equalities Minister Julia Mulligan explained that it was difficult for the Conservatives to promote many black MPs to the cabinet because they only had one or two in the first place, none of whom had gone to Eton.

Selling England by the pound (2)

From City AM:

It may be more at home ferrying workers across the capital - but now Transport for London (TfL) has announced plans to build homes, as well. In fact, it reckons it can create 10,000 homes in London.

More than 300 acres of land owned by TfL across 75 sites has been put forward for development. The organisation suggests it will create 10m sq ft of development over the next 10 years. Even more encouraging for aspiring home owners: 67 per cent of the sites are in zones one and two.

TfL, one of the London's largest landowners, is currently narrowing down its shortlist of 16 developers for a framework of partners, which can then pitch to develop housing schemes on the sites…

The scheme is part of TfL's plan to generate £3.4bn in revenue over the next 10 years from advertising, sponsorship partnerships and property development, which it will reinvest into updating the transport network.

This is how a corrupt government works - from Venezuela to Thatcher's Right to Buy to today's London - sell off stuff cheap to your friends and family/voters who then sell them back to your best mates, the bankers and landlords/party donors.

If TfL, a government body, just built those 10,000 homes itself, with a clear profit (land/location rent) on each of £20,000 per home per year, it could bank £200 million a year. Over ten years, that's £2 billion. In the next ten years, another £2 bn or £3 bn. And so on.

Considerably more than what they hope to get under current plans, even assuming that most of the £3.4 billion from "advertising, sponsorship partnerships and property development" is the last bit.

Selling England by the pound.

Well, more like by the acre. Private Eye has mapped all the bits of the UK bought by offshore companies in the last nine years, to which you'd have to add all the land bought by foreign individuals. Still, well worth a look.

Pro-EU MPs are really scraping the barrel.

From The Evening Standard:

Pro-Europe MPs served the threat of a pricier pint a day after Tory eurosceptics claimed that chicken tikka masala would taste better in an independent UK.

Lucy Thomas, from Britain Stronger in Europe, said: “The cost of everyday items is lower in London because of the EU. Trading freely across Europe means cheaper goods and services ... whether you’re buying a pint or booking a flight. If we left Europe then UK pubs may have to pay a higher tariff to buy in beer from France, Belgium, or Germany. Let’s make sure we avoid that hangover.”

However, Tory MP Paul Scully scorned the claim. He said: “I don’t see us losing access to the single market because European brewers will still want to export their beers. Competition would keep prices low and restaurants and pubs could knock off the cost of EU red tape, which would be something to celebrate.”

Above and beyond that, (nearly) half the cost of a pint in the pub is Beer Duty and VAT, which an independent Britain would be able to increase or reduce to suit itself. The actual price of beer ex-duty is almost irrelevant. And there are plenty of bansturbators who want beer to cost more anyway, so from their point of view, a price rise would be A Good Thing.

I mean, there are some legitimate arguments for staying in the EU (but I'm not giving them away and there are more and better arguments for leaving), so why do they have to stoop to such crap? It does suggest that they can't think of any.

Benjamin Netanyahu makes a fair point.

Poor old Bibi was being wildly misquoted on the basis of the normal level of exaggeration you would expect from a politician playing to a particular gallery.

If you read the actual text of his recent speech, you can see it was just a bit of hyperbole not central to anything. You also get this bit of poetry:

The sixth lie is that the reason we have this increase is not only a surge in settlements, it’s the stagnation in the peace process.

Well, some of the worst terrorism that Israel has experienced in its history occurred when the peace process was at its peak.

We’ve had terrorism when there was a peace process. We’ve had terrorism when there was no peace process.

We’ve had terrorism when there was an Israel. We’ve had terrorism when there was no Israel.

We’ve had terrorism when there were settlements. We’ve had terrorism when there were no settlements, when we didn’t even control Judea and Samaria.

The real reason we have this terrorism is not because the terrorists are frustrated in the peace process. They’re frustrated because there’s a State of Israel and that frustration will continue.

Even though we'll have to mark him down for the slight contradiction about there being terrorism (by Arabs against Jews, presumably) before the State of Israel existed, and then saying that terrorism will continue as long the State of Israel exists.

Highly unusual to see these three sources saying much the same thing on the same day.

From City AM, normally a huge supporter of the rent seekers and the practices referred to in The Guardian article below:

The government is making its case for stepping up the Sino-British relationship by announcing £30bn worth of new trade and investment deals, despite escalating concerns that the UK steel industry is crumbling at the hands of Chinese manufacturers.

The Prime Minister announced the business deals, which the government says will create more than 3,900 jobs across the UK, one day after reports that [British steelmakers are to cut over 5,000 jobs in the face of Chinese steel dumping].

From The Guardian, actually hitting the spot for once:

Osborne is all for renationalisation – so long as the nation isn’t Britain

To secure EDF as a builder, Cameron guaranteed a fixed price for electricity from Hinkley of £92.50 per megawatt hour. That is around double the going rate for electricity on the wholesale markets, a price so high that equity analysts term it “financial insanity”.

Change your supplier as often as you like, you and everyone else in Britain will be paying for that de facto subsidy in your electricity bills for decades to come. Britons will in effect be paying more for their energy so that French households can pay less. Indeed, so generous are the terms of this deal that the government of Austria is currently taking Britain to court on the grounds that it’s handing out state aid to EDF.

Yes, you read that last sentence right: the UK stands accused of dispensing state aid – to another state. How many times have you read about some age-old manufacturer and thousands of jobs going down the swanee, while ministers wrung their hands over European state aid rules? Now we know that such rules can be tested – provided the recipient is headquartered not in Port Talbot, but Paris.

And finally, from The Daily Mash:

As thousands of redundancies in Redcar are followed by hundreds more in Scunthorpe, the business secretary said he wishes there was something he could do.

Sajid Javid continued: “Tragically, the industry has been hit by a perfect storm of being in the provinces, traditionally supporting Labour and not being financial services. Add that to us not wanting to do anything that might offend our new Chinese friends, and there’s absolutely nothing we are prepared to do.

“If only these plants manufactured something useful, like insurance derivatives supported by credit default swaps, then we’d gladly go billions into debt for them. But steel? What’s that even for?”

"What does China own in the UK?"

The BBC article includes this handy chart:



As you can plainly see, most of this is not 'investment' in the productive sense, they are just buying up pre-existing streams of rental or monopoly income.

They own land! Give them money!

From City AM:

Calls for more properties to be built in London to slow rampant price growth are being partly answered. The capital is leading the way in the Build to Rent scheme, with the number of rental developments in the pipeline more than double that in the rest of the UK.

The scheme allows developers to build properties for rent with the government sharing risk in order to encourage new housing investments....

“The momentum behind Build to Rent continues. It is moving firmly beyond theory and into reality. With continued support from both national and local government this progress can continue,” said Andrew Stanford, residential fund manager at LaSalle Investment Management.

“The growing number of long-term institutional investors in the sector will then find a suitable home for their capital, ensuring that housing supply and tenant choice can increase.”

We now appear to be in some bizarre parallel universe.

"Pan" (2015 film)

From Wikipedia

Peter (Levi Miller) is a small copper-bottomed cooking utensil who is left on the steps of an orphanage in London by his mother Mary (Amanda Seyfried).

Several years later, during World War II, fearful that they will be rounded up under Max Beaverbrook's "pots and pans" initiative and melted down to make fighter planes, Peter and his best friend Nibs run away to Neverland.

Peter grows up to be a large skillet and when the pirates put him over a hot stove and crack some eggs into him, he finally learns how to fry.

In the immortal words of John Lee Hooker...

You got dimples in your jaw
You got dimples in your jaw
You got dimples in your jaw
You got dimples in your jaw
You my babe; I got my eyes on you

Microsoft Office and Walker's Crisps

We all know that Walker's got it the wrong way round by making salt and vinegar crisps green and cheese and onion blue. We will have to live with that, even though half of use will never get used to it (I did a Fun Online Poll on this six years ago which is no longer accessible).

Microsoft used to use the same colours:
Excel = salt and vinegar = green.
Word = cheese and onion = blue
Powerpoint = ready salted = red
Outlook = roast chicken = yellow.

One of the millions of really shit things about Windows 10 is that they kept the colours for Excel and Word, but Outlook is now blue and white and Powerpoint is a sickly orange-red colour.

Fun Online Polls: The Tory conference & Is it racist?

The results to last fortnight's Fun Online Poll were as follows:

The protests outside the Tory party conference were a bit inappropriate.

Agree - 75%
Disagree - 25%

I was with the majority on this one.
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This week, let's do the ladies-on-the-bus-incident which fuelled more than one Guardian column.

"Is it racist if a black British woman tells a woman in a full-face burka to go back to her own country?"

Vote here or use the widget in the sidebar.

The tax shift: a very nuanced and circular calculation.

BenJamin and I were discussing this thorny topic in the pub, i.e. if we taxed land/location values instead of earnings/profits, and ignoring the boost to the economy from losing deadweight costs, how much would flow through into higher rents, which enable more taxes to be collected from land/location and enabling taxes on earnings/profits to be reduced yet further..?

We started by writing down what we know:

1. Just about all increases in wages flow through into higher rents. We know this for a fact; London wages are about £8,000 higher than the rest of the UK and rents are also about £8,000 higher. Back in the 1980s when the North Sea oil boom took off, people in Aberdeen were proud to boast that their house prices rose to London levels. That's Ricardo's law of rent #1, which applies on a regional basis.

2. Von Thünen's law of rent, which applies on an sub-regional basis says the same. Rents are the inverse of travel costs, and the bulk of travel costs is hours wasted, and the value people place on their time is "how much money they could earn if they moved closer to where they work and worked longer hours instead of commuting". There are plenty of London-wide statistics that back this up.

3. Effects 1 to 2 are short-term/static things. If only 1 and 2 were true, then by now, 90% of GDP would go into rents and normal living standards would be no higher than at the start of the Industrial Revolution, which is clearly not true.

We also know long-term that people are prepared to spend about one-third of their income on rent (gross or net income? This is unclear). This is a crude average and more relevant is Ricardo's law of rent #2, which says that any rent = net income minus cost of a normal, basic living standard. So if wages drop to or below this level, land/location rent is zero.

4. Also, to counter-act 3, what people consider a normal, basic living standard changes over time, and tends to go up. But whatever happens, rents tend to go up slightly faster than that.

Pull 1 to 4 together, and the easiest way to reconcile these countervailing effects is :
Year 1 = income £100 = living costs £80 + £20 on rent.
Year 2, income = £102 = living costs £81 + £21 on rent…
This reaches an upper limit where income = £150 = £100 living costs + £50 on rent, and at that stage the economic/political pressure is to redistribute land wealth a bit (rent caps, social housing, mortgage caps, more construction, selling off social housing or overt redistribution via the tax system etc), so our owner-occupier with income of £150 does not worry about the rental value of £50, he can spend all £150 on living costs and this gets the average down again.

5. If you reduce taxes on earnings/profits, you get more business activity, more employment and more competition, so the unit price of goods you can buy for your net wages goes up. There are three more or less opposite conclusions to be drawn from this:

a) The cost of a normal, basic living standard goes down, so the amount going into rents goes up.

b) Currently, an average family can choose to rent a home with an extra room for £2,000 a year. That means they have to cut other spending by £2,000, so they sacrifice a new car every ten years. If the cost of a new car halves, then the opportunity cost of an extra room doubles. So rents might go down accordingly.

c) People might accept the split between spending on goods and services and on rent and simply consume correspondingly more 'other stuff' leaving spending on rent unchanged. So the basic, minimum living standard goes up in material terms but not in £-s-d.

6. As wealth rises, luxury/status/positional goods become more and more important. Location is the most pristine positional good there is. So if there is more money chasing a fixed supply of land/location, rents and prices go up. The fact that they cost more enhances their signalling power so does not dampen demand. This affects the top of the market more than the bottom, to be fair.

7. As a tie-breaker, we agreed that half the increase in net wages would flow through into higher rents i,e, higher land/location values. This is now a circular calculation:

a) For example, current land/location values are £240 bn a year, of which (say) £80 bn is collected in tax (council tax, business rates, SDLT, IHT, CGT and so on). Total taxes on earnings/profits are £400 bn (income tax, VAT, NIC, corporation tax). So we can collect £240 bn in LVT, an increase of £160 bn and reduce taxes on earnings/profits by £160 bn to £240 bn. That means net wages/profits to be spent on rents are £160 bn higher.

b) So land/location rents increase by half of that = £80 bn. We can then increase LVT by £80 bn and reduce taxes on earnings/profits by another £80 bn from £240 bn to to £160 bn.

c) That means net wages/profits are £60 bn higher and half of that £30 bn goes into higher rents etc…

d) By the time we get to iteration #8, which I did on a spreadsheet rather than boring you with it, LVT receipts would be £400 bn and taxes on earnings and profits would be a modest £80 bn, which means a flat income/corporation tax of (say) 10%.

e) Then we can factor in the loss of deadweight costs. The economy will grow considerably as taxes on earnings/profits are reduced, as a very modest and conservative estimate, by 20% over the transition period = £200 billion a year. Again, let's assume nearly half of that goes into location/land values, giving us the last £80 bn we need to get rid of even a token 10% flat income/corporation tax.

Job done, sorted.

Marginal Seats

This has also been added to the Quick Links in the sidebar, but a friend of mine that does various internet and computing stuff has created a website that shows all the Marginal Seats of the last election. It's sortable and filterable by parties.

One thing it does show is that UKIP really aren't the next force in politics. They only have 5 seats where they are within 5000 votes, and 2 of those are in solidly Labour areas.

Link

Something worth haggling over.

From the BBC:

EU states have approved an action plan for Turkey, which it is hoped will ease the flow of migrants to Europe.

Nearly 600,000 migrants have reached the EU by sea so far this year, many of them travelling from Turkey to Greece before seeking to head north. Turkey made a number of demands in exchange for helping to stem the flow…

Turkey had also asked for €3bn (£2.2bn, $3.4bn) in aid, something German Chancellor Angela Merkel said EU states were considering.

1. From Turkey's point of view, they have to hold out for at least as much as it costs to put up tents and camps for all these people, something the Turks are apparently very good at. The short term cost is knowable, the long term cost could be much lower or zero, depending on how well the people integrate.

2. From European countries' point of view (unless you are insane like Angela Merkel), each 'asylum seeker' has a known short term cost for food and accommodation, but the long term cost is unknowable. Some of them will integrate, work hard and contribute to society (thus being a benefit rather than a cost) but an unknown number will be terrorists, criminals or slackers. It is very difficult to estimate the overall cost of the last three categories, and you can't put a price on 'social cohesion'.

3. Suffice to say, the price Turkey needs to be paid to keep one person is much lower than the (potential) cost to European countries of one such person. As long as the price paid is somewhere between those two, then both parties to the deal have made a profit.

4. So we do the two calculations and I don't think that Turkey is being overly greedy:

a) There are about two million people in their camps. £2.2 billion divided by 2 million is only £1,100 per person, which doesn't seem like much to me, even if it's payable yearly not just a one-off.

b) From the UK's point of view, let's assume one-quarter of the 600,000 trying to get to Europe end up here = 150,000 and we have to pay a quarter of the £2.2 billion cost, that's £3.700 each. That's a lot, lot cheaper than processing an asylum claim. That's a tiny fraction of what it costs us if somebody turns out to be a terrorist, criminal or slacker.

It cost £2 million to get rid of Abu Qatada and pay his family welfare. There only need to be a few dozen bad apples among our 150,000 and that's burned straight through our one-quarter of £2.2 billion.

Yes, we will lose a few genuine hard workers who have no interest in stirring up tensions, but so what?

Looking at it this way, if I were Turkey, I'd hold out for a bit more, a bit like Colonel Gaddafi tried (and failed).

