Friday, 24 March 2017

Daily Mail on top form

Spotted by MBK in The Daily Mail:

English teacher Khalid Masood, 52, a 'lone wolf' attacker, who was living in the Birmingham area, had a series of convictions for assault and other crimes.

Scotland Yard revealed how Masood was known by a number of aliases and MailOnline can reveal he was born Adrian Elms to a single mother in Kent before his religious conversion. Masood has used the names Khalid Choudry and Adrian Ajao among others.

He grew up in a £300,000 house in the seaside town of Rye, East Sussex and had a long criminal history…

Landlord Farhad Makanvand said he didn't know who had been staying at the flats above his curry house as it was rented out by a separate letting agents.

Mr Makanvand, who also owns the next door curry house Shiraz, said: "I wasn't at the scene last night, I don't live there. I bought the property six years ago for over £300,000. It is contracted to the letting agents so I have no idea who lives there or how many people."

Thursday, 23 March 2017

Anti-Business Rates propaganda doesn't even make sense.

From page 8 of Monday's City AM:

SIX OUT of 10 firms facing increased business rate bills are already planning cutbacks, new figures reveal.

The revaluation of business rates is due to come into force next week, and amid building pressure chancellor Philip Hammond introduced some transitional protection for firms in his spring Budget. However, a survey of London’s firms has now laid bare the number of businesses forced to find savings.

A poll of 500 firms commissioned by the London Chamber of Commerce and Industry (LCCI) has found 60 per cent of businesses facing bigger bills will make cutbacks, including downsizing or relocations. Just over one in four of the London firms planning savings expect to look at reductions to capital investment, while a fifth say they plan to look at reducing staff numbers.

And 17 per cent say the increases, which are expected to hit firms in London and the south east hardest, could see them move some activities outside of the capital...


Yes, Business Rates are inferior to proper LVT in many ways (the legal liability is on the tenant not the landlord; they include the value of the building; revaluations are too infrequent etc), but they're the closest we've got.

Anybody whose done more than five minutes of micro-economics knows that proper businesses try to maximise profits (including a notional cost for proprietor's own time, effort and capital). Decisions on staffing levels, pricing, opening hours, whether to do up the premises etc are all geared up to this.

A change in fixed costs (rent and rates) does not change the profit-maximising mix of staffing levels, pricing, capital investment etc one iota. Why would it? So an increase in fixed costs does not change it either. Day-to-day business decisions remain unaffected, unless the increase is so large as to make the whole business unviable (which will only happen in 0.1% of cases).

In some cases it would make sense to relocate to cheaper premises or start selling online. Great, that means more jobs in lower rent/wage areas (hello Amazon!) and more profitable businesses move into the newly vacant premises in high rent/high wage areas. Win-win, what's not to like?

I could understand if a small business owner on The High Street says "Shit, I'll have to extend my opening hours to generate enough money to keep my business afloat" that's not so nice for him, but good for his customers and the economy overall, so still a win-win.

Wednesday, 22 March 2017

"Universal income would make inequality worse, say people who don't do numbers or logic"

Emailed in by MBK, from The Times:

A Labour proposal to replace benefits with a universal basic income would increase inequality and lead to billions of pounds in extra taxes, an independent review has concluded.

Let's just bathe in the warm glow of that self-righteous non-logic for a minute...

Would a fiscally neutral UBI paid equally to all mean that some small segments of the population receive less in benefits than they do at the moment? Yes, of course (mainly unemployed single mothers - many of whom might well have an undeclared live-in partner).

You can consider that A Good Thing or A Bad Thing, and say that it would "increase inequality" if you wish. In my book, treating everybody the same reduces inequality, the same as everybody gets one vote at elections, the right to vote is free and neither contributory nor means-tested.

In the next breath, the author is wailing about "billions of pounds of extra taxes", implying that people would be worse off all the way up the income scale, which in turn would reduce inequality.

Put the two together, and he is saying that everybody would be worse off, which is mathematically impossible.
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If you read the full report by Bath University's Institute for Policy Research, you notice that they have indeed played fast and loose with the numbers and ignored their own logic.

Let's go with their Model 2.4, page 20, which is fairly full-on "UBI set at the level of existing benefits" which they consider to be £67/week per child; £73/week per working age adult; and £156/week per pensioner. The gross cost of this would be £288 billion.

This would be part funded by eliminating the personal allowance for income tax, the basic state pension, Pensions Credits, Child Tax Credits and Child Benefit, Working Tax Credits and the various categories of unemployment benefit (Carer's Allowance, Employment Support Allowance, Income Support, Jobseeker's Allowance etc). They say the shortfall would be £76 billion, to be made up with higher taxes.
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Let's iron out the easy mistakes first, if you divide total Child Benefit and Child Tax Credits by the number of children in the UK, it works out at about £50 a week, so let's stick with that. No need to worry about funding it.

The same goes for a Citizen's Pension replacing state pensions (basic and earnings-related) and Pensions Credit. Add up current cost, divide by number of pensioners, comes out at about £156/week, job done, no need to worry about funding that.

Next, paying all UK resident working age adults who hold a British passport £73/week would cost £141 billion. The bulk of working age adults have a job and earn more than £11,000 a year, the intention is not to make them better or worse off.

This can be achieved quite simply by scrapping the personal allowance for income tax and the lower limit for NICs and halving the lower limit for Employer's NICs. The extra tax and UBI net off to nothing, so no problem funding this.

This leaves maybe ten million adults who are unemployed, students, low-wage/part timers earning less than £11,000, and non-working spouses. Nearly all these people currently get something or other - unemployment benefit, Working Tax Credits, Statutory Maternity Pay, Statutory Sick Pay, student loans and grants etc. These people break even if they get a flat £73/week.

We could shave off a few billion by sticking with current rules and paying people under 25 a lower weekly amount. The report ignores the current cost of SMP, SSP and student loans/grants or the under-25 savings, but clearly no problem funding this.

For sure, a couple of million low- and non-earning adults in the UK currently get zilch in benefits (mainly spouses of people with a full-time job), paying them £73/week is an extra cost of maybe £10 billion. But it costs about £10 billion to run the DWP and next to nothing to run a Citizen's Income scheme, so that extra cost covers itself.

So overall nobody knows what the additional cost or saving would be, it's all within the margin of error. Their headline figures of £76 billion and at least 4% on income tax are clearly miles out.

As to higher tax rates, most people would face the same marginal tax rate, a few low-earning non-claimant spouses would face a slightly higher tax rate and several million claimants (and people with children earning more than £50,000) would face much lower marginal tax rates if they find some paid work/increase their earnings.

Added to that is the fact that all this complying and claiming, notifying of change in circumstances, worrying about being overpaid and having to pay it back etc, all the hours wasted filling in forms, traipsing to the job centre, being on hold with a call centre etc falls by the wayside. That's not necessarily a cash cost, but a massive benefit to people in the bottom couple of deciles.

I work in Pensions and Still I Think that this is Wrong headed.

Here ....and it's not a 'raid' you numpties.  You haven't got anything to 'raid' until you've made the contribution.

The fact is that higher rate taxpayers mostly use pension contributions as 'tax planning'.  Given the new access freedoms for pension funds this will likely lead to obtaining contribution relief at higher rates and tax payments on benefits taken at the basic rate and a potential double benefit of tax free transfers on death.

In fact only a relatively small number of taxpayer benefit from higher rate relief for pension contribution.

I for one would wholly support restricting pension contribution tax relief to the basic rate.

Tuesday, 21 March 2017

Fun Online Polls: Immigrants, expat's & trade deals.

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

Citizens from other EU Member States currently living in the UK should…

… all get permanent residence visas automatically - 13%
… apply for British citizenship if they want to stay - 11%
… be made to reapply for work permits every few years - 13%
… given the same rights as other EU Member States give UK citizens - 58%
… be told to leave the UK soonest - 4%
Other, please specify - 1%


Good, I was with the majority on that one, I've absolutely no grudge against foreigners living here (being half a foreigner myself, married to one etc) and in truth I would not like to see any of them made to leave (apart from the crims and the scroungers), but fair's fair and all that.

A good turnout of 104 votes, thanks to everybody who took part.

The gimmick being, this is not actually an EU competence - while the UK (or any other non-EU country) cannot strike trade deals with individual EU Member States, it can very much agree specific rules on immigration/emigration with each individual MS.
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While we're on the topic, I'm not sure if we've done what kind of post-EU trade deals we'd like to see, so that's this week's Fun Online Poll.

Vote HERE or use the widget in the sidebar.

Monday, 20 March 2017

They own land! Give them money!

From The Guardian:

The cost of an average stay in a residential care home can swallow up more than half the value of an individual’s house in some parts of the country, according to new research.

The findings, which show that the typical person entering residential care will face a total bill of £50,000-£93,000 depending on where they live, will fuel the debate about social care funding.

The chancellor, Philip Hammond, announced in this month’s budget that an extra £2bn would be granted to social care in England over the next three years. He also said the government would produce a discussion paper later this year that looks into how to fund social care in the future...

The new research from the mutual insurer Royal London, whose director of policy is the former pensions minister Steve Webb, found that variations in house prices around the UK mean the cost of a typical residential care home stay could range from 18% to 56% of the value of the average house.

Webb, a former Liberal Democrat MP, said successive governments had “failed to grasp the nettle” when it came to care costs, and that urgent action was needed.

Sunday, 19 March 2017

Nanny McPhee: The Prequel

Although the first-made film in the series is sugar-coated child-friendly nonsense, I imagine that the prequel is a much darker film, highlighting the pretty brutal attitudes that well-to-do Victorians had towards their servants; that men had towards women; and fathers towards children.

The film propably opens with the birth of Mrs Brown's sixth child, which she adores while Mr Brown (Colin Firth) mumbles some rather unenthusiastic congratulations in the background. The doctor tells the parents solemnly that Mrs Brown is not in the best of health and having another child would kill her.

With little knowledge of contraceptive methods, Mrs Brown then refuses to have sex with her husband any more. In his indignant frustration, he forces himself on his under-age scullery maid Evangeline (Kelly Macdonald) every time his wife is busy with the children, which is often.

Seeing this as a possible way out of her lowly station in life, Evangeline eventually learns to accept his advances. It is unclear to the viewer whether perhaps she actually starts to rather enjoy the submissive and borderline violent sex (you have to have a bit of controversy in a film, a bit of feminist outrage is always good publicity, history professors can hit back that this is just what it was like etc).

Mr Brown eventually loses interest in his wife and becomes infatuated with Evangeline who does all sorts of pervy stuff to him. Mr Brown is an undertaker by profession (he actually is in the first-made film), so has a suppressed kinky side as well as access to poisonous chemicals.

Together, the lovers hatch a plot to be rid of Mrs Brown. In public, Mr Brown misses no opportunity to mention the doctor's warning, while privately he persuades his wife to "try for one more child". As an undertaker, he knows just which poisons to use on his wife and how to disguise the cause of death afterwards.

Having established an alibi in advance, sure enough, Mrs Brown becomes pregnant and duly dies in childbirth - largely because of the large doses of poison which he and Evangline have been administering in the final trimester.

Evangeline is keen to be married to her master as soon as possible, but she and Mr Brown agree that it would be rather unseemly and possibly raise suspicions if they are married too soon after his first wife's death. Privately he worries about what marrying a scullery maid who is not yet of age will do to his social standing.

They agree therefore that it would look best if Evangeline goes away for a while, perhaps entering service for another family until she is old enough to marry.

The End.

Those who have seen the first-made film will know that the opportunity presents itself when Mrs Brown's wealthy aunt offers to take in Evangeline to "make a lady of her", so this all ties in nicely.

Saturday, 18 March 2017

Janet Yellen

Friday, 17 March 2017

"Dutch voters… halt the wave of populist successes that delivered Brexit and President Trump"

Emailed in by MBK, from The Times.

“It is an evening when the Netherlands after Brexit, after the American elections, said ‘Stop’ to the wrong kind of populism,” a beaming Mr Rutte told supporters last night in the Hague.

Richard Ambler, in the comments:

Really? Are we looking at the same figures?

Mr Wilders, was on course to win 19 seats, an increase of over 25%
Mark Rutte, the centre-right prime minister lost over 25% of his seats
Labour, lost 28 of 38 MPs or lost nearly 75% of their seats

This equally could qualify was a massive swing away from the centre left towards the far right… This blatantly biased piece of reporting tries to hide this swing and refer to Mr. Wilders as a populist, extremist who must be stopped at all costs and then tries to present this result as his humiliation.

Thursday, 16 March 2017

'Everything is all right, offshore and out of sight'. As the Song Goes!

You just have to admire the new, Irish economic miracle highlighted by the 2017, Major Foreign Holders of US Bonds figures here:

I must admit that the once common Japanese, then Chinese, consumer electronics goods around my house have been quietly, unnoticed, replaced with the ''Made in Ireland" logo. Only the Kerry Gold butter in my trendy, new red fridge (made in Cork), still has the Chinese moniker on it. 

