Nobody move or the cancer patients get it!

From the front page of today's Evening Standard:

Theresa May today faced a Tory rebellion and a stark warning that “thousands” of cancer patients face delays to their treatment as a direct result of Britain’s decision to quit the European nuclear body Euratom.

The agency, which governs the movement of radioactive material around Europe, is not formally part of the EU but is under the jurisdiction of the European Court of Justice — leading to the Government’s decision to pull out as part of the Brexit process.

Nobody move or the commuters get it!

From The Evening Standard:

Rail commuters face 'Brexit fare hike' of nearly four percent

Regulated fares, which include season and other commuter tickets, are set to go up next January in line with the rate of RPI inflation this month.

Economists are predicting RPI will be between 3.6 per cent and 3.9 per cent in July...

The spike in inflation that will trigger next year’s rise has been largely blamed on the fall in Sterling’s value after last June’s referendum on quitting the EU.

"Labour tax to hammer workers on £80,000"

... wails The Telegraph, despite not knowing how much tax Labour would make them pay if they get elected, which they won't.

Funny, The Telegraph's response was much more muted when Georgon Osbrown "hammered" families with children where one parent happens to earn a rather more modest £50,000 or more a year.

Pots, kettles. They are as bad as each other.

The revolving door

From House of Commons Committee of Public Accounts, Tax avoidance: the role of large accountancy firms, 2013 (page 14)

HM Treasury’s Office of Tax Simplification was established to provide the government with independent advice on how to simplify the UK tax system.

Deloitte and PwC told us that they have seconded staff to work at the Office of Tax Simplification.

From The Daily Mirror:

George Osborne will have trousered more than £1million from part-time jobs before stepping down as an MP, it emerged today.

The ex-Chancellor's earnings from speeches alone are due to total £1.14million in the 10 months between being sacked by Theresa May and leaving Parliament...

And £65,901 is expected from seven hours' work speaking to accounting firm PriceWaterhouseCoopers in Dublin.

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.

Compare and contrast

Emailed in by MBK, a good article in The Spectator about the differences of language used to describe the battles in Aleppo and in Mosul. In Aleppo, the occupiers are rebels being besieged by a dictatorial regime; in Mosul, the occupiers are Islamic terrorists and the town is being liberated by government forces. In fact, the occupiers are in both cases exactly the same kind of IS/Al Qaeda nutcases, and so on.
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The stories about George Osborne now being paid out for all the support he gave the banking sector remind me of Tony Blair who did the same thing.

JP Morgan paid him £2 million for services rendered while Prime Minister but apparently he has collected £60 million in total, presumably for services rendered to the armaments industry, Halliburton and the like.

The missing bit is Gordon Brown, who was responsible for the massive bank bail outs. Osborne was only throwing small change at them after that. Does anybody know why the banks aren't now 'hiring him as a consultant' or paying him for 'after dinner speeches'? Or are they, and we just don't know about it?

I can't stand Brown any more than I can stand Blair or Osborne, i.e. not at all, but judged by the standards of the kleptocracy, it still seems a bit incongruous and hence a tad unfair on the Broonster. Or does he have principles?

George Osborne scales new heights of hypocrisy

From the BBC:

George Osborne echoed this message in his Peston on Sunday interview on ITV, saying:

"There is no turning back. It is a one-way door to a much more uncertain world, where people's jobs and livelihoods are at risk.

"British people can't take their money out of Britain. Brexit may be for the very rich but it is not for the working people of this country who will be paying the price for many years to come."

George's Help to Buy is also for the very rich and is not for the working people of this country who will be paying the price of it for many years to come etc. So what's the difference?

I am sorry, but there's no polite way to put this, but...

...they are lying again. Headline and Article.

Heir to Blair indeed.

I do not have time to fisk the whole nonsense, so let's consider what would happen to the GBP if (when?) we exit.  We should note that Cameron/Osborne comments are pure speculation.  The numbers they cite are just fiction. (In lots of ways this sort of lunatic economic soothsaying is what has got us into this mess in the first place.)

Initially there will be uncertainty in the currency markets. (Personally I think that a lot of that is already in the price.).  The markets will then take time to work out what is going on.  I don't think that that will take long - financial markets being among the most efficient markets. The markets will quickly  realise that we are off the hook for all our contingent liabilities to the EU.  These are both massive and we have the true quantum deliberately hidden from us.  They will also realise that the government's finances have been materially improved by about £9 Bn per annum.  (I concede that there is a lot of uncertainty as to just how much the EU costs us).  This will mean that we can repay our international debts quicker.  Although it will take longer (the quangoistas will fight like Hell to hang onto their power and fat entitlements - I fully expect them to argue that 'now we have left the EU we need more regulation') the deadweight costs of EU created regulatory burden will be removed from the 55% of our international trade that does not go to the EU and all of it from the 90% of our GDP which is internal.  Production costs in the UK will fall. (If the Government had any clue what is was doing it could immediately cut taxes on production and hence create a low tax economy which in turn would immediately cancel out the  4% to 5% external tariff on exports to the EU. Next and crucially we will be able to return to proper supervision of our banks. (As you know I hold that Bank of England is largely incompetent at this and the FCA / PRA totally useless), but we could start to address the structure of bank capital outside the constraints of the EU's agenda that is to keep itself and the Euro in being come what may, mostly by printing money. The City would profit from this.  I also fully expect us to quickly become the largest offshore financial centre on the planet. (As part of this I also fully expect London land prices to carry on rising - but 'we' know how to address this, don't 'we')

Overall I expect GBP to rise in relative price.

Which is good because we'll be able to buy Mercedes cheaper.  Question,  What will Mercedes do with all those lovely GBP's?  Where can they spend them?

Cameron / Osborne whole scare mongering meme is based entirely on ill thought out speculation and deceit.

Wow! That Sounds Great to Me! Where Do I sign?

Making homes more affordable.  Another excellent reason to quit the EU.

Georgon Osbrown on top form

Emailed in by MBK from The Telegraph:

"We're doing the work on it now but the emerging Treasury analysis backs up what you are hearing from major banks like Virgin Money that the value of people's homes will be affected and people trying to get on the housing market would be hit because mortgage costs would go up."

Exactly not.

Future purchasers would be unaffected because the hypothetical house price fall and hypothetical interest rate rise would cancel each other out.

Can you spare 15 minutes to wreck the economy some more?

Do you have some spare time and money to campaign against taxes on landlords? They're not taking these attacks on their way of life laying down.

In the more recent comments, NW Landlord reveals:

One of my business partners has there own manager within the council personally handling all of the claims and issues with payments because they are that worried that if he decides not to benefits they will have literally hundreds of families looking to be housed and with this universal credit it’s going that way let alone clause 21. where are all these families going to live if we can’t meet our tax bills and government pulls the plug?

Gareth Wilson spots an opportunity:

Perhaps your friend or even his manager could be convinced to write to the Mail as well or any number of the other members of public office we have been trying to awaken. Should our arguments be voiced by an individual within a council, they could carry more weight.

Manchester Landlord has a cunning plan:

In a few years Conservative party members will have the opportunity to vote for the next conservative leader in the run up to the election. As a collective of tens of thousands of landlords we could threaten to become members and vote for his opposition. Call it bribery or blackmail or whatever you like, but this will make him listen very carefully.

But Darren Bell would favour a more direct approach

A landlord strike would have a powerful effect. Put a load of tenants on notice and whilst the local authorities are trying to deal with the problem throw the ball back into Gorden Osbourne’s court. Result, new tenants on higher rents, GO with his tail between his legs.

Ros likes Manchester landlord's idea best:

I’m loving it! Depends who is standing against him of course – we don’t want to get rid of the Shah only to end up with the Ayatolla – but I agree it is a potentially brilliant idea, ML. And if we all agree on it, we should start publicising the idea asap so that he gets wind of it.

"The charter would legally prevent future governments from…"

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

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

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

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

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

We own land, give us money!

From the BBC:

But Mr Osborne also announced:

* The benefits cap - the total amount a family can claim a year - will be cut to £23,000 in London (the BBC understands the cap will be £20,000 per household outside of London)

Very few households get anywhere near £20,000 or £23,000 in non-housing related benefits, so by an large, this is a cap on Housing Benefit (a good thing, in and of itself). But as most MPs own buy-to-lets and a disproportionate number of those are buy-to-lets in London and many of their tenants receive Housing Benefit, they decided to cut back Housing Benefit a little bit less in London.
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This bit either shows he is either stupid, lying or not prepared to say what he means:

Mr Osborne confirmed he would be seeking to make cuts to tax credits for people on low incomes, which had become a "very expensive" system, costing £30bn.

Very little of that £30 bn is actually Working Tax Credits, which would indeed be unnecessary if they increased the National Insurance threshold and the personal allowance for income tax.

The bulk of the £30 bn is Child Tax Credits, the bulk of which go to non- and very low earners. If he wants to cut Child Tax Credits, why doesn't he just say so? That might or might not be a good idea, but this is the bookend to him removing Child Benefit from households where one parent earns over £50,000. So basically he is now clobbering parents all the way up the income scale.
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Their policies on social housing are all over the place:

Under the planned changes to housing subsidies, local authority and housing association tenants in England who earn more than £30,000 - or £40,000 in London - will have to pay up to the market rent, Mr Osborne will say.

Those are hardly ridiculously high salaries, so what he is saying is "Get a job and we will not just punish you with income tax and NIC, we'll punish you with higher rents as well" thus creating a whole new set of break-even calculations.

And wasn't their recent bright idea to sell off as much social housing as possible? Will the Right to Buy be restricted to people who earn less than £30,000 a year?

If 'no', then middle and higher earners' best strategy is to simply exercise their Right to Buy (which might be the thinking behind this) and makes a mockery of the whole thing - if these people don't deserve a discount to the market rent, why do they deserve a much bigger discount if they buy?

If 'yes', then their best strategy is to work part-time for a year, then exercise Right to Buy and then go back to work full-time.
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But at least it is all for a good cause:

Extra money from those living in local authority properties will go straight to the Exchequer.

The Budget will also confirm the end of inheritance tax on family homes worth up to £1m.

George Osborne talks sense: shock.

From City AM:

BRITAIN’S lenders face having to pay the bank levy forever, as the chancellor yesterday revealed that the crisis-era tax was here to stay...

“I think the bank levy is going to be here to stay. It is perfectly reasonable as a society to ask the banking sector to make a contribution,” the chancellor told MPs on the treasury select committee.

Hooray.

“I was very clear in 2010 when I replaced the bonus tax with the bank levy, that the bank levy was a more effective way of getting the banking sector to make contributions.”

It is and it does.

Osborne hiked the levy for the ninth time in his Budget last week, increasing it to 0.21 per cent of UK banks’ global balance sheets. The initial plan was to set it at just 0.05 per cent of the balance sheet.

Osborne had targeted revenues of £2.5bn from the tax, hiking the rate as banks shrank in order to maintain that level of revenue. But under the latest plan, it will increase to take £3.7bn per year.

That's part of the point; to get banks to "shrink their balance sheets"; in other words to stop making the very low margin but high risk loans to land price speculators. So to keep revenues constant, the headline rate has to increase.

It's still only a paltry 0.21% though, which barely nibbles into banks' overall lending margin of 2% (i.e. mortgage interest average 3%, deposit interest average 1%, or whatever).

Analysts fear that such a large loss from the banking system will have larger ramifications for the wider economy.

"Large loss"? Get a grip. Banks hand out £10 billion a year in bonuses; the financial sector boasts that it pays over £50 billion a year in tax (mainly PAYE plus corporation tax and other bits and pieces). UK gross bank balance sheets are in the many trillions; if you net off inter-bank lending and other pure accounting entries, they are about £1,800 billion. Check: £1,800 billion x 0.21% = £3.8 billion.

“If that £3.7bn was capital that banks levered up into lending, that is easily £75bn of lending that could have been provided to the economy,” said analyst Joseph Dickerson from Jefferies. “I’m not sure it makes a lot of economic sense. It is like a sin tax, like on cigarettes, and governments usually like to have more taxes.”

Nope.

Loans create deposits (especially in a land price fuelled bubble system). The constraint is what people are willing to borrow; once they've 'borrowed' that freshly printed money, it goes straight back into the banking system as a deposit.

The mechanism by which the bank asset tax depresses lending volumes is because the very, very low margin loans are no longer profitable; hence and why the sensible medium term policy would be to hike the bank asset tax to 1% or even 2% of assets (there are plenty of other bad taxes we could get rid of, like Stamp Duty or the 45% income tax rate, just to make it fair all round and fiscally neutral).
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Dinero adds: "Bank capital is paid in capital. Its not derived from lending. See the document. Basel III capital"

1. Where did I say that "bank capital" was derived from lending? I didn't, that is an irrelevance and not central to this debate. I said that "loans create deposits". A well run bank doesn't actually need any share capital (Basel notwithstanding), and strictly speaking, building societies do not have any share capital at all.

2. If bank capital is issued in exchange for cash, then what does that cash represent? Ultimately it represents somebody else's debt. If different people have some spare cash, they can either give it to the bank as a deposit, or give it to the bank in exchange for new shares (or half-way house, give it to the bank for bonds). It's a legal distinction rather than an economic one.
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Dinero again: "and so the statement "If that £3.7bn was capital that banks levered up into lending, that is easily £75bn of lending that could have been provided to the economy," is broadly correct."

No it's broadly complete and utter bollocks, this is special pleading put out by the banksters. The total amount they can lend is restricted only by the amount that people are prepared to borrow. Whatever they lend out comes straight back in again, as deposits, as bonds or as share capital. If they want people to put the money back in as share capital rather than deposits, they will just reduce interest on deposits and increase dividends on shares.

"Capital adequacy requirement is to be 10%
Mortgages have a risk weighting of 1/2
3.7 bn times 10 = 37
37 times 2 = £74 Bn
the £3.7 Billion goes from retained earnings, bank capital and so is no longer available for the capital adequacy criteria."

Read the post! That £3.7 bn is only a very modest increase in their current overall tax bills and only one-third of the bonuses they award themselves.

And finally... lending to land speculators (akak "mortgages") is not lending to "the economy", is it? It's just an increase in debts for some people and deposits for other people.
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Dinero: "" If they want people to put the money back in as share capital rather than deposits, they will just reduce interest on deposits and increase dividends on shares."

That would only work if people were happy to convert their no risk deposit at the bank to an at risk capital at the bank. That would satisfy capital adequacy, but its not very likely to happen."

Again, nope.

Apply common sense or read my earlier post "Economic Myths: Gearing reduces the cost of capital".

The total 'risk' of borrower defaults etc. faced by 'the bank' is the same however it is funded. And that 'risk' is ultimately borne by its funders (be they depositors, bondholders or shareholders).

From a depositor's point of view, the more share capital there is, the safer he is.

But the same applies to shareholders. The more share capital there is, the safer each individual one is.

Imagine a bank that was ONLY funded by share capital. The shares would be very, very safe indeed. Even Northern Rock only managed to lose about 5% of the money it had lent out on reckless mortgages.

Or imagine a bank that was ONLY funded by deposits, i.e. a building society in the good old days. Putting your money in a building society is technically slightly riskier than in a bank, but the difference is negligible and nobody ever gave it a second thought.

(The £85,000 deposit guarantee clouds this picture, but then the government always does.)
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Dinero: "People would not want to convert their deposits to share capital..."

Yes they would, I just explained that. If a mortgage bank were 100% funded by share capital, then its shares would trade at close to par and be easily buy-able and sellable; banks would redeem them when they had spare cash, pay very modest dividends that are only slightly more than normal deposit interest, and worst case in really bad years, you'd not get any dividends. They would be so close to being 'cash' as makes no difference.

"... and so that is not a route by which the retained earnings that are transferr5ed to the HM Treasury's custody by the levy could be replaced. So the amount of assets allowed to be held in line the capital adequacy regulation is reduced by the bank levy. "

A tax is a tax is a tax. Banks already claim that they pay £50 billion a year in tax, what's another £3.7bn?

That tax can be paid out of retained profits (i.e. share capital); or it can be paid by reducing deposit interest, or the banks could reduce bankers' bonuses by one-third. Or downsize their palatial head offices a bit etc etc etc.

The quoted bankster is talking shit, you can bend and twist it any way you like. If you follow that fucker's logic, banks should not pay any tax at all.

Budget fun

The most stomach churning part of yesterday's Budget speech was the Indian Bicycle Marketing at the beginning, suggesting that Labour was the party of high spending and deficits.

The official version reports it thusly:

We’ll also redeem the last remaining undated British Government bonds in circulation. We’ll have paid off the debts incurred in the South Sea Bubble, the First World War, the debt issued by Henry Pelham, George Goschen and William Gladstone.

Osborne actually added a reckless ad lib at this stage, from The Telegraph's live reporting:

"We will pay off debts occurred in the South Sea Bubble, the Second World War, those incurred by Pelham, Gladstone. Those raised by Gordon Brown will take a little longer to pay off."

Which, as Matthew Holehouse points out, is bold, given this government has racked up more [National Debt] than Gordon.

This paints Labour into a nice corner; they can't pillory the Tories for overspending because that's supposed to be their policy.

Those who have absolutely no policies on such lofty matters are free of the constraints of IBM and can get a bit closer to the truth:

"Ukip leader Nigel Farage branded Mr Osborne's statement the "long-grass economic plan", saying: "This Government has evidently failed in its promise to the British people to eradicate the deficit and whilst it took Labour 13 years to double the debt this Government has done it in five."

There are different ways of looking at this, handy charts and tables at Economics Help.
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The only bit of good news in the Budget was that Osborne has cranked up the Bank Asset Tax a bit, even though he's doing it wrong:

“This is a three-fold increase in the bank levy in just four years and once again is anti-competitive for our own UK banks. It will hit UK headquartered banks hardest as it’s a tax on their entire global balance sheets, whereas foreign banks in the UK are only taxed on their UK liabilities,” said EY’s Anna Anthony.

“The constant tinkering with the tax regime for banks in the UK is unhelpful, and in the long-term unsustainable – the industry will definitely be looking for a commitment to a more certain tax environment in the future.”

The Bank Asset Tax is a splendid tax and does not make banks 'uncompetitive' as banks are the very essence of a cartel; but ideally it would only be applied to domestic bank assets or liabilities. Then every country can choose its own rate independently.

That was then, this is now.

BBC, December 2013:

The Scotch Whisky Association (SWA) has urged the UK government to abolish the automatic annual increase in duty on wines and spirits.

The industry body is fronting a campaign to encourage consumers to raise the issue with their MPs. It said the alcohol duty escalator was damaging the domestic market and punishing consumers when household budgets are tight.

The Treasury said 90% of Scotch whisky was exported and unaffected by UK duty.

Quite correct.

Although UK alcohol duty (and especially spirits duty) is far too high (with VAT on top, of course), it only affects domestic demand as it is not levied on exports; output is fairly fixed in the short term, so all things being equal, higher domestic duty is 'good' for exports. The same logic applies as it does to domestic duty on imports, which is 'bad' for imports.

That economics Wunderkind Osborne has now finally decided to firmly grasp the wrong end of the stick and came up with shit like this in his Budget speech today:

Mr Deputy Speaker, we want to help families with simpler taxes – and with lower taxes too...

And to back one of the UK’s biggest exports, the duty on Scotch whisky and other spirits will be cut by 2% as well.

Quite clearly, all things being equal, this will reduce exports of whisky.

George Osborne: Knows sweet FA about how prices are set

From The Daily Mail:

The Chancellor insisted it was ‘vital [that the fall in the price of crude oil] was passed on to families at petrol pumps, through utility bills and air fares’.

‘The Government is conducting studies of industries like the utilities and the airlines. We are examining if any action needs to be taken,’ a Treasury spokesman said.

How much the price of a) petrol, b) domestic energy bills and c) air fares fall when oil prices fall are three entirely separate topics.

a) Petrol is the easiest. The market is highly competitive, and falls in the price of oil are passed on in lower prices almost immediately (even though demand is fairly price-insensitive).

In round figures

July 2014

Pump price £1.32, knock off VAT = £1.10, knock off 59p fuel duty and 10p profit margin for the transporters/retailers = residual cost of actual oil = 41p/litre.

Crude oil $110/barrel, convert to £ at 1.70, divide by 159 litres = 41p/litre.

January 2015

Pump price £1.10, knock off VAT = £0.91, knock off 59p fuel duty and 10p profit margin = residual cost of oil = 22p/litre.

Crude oil $55/barrel, convert to £ at 1.55, divide by 159 litres = 22p/litre.

b) With domestic energy, it is nigh impossible to calculate by how much prices will fall for umpteen reasons which have nothing to do with the price of oil. Generators also use coal, gas and nuclear; generators and customers are locked into various fixed price contracts, there is little ease of substitution etc, so let's not bother.

UPDATE: VFTS in the comments reminds us that according to Energy UK, only 1% of UK electricity is generated from oil. i.e. in practical terms none at all.

c) Air fares are set according to what the market will bear.

This bears very little relation to costs in the short or even medium term. Some flights are run at a loss because the airlines don't want to forfeit their landing rights (they hope that things will pick up in future); some flights are hugely profitable.

International travellers will pay a lot more to land at a London airport than elsewhere in the UK, even though the total distance flown is much the same, etc. UK travellers have to pay a lot more to fly to a major European city rather than somewhere in the back of beyond.*

If this were not the case, then landing slots at London airports would not be bought and sold for such huge amounts of money. What the purchaser is paying for is the scarcity-monopoly-rental value. Airlines just try to sell as many tickets as possible for the highest price possible using a variety of auction methods (i.e. trial and error).

So the overall impact on air fares will be minimal, although we would expect a modest reduction overall; it will be negligible at London airports and larger at regional airports which are running at two-thirds capacity on average.

* Thanks to the miracle that is the internet, we can quickly establish that flights from Leeds-Bradford to Geneva start from £86 (British Airways); a similar distance flight from Heathrow to Munich starts from £141 (also British Airways).

"Man in charge of nation’s finances struggling with concept of half"

It's a funny old world where spoof news website Newsthump comes up with the clearest explanation of why George Osborne's much vaunted success at negotiating down the UK's EU contributions is no such thing:

The Chancellor said that the UK will now be able to offset its EU rebate of £850m against the surcharge, meaning it will only have to pay £850m extra to the EU next year.

Economist Simon Williams, who actually understands the principle of ‘fractions’, told us, “The point here is that the Chancellor has given away the rebate we were due to get next year.

“So we’ve given up a £850m rebate from the EU, in order to have £850m taken off our surcharge bill. You don’t need a degree in economics to see how this isn’t the same as ‘halving your bill’.”

Indian Bicycle Marketing: George Osborne lets the mask slip

From sundaypost.com:

George Osborne appears to have admitted defeat on the Tory pledge to bring annual net immigration below 100,000 by the general election.

The Chancellor said progress had been made on reducing numbers, but suggested Britain's relationship with the EU would need to be renegotiated after May 2015 to deliver David Cameron's promise. He also warned that border controls will be loosened again if Labour returns to government next year...

Official figures showed net migration - the number coming to the UK for at least a year, minus the numbers leaving - rose 58,000 to 212,000 in the year to September 2013...

Righty ho, just for starters, Osborne has sort-of admitted that his party won the last election partly on the strength of them lying about getting net immigration below 100,000, having known full well that it was impossible and a meaningless target anyway: even if a government can control immigration (and they could if they wanted to) it cannot control emigration so it cannot control net immigration unless it runs a daily tab and expels recent immigration immigrants if not enough people emigrate.

And on the facts, annual net immigration has stayed pretty much constant since his lot got into government, the direct comparison with the previous year is misleading.

[Whether or not that is a desirable aim is up to the voting public to decide, and I guess that given the choice, we would vote for it: that is a separate topic.]

Anyway, building up to classic bit of Indian Bicycle Marketing:

Mr Osborne said. "So we have got our policy, we are delivering on the policy, and the key dimension to it which we need to now deliver on is the European aspect.

"That requires renegotiation of our membership of the EU, an in-out referendum so the British people have their say...

A bit like Dave's famous cast-iron guarantee of 2009, eh..?

"If there's a Labour government not only will the economy go to ruin but the borders will be uncontrolled and you won't get that renegotiation in Europe because they're not even pretending that they want to do it."

So he wants us to vote for his lot because they are at least pretending?
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Jackart comments: There has been a big fall in people coming in. There's been a big fall in people going out, which was unexpected. Failure to meet a target, despite measures taken isn't a "lie"; this is one of the most tedious tropes in today's politics.

This post was about Indian Bicycle Marketing, which is a political strategy agreed between the two largest parties, it was not a post about immigration per se.

[It could just as well have been a post about Lib Dems saying that "If you vote for us, we will reduce climate change"].

The Tory "lie" was the notion that they can control net immigration in the first place, as you say yourself, they have little control over immigration and no control over emigration, so the net figure is pretty random. Like the weather.

And you repeat the "cast iron" idiocy, as if you didn't know that promise was made (foolishly) in the context of an anticipated 2008 election pre-ratification.

Yes, I have read the original Sun article and that is what the small print said; but Dave used the words "cast iron" himself, and who's to say that his promised referendum will materialise in 2017? This is, again, couched with lots of vague conditions (i.e. "if I cannot satisfactorily renegotiate etc" leaving himself as judge and jury on whether the renegotiation was "satisfactory".)

Basically you've repeated the entire cannon of UKIP anti-politics stupidity. Are you a 'KIPper?

I joined UKIP in 2007 when there was a still a liberal-libertarian-free market wing to the party; they turned into a caricature of themselves over the years (racist, authoritarian, NIMBY, Home-Onwer-Ist etc) and so I left a couple of years ago and joined YPP. It's only a question of time before UKIP themselves start doing Indian Bicycle Marketing.