Movie Review: Knocked Up

I started watching this the other night and almost instantly felt like giving up on it. It's a film where a guy that looks like Seth Rogen:-



but without the fame and money of Seth Rogen (and actually a slacker) picks up a woman that looks like Katherine Heigl. And a successful TV person played by Katherine Heigl at that:-



and manages to have sex on the first date.

I wouldn't have even minded if it was a story about the nerdy, slightly overweight guy with hidden depths of bravery or skills. But he literally had nothing to offer a hot successful woman.

It wasn't even a great story and I only laboured through because of the charms of Heigl and Leslie Mann, and the odd moment where Jonah Hill made me laugh pretty hard. There weren't a lot of laughs and it finished in the most ridiculous fashion, where this stoner loser walked into a desk job in an internet company in LA and managed to afford a flat right away that was big enough for the two of them and a baby.

Reader's Letter Of The Day

From CityAM:

Cameron constantly refers to "Paying down our deficit".

How do you pay down a deficit? You reduce a deficit and pay down* a debt.

@CJCHowarth

* In this country you "pay off a debt", but hey, his point stands.

Because as we well know, Switzerland and Norway are teeming with foreign criminals who they just can't deport or extradite...

From the BBC:

Fugitives across Europe will flock to the UK as a safe haven if it leaves the European Union because a series of laws and extradition agreements would be ripped up, the former head of the Association of Chief Police Officers (Acpo) has said.

In one of the strongest warnings of the dangers of a UK exit, Sir Hugh Orde said criminals would know that it would take longer to extradite them if Britain were outside the EU.

He said: “If I was a villain somewhere else in Europe and I’m escaping justice, I am going to be here because it is going to take a lot longer to get me back.”

In order to even this up, I suppose we ought to do a couple of fatuous non-arguments for leaving the EU, but so far, the in-crowd has given us the easiest targets.

"The charter would legally prevent future governments from…"

The most important rule in the UK constitution is that a Parliament cannot bind future Parliaments. This government can pass whatever laws it likes and future governments can repeal and replace every last one of them.

So this bullshit started off under New Labour with legally binding carbon budgets and Boy George is trying the same stupid trick with the Charter for Budget Responsibility which would legally prevent future governments from spending more than they receive in tax revenue when the economy is growing.

This is so vague as to be a meaningless and reminds us of yet more New Labour bullshit, the Golden Rule. It also reminds us that even though the Tories insist that the economy is recovering/growing, they are spending money like a drunken sailor who knows he is terminally ill and who has just won the lottery while on shore leave.

So the only reason to vote for this - if you could overcome your inner pedant - would be that as soon as it receives Royal Assent, you could have the entire Tory cabinet arrested for breaking the law.

Which raises the next question, does the Charter actually say what the penalties are if a future government does not comply with the law or tries to repeal it..?

"The Ladybird book of living with your parents your whole life"

Normally you visit the Guardian website to find some fish in a barrel which you can shoot, but this article is really rather good.

Legal and economic incidence of a tax.

From The Evening Standard:

London homeowners are being forced to make dramatic price reductions to sell their properties as George Osborne’s stamp duty shake-up continues to send shockwaves through the market, the Evening Standard has learned.

Nearly one in five homes on the market for more than £1 million has had its price cut in the latest evidence of a slow down since the Chancellor’s new regime came into force.

Yup.

A tax is borne by whoever is less price sensitive - the supplier or the customer. So a tax that goes anywhere near land and buildings is always mostly* borne by the landowner and ultimately by 'the land' rather than 'the buildings'.

It does not matter a jot that legally, the purchaser is obliged to pay it. Any hike in such tax just results in lower selling prices or lower headline rents.

Here endeth.

* Transaction taxes like SDLT or CGT do result in lower supply and hence slightly higher prices/rents, so a small part of these is borne by the customer. Annual recurring taxes are borne entirely by the landowner.

Von Thünen's Law Of Rent, part the manieth.

From City AM:

Professionals working in London are the poorest workers in Britain, despite earning the highest average salary, according to new research from job site CV-Library.

Based on new roles advertised in the third quarter of 2015, CV-Library calculated that the average annual salary in London is £36,905, which is 16.6 per cent greater than the national average of £31,625. However, according to the job site's research, premium costs in the capital “drastically outweigh the slightly higher-than-average salaries meaning Londoners have the least disposable income in the country”.

CV-Library's data shows that employees making an average salary in London are likely to end up with minus £964 each month after paying for basic costs, which include rent for a one-bed flat near the city centre, council tax, a local monthly travel card, basic utility bills and groceries. Professionals making an average salary in Aberdeen are likely to have the most disposable income in the UK, with £1,313 left over each month after basic costs are met.

Obviously they don't run up a deficit of £964 each month, that assumes they rent a one-bed flat near the city centre, they are more likely to be a sharing a flat a bit further out so as to at least break even, but hey. I didn't realise that Aberdeen rents were so much lower, but let's just take that as a given.

This is what you want, this is what you get.

City AM has long been a cheerleader for the One Per Cent, the landlords, land speculators and bankers etc, but it appears that london's businesses have finally woken up and smelled the coffee:

Housing costs are becoming a problem for employers as much as for workers. The scarcity of talent, inflating wage costs, and the drag on the whole London economy are beginning to bite hard. Our aim is to put the housing crisis at the very top of the new mayor’s priority list, whoever wins.

Exclusive research for the campaign by economists at the Centre for Economics and Business Research has examined what percentage of salary those working in different sectors would have to spend to afford an average home rental in the capital. The results are startling.

In food and drink, which includes the people who sell you your morning coffee, the cost is 112 per cent of salary. Then there’s the care workers at 99 per cent. Those in education, giving the city’s workers the vital skills needed for the future: 58 per cent. Creative industries, 57 per cent, and science, 48 per cent – both key growth sectors for London. Even lawyers and accountants are at 40 per cent. For many people, renting a home with a single income is impossible – unthinkable just a few decades ago.

It’s generally accepted that, in a functioning housing market, the cost of renting or servicing a mortgage ought to be no more than a third of a person’s income. Well, that construct has been well and truly broken in London. The capital is already one of the most expensive cities in the world to live – with rents three times as expensive as in Berlin and close to double those in Dubai. House prices have doubled in the past decade – and the typical cost of a home is now an eye-watering £525,000.

This is all causing a staff retention problem for companies based in the capital, because we’re seeing employees just get fed up of the costs, and the lack of pounds in their pockets, and move out of town.

'Nuff said.

Killer Arguments against Brexit, Not

The referendum about whether Britain should stay in the EU has hit the headlines again, with Lord Lawson placing himself at the head of the campaign for a vote to leave.

For a brief period, all the pro and anti arguments have resurfaced in the media. Some are serious points, but many, and many of the most popular, are true KBNs. The current leader is "we must stay in the EU, because it is only the EU that has prevented war in Europe for the last seventy years".

Well quite apart from the fact that the EU only came into existence in 1993, if you look at history, the last war in Europe started by Britain was probably the Seven Years' War, which ended in 1763, 188 years before the founding of the European Coal and Steel Community, the original forerunner of the EU. The EU and its predecessors may possibly have stopped other European states from going to war in the last 70 years, but, if so, it is going to go on doing that after we have left.

Even if the predecessors to the EU, like the EEC, were responsible for keeping the Pax Europa, it is not the EEC, which we actually voted to join, that we are trying to leave, it is the EU, an organisation which, with its shenanigans in Ukraine, has arguably brought us closer to an new European war than we have been at any point since the second world war.

There are reasons for staying in the EU, but this is not one of them.

Midwife Shortages

From the BBC 11th October 2015

The Royal College of Midwives (RCM) said a shortage of midwives was having a major impact and mistakes would "almost certainly be made".

From The Guardian August 18 2013

The calculations, by the Royal College of Midwives (RCM), suggest that the gap between the number of midwives the NHS in England needs and the number it now has will not be closed until 2026. The shortage is certain to force maternity units to close suddenly and lead to some mothers receiving inadequate care before, during or after giving birth.

From the Daily Mail March 18 2012

Mary Newburn, head of policy research at the NCT, said: 'There is a major retention problem across the UK but moving staffing provision from midwife-led units into hospital delivery suites is not the answer, and it is certainly not what women want.
'When community-based, midwife-led units are closed, women often have to travel miles to hospital to have their babies delivered by unknown, stressed staff, which can lead to tension and further complications, including increased intervention.'

From BBC 15th September 2011

Parts of England are facing big midwife shortages, putting mothers and babies at risk, midwives have said.

"Führer as four-day OktoberFest London festival is Kanzlered"

From The Daily Mail.

"Traffic lights go out at Beverley's Grovehill junction – and flow improves"

From Hull Daily Mail:

The 42 traffic lights which control the new junction – dubbed the “red light district” – went out this morning.

Grovehill Road resident Anita Tomlinson said: “The traffic has been flowing very well since the lights went out, it’s flowing like it used to do when it was just a roundabout.

“I had wondered myself what would happen if all 42 lights went out but drivers are being very careful, they are seeing what is going on and so far it appears to be flowing well.”

This will be no surprise to anybody who's already seen what happens when traffic lights are turned off, and most of us have.

Might Want to Do Your Research, Polly

From the Guardian

A star was born as glorious Bake Off ended last night with the victory of Nadiya Hussain. Expect a million Nadiya baking books to sell before Christmas. Yet again, the BBC has surged ahead with an unexpected phenomenon that no commercial TV company would have bothered with in prime time. Until, that is, it became a hit – and that’s when BBC-haters pile in to say they shouldn’t be doing such popular stuff – leave it to the market.

So, a show with multiple contestants, baking cakes, with multiple different rounds, with a contestant eliminated after each stage, and a male and a female judge? That sounds totally original and not at all like Cupcake Wars on the Food Network:-

The show is similar to successful Chopped cooking show aired on the same network, in that it starts with four contestants who are eliminated one-by-one in three rounds.

The show invites cupcake bakers from all over the United States to compete. There are three judges in the series, with two of them serving as permanent judges.

All hail the BBC. Providing slightly stretched out versions of cable TV cookery shows, and funded by threats of violence.

National Poetry Day

Reading a bit about this and the BBC thing. It occurs to me that we kinda dropped poetry when recorded music came along and you could have songs on demand from your gramophone/tape deck/CD player/iPod/iPhone. Leonard Cohen was a poet who became a singer/songwriter. In an earlier age, he would have been a poet.

Of modern stuff, I like John Cooper Clarke's stuff, but it's all in the delivery (Not Safe for Work)

Simon Walker: Chairman of the Institute of Rent Seeking Parasites,

From an article entitled "Entrepreneurs will reap the rewards of business rates change", Simon Walker, Top C**t at the Institute of Directors writes, "Ask a small business what bothers them most on a daily basis, and it won’t be long before they raise the dreaded spectre of business rates. For many small businesses, it’s of more concern than corporation tax (a tax on companies’ profits the rate of which depends on the amount of profit)."

This is the Poor Widows in Mansions argument, but even more pathetic as it's made in defense of businesses clinging to the security blanket of imputed rent.

Firstly Walker ignores that taxing profit IS the tax on business. The better you are at making a profit, the more you get penalised for doing so. Walker appears to think this is fair compared to paying the fixed cost of rent.

Secondly, even Walker must know his point is only relevant to owner occupiers. It makes no odds to tenants if they are sweating over paying their rent to a private landlord or the Council. Yet, Top C**t Walker chooses to gloss over that pretty important point.

Thirdly, Walker chooses to ignore the role of rent in allocating valuable location and fixed capital. Rent is the market's way of saying, that one Capitalist is prepared to pay X amount to exclude others from using those resources.

If  businesses are sweating if they can pay the rent or not, this shows the market is working as it should. Efficiently.  If they cannot turn a profit and lose that premises to someone else, that is a GOOD THING.

It's truly ironic that a Lefty like Carol Wilcox at the Labour Land Campaign is more of a hardcore capitalist than the IoD and TaxPayers Alliance.

In their joint policy document cited by Walker in the article " 2020 Tax Commission" they recommend scrapping  property taxes in favour of locally collected sales taxes.

Why? Because they do not want competition. Paying Business Rates puts owner occupiers in direct competition with renters. VAT provides a barrier to entry for small businesses.

The members of the IoD and Chambers of Commerce don't care if this shrinks GDP. It protects their shareholders interests and their place on the board.

For Walker to invoke entrepreneurism as the beneficiary for cuts to UBR is sickening. It's no good blaming the politicians. They just do whatever the fake-Capitalists tell them to.

They own land! Give them Crossrail!

From City AM:

THE ARRIVAL of Crossrail is set to bring a £2.45bn boost to the West End by 2020 as thousands more visitors pour into central London, new research shows.

The New West End Company (NWEC), which represents 600 businesses, said annual turnover for its retailers is predicted to hit £11.25bn just two years after completion of the new high-speed rail link, compared with £8.8bn today.

Oxford Street will retain the lion’s share of consumer spending at £6.15bn, followed by Regent Street at £1.88bn, and Bond Street at £1.44bn, according to research conducted by retail property consultancy Harper Dennis Hobbs for the NWEC.

Crossrail is expected to cost [the taxpayer] £15 billion.

This has lifted land prices near stations all along the route of course, but (as I have shown before), the uplift in rental values between Tottenham Court Road and Bond Street (which already has the highest location values in the whole of the UK and possibly the whole world) alone would just about enough to pay for the whole thing (assuming half of that extra turnover goes into higher rents and those extra rents were collected in tax).

For sure, there is an element of beggar-my-neighbour. In the short term, the uplift in the west end will be partly offset by declining rental values for retail premises elsewhere. However, those other retail premises can then be used for something else (offices, residential) so the effect is only short term.

They own land, give them money

From the FT

George Osborne announced the biggest shift in financial control from Whitehall to town halls in decades, pledging that local areas will fully benefit from growth in their business rates in the latest phase of his devolution “revolution”.

The chancellor on Monday said he would overhaul the system of local government finance introduced by Margaret Thatcher in 1990, vowing that he would also give councils the power to cut — but not raise — business rates, a uniform tax on the value of business premises.

It's not hard to see where the Tories are going on this one: give the local authorities the power to cut business rates and they will do it, eager to attract businesses to their "low rate area". No doubt businesses will come, lured by the promise of paying less in business rates, but wait. Almost immediately the price of commercial land will rise in these low-rate boroughs. So also will the rents on premises to let. Then rent review by rent review, the commercial rents will rise to the point where the entire saving in rates is absorbed by additional land costs. The net result will be that landlords will have more tenants and higher rents and the local authority, if it is lucky, will find that the increase in business might just about pay for the rate cut.

I think it's called "bait and switch".

"David Cameron vows 'assault on those in poverty' in conference speech"

From the BBC:

David Cameron has vowed to devote much of his time in office to "an all-out assault on those in poverty" in his speech to the Conservative Party conference.

The prime minister, who will stand down before the next election, said he wanted to combat "people with deep social problems" and boost downwards social mobility.

Mr Cameron said he wanted his time in power to be remembered as a "defining decade for our country.. the turnaround decade... one which people will look back on and say, 'that's the time when the tide turned… when people no longer felt the current was working with them but going against them'."

"Reading and writing is eroding human memory"

From the BBC, some time in the late Middle Ages:

An over-reliance on using maps and reference books is weakening people's memories, according to a study.

It showed many people jotted things down and referred to them later instead of memorising information. Many adults who could still recall their childhood friends' birthdays could not remember birthdays of people they met later in life. There is an alarming trend of people using 'shopping lists' to remind themselves what they wanted to buy.

Maria Wimber from the University of Birmingham said the trend of looking up information which people had first written down "prevents the build-up of long-term memories". The study, examining the memory habits of 6,000 adults in the UK, France, Germany, Italy, Spain, the Netherlands and Luxembourg, found more than a third would turn first to written sources to recall information.

The UK had the highest level, with more than half "looking in the Encyclopaedia, parish records or maps for the answer first". Ms Wimber gave the telling example of a parish priest who read out loud from The Bible instead of learning the relevant passage by rote.

Theresa may have a point,

From the BBC:

[Theresa May] also said high migration made a "cohesive society" impossible.

Fair enough, you might think. That is just simply a statement of fact. We could argue about the word 'impossible' or point out that 'cohesiveness' is not an either-or thing i.e. high immigration merely reduces cohesiveness by a few per cent on some arbitrary scale, but hey.

(And as a Home Secretary, she is probably just as useless as most of the Home Secretaries we've had before, but that is irrelevant here.)

There was the inevitable outpouring of wailing about this. But why? You might not like it, you might wish it were not so, you might say that this is only because British people are racist (they're not). I am not aware that Theresa May said she liked this state of affairs. But that doesn't stop it being true.

Taking a longer passage from the article, you can see that she even threw in a bit of the usual PC crap:

Mrs May also said refugees should not be "conflated" with economic migrants.

Why not? A refugee is somebody fleeing a war or disaster zone to the nearest safe country, not somebody who has made the decision to travel half way across the world to somewhere that's considerably wealthier than the nearest safe country.
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Disclaimer: I like foreigners. I'm half German and my wife is from a distant Commonwealth country. Many of our friends are mixed-race or mixed-nationality couples/families. But I like individual foreigners, those who try and fit in, you can have all sorts of interesting conversations with them, but I do not particularly like large groups of foreigners walking round like they owned the place and trying to impose their rules on us.

Fun Online Poll

I admire a good protest, demonstration or publicity stunt as much as the next man, but somehow, all the shenanigans going on outside the Tory Party Conference seem a bit out of place, staged, inappropriate, whatever you want to call it.

By all means, protest against 'the government' if you don't like what they are doing, but party conferences are a purely private event and have no legal status or legislative power whatsoever.

Your thoughts?

Vote here or use the widget in the sidebar.

More Sport...

Here


Go on.  Treat yourself to a bit of baiting... You know you want to.

Interesting... even if possibly a little biased.

From The Electoral Reform Society:

Councils dominated by single parties could be wasting as much as £2.6bn a year through a lack of scrutiny of their procurement processes, according to a new report for us released today.

The study – undertaken by Cambridge University academic Mihály Fazekas – is titled The Cost of One-Party Councils and looks at the savings in contracting between councils dominated by a single party (or with a significant number of uncontested seats), and more competitive councils...

The report also measures councils’ procurement process against a ‘Corruption Risk Index’ - and finds that one-party councils are around 50% more at risk of corruption than politically competitive councils. The corruption risk of competitive councils compared to those dominated by one party is similar to the difference between the average Swedish municipality and the average Estonian municipality. This doesn’t bode well for democracy or council coffers.

And it’s no small-scale study. It uses ‘big data’ to look at 132,000 public procurement contracts between 2009 and 2013 to identify ‘red flags’ for corruption, such as where only a single bid is submitted or there is a shortened length of time between advertising the bid and the submission deadline.

Women Junior Doctors

From the Telegraph

The contracts also change the current automatic pay progression that means a trainee doctor’s salary goes up every year. Under the proposed changes, doctors who take time out of their training for maternity leave or to study for a PhD will not be eligible for the automatic rise.

You get an automatic pay rise when you take a year out to spend it changing nappies? And some people think it's wrong for the government to be stopping this? Are you a better doctor after you've spent a year with rattles and warming bottles? No, so why should you be paid more?

“It’s really difficult if you’re trying to put a roof over your children’s’ heads,” says Tamsett who has just had her first child and is currently on maternity leave. “The fact that I could work part-time was one of the reasons I thought medicine was a good career for me but now I’m faced with the prospect of returning to a job that demands longer hours for less pay.

Go back to work and hire a nanny then. £32K will cover it and you'll be better off if the finances matter.

But female doctors particularly feel they will be penalised by the potential new contracts. “If you’re a mother as well as a doctor, you’re hit extra hard,” explains mother-of-two Dr Rachel Clarke, 42. She gave up a well-paid career in TV production to retrain as a doctor and is now doing her core medical training in Oxford, where she earns around £20,000 a year.

What clown allows people in their late-30s to do medical training? Seriously. It costs £250K to train a doctor and there are limited places. If you consider that someone normally works for around 40 years, that's like training half a doctor.

Sarah, a 31-year-old junior doctor in anaesthetics who didn’t want to give her full name, is worried about the effect the contracts would have on gender equality within the medical profession as a whole:
“As the majority of medical school graduates are now female, it is clear that penalising against trainee doctors for taking parental leave has widespread implications for medicine as a profession, just as we were making strides in the area of gender equality.”

Widespread implications being that more men, and women who would rather hand their kids to nanny go into medicine raising the total capacity of doctors? And this is a bad thing, how?

Short List

"Numbers which became television catchphrases"

I'll give it five

One hundred and eighty! (darts commentary in the 1970s).

One, two, three, four (The Teletubbies).

Sev-en! (Len Goodman on Strictly Come Dancing).

Until the pips squeak.

Quotes relating land are often reformulated as general attacks on wealth. A good example of this is Denis Healey's much quoted  "tax the rich until the pips squeak". What he in fact said was he would "squeeze property speculators until the pips squeak". Apparently citing the then Secretary of State, Lord Carrington, as an example of this as he'd just made £10M profit selling off farmland, presumably with a change of planning permission.

Unfortunately, somethings never change, but others do. I met Denis Healey, the then Chancellor of the Exchequer, as a small boy on a day trip ferry crossing between Dover and Calais. He was outside on the upper deck quite alone, causally dressed, camera around his neck. My mischievous father told me to go and ask him if he was any good as maths. Which I did, to which he gave a chuckle, admitting it wasn't his strongest subject. We had chat about this and that for a while and before we departed company he requested me not to let any of the other passengers know he was on board as " I'm not terribly popular at the moment, and they might throw me overboard".

I wonder if George or Dave do the booze and fag run over to France?

Short List

Areas in Europe called Galicia.

Bayard adds: Galatia (ancient place name in modern Turkey)

Friday Night Gearchange

I haven't done one of these for ages because they are out of fashion at the moment - only they forgot to tell Meghan Traynor, who goes up a pointless semi-tone 2 mins 00 seconds into "Dear Future Husband".

Not even clear whether the song is supposed to be taken at face value or is a send up.
"I'll be sleeping on the left side of the bed,
Open doors for my and you might get some… kisses"

Sinkhole of the week

A large sinkhole has appeared in St Albans, but, puzzlingly, no one is even venturing to guess what caused it, which must be a bit worrying for those whose houses are next to it.

"Tory MP Richard Fuller backs London underground trains"

From City AM, some time in the 19th century:

A member of a powerful commons committee is calling on colleagues in parliament to scrutinise HM Commission for Transportation in London (HMCTL) over its drastic new proposals to impose draconian regulations on underground train services.

Richard Fuller, a Conservative MP who sits on the business select committee, told City A.M. the proposals were “precisely the sort of thing the committee should be looking at”.

“What is the purpose of some of the regulations? Why is it in anyone’s interest to make people wait longer for a train?” Fuller said. “I don’t understand why a regulator feels that these are so important for the public interest. And if they’re not for the public interest, then who is the regulator working for?”

HMCTL said yesterday that it will consult on multiple proposals to regulate underground trains, including imposing a minimum waiting time of five minutes between trains, banning carriage-sharing and stopping companies from publishing timetables in advance. It has also suggested forcing operators to offer pre-booking of train seats seven days in advance...

Mayoral hopeful Zac Goldsmith said last month that regulations needed to be imposed to prevent handsom cab drivers and from being “extinct in a matter of years”.

Mr Goldsmith has also spoken out vociferously against the construction of 'bridges' spanning the River Thames, saying that they would make Thames ferrymen "a thing of the past".

Killer Arguments Against LVT, Not (372)

A traditional fatuous argument against LVT is that "Landlords will just increase the rent".

No they won't. They can't. Rents are set at the upper limit of what tenants can afford/are willing to pay and that is the end of that. The landlord's outgoings are entirely irrelevant (except in very marginal areas with little or no location value). But it is traditional Home-Owner-Ist strategy to just lie, lie, lie, regardless why; totally ignore logic or hard facts; and never, ever to concede on anything.

Exhibit A, from City AM:

There were 74,000 tenants owing more than two months’ rent at the end of the second quarter – up 7.2 per cent on the same time last year when this figure stood at 69,000 across the UK...

However this is still significantly less than the worst peak in the third quarter of 2012, when the number of households owing more than two months rent was 116,600.

It also represents just 1.4 per cent of all tenants, which is stable compared to the previous quarter and compares to 2.9 per cent of tenants in the first quarter of 2008 at the height of the crisis.

Memorabilia and Nostalgia

From The Guardian

The final instalment in blockbuster sci-fi saga The Hunger Games has moved ahead of Star Wars: The Force Awakens in the consciousness of cinemagoers, according to new research published by Variety.

US firm Piedmont Media Research found that The Hunger Games: Mockingjay – Part 2, which debuts in North America on 20 November, scored the highest level of anticipation ever recorded, a rating of 514 out of 1000. The Force Awakens, which is among the most-hyped films of all time, got 495 - though that figure is still the third-highest rating the company has ever recorded.

My first reaction to this was "really?". Star Wars is like this huge cultural thing, isn't it? A massive money-spinner, much loved by fans, while The Hunger Games is this smaller film thing, right?

But I'm starting to think that maybe George Lucas got the much better deal out selling Star Wars to Disney. I've come to terms with my love for Star Wars and how to a boy in 1977 it was a the dog's bollocks. I'd seen films before, but just nothing that was so visually amazing. That's not to say that they aren't good films. The reason they have lasted so long is that they aren't just special effects. There's good enough characters and story behind the effects to still make them watchable. But there's no denying the nostalgia. And the kids who saw films after it with much greater effects just aren't that bothered. My kids have a greater love for Pacific Rim than Star Wars (and Pacific Rim is a good fun action movie).

This also links into a story I heard on the radio about how Beatles memorabilia is falling in value, and what occurs to me is that well, Beatles fans, the people who will buy this stuff because of an emotional connection, are getting pretty old, into retirement, maybe running on pensions rather than good incomes, and being a bit more careful with money. That doesn't mean other people don't enjoy The Beatles, but that they don't have that depth of connection to them.

And The Hunger Games has been a great movie series so far. It hasn't disappointed audiences one bit. Mostly, by making faithful films that keep almost everything in, and not deviating to make it more palatable, more glamorous or whatever else. They even managed the thing of splitting the last book in 2 without cheating the audience with a duff first film to make more money (there is a tonal shift half way in the last book).