"Natwest Three banker slams 'pernicious' US-UK extradition treaty"

From City AM:

Writing in The Times today, David Bermingham, one of the so-called Natwest Three, attacked the unfairness of the extradition treaty between the UK and the US...

"It is a near statistical certainty that someone extradited to the US will end up guilty, most probably through a plea bargain rather than going to trial, because the criminal justice system in the US is so heavily geared towards this outcome. Extradition becomes, in effect, a summary conviction, without the dull necessity of examining evidence."

Bermingham also pointed to the case of Anne Sacoolas, who the US is refusing to extradite to the UK to face a charge of causing death by dangerous driving. "As the case of Ms Sacoolas shows, the US looks after its own. Maybe, just maybe, the government will finally grow a spine and realise that acting as a poodle is not the mark of a special relationship with America, but simply supine," he said.

Yesterday, former Brexit secretary David Davis writing in the Mail on Sunday said that sending Lynch to the US to face trial would "cripple the City and Britain's ability to determine its own future".

He said: "We are now looking at the bizarre prospect that a UK citizen could be tried and potentially acquitted by an English judge, where the burden of proof against him is lower, but find himself in a US prison facing a charge where the burden is higher, before the UK case has even been decided."

Under the treaty there needs to be probable cause for the US to extradite its citizens to the UK, but just reasonable suspicion for Britain to be forced to extradite its citizens in the other direction.

Amen to all that.

Like most people, I've no particular sympathy for bankers, but they make sound points.

That's completely irrelevant and not even necessarily true...

From the BBC:

Grammar schools are "stuffed full" of middle-class children and do not improve social mobility, the chief inspector of schools in England says.

Sir Michael Wilshaw told the Observer the selective system was not the way to make up ground on other nations. He spoke after plans to expand grammar school provision in Kent were rejected.

The main point of the education system is to educate people. If that leads to "social mobility", that is a bonus and not a feature, but we'll come to that later.

And let's use the analogy of doctors:

1. Doctors are primarily "middle class" (they are surely the definition of middle class, are they not? And they are a self-selecting bunch. Most female doctors are married to other doctors.)

2. The taxpayer (via the government and the NHS) pays for the bulk of medical education and then pays them their salaries afterwards.

3. Although everybody pays to educate middle class doctors (glossing over the fact that high earners pay far more tax than low earners, so high earners pay far more towards doctors' education), this does not, using his logic, lead to more "social mobility".

4. Therefore, justice would be served if we shut down or privatised all our state-run medical schools and also shut down the NHS.

5. Whatever the economic or political merits of this, would that:

a) Improve the standard of doctors in this country and improve the standard of medical care for the common man? Possible but unlikely.

b) Would it improve social mobility?

- The people at the bottom would be worse off because no "free" NHS any more.

- Who would end up going to those now privatised medical schools? Only people with very rich parents, so the band of doctors would become even more self-selecting and self-reinforcing, and then nepotism and cronyism in the healthcare system will get even worse (I'm not saying it doesn't exist already).

- What are the chances of anybody outside the top couple of percent becoming a doctor? Virtually zero. So that would reduce social mobility. It would be the same with state grammar schools: everybody outside the richest seven per cent would be pretty screwed.

Interestingly, David Davis starts off by talking good sense:

Tory MP and former grammar school pupil David Davis told BBC News many working-class children "got on through having access to grammar schools".

He said: "The reason grammar schools are dominated by the middle classes now is because we've shrunk the size of the sector."

And then ruins it all:

He added that "working-class kids" could not get in "because they've been elbowed out by ambitious middle class parents".

Hang about here.

It's every parent's right to do what they think is best for their kids, which does involve a lot of extra-tuition, attending church, making 'donations' to the school's PTA, sending them to a private primary school etc, and so on to get their kids into the best school (be that private or state) they can.

Does that give kids of pushy parents an advantage: yes. Is this an unfair advantage? I don't see how it is, that's like complaining that Eddie Van Halen has an unfair advantage over other guitarists because he's practised so much.

Are they deliberately "elbowing out… working-class kids"? Are they heck, these people couldn't care less whom they elbow out, by definition, every kid that gets in has elbowed somebody else out. They'd sell their grandmothers to get their child into a state grammar school.

Having made the good point that non-middle class kids would get a better shot if there were more grammar schools, Davis misses the obvious follow-up point: what if all kids had to sit the entrance exam, like the good old-fashioned 11-plus.

Those kids who aren't interested are free to flunk the exam if they wish, but that is surely a fairer and better system than one in which only a few parents (the pushiest ones) even bother entering their kids for the entrance exam.

Here endeth.

David Davis: obviously not a quantity surveyor

DD sets a new record for cramming Home-Owner-Ist lies into one paragraph:

It is said the Lib Dems (1) want a "mansion tax" instead [of the 50p tax rate]. Since cutting the top rate will generate revenue, (2) this is a political (3) and not an economic demand (4). It is a tax (5) on bricks and mortar (6) not on wealth, and as such makes about as much sense as a window tax.(7) It would probably hit elderly widows (8) harder than billionaire banker. If was precisely to avoid penalising people who are cash-poor (9) but for reasons of history, family or sentiment (10) still live in large houses that the whole council tax system was designed. (11)

1) It is not "said that", they quite clearly want it.

2) Not proven and irrelevant. The best guess is that it is revenue neutral, i.e. makes some people poorer without making other people richer. We can oppose the 50p rate in principle whether or not it is a net revenue raiser (the top of the Laffer Curve is not where we want to be).

3) Particularly ironic, given his later sentences, see 11).

4) There is every economic argument for taxes on the rental value of land, at which the Mansion Tax is a crude attempt, instead of taxes on income, profits or output. The only counter arguments are political.

5) The Mansion Tax is not a tax, it is a user charge on the community-generated rental value of land, continues in footnote*.

6) Woah! For £2 million, you could build a twelve-bedroom mansion with more ensuite bathrooms that you can count, with underground parking for six Porsches and a home cinema. That's not what we are talking about here. Ninety-nine per cent of homes worth £2m or more are worth that much because of the location value alone.

The fact that the Mansion Tax would not apply to physical houses in some locations but would apply to physically similar houses in other locations is the clue here - it's not a tax on the "bricks and mortar" it's a tax on the location (or the amount of the location they are consuming).

7) A Window Tax is a tax on improvements, it's vaguely land-related but (proveably) a bad tax for all that. Stamp Duty Land Tax is also vaguely land related but that's a bad tax because it discourages efficient use of land; it achieves the same as the Window Tax and the opposite of a Mansion Tax. but DD goes on to say that "we should close the offshore company house-purchase loophole", so he's the Window Tax supporter here.

8) Poor Widow Bogey. Just exempt them and make everybody else pay a bit more, see if I care. By his own admission, the "billionaire banker" can easily afford it (very few bankers are billionaires, there are only a few dozen billionaires in the whole world). Of course, the Poor Widow Bogey illustrate again that a Mansion Tax is not a tax on real wealth, as the truly wealthy can easily afford it.

9) Another Poor Widow Bogey.

10) Aha, that's priceless logic. The more that people want something, the less they should have to pay for it? Isn't one of the basic rules of free markets that people are prepared to pay more for things which are of value to them; and isn't there a behavioural rule that people value things more if they have to pay for them? A childless Poor Widow could be exempted anyway (her estate reverts to The Crown) and if she has, er, family, couldn't they step up the oche? Or is the idea that 'everybody else' chips in a bit more tax to keep these "families" in the style to which they have become accustomed?

11) That's historically a huge great lie, they introduced Council Tax in a hurry because their Poll Tax backfired on them so spectacularly; what he should have said is that they got rid of Domestic Rate to pander to the Home-Owner-Ists.

But isn't this waffling completely at odds with his principles at 3) and 4) that taxes should be based on economic not political logic? What on earth do "history, family or sentiment" have to do with a small-government, free-market, liberal economy? If people are willing to spend their own money on keeping their Poor Widowed Mother in a house that's far too big for her, then fine, each to his own, but don't go round spending other people's money on it.

* And it's not a tax (or a user charge) on private wealth either, as the rental value of land can never represent net private wealth, it only represents real wealth at national level. For example, a good local rail service boosts output, hooray, that's additional national wealth, and those people who can earn more by using the railway earn or create more private wealth. But the money that is transferred from those extra earnings to landlords (or vendors, or mortgage banks, same thing) is not net private wealth as the income and expense net off. It is merely a forced transfer payment, like taxpayer funded welfare and pensions, and I doubt that anybody would count pensions liabilities as wealth.

"If I were the defence minister, I wouldn't pay a penny"

Thin ends, wedges.

From The Daily Mail:

Motorists could face prosecution for smoking while their children are in the car, under new proposals.

The move, outlined in the Welsh Assembly, could see Wales becoming the first country in Europe to impose the ban. It would mean drivers who light up at the wheel in England would be breaking the law if they continue as they cross the border...

Tory MP David Davies*, whose constituency in Monmouth sits on the border, also hit out at the move: "I don't condone smoking and everyone knows it is bad for health and can kill people. But this move by the Welsh Government is reaching the stage where smokers are being victimised and that can't be right."

* Not to be confused with David Davis, which has led to all manner of hilarity!

David Davis: superficial, devious, or congenitally stupid?

DD wrote a column for the FT today, headed It is time for debate on how to cut public spending, it kicks off with some vaguely sensible ideas, although rather than calling for a mass cull of the quangocracy, he waffles on about "pay and recruitment freezes for the entire public sector", but it gets interesting here:

But the big numbers are in the departments, particularly the burgeoning welfare budget, currently heading towards £180bn within two years. Much of this is a direct consequence of Gordon Brown’s badly designed, fraud- and error-prone tax credit system...

£180 billion looks about right, but Tax Credits (as evil as they are) only 'cost' £20 billion in 2007-08 (page 8). Let's first remind ourselves why tax credits are so prone to fraud and error and why are they so damaging - it's because they are 'targetted' (i.e. at lone mothers) and because of the savage withdrawal rate (39p for every £1 of gross income, giving a total tax/benefit withdrawal rate for most claimants of 70p in the £1). So far so bad.

"... he has created a system of benefits that amount to welfare for the well-off. But to provide welfare for the wealthy, the poor will pay. So we should target child benefit solely on the least well off, and replace winter fuel payments and other gimmicks with targeted help for poor pensioners."

Ah right. He slags off tax credits (quite rightly, although he appears to have no grasp of the 'cost') and in the next breath suggests that we make Child Benefit targetted and means-tested, a bit like, er, Tax Credits. And as we know, means-testing has much the same effect as income tax - it reduces work incentives. Let's say that Child Benefits are withdrawn for households earning over £20,000 and is tapered to nil once you reach £50,000, that's equivalent to increasing income tax on most earners with children by about 5% (assuming they've got two kids). Even stupider than that is that Child Benefit (being the best type of benefit we have - universal, non-means tested and non-taxable) only 'costs' £10 billion a year anyway, and fraud and error (because of its simplicity) is barely measurable.

The same logic applies to even more means-testing of benefits for pensioners (I agree that they are gimmicky - all the more reason to roll them into a flat rate Citizen's Pension and have done with it).

Y'see, if DD really wanted to do something about "welfare for the wealthy [for which] the poor will pay" but without further means testing and without increasing income tax rates, then maybe he'd suggest reducing the cap for tax-relievable pension contributions from the ridiculous £235,000 per annum to something sensible like £10,000 a year, and use the saving to cut income tax rates or increase the personal allowance. Or maybe he'd suggest reducing council tax on Band A homes and adding a few new bands at the top end, all the way to Z as far as I am concerned.

And if DD really wanted to shave £9 or £10 billion pounds off the welfare budget, how about replacing it with a Citizens Income style scheme, which would reduce fraud, error and administration costs by £9 or £10 billion, while leaving very few worse off* and reducing everybody's marginal tax/withdrawal rate to the basic rate of tax plus NIC?

But he doesn't want to do either of course, this is just Indian Bicycle Marketing.

What's really worrying is that he clearly has no idea about my specialist topic - tax and welfare reform - so what are the chances that he knows anything about the other topics he covers?

* The only group that would really lose out would be unemployed single mothers, but that's a bonus AFAICS.

The real reason why David Davis resigned

There has been a lot of speculation on this topic. All sorts of ulterior motives have been imputed, and all sorts of guesses made.

If you watch the interview that was on the Andrew Marr show this morning (transcript here), it must be quite clear, David David does not really exactly know himself why he did it. He just did!

Let us not forget, that DD has long spoken out in favour of downright sensible things, see for example an article he had published in the Yorkshire Post just a week before his resignation.

And what is Plan DD?
- allow use of phone tap evidence in terrorism trials;
- allow the police to question terrorist suspects after they have been charged with an offence;
- take a zero-tolerance approach to those who foment hatred and violence against Britain;
- implement proper visa controls to prevent anyone entering this country to incite violence in the first place.
Hardly radical, is it? Not headline-grabbing, but sort-of-sensible. Shouldn't we just try Plan DD first and see what happens?

Heaven knows what it was that finally made him snap, but something did, and maybe he'll never know himself, even if he still doing the rounds and being asked the same daft question in ten or twenty years' time. But I am quite sure, that in some small way, he has made the world a slightly better place*.
-----------------------------------
* Of course he has made the world a slightly more awkward place for UKIP. Rather embarrassingly, our sole MP voted in favour 42 day detention, in direct conflict with para 7.9 of our law'n'order manifesto: UKIP would abolish Control Orders, as we regard detention without trial as an improper state of affairs. UKIP would also allow the use of phone tap evidence in terrorist cases unless the security forces or police have overriding objections.

Which is pretty close to Plan DD anyway. 

Now, read on in the Andrew Marr transcript; DD talks about "the sort of snooping on our people, even by local governments, a thousand surveillance operations by, not by MI5, but by local government. Snooping on people's bins, snooping on their, the way they take their kids to school. All those issues have led to a sort of corrosion of freedom in this country. "

Right. let's talk bins. This whole bin-snooping all goes back to the EU with their lunatic recycling and anti-landfill targets. UKIP could, if they had the nerve, outflank him on that.

Let's talk schools. For sure, some people bend the truth about where they live in order to get their kids into a good State school. If we had education vouchers (see UKIP's education manifesto, top of page 7) - which would allow more parents to get their kids into a good school, whether State or private - there'd be no need to snoop on the route they take...

"David Davis resigns from Commons"

David Davis, you rock!

''Too few armed police, say Tories''

I don't understand what point they are trying to make.

Yes, there would be less violent crime if there were more police officers on the streets, higher detection rates and much longer sentences for violent offenders. Oh yes, and if drugs were made legally available, suitably taxed and regulated, of course.

But why would the simple fact that more police officers are armed make the slightest difference to a criminal who is prepared to use a gun (or any other weapon, for that matter)? If there are no police officers in the area at the time, then criminals are not deterred from committing crimes, whether they involve weapons or not.