These figures clearly demonstrate Ireland's growing industrial muscle in the world. Thank god its not all banking fraud and corporation tax 'avoidance' this time Enda? Isn't it Enda?Enda?


Wednesday, 15 March 2017

Fun with numbers: Falling unemployment vs falling median wages.

From the BBC:

UK unemployment fell in the three months to January but there was a sharp slowdown in wage growth.

The Office for National Statistics (ONS) said the unemployment rate fell to 4.7% - it has not been lower than that since the summer of 1975.

However, wage growth has slowed significantly to 2.2% from 2.6% in the previous three-month period. Wages are rising above the rate of inflation, which is currently 1.8%, but the gap has narrowed...


Chris Snowdon at the IEA reconciles this apparent contradiction:

A one per cent drop in median earnings, as shown in the FT graphic, does not mean that people have been slogging away in the same old job on lower wages than they received before the recession.

Nor should it be inferred that life is rosier in France and Spain where median earnings are slightly higher than they were in 2007. When it comes to wage data, you only count if you have a job. The unemployment rate in France is twice as high as it is in Britain. In Spain, it is four times higher.

Understanding changes in the labour market helps us to explain the counter-intuitive finding that median incomes have risen since 2007 while median wages have fallen. Part of the reason is that people who were previously on benefits have found work, thereby raising their own incomes, but have disproportionately taken jobs that pay less than average, thereby lowering the median.

In general, this has made people better off. If, on the other hand, the economy had shed large numbers of low-skilled jobs, the median income would have risen mathematically without benefiting anyone.

-------------------------
His article also mentions this:

But whilst there is no evidence that wages are falling, it is true that they have fallen and that whilst median earnings are rising they have still not returned to the levels seen in 2007. 

That is what the Financial Times chart actually shows and the FT offers several reasons for this, including the relatively high inflation rate between 2008 and 2011, but averages can be misleading and there is one statistical explanation that is so important that the ONS dedicated a whole webpage to it in 2015.

There is another obvious explanation for that. Let's assume our employer has been allocating £100 of pre-tax profit ('value added') to wage costs since 2007.

Back in 2007, the maximum he could pay out was £100 less 17.5% VAT less 12.8% Employer's NIC:

£100/1.175 x 1/1.128 = £75.49

Fast forward to 2017, the maximum he can pay out is £100 less 20% VAT less 13.8% Employer's NIC less 3% Workplace Pension contributions (assuming the median employee has opted in, which is questionable but let's run with it):

£100/1.20 x 1/1.138 * 1/1.03 = £71.10.

Those tax changes would cause a +/- 6% decline in reported total wages over the period, or 0.6% a year on average.

Fun Online Polls: Speed traps & EU citizens in the UK

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

Sent a fixed penalty notice for 61 mph in a poorly signalled 50 mph stretch on the M62 at 10.22 pm. What's my best course of action?

Do the Speed Awareness Course - 68%
Take the 3 points on my licence - 15%
Go to court and appeal - 13%
Other, please specify - 4%


Thanks for all the comments and suggestions.

(I still haven't made up my mind, the stubborn part of me does't want to meekly cough up £100 and do the SAC even though AFAIAC it was so poorly signalled that I ought to be given the benefit of the doubt. AFAIAC the speed limit on motorways is 70 mph unless there is good reason to assume otherwise. There was no such reason, everybody else was accelerating back up to 70 mph, end of discussion.)
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This week's Fun Online Poll - what approach would you like the UK government to take regarding citizens from other EU Member States currently living in the UK?

Vote HERE or use the widget in the sidebar.

UPDATE: Having now thought about this for a couple of hours, if I were the UK government, I would by-pass the EU entirely and just go to each individual Member State and thrash out individual, bilateral, mutual deals i.e. your passport holders can stay in the UK and our passport holders can stay in your country on the following terms and conditions to apply in both directions...

Quite what those T&Cs are doesn't really matter, hopefully it will level out at something sensible either way (so we might agree that Poles in the UK do not need work permits and neither do Brits in Poland. Or perhaps Poles in the UK need work permits and so do Brits in Poland, whatever). But that was a bit long to squidge into the possible answers section on the Poll.

The rules might have changed since I did a couple of units of EU law seventeen years ago, but at the time, EU Member States were bound by EU rules as regards citizens from other MSs, but each MS can make up its own rules vis a vis citizens from non-EU countries or enter into treaties with non-EU countries regarding immigration, extradition and so on.

Tuesday, 14 March 2017

NIMBYs Of The Week

From yesterday's Evening Standard

Residents in the exclusive and elegant neighbourhood of Holland Park say they would be reduced to living in “Third World conditions” if a proposed housing development goes ahead.

Oh! Is the proposed development going to be housing for refugees and asylum seekers..? Nope.

Opponents of developer Christian Candy’s plans to build luxury apartments in an area famed for its grand double-fronted mansions say local traffic congestion already makes the area seem like a “war zone” — and construction work would make it worse.

Ah, they're complaining about a period of heavier than normal traffic, something which is part and parcel of living in London.

... residents including Queen guitarist Brian May have objected to the developer’s traffic management plan.

This reveals that there could be up to 80 lorry visits a day to and from the construction site during the busiest period of work and 32,500 over two-and-a-half years.


An additional vehicle going past every ten or fifteen minutes, would you even notice it?

And didn't Mr B May used to play at concerts attended by tens of thousands, each generating thousands of extra vehicle movements in small areas?

One neighbour said: “The pollution is so bad that I cover my mouth every morning when walking to the Tube. It’s unacceptable that residents need to worry about their health in the heart of the Royal Borough of Kensington and Chelsea. We will soon be living in Third World conditions.”

Sell up, cash in a few million quid unearned land price gains and move somewhere else then.

Jon Bradley said the nearby junction was already a “war zone”, and Ross Yealland added: “This plan will bring us local residents three years of hell — from life-reducing air quality to nightmare traffic from thousands of individual lorry movements.”

Third world conditions, war zone, hell, nightmare. Do these people have no sense of perspective?

Guardian making itself look a bit silly (as per usual).

My radio-alarm clock is set to Radio 4, which I listen to as I drift back into consciousness. This morning, they quoted from a Guardian editorial, which seemed so far-fetched that I wasn't sure I hadn't imagined it.

Nope.They actually said this about a possible second Scottish indyref:

The choice facing voters in an independence referendum can be framed as one between the certain economic catastrophe of crashing out of the EU and the uncertain consequences of leaving the UK.

As is well known, Scotland's economic links with the rest of the UK outweigh Scotland's links with the rest of the EU by about four-to-one. By economic links I mean, cross-border investment, imports-exports, jobs and so on,

So whatever the disruption is when* the UK leaves the EU, it would be four times as bad for Scotland if they left the UK and tried to rejoin the EU.

* It's a great feeling finally being able to say "when" instead of "if".

Monday, 13 March 2017

So how are those rent rises working out then?

When Obsborne increased SDLT rates by 3% for all purchasers except owner-occupiers from 1 April and then announced that higher rate income tax relief for landlords' mortgage interest would be phased out over three years, starting 1 April 2017, all the usual Homey lobby groups insisted that "landlords will just increase their rents".

Logic tells us that if anything, these measures will push down prices and rents slightly, although it is always difficult to disentangle this from other influences.

From today's City AM:

Rent increases for tenants across the UK have fallen to their lowest since 2013, new figures have shown, with prices in London dropping for the ninth month in a row.

Rents rose just one per cent to £1,190 in the year to February, the lowest rise since April 2013, figures from Landbay showed. In the capital, rents fell 0.5 per cent, although they were still as high as £1,882...


The lobbyists are keeping up the pressure though:

And a study by the Royal Institution of Chartered Surveyors (RICS) published last week suggested rents in the UK could rise by a fifth over the next five years, although tenants in the capital will be faced with a rise of 15 per cent.

Here's a fun bit from the linked article:

The research suggested a third of its respondents believed those on lower incomes are being pushed out of the private rental market, while 29 per cent blamed caps on housing benefits. Just over half of landlords it surveyed said they'd be prepared to rent properties to households receiving housing benefit if help was provided through central government which provided financial guarantees for both deposits and rent.

“We see this as a matter of public interest," said RICS chief executive Sean Tompkins.

"The housing market is falling increasingly out of step with the majority of household incomes. In the current climate, it can be hard enough for young professionals to make ends meet. But for those on benefits, the pressures may be insurmountable.

"Worryingly our figures show that as a result of a combination of economic pressures, more and more vulnerable tenants are being pushed out of the private rented sector. However, if government were to put in place additional support measures through the introduction of help to rent schemes, the door to the rental market may once again be opened for Britain’s most vulnerable.”


The utter, utter money grubbing shits.

Assuming landlords refuse to take housing benefit tenants any more, what will they do with the now vacant homes? Sell them to better of FTBs presumably. Supply then dwindles until landlords end up with the stark choice - rent them out to lower earners for lower rents or sell them etc, taxpayers save money on housing benefit subsidies. Win-win-win.

Corruption "with a little c"

Reader's letter from City AM:

George Osborne's new job

The reason that appointments like this are treated with suspicion is because there are many examples of corruption "with a little c" in government and the question arises whether BlackRock benefitted from the decisions George Osborne made while Chancellor.

If Osborne is worth the money he is being paid, then good luck to him, but don't be surprised that questions are asked!

Rob Kelly


As if on cue, MBK emailed me this from yesterday's Sunday Times:

The US funds giant that employs George Osborne on a £650,000-a-year contract is considering bidding for billions of pounds of taxpayer-backed student loans.

BlackRock is understood to be eyeing the debt portfolio, which was originally put up for sale in 2013 when Osborne reigned over the Treasury...


I'm sure we can all work out who the "little c" is.

Saturday, 11 March 2017

Nun Too Many?

I have to admit I think this is brilliant.

A cosmic, Catholic joke that would be fit to grace the best Father Ted episode. I am about to go down to the fancy dress shop and see if I can fake a few of these pictures myself, and earn a quid or two back from the BBC to pay my license fee. A version of 'cosmic' that feels appropriate to me I might add!

I have got Blackfriars covered (although I suspect the BBC will censor that one). Victoria is too easy, boring even.

But for the real, top of the range gag, and if I have enough money for the costume deposits, I will go for a twenty stooge, Waterloo turnout, in full 1815, Bearskin, Blue, Imperial Guard* outfits. Unless you have anything better of course.

*I know the Imperial Guard was a whole Division numbering thousands in 1815.  Twenty outfits is all I can afford. So it models the Guards at teatime on the day of the battle. After Wellington had shot them all to pieces.

Friday, 10 March 2017

Economic Myths: A 'flat tax' is a 'rich giveaway'

Something which the current furore over the increase in NICs paid by the self-employed from 9% to 10% of earnings in the basic rate band has miserably failed to provoke, is any sort of debate about NICs suffered by employees, which are 23% of earnings in the basic rate band.

(I accept that the self-employed are at a disadvantage when it comes to claiming certain minor benefits, although under the new rules, they are accruing very similar state pension rights to employees and they can claim Working and Child Tax Credits. That side of the equation can be fixed by moving towards a Citizen's Basic Income).

The first point, which gradually seems to be dawning on people, is that NICs are just a tax on income. (I'm not holding my breath until they realise that about VAT though).

As to flat tax, for a good overview of the tedious and unfounded arguments for and against, see here. the myth underpinning this, and the false assumption made by both sides is that flat tax = very low rate or = lower overall revenues. No it doesn't.

The next point is that the combined effects of income tax and NIC vs endless exemptions for investment income means that basic rate taxpayers pay the same or a higher overall rate of tax on their employment income, than higher rate taxpayers pay on investment income. This must surely be wrong, whichever side of the argument you're on. The Indian Bicycle Marketeers sell this as "ensuring proper funding for the NHS" while simultaneously "encouraging people to build up capital", it requires DoubleThink or absolute cynicism to support both those things, but most people seem to manage.

To my mind, 'flat tax' is three separate concepts:

1. All income from whatever source is taxed at the same rate, be it wages, self-employment income, dividends or interest (rental income should be taxed at penal rates via LVT, of course) or company profits (dividends would come with a tax credit for corporation tax paid at source). Abolish all the fiddly allowances and exemptions for investment income and merge them into a higher personal allowance. This reduces distortions in the economy, saves admin costs etc. This still leaves room for basic and higher rates of tax, of course, but is half way there.

2. That there are no basic higher rates, just one single rate. .This reduces distortions in the economy even more, saves even more admin costs etc.

Because of the maths, low- to middle earners benefit far more from an increase in the personal allowance than from a reduction in the basic rate of tax. So if there is a fiscally neutral shift - a higher personal allowance combined with higher tax rates - low- and middle earners pay less tax and higher earners pay more tax. Conversely, if the personal allowance were scrapped and tax reduced to collect the same revenue, low earners would pay more tax and higher earners would pay less tax.

So a flat tax could be more or less redistributive than the current system - that all depends on the personal allowance and the actual rate.

3. Because of the economic damage and collection costs caused by taxing output and earnings, a lower rate is better than a higher rate. (Yippee! shout the Faux Libs). If you want to collect tax in way that does not drag the economy down while at the same time reducing net income inequality, you should be taxing land values instead, an idea universally loathed by left and right, Faux Libs and Homeys.

Daily Mail letting itself down a bit

From The Daily Mail:

Mother who was found seriously injured at home along with a dead man revealed on Facebook the day before how she wished she 'could just run away'

Yes, that's all well and good, I hear you cry, but what is the house worth?

You have to read half way down the article, past all the boring details before you get to the money shot:

Police are investigating what happened at the £200,000 bungalow yesterday afternoon, but are not looking for anybody else.

I wish they'd just stick to putting the house price in the headline and save us all this dreary "reading" malarkey.

The Disappearing Homes Conundrum. On steroids.

Via Peter Smith on FB, from Landlord Today:

Mr Hannah observed, ‘... the government continues to break down the [buy-to-let] sector that has absorbed change and provided homes for those who simply either cannot afford or do not wish to commit to homeownership.

With the sector currently in its fourth consecutive quarter of decline, paired with a fall in homeownership rates, we are fast approaching a new type of housing crisis.’


Well fuck me! Are homes actually ceasing to exist? The way that his contradictory statements can be reconciled is to assume that there has been a corresponding increase in people in council housing, which is news to me.

More on 'Spreadshit Phil's' NIC Changes

The level of understanding among the Powers That Be as to tax incidence is woeful.

Case Study

I am both self employed and an employer, as are an awful lot of self employed.  (BTW, It would be correct to include the owners of small businesses who chose to trade through a limited company as 'self employed').

I pay my own NIC's

I also pay all my employees NICs.

How come?

There are two market clearing prices for employees.

From their perspective that price is the pay that they actually are motivated to turn up for. That is their net take home pay.

From my perspective the market clearing price for their services is the total cost of employment. That is the sum of their net pay, their PAYE and their NICs and my employers NIC.

NICs and PAYE are a tax on employment.  And if you put high taxes on things you get less of it.

Someone point this out to the witless wankers in Spreadshit amd Tessa's government - and the state bureaucracy.  Please.

Update

As Shiney says in the comments:

You need to add employers workplace pension contributions, non reclaimable SSP, SMP and statutory holiday pay as well. Plus the cost of ruinning the bloody payroll and dealing with attachment of earnings orders and shit requests from HMRC. If I could just pay all my people their gross pay and say 'your problem' that would be great. Seconded.

Thursday, 9 March 2017

Today's award for conflating two totally unrelated issues goes to...

From The Evening Standard:

Liberal Democrat leader Tim Farron said: “The Government is forcing workers to pay for its reckless hard Brexit plans. It’s a disgrace that thousands of hard-working entrepreneurs in London will be hit by a tax hike.”

He's not as old as he is confused, is all I can say. Were the Lib Dems not in the coalition government which increased NIC rates for employers, employees and the self-employed by one percent from 5 April 2011?

All those moany Labour MPs appear to have forgotten that a Labour government did exactly the same thing back in 2003.

And WTF does this have to do with Brexit anyway?

NB, NICs are clearly the second worst tax after VAT so I'm not defending Hammond, I'm just judging people by their own standards.

"Essentially, we will pretend the best option doesn't exist."

From the BBC:

As an EU member, the UK and UK-based firms can sell their goods to EU customers without having to pay additional taxes. Likewise, British firms and consumers can import from the EU tariff-free.

The prime minister has already ruled out continued membership of the EU's single market post-Brexit, with many assuming this means the UK will also leave the customs union.

So what will we do instead? Essentially there are two options:

◾ a newly negotiated trade deal like the EU has with Canada or South Korea, which eliminate most tariffs and many other trade barriers. But the EU's record is one of slow progress in similar talks, and political tensions from the Brexit process could also be an obstacle

◾ an arrangement sometimes called World Trade Organization (WTO) terms.


What about the third option? The UK declares unilateral free trade and abolishes all quotas and import tariffs, that requires no haggling whatsoever, if other countries want to be prissy and impose quotas and duties on UK goods and services, that's as can't be helped.

If I were 'negotiating' with the EU, I would point out to them that our starting position is unilateral free trade with all comers; if the EU is not happy with that, we're prepared to compromise and declare unilateral free trade; and if that is not acceptable, we'll just walk away and declare unilateral free trade. What time's the last Eurostar back to England?

To be fair, the idea gets a mention later in the article:

Some economists, including Patrick Minford of Cardiff University and one of the leading members of Economists for Brexit (now renamed as Economists for Free Trade), favour a more comprehensive exercise in cutting tariffs and other barriers unilaterally.

Hooray!

But these cuts would have to apply to goods coming from the EU as well.

Well of course they would, that's the whole point.

Adam Smith Institute FAIL

From City AM:

How did people react to the National Insurance hike?

Sam Dumitriu at the Adam Smith Institute said: “It’s right to bring National Insurance on the self-employed in line with that paid by employees. But the chancellor must ensure he is not discouraging the self-employed from investing, and allow them to immediately deduct capital expenditures from their taxable income...


LOLZ! has he not heard of the Annual Investment Allowance, which means that most small and medium-sized business can claim 100% of their capital expenditure in the first year? (This is some nonsense dreamed by Georgon Osbrown: reduce the normal capital allowance rate to a miserly 18% (or 8%) but then give most businesses a 100% rate anyway).

... We shouldn’t be looking to increase the overall tax burden, especially not on low-income workers. So we should use the extra revenue raised to cut the overall National Insurance rate.”

If he means align the NIC rate on employees and self-employed, they've got a long way to go (10% vs 23% on the first £43,000), even further if they look the rates above that (2% and 14%) and even further if they look at the NIC rates on investment and rental income (0%). But the Annual Investment Allowance (which is only a timing thing anyway) is bugger all use to low-income self-employed who probably don't incur much capital expenditure.

To give Philip Hammond credit, he did point out that employees pay/suffer two layers of NIC and IIRC, referred to it as a "tax".

Wednesday, 8 March 2017

Daily Mail on top form

From The Daily Mail:

A 43-year-old man has been arrested on suspicion of murder after an Oxford-educated business development manager was found battered to death at her home.

Samantha Blake-Mizen, 47, suffered severe head injuries in an attack at a £500,000 property in the small village of Ludgershall, Buckinghamshire.


It gets worse/better:

An 82-year-old retired opticians assistant, who lived opposite Miss Blake-Mizen but who asked to remain anonymous, admitted it was a huge shock to village life.

Not going to take the locals long to identify her, is it?

Killer Arguments Against LVT, Not (409)

Via MBK from The Times:

The row over business rates, with Tory MPs leading the charge against rises for small companies, has prompted a rethink in the Treasury about the whole way in which companies are taxed. 

Again, there will be short-term relief in the budget for some of those hit by the recent revaluation, but Mr Hammond has become convinced that much wider changes are required in the longer term.

In his view, it is unfair and anachronistic for businesses to be charged on the basis of the value of property when many of the most lucrative enterprises now operate online. There could be a review of business rates, which date back to 1572, as part of an overhaul designed to make corporate taxation fit for the 21st century.


A tax on land values is not a tax on business, or households, or farmers. It is a 'tax' (actually, a user charge for benefits received/burden placed on those excluded*) on land owners. People owned land in 1572, they own land today, they will continue to own it for as long as nation-states exist and permit it. The basic concept is the same, what you (are allowed to) do with it is a separate issue, but clearly you hold it for some purpose or other.

A business (or a household or a farmer) which pays rent (or a mortgage) is just paying privately collected tax, so turning his non-logic round, we might as well say that "It is unfair and anachronistic for businesses to be charged rent based on the value of the premises they occupy" which is surely nonsense.

At the same time, the chancellor is determined to ensure that companies are taxed properly on the profits they make in this country — even if their customers are on the internet rather than physically going into a shop. For him this is not about waging a political war on “fat cat” multi-national corporations, such as Google and Facebook, but a question of making the system fit for purpose in the digital age.

Can we stop wailing about small, local retailers on The High Street and blaming their woes on glorified mail order services like Amazon**? If you want to run a small, local business from the High Street, then provide services - hair dressing, repairing mobile phones, a café, estate agent, launderette, whatever - where there are little or no economies of scale - Amazon will never put them out of business. If you want to run something really niche, like second hand books, then the High Street is probably not the place for you, you can sell your stuff via, er, Amazon.

* Which is why Good Queen Bess introduced Poor Rates in the first place - to finance a very rudimentary welfare system.

** If we think that Amazon et al are taking the piss on corporation tax - and there is evidence to suggest they are - then it's easiest to just charge them higher Business Rates on their massive distribution centres and get the money that way.

Tuesday, 7 March 2017

Aligning National Insurance rates - half right, but apart from that, completely wrong.

From The Daily Mail:

Philip Hammond was last night urged to abandon plans for a £1billion tax raid on the self-employed, amid warnings it would wreck Britain’s growing entrepreneurial culture.

The Chancellor is reported to be planning a rise in National Insurance rates for the self-employed in tomorrow’s Budget to bring them closer to the level paid by those in salaried jobs. The move could eventually see the National Insurance rate paid by self-employed people rise from 9 per cent to 12 per cent.


Closer? It's not much closer is it? Employees suffer two levels of NIC, which cost 22.7% of gross pay (£25.80/£113.80); the self employed suffer one layer which costs 9%. NICs are a regressive tax and the rates above £43,000 are lower; this largely cancels out the fact that income tax is higher above £43,000 (i.e. the system is a lot flatter than people think).

I'm all in favour of aligning rates, but how about reducing the NICs suffered by employees as well and let the two meet in the middle?

Chris Bryce, chief executive of the Association of Independent Professionals and the Self Employed, said the Chancellor should hold a full consultation before deciding on a massive hit on the sector.

He added: ‘If the Chancellor were to increase National Insurance contributions for the self-employed, a large number of low-paid people could lose out on a significant amount of income.’


Three per cent of not much is not much, is it?

One former minister warned that Mr Hammond would face a major backlash if he pressed ahead with the full rise.

‘We can’t, on the one hand, claim that we are the party of the strivers while, on the other, say we’re going to hit millions of them with a massive tax bill,’ he said.


How about the 'millions' of employees whom you are already slapping with an NI bill that is twice as high?

Treasury sources did not dispute that the overall tax burden could rise slightly as a result of tomorrow’s Budget measures, despite warnings the UK is already heading for the highest tax burden since the 1980s.

Funny how the Tories get away with increasing taxes while still running huge deficits, exactly the thing they are always accusing Labour of having done. History shows that over the long run, Labour run smaller deficits/are more likely to reduce the national debt and do not collect more in tax.

The only good news from all this is that all parties appear to agree that National Insurance Contributions are indeed just another tax.

Monday, 6 March 2017

Housing Crisis : Supply vs Demand In Colour


In the top graph we have a snapshot of the UK housing market, with 27 million dwellings being supplied at an average of £220K each.  At £100K this represents the capital only constituent of that average home. 

The bottom graph shows the results of two different ways to bring down average house prices (and rental incomes). 

The most popular option is to increase the supply of housing. Demand 1 stays the same, while supply is shifted to the right to position 2. The pink area shows the added costs resulting from this. 

The unpopular option is to reduce demand by a recurring tax on the rental value of land(location). Supply 1 stays the same, while demand is shifted to the left to position 2. The blue area shows the reduced costs resulting from this. 

Of course in my graphs I've made all sorts of assumptions/guesses about supply/demand elasticity which gives the following results.

The difference in the number of houses is 12 million x average capital cost £100K = £1.2trn

The numbers don't really matter, but the principle does. Given economic policy should be about reducing costs, why on earth do so many economists recommend policies that increase them?


Small Local Businesses v Eton

Via MBK from The Sunday Times:

Eton College is eligible for an 80% discount on its business rates because, like most other independent schools, it is a charity. This saved it almost £500,000 last year — and will be worth more than £630,000 this year.

But the discount is a source of anger and resentment among the owners of small businesses on the nearby high street, which are seeing their business rates rise by up to 15%...

Eton Antique Bookshop on Eton High Street just misses out on the exemption from business rates as its rateable value is rising from £11,000 to £12,750. It will pay £1,425 this year — a sum it can ill afford thanks to falling tourist numbers.


That's £30 per week.

... Aimee Fleet, owner of the Wags Pet Boutique a little further up the High Street, said the small business relief she had been granted this year was the only thing saving her from going under.

“I paid £6,000 in business rates last year and am only getting a slight reduction next year because I am getting some small business relief. If my rates had gone up like others around here, I wouldn’t last more than another year.

“It’s not much of a support for small businesses, is it? I don’t know what I am paying for, either, because the council doesn’t collect waste any more from us and we have to pay for cardboard to be collected.


If she is renting, she will be paying a damn sight more than £6,000 in rent. Does her landlord provide the public transport, collect the rubbish, light the streets, provide the overall ambience and other local amenities which draw tourists there? Does he heck. So what is she paying him for, above and beyond a few thousand quid for the building? And why is she not complaining about the rent?

Some of the comments are spot on:

dcch: This is a silly article that seems to have been manufactured in the news room. The new business rate wouldn't be any more affordable if Eton paid it too. The school is not competing with the local shops so the same complaint about Eton enjoying discounted business rates could be made by any business in the country. The idea that an organisation should be stripped of charitable status because it turns over a lot of money is particularly fatuous.

David at Wateroakley: On the basis of 1300 pupils, the rebate is worth about £484 per pupil. Senior school education in the state sector is about £4,500 per pupil. On that basis, Eton College is potentially saving the state incurring additional costs of about £5 million.

Stefan: If you don't like it, then go set up shop in a town that doesn't owe its existence to a historic institution like this (so better avoid Cambridge and Oxford then).

Neil Alldritt: Would the shops survive if it were not for Eton being there?

The Read Lines: Roolz is Roolz - It is a charity, education establishment and fancy dress party. Ok so it is for the toffs but if you live in Windsor it all sounds pretty toffish to me. I am sure it has its parts where you don't want your kids mixing with, but my guess is that the business' set up there to sip some of the cream. At least you did not mention Amazon.


Clearly, the Business Rates for "charities" is a nonsense because charitable status is at the bureaucrats' whim, it encourages inefficient use of land and buildings and is a tax break for landowners, but the points stand.

The Tax Returns You Can See and Those You Cannot

Guardian, Independent and BBC try again here. If anybody here whose opinion I actually give a shit about about can quickly cast an eye over the accounts. If it is tax fraud, I'll resign from the party by six o'clock tonight. Note to Jabba the Watson: It's Blair's tax returns, which we will all one day see, that fucking matter, but yours will be a good start too!

Sunday, 5 March 2017

"According to calculations by a mortgage broker…"

Via MBK from The Times:

According to calculations by David Hollingworth of the broker L&C Mortgages, buying a house with £12,000 income and £6,000 interest each year through a limited company would earn a higher-rate taxpayer an additional £2,400 profit, even taking into account corporation tax.

That's not comparing like with like.

If our higher rate taxpayer collects the rent and pays the interest, he pays 40% on the income (£4,800) and will (once the changes have been phased in) get 20% relief for the mortgage interest (£1,200), total tax bill £3,600.

If the same home were owned by a company, it pays flat 20% corporation tax on net profit £6,000 = £1,200.

So far, that looks like a £2,400 tax saving. But it isn't the full picture, money rolled up in a company is no good to the landlord/shareholder. If he takes the after tax profits as a dividend, he is liable to 32.5% on the dividend (assuming his £5,000 dividend nil rate band is already used up) = another £1,560 income tax, to the total tax bill is £2,760.

That's still a saving, but only of £840 a year, and accountants will charge you more than that for running the company and submitting all the required returns.

I love the whining in the comments about it not being fair that landlords don't get full relief for the interest. The UK tax system has always treated interest differently to real business costs and there never was a blanket presumption that it is allowable against tax, it is only allowable where the statute expressly says so.

Saturday, 4 March 2017

Dear Phil....

...if this is your Bright Idea I'd like to point out that for my company to set up an ISA for a client I am supposed to produce at least 110 - yes one hundred and ten - pieces of paper as required by your regulations. Without your regulations I could provide all that the buyer really needs to know on one sheet of A4, double spaced, 10 pt, Verdana.

And I'd also like to point out that the FCA uses its Handbook to specify these regulations, and at the last count there were over one million, yes 1,000,000, paragraphs (and here) in that alone.

And what about the UK tax code?

Look to your own house you wanker.

Friday, 3 March 2017

Shit (not to mention pointless and unworkable) ideas of the week

From The Evening Standard:

The influential Institute For Public Policy Research said Mr Khan and other mayors should be put in charge of chairing health and care management bodies and be given tax-raising powers, as in New York, that could include “sin taxes” on sugar, fats and cigarettes.

Ahem, won't Londoners just do "booze cruises" out to the Home Counties?

From the BBC:

Stamp duty should be a tax on property sellers, rather than buyers, to help those trying to buy their first home, a major UK building society has said.

As OnTheOtherHand said when emailed me the link...

... imagine the simultaneous conversation that couples A, B, and C all bidding for the same house in London have after the law is changed:

"Now that the seller is paying £13,171 stamp duty, let's take that money we deposited with the conveyancing solicitor to pay the duty on our behalf, and bid £13,171 more for the property to beat the other couples..."


From The Guardian:

So when Bill Gates pitched into the debate last week with a proposal that robots should be taxed, just like human workers are, you can imagine the splutters of outrage from the neoliberal fortresses of Silicon Valley.*

“Right now,” he said, “the human worker who does, say, $50,000 worth of work in a factory, that income is taxed and you get income tax, social security tax, all those things. If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level.”

And the money raised should be used to retrain people the robots have replaced, with “communities where this has a particularly big impact” first in line for support. I never thought I’d write this, but here goes: good for you, Mr Gates.


* Wanker. People working for the "neo-liberal fortresses in Silicon Valley" are already paying a super-tax i.e. the very high rents they have to pay to be able to live within commuting distance of a well-paying job.

To be fair, the rest of that article was a bit more nuanced that the knee-jerk Luddite "tax robots" meme that has been doing the rounds recently and which I intended to take the piss out of.

Gates actually said "you'd think we'd tax the robot at a similar level [to the worker]", which is nothing more than saying that corporate profits (from the automation) and wages (from not automating) should be taxed at the same level, rather than taxing wages at double the rate of corporate profits, which is of course a good idea for many other reasons.

No idea what the "retraining" nonsense is all about, pay people welfare while they're unemployed and pray that new businesses grow and develop and take them on is all you can do.

Killer Arguments Against Citizen's Income, Not (8)

From The Independent:

Finland’s basic income experiment is unworkable, uneconomical and ultimately useless. Plus, it will only encourage some people to work less.

That’s not the view of a hard core Thatcherite (1), but of the country’s biggest trade union. The labour group says the results of the two-year pilot program will fail to sway its opposition to a welfare-policy idea that’s gaining traction among those looking for an alternative in the post-industrial age...

The traditional paladin of workers’ rights would rather tweak the existing system. It has the backing of the country’s biggest opposition party, the Social Democrats, whose Kalevi Sorsa foundation concluded in a 2012 paper that UBI may simply be a means of scrapping minimum wage requirements.(2)

SAK rejects [UBI proponent] Standing’s accusations that the union’s real motive for opposing UBI is fear of a drop in membership or a collapse of its insurance funds. (3) A 2014 report by the German Institute for Economic Research suggested that trade union hostility “may be a result of the threat of losing bargaining power.”


1) Unfair to drag Thatcher into this. According to Christopher Monckton, she was not entirely opposed to the idea (but as per usual never got round to implementing it).

"Thatcherites" as a stereotype oppose all social security systems.

2) Whether we have minimum wage legislation or not is an entirely separate topic to whether we have a welfare system or not and if so, whether a Citizen's Income is the least distortionary and hence 'cheapest' kind of welfare system for a given level of financial support.

3) Standing's probably put his finger on the real reason why so many Trade Unions oppose it; but by their logic, they should be opposing all kinds of taxpayer-funded welfare system which allow the unemployed to survive.

A genuine invitation to take part in the fake news...

This turned up on my Facebook feed for a dance class I attend.  I've blanked a few things out to protect the innocent.  Does 'recreating' a dance class count as 'fake news'?  Should I attend?


Thursday, 2 March 2017

You'd really think he'd know better

On the Lifetime ISA:

“This is not necessarily a bad thing: people need to buy houses, and houses can be a valuable investment,” says Nick Hungerford, chief executive of Nutmeg.

From here.

LISA another excellent potential boost to land prices. MIRAS with real money from the taxpayer.

Daily Mail on top form

'Get away from me, somebody call the police': Extraordinary moment £1m homeowner jabs her walking stick and rants at her neighbours in culmination of 10-year feud that ended in court

City AM jumps the shark, again.

The Chief Executive of the British Retail Consortium in City AM:

Retailers pay a quarter of all business rates and it is the single largest tax paid by the industry.

My comment, let's see if they publish it...

You really are ramping up the propaganda. Quite clearly it isn't. Retailers pay £7 billion business rates (quasi rent) and over £40 billion in VAT, with tens of billions in PAYE/NIC (not sure how much).

So in truth, business rates is the fourth largest tax paid by retailers, and the economic incidence is of course not on the business itself but on the owner of the building - tenants are shielded from business rates in the long run because every £1 rates pushes down rents by £1.

Funny how you don't complain about rent being a "disincentive to investment" and all that nonsense.

Wednesday, 1 March 2017

A Right Royal Conspiracy

It is strange that this story here should come up. I have heard about the case and the role of the security services in the Tomlinson union scandal. I was discussing with a friend a couple of days ago, how I assumed that all the extreme right parties: National Front, BNP etc, were actually staffed by MI5 and MI6 agents at the groups' highest level.

I guess if you walked into the room with Nick Griffin and co in the late 70s and 80s, and you did not work for the secret services, then as per Warren Buffet quote: you knew you were the patsy!

I think, in contrast, left wing groups and animal rights groups, etc, were crippled by 'division sowing', Monty Python, 'splitter teams' at the mid and low levels.

As for the journalists here, 50% of them, on a cash in hand basis (another 25% don't know where the money comes from). At the Guardian, BBC and ITV proper salaries on the MI5/6 books paid out by the embassies around the world. Nevertheless, what really surprised me was not Richard not-so-white-now, but the bit about Jill Dando in the comments under the article. I really never knew!

* As soon as I typed 'MI5' this programme started to slow down a great deal, and I have had several problems with the function keys. I am going to stop now, as there appears to be someone knocking at the d....

Rumours that Jill Dando was recruited by MI6

Economic Myths: "Party-loving couple build their OWN ultra-modern home for just £100,000"

From The Daily Mail:

* Derek Wright and Christine Burford wanted to retire in Kent from Huddersfield
* They could not afford the house prices so bought a plot of land for £160,000
* Mr Wright, 71, then set to work building a three-bed home, despite no experience
* Couple are now living in a modern, personalised home which cost £108,000

... despite a series of hiccups along the way, the couple ended up with a personalised, ultra-modern home, which they say would have cost them £200,000 more if bought ready-built from an estate agent.


Fuck off, it did NOT cost £108,000, it cost £268,000. Can these people not add up?

If a ready made home would have cost £308,000 then their £40,000 saving is basically their wages/profit for the effort they put in building it and the risk they took with their own cash. In the light of events, that's not much of a reward. And they saved a fair bit of SDLT, I suppose.

Land prices, truly the elephant in the room, people just refuse to mention the topic to the extent of pretending it doesn't exist.

Economic Myths: "Pumpkin artwork valued up to £600,000 smashed by selfie-taker"

From the BBC:

A visitor to the Infinity Mirrors art exhibition in Washington DC has lost his footing, reportedly whilst* taking a selfie, and fallen into one of Yayoi Kusama's signature polka-dot pumpkins...

A similar sculpture sold for almost $784,485 (£635,000) in 2015 according to Artnet.


Seeing as the sculptor is still alive (although getting on a bit), the "value" of the pumpkin depends entirely on the lower of a) how much the owner is prepared to pay for a replacement and b) what she will charge to sprinkle some holy water over a new one and certify it as an original.

What an earlier pumpkin sold for is neither here nor there.

If the owner of the collection of dozens of similar pumpkins decides that it makes no odds whether one is missing, then it's not worth that much; if the set has to consist of some magic number of pumpkins to be considered complete, the price she can charge for a new one is considerably higher etc.

If the artist is dead and there is no possibility of obtaining a new replacement, then the equation is different of course, that's just down to supply and demand between owners and would-be owners.

* "Whilst" can also mean "although", so the better word to use is "while".

"Shipping slump: Why a vessel worth $60m was sold as scrap"

From the BBC, mainly because of over-supply of ships, but also:

The Panama effect

And there was another reason to buy - and to buy big: the Panama Canal.

Last year it got a serious upgrade. The old locks could take container ships up to only 5,000 TEU (Twenty-Foot Equivalent Unit, roughly one container). These are known as Panamaxes.

But the new locks, with gates weighing 700 tonnes or more, are designed to take so called Neo-Panamaxes. These are giants, equivalent to the width and length of three football pitches laid end to end, and can carry about 13,000 TEU.

So shippers looking to carry cargoes from Asia to the American east coast ports, can now take Neo-Panamaxes through the new canal - and sell off their smaller Panamaxes. That's why Panamaxes like the Hammonia Grenada are going cheap - in fact, they're going nowhere...


Hitherto, from the point of view of Chinese exporting to Europe or the US Eastern Seaboard, they were pretty indifferent between using the Suez Canal (simple, cheap to build and maintain) and the Panama Canal (stupendous and expensive feat of engineering), so the tolls (largely rent to use that location) which either canal could charge was roughly the same.

Assuming people prefer using larger ships, whichever canal allows larger ships is obviously as a huge advantage and can charge extra tolls, but this suggests that Suezmax ships are still slightly larger than Neo-Panamax ships, in which case the Panama Canal has miserably failed to leap-frog the Suez Canal in terms of size, but nice try anyway.