Outbreaks of common sense in right leaning think tanks!

Exhibit One: Philip Booth (of the Institute for Economic Affairs) in today's City AM:

Cafod argues that we should remove our trade barriers without expecting anything in return from other countries. There is much to be said for this. Our trade barriers hurt British consumers and poor-country exporters and, ultimately, harm UK industries with an export focus. For example, we still have very high tariff barriers of up to 30 per cent on processed foods such as coffee and chocolate. We should just remove them...

Trade deals have become extraordinarily complex because most trade barriers relate to regulation. When it comes to agriculture, for example, regulation of GM foods is used to keep imports out. In financial services, we make enormous efforts to make already complex national regulatory systems internationally compatible. This all requires a great deal of commercial expertise. The result can be a marathon process and trade deals that create regulatory regimes that benefit incumbents and large firms.

Outside the EU, the UK government can be more relaxed about not using trade deals to harmonise regulation except, perhaps, in extreme cases of health and safety. Products and services that abide by UK regulations can be clearly labelled as such and consumers can then make their own choices.

We cannot go on negotiating trade deals that resemble the Encyclopaedia Britannica. Such deals should go the same way as the hard copy of that great set of books. We should give an intellectual and political lead so that countries such as India and most African nations might follow. Such a policy would enrich consumers and disempower elites.

He doesn't specifically say "Sod this, let's have unilateral free trade" but I think we can assume that's what he meant.

Which is what I and others have been saying here, free trade agreements (which sometimes take ages to sort out) are themselves a hindrance to free trade, not least because a free trade agreement with any one particular country automatically means less favourable terms for other countries. Far better to start with unilateral free trade as a general assumption and - if needs be - impose embargoes now and then.
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Exhibit Two: David Bentley (of Civitas) in The Times (via MBK):

[The government's] goal is to increase the amount of land brought forward for development and the speed at which it is built on. There are various proposals for achieving these objectives and one fundamental obstacle to both: the right of landowners to hold back potential sites and squeeze as much profit from them as they can.

Securing planning permission for homes on greenfield sites usually results in an enormous windfall for the landowner. These are often life-changing sums for a farmer, say, who happens to occupy the land that is needed for new homes due to the expansion of the local town or city.

The average hectare of agricultural land in England is worth about £21,000; with permission to build homes on it that rises to about £2 million (excluding London, where values are very much higher still). If the owner does not think they are getting a good enough price, they can sit tight and wait while the market rises, as it usually does, or someone comes along with a better offer.

But the right to extract every last penny from sites like this — enshrined in the 1961 Land Compensation Act — is to the cost of the rest of the community. The more the developer pays for the site, the less money there will be for infrastructure or social housing, and the more the new homes will have to fetch to turn a profit...

Underlying the housing crisis is the issue Mark Twain was addressing: that land is inherently scarce and inflates in value as the population grows and more people come to draw on it. The question is, who should benefit from this progress?

He's falling for the "increasing supply will push down prices" myth but at least he's grasped some of the basics. I don't like his suggested solution to this either, as Richie in the commenters says: "Three words, 'land value tax'.", but hey, it's a start.

Price and non-price rationing

Civitas, a reliably dusty old right-wing authoritarian think-tank have, somewhat to my surprise, published this:

Overseas investment in London homes must be curbed to help reduce rampant house price inflation and ease the housing shortage, a new Civitas report says.

The UK property market is being used as an investment vehicle by the global super-rich while hundreds of thousands of younger residents are being priced out of the market and rents are eating into more and more of people's salaries.

A Civitas paper published today calls for new restrictions on overseas buyers seeking to use London's limited housing stock purely for investment purposes.

The think tank says that non-residents of the UK should only be allowed to purchase a property here if that investment will add to the number of homes.

The idea reflects the system in place in Australia, where all non-residents wishing to purchase property must apply to that country's Foreign Investment Review Board (FIRB).

While I agree with the general sentiment, this sort of non-price rationing never works of course.

People always find ways round it - as a matter of fact, "the global super-rich" have been primarily buying new-build homes - as the full report says* (and leaving them standing empty). And how on earth would you prove that somebody bought something "purely for investment purposes"? How many days a year would somebody have to live in a home to get round the rules?

And isn't the whole basis for Home-Owner-Ism that people buy housing, whether to live in or rent out, for "investment purposes"? How come that's a bad thing all of a sudden?

Price rationing would work far better - can anybody think of a way of getting those of "the global super-rich" who own land and buildings in London to compensate "hundreds of thousands of younger residents" via the tax system?

And if we agree with the general principle, why shouldn't the same apply to wealthy Londoners snapping up second homes and holiday homes in the South West or on the South Coast?

* "The new-build market in central London is dominated by interest from overseas, meaning that even relatively well-paid young people wanting to buy their own home now struggle to do so...

There are even warnings that, as well as driving up prices for domestic buyers, the nature of investments from overseas is distorting house-building priorities, with developers disproportionately attracted to high-value developments while ignoring the undersupply at lower levels of the market...

Unfortunately, not only is the government’s default setting to quietly encourage house price growth, it is also to do nothing that would impede overseas investment – without regard to whether it is having a deleterious effect."

Chris Grayling to offer Chris Huhne a "rehabilitatory" post at the MoJ?

In a major speech to the Civitas think tank, Mr Grayling urged companies and the public sector - including the NHS - to hire convicted criminals.

And, asked by a charity for ex-offenders if he would consider taking on one in the Ministry of Justice he agreed it was right to ‘lead from the front’.

Mr Grayling said: "I'm very up for the idea of looking to see where we can find more educational or work opportunities for former offenders and of course we should lead from the front with that."

Police numbers versus recorded crime in Europe

Civitas have done a nice X-Y scatter graph in this article, which shows a definite correlation. Where it falls down is that not all crime is recorded; some things count as a crime in one country but not in another etc, and what exactly is a 'police officer'? Does it include PCSOs, traffic wardens, HM Customs & Excise people? Do they adjust for the fact that some police officers are out on the beat and some are stuck behind desks?

Either way, Excel tells me that the correlation is -0.52, and broadly speaking, for every additional police officer there are 20 fewer recorded crimes.

Which makes the maths nice and simple:

IF the cost of each crime is greater than (say) £2,500 (including emotional wear and tear as well as actual financial loss)
AND it costs less than (say) £50,000 to employ a police officer (including training, car, back up staff, pension and all the trimmings)
THEN employing additional police officers is a very good deal,
ELSE not.

Similarly, the total cost of running the UK's prisons is less than £4 billion a year, allegedly, i.e. it costs every citizen £65 a year, which seems like stupendously good value to me.

Twats of the day (6)

At the bottom of the same article covered in my previous rant we find this:

Mr Purnell said: ... "There's a danger of saying, as David Cameron did in the Sunday papers, that all five million people on benefit are potential Karen Matthews. I think that's offensive to people looking for work."

He said the Government was spending an extra £1 billion over the next two years on more Jobcentre advisers and other help. Mr Purnell said that the lone parent changes were aimed at giving young people more "aspiration". But he admitted that "if there isn't childcare, that would be a good reason for not going to work". Today's White Paper features moves to increase sanctions on those who avoid work, with a range of penalties from losing one week's £60 jobseeker's allowance to being forced to work for the benefit.

However, Right-wing think tank Civitas hit out at the proposals for being "too soft". It claimed that allowing single parents to simply "monkey about with their CV" was a "waste of time".

As ever, clowns to the Left of me, jokers to the Right.

1. I've bolded the important bit; "an extra £1 billion over the next two years on more Jobcentre advisers and other help". I make that about 20,000 extra tied Nulab voters come the next election (20,000 x typical salary £25,000 x 2 = £1 billion).

2. As to 'childcare', it's not my decision if single women choose to have children. They ought to think about 'childcare' before they have 'em. Yes, I am perfectly happy to scrap Child Tax Credits (which are a straight bung for single parents actually) and roll them into a higher Child Benefit of (say) £30 a week (or whatever is fiscally neutral), but of course I'd restrict it to the first three children per mother to prevent baby-farming à la Karen Matthews).

3. The real point is that welfare claimants have no strong motivation to find a job because they lose more in benefits than they can earn in net wages. Until the Powers That Be grasp this simple fact, all this tinkering achieves nothing.

4. Civitas make superficially fair points actually, but I've read plenty of their pamplets and while they are good at diagnosing the reason why the welfare system is so corrosive (the perverse incentives and poverty trap), to my knowledge they haven't twigged that the key to all this is simply reducing the savage withdrawal rates. Such a measure would probably more than pay for itself (total withdrawal rates of seventy per cent-plus are quite clearly on the downward slope of the Laffer Curve).