Reinventing the wheel, although it's a good wheel to reinvent.

This IPPR report has some good stuff in it, in among the waffle (as you can see from the excerpt below). The recommendation that was given most attention (favourable and unfavourable*) is that house prices could/should be stabilised by capping loan-to-value and loan-to-income ratios:

Currently, the FPC achieves its objectives via controls on loan-to-value and debt-to-income ratios allowed by mortgage providers, and controls on the proportion of mortgages in bank portfolios. The FPC recently implemented a loan-to-income ratio of 4.5 for 15 per cent of new mortgages, even though the Bank of England recently estimated that around 11 per cent of mortgages exceeded this ratio in 2015 (Chakraborty et al 2017).

Implementing targets that bite requires giving the FPC a strong mandate to limit asset price inflation. Since house price inflation is different in parts of the country, the FPC’s guidance should be regionally specific. There is a risk that a target for house price inflation, tackled through macroprudential tools, could inadvertently increase inequality, by reducing access to credit for the  poorest borrowers**. To mitigate this risk, we recommend that the exact nature of the target, and the tools the FPC be given to achieve it, be determined jointly by the Bank of England and the Treasury, and be put out for consultation before being implemented.

House prices are also determined by other factors, not least the supply of housing, and therefore adoption of the target would need to be accompanied by a much more active housing policy. This might include public housebuilding, changes to planning policy, and curbs on overseas purchases of UK homes (Ryan-Collins et al 2017). The FPC should be able to request that the government do more with housing policy if it judges that it will be unable to meet its target through macroprudential tools alone.

It is also worth noting, however, that recent research has shown that the level of mortgage lending is the primary determinant of house prices (Ryan-Collins et al 2017).

Well duh, this is what building societies did until the 1980s. And it worked a treat, getting rid of these limits was a key part in stoking the Home-Owner-Ist bonfire. The report doesn't emphasise enough that this is all tried and tested IMHO.

* The nutters at CapX are sticking to the Faux Lib orthodoxy that it's all about supply and lax lending has nothing to do with it, despite the report going to some length to provide evidence to support their opposite and correct explanation.

** They are undermining their own case here. Credit bubbles are an arms race. By being allowed to borrow more, every borrower ends up worse off, rich and poor alike. It is quite possibly the case that higher income borrowers will see bigger absolute savings than lower income people (in fact, mathematically that must be true), but so what? Overall equality (taking earnings and housing wealth together) will increase, and higher income and lower income aren't competing to buy the same houses anyway.

I'm pleasantly surprised he said that.

From The Daily Mail:

Tory backbencher Julian Brazier, author of a paper on rising population, said: ‘Late motherhood is one more example of how property prices in Britain are making family life increasingly unattainable.’

Mr Brazier, MP for Canterbury, said: ‘Despite the downturn, we have the highest property prices in the world in relation to incomes.
There is also the effect of immigration, which is responsible for two fifths of housing demand. It is important that the Government succeeds in getting immigration down.’

Well done for pointing out that high house prices are bad for 'family life', something which the Tories claim to support (but don't).
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He's a bit off piste with the immigration sideswipe though. It's true that recent immigrants have a slight advantage when it comes to social housing - the IPPR published some research which purported to show they don't, but they were too honest for the own good and the figures they included said otherwise.

What he probably means is that the net number of immigrants per year (presumably divided by two to give number of households) is equivalent to two fifths of the number new houses built per year*. So yes, getting immigration down is one possibility, the other is just allowing more houses to be built.

* Net immigration from 'New Commonwealth and EU8' was about 160,000 a year, divide by 2 = 80,000, for a long time, new construction every year was about 200,000, 80,000/200,000 is two-fifths. Of course, now that the Tories have got in, they have restricted new construction to 100,000, so next year they'll be able to say that immigrants take up four-fifths of housing.

Another jolly bash at the IPPR

Announced here:

07 December 2009, 10:00am - 11:30am

30-32 Southampton Street, London WC2E 7RA

Speakers:
Harriet Harman, MP, Minister for Women and Equality
Dr Dalia Ben-Galim, ippr
Samantha Smethers, Grandparents Plus*

Demographic changes mean that more and more people are taking on caring responsibilities. Carers are a diverse bunch who have a variety of different needs that depend on a range of factors that include the needs of the care recipient, gender, age, labour market position and family status. As four generation families are becoming more common and many more of us becoming carers, innovative policy reform is needed if we are going to meet the future demand for care... [yadda yadda, blah, waffle].

Interestingly, they don't say that Harriet will be attending via video-link from HMP Holloway, so presumably she's expecting a non-custodial sentence?

* In 2007, Grandparents Plus received half its funding from the Basic Skills Agency which appears to be part of the Department of Education (or whatever it's called this week); they appear to have received only private donations in 2008 (see Note 9 in their 2008 accounts) but are back on the Big Lottery drip again by now.

FakeCharity and Quango Festival

If you'd like the opportunity to see the following speakers:

Martin Narey, Chief Executive, Barnardo's
Ivana La Valle, Director of Research, Evidence and Evaluation, National Children's Bureau
Yvonne Roberts, Senior Associate, the Young Foundation
Simon Antrobus, Chief Executive, Addaction
Debbie Scott, Chief Executive, Tomorrow's People
Kathy Evans, Director of Policy, Children England
Liz Railton CBE, Director of National Programmes, Serco Education and Children's Services
Cllr Brian Connell, Cabinet Member for Economic Development and Family Policy, Westminister City Council
Hugh Thornbery, Strategic Director of Children's Services England North, Action for Children Lisa Harker, Co-Director, ippr (Chair)

... and to rub shoulders with these sorts of people:

Regeneration officers
Senior management: heads and directors of services
Social services: adult, children, education, family and mental health services
Voluntary sector organisations involved in the whole family agenda - children’s charities, homeless and substance misuse fields
Parenting and family support organisations
Youth Justice Board and Youth Offending Teams
Drug and alcohol support services
Probation and ex-offender officers and managers
Children’s centre practitioners
Civil servants and policymakers
Clinical psychologists
Connexions partnerships
Primary Care Trust / Mental Health Trust representatives
Regional Development Agencies
Trades unions
Education sector
Employment service providers
Academics and think tanks
Adult learning and skills providers
Media,

... then sign up to this shindig hosted by the Institute For Public Policy Research. Don't forget to take some plastic cutlery with you to prevent serious injury should you be overcome by the urge to stab someone (or indeed to stab yourself).

More FakeCharity Fun

The Metro did a brief summary of this press release, but as ever, there's a lot more fun to be had with the BBC's version:

Hull is the British city with the highest rate of youth unemployment, a study has said, with 9.85% of under-25s claiming jobless benefits in May. Sunderland had the second worst rate of 9.45% with Barnsley third at 9.13%, the Centre for Cities research group(1) said...

The Centre for Cities predicted that the number of long-term unemployed young people would rise from 130,000 in May 2009 to 350,000 by December 2011. The figures for the number of long-term unemployed people are based on the International Labour Organisation's (ILO) figures(2), instead of the number of people claiming benefits...

It said that the government's Future Jobs Fund, which aims to create 150,000 jobs for young people by 2011, would not be enough... "So it will need to be targeted very carefully on those young people in cities that have seen a recent rise in unemployment due to the recession."(3)

The Future Jobs Fund is £1bn that local authorities, companies and other organisations can bid for to fund the creation of jobs for young people who have been out of work for a year or more. At least 50,000 of the jobs created are supposed to be in unemployment hotspots. The deadline for the first round of bids for the fund is 30 June.(4)

(1) And who are 'The Centre For Cities'? Ah ... an offshoot of everybody's fakecharity, the Institute for Public Policy Research.

They're not funded directly by the taxpayer, but by Sainsbury's, who seem to be exercising a lot of influence over government policy for relatively little cash cost, see e.g. point 2 here, and their involvement with other fakecharities such as We Need To Talk, scroll down to the footer of their website.

Remember also that "Sainsbury's came top overall for the second time in a row, gaining praise for its progress on labelling and nutrition, and scoring highly on customer information." in a survey carried out by yet another fakecharity, The National Consumer Council.

(2) "The figures for the number of long-term unemployed people are based on the International Labour Organisation's (ILO) figures". IIRC, the ILO are a pretty reliable lot, but what this means it that the CFC's research consisted of sticking a ruler on an existing chart and extrapolating a bit.

(3) The BBC being the BBC, their template is to start off an article by referring to some 'research' carried out by a 'charity', just to soften up the audience for a plu for some government scheme or other, in this case 'the Future Jobs Fund'. Note carefully the use of the word 'targetted'.

(4) As to the last paragraph, am I just being overly suspicious, or is Sainsbury's angling for some subsidies for 'creating' new jobs? Does Sainsbury's have a lot of supermarkets in the towns and cities highlighted in the report? As we well know, supermarkets are incredibly flexible employers and can create jobs at will, for example by splitting up a job into two part time ones, or taking on 'trainees' (funded by the FJF, no doubt) instead of replacing leavers in the normal course of business.

If we apply the patented DBC Reed Test, the report doesn't mention Northampton, so is probably completely made up.

Another little mystery solved

As I said after The Budget:

What I'll have to look into is how a 3.5% fall in GDP (which inevitably leads to a fall in tax revenues) can possibly lead to a 10% budget deficit (assuming level spending)? Even at a marginal tax rate of 100%, a 3.5% fall in GDP would only lead to a 3.5% deficit. Hmm.

Thankfully, the chaps at Policy Exchange (pdf) have pinned it down:

Only a third of the ... surge in spending is the result of the recession – most simply reflects a choice to increase Government consumption spending. Between 2007/8 and 2010/11 spending is forecast to rise by £119 billion. But little more than a third (38%) of this increase in spending reflects the costs of the recession – like rising social security bills, and higher debt interest.

Policy Exchange rather generously assumed assumed that the increase in spending at DWP all relates to actual cash benefits paid out. Yeah, right. Now, call me a Communist, but IMHO we can't let people in this country starve to death - but that only means cash benefits paid to people without incomes, not paying for shit like this, courtesy of fakecharity IPPR (pdf):

PA innovation Hub Seminar 2 - The emerging adviser role in employment and skills Tuesday June 23rd

Following the publication of ippr's pamphlet Now It's Personal: Personal Advisers and the new public service workforce, due to be published on the 17 June, this seminar will look at the relationships between welfare to work providers and skills and training providers. Set in the wider context of the integrated employment and skills agenda, issues explored will include how the creation of the Adult Advancement and Careers Service and the replacement of the LSC with the Skills Funding Agency will impact on the role of the Personal Advisers. In particular it will focus on the how this will affect their ability to support the customer journey.

A key question to be examined will be how Personal Advisers can be better supported to make appropriate referrals and improve their understanding of support available. We will examine the role that cross-organisational skills and knowledge sharing could play, opportunities for secondments and work shadowing, as well as discussing different approaches taken by a range of different organisations and frontline staff.

Speakers include:
Graeme Caul, West London Working (West London City Strategy Pathfinder) TBC
Sara Dewson, Institute for Employment Studies
Paul Sheppard, Bemerton Villages TMO (Islington LSC network prototype)

This seminar is for welfare to work providers, training and skills providers, and Personal Advisers and other frontline staff...

Inevitable conclusion: our country is run by twats who can't do maths

Via Witterings, an article in The Torygraph headed "Campaign to save the 'great British pub' backed by 200 MPs". (Witterings also links back to UKIP's original petition, which states the bleedin' obvious, that the best way to help pubs is to scrap the smoking ban, but let's put that to one side for now). Two of the MP's key demands are: "To axe plans to increase beer tax even further [and] To end the irresponsible promotion of alcohol in supermarkets, pubs and elsewhere".

Let's not forget that the Tories also launched a petition "to cut taxes on low alcohol drinks such as beer" and the Nulab fakecharity IPPR stated that two of "the main factors contributing to the rise in pub closures [include] Competition from shops and supermarkets where alcohol is much cheaper [and] Increases in tax on beer".

OK, let's assume that the total amount of alcohol consumed is a given; and that consumers are best-placed to decide where and how to consume it. It's a simple observation of fact that people are prepared to pay more for a pint in a pub than a pint from the supermarket, so what clinches the decision whether to drink in a pub or to buy from a supermarket and drink at home (apart from the fact you can still smoke at home) is the relative price difference.
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Right, now for the maths bit.

Beer tax is £16.15 "per hectolitre per cent of alcohol in the beer", i.e. the 'beer tax' on one pint is about 40p. The EU imposed Value Added Tax is 13% of the total selling price (or 15/115 of the total selling price). Remember that 'beer tax' is the same whether it's sold in a supermarket or in a pub, but VAT is a percentage of the total selling price!

So if a pint of beer in a supermarket costs 80 pence, and a pint in a pub costs £2.40 (i.e. three times as much), the total tax on the pint from the supermarket is 50p but the total tax on the pint in the pub is 70p. Ask yourself...

1) What would happen if they went the whole hog and scrapped the beer tax entirely in some vague attempt to help pubs, and both supermarkets and pubs passed on the full saving to the consumer* - then the pint in the supermarket would fall to 40p and the pint in the pub would fall to £2. All of a sudden, a pint in the pub would cost five times as much as a pint from the supermarket that you drink at home. Would this help pubs? Methinks not.

2) What would happen if they went the on the other tack and scrapped VAT but increased beer tax to 55p per pint (in the interests of some sort of fiscal neutrality), and both supermarkets and pubs passed on the full tax changes to the consumer* - then the pint in the supermarket would increase to 95p and the pint in the pub would fall to £2.25. All of a sudden, a pint in the pub would only cost two-and-a-third times as much as in the supermarket. Would this help pubs? Methinks it would.

Ergo, if 'they' really want to help pubs via the tax system (rather than just scrapping the smoking ban), it's not the beer tax they should be looking at, it's the bloody VAT, The Worst Tax of All.

* The price-demand curve for alcohol is inelastic, so this is one of the few cases where the consumer bears the bulk of a sales or turnover tax.

"Now it's personal"

Continuing my occasional series on quangoes-calling-for-creation-of-more-quangoes, comes this from the IPPR:
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ippr is seeking partners to test and evaluate various principles of the personal adviser role developed during our project Now its Personal – an understanding and analysis on the role of Personal Advisers. For the Invitation for Expressions of Interest click here.

ippr is hosting a conference that will explore a new model of public service professional: the personal adviser. It will review the changing role of frontline staff – personal advisers and intermediaries from the public, private and voluntary sector – in welfare-to-work and related services. Read more.

This project will look at how personal advisers in the welfare system can be best equipped to deliver a personalised and flexible system of welfare to work in order to support more people off benefits and into sustainable employment.

Personal Advisers are emerging as new core public service professionals, whether they work in JobCentre Plus, the private or voluntary sector. They are critical to success in getting more people off benefits and into sustainable work.

In our recent report, It’s All About You: Citizen-centred welfare, we argued for a single income-replacement benefit combined with personalised employment support and conditions on benefit receipt. These ideas have gained considerable traction amongst policymakers and practitioners, and the role of Personal Advisers is crucial to making this system work at the frontline.

This project will set out a framework for the future development of the PA profession, rooted in the structure and operation of the benefits, skills, employment and other systems that they use. We will examine what commissioning arrangements, partnerships and structures will best support and empower Personal Advisers and customers to create a more effective service. We aim to influence government and opposition parties as they draw up plans for the next phase of welfare to work reform. Through working closely with organisations delivering welfare to work services, the project also aims to support improvements and learning in frontline provision through demonstration trails.

As an example of the importance of the frontline workforce to delivering more effective, personal and integrated services, this project will look at what lessons employment and skills support can offer other public services.

For more details, download a copy of the project proposal.
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To cut a long story, these bottom feeders have run out of ideas for new quangoes, so they're casting around for inspiration.

(And yes, it is personal. You're next.)

Bring out your dead! Bring out your dead!

Leftie think-tank the IPPR proudly invite you to this event:

Getting personal

A one-day conference on the role (sic) of personal advisers in welfare and related services. Don't miss your opportunity to register for this must-attend event, which will:

Hear the Government's plans for changing welfare and employment services.

Review the changing role of frontline staff - personal advisers from the public, private and voluntary sector - in the welfare-to-work and related services and outline what role, skills, pay and powers they will need to deliver effective services.

Explore how we can improve services from the frontline and hear what policy frameworks, contracts and structures would best support quality, customer-focused services.

Outline what personal advisers in the welfare system can learn from other public services and workforce roles in order to deliver personalised, holistic and effective services.

Consider the emerging market in delivery - by both the private and public sectors - as contracting for the Flexible New Deal progresses.

A history lesson for the Sub-Prime Minister

The Goblin King tried to justify the 42-day detention idea in a speech to the IPPR as follows: "The modern security challenge is defined by new and unprecedented threats [such as] terrorism ..." (full transcript here).

Wot? "New"?

Has he never heard of Robert Catesby? The IRA? The Nail Bomber?

The summary on the IPPR website (see first link) is even more bizarre: "Gordon Brown has called for modern crime-fighting measures to be embraced and adapted to fit with the principles of individual freedom and liberty. Topics covered included the use of CCTV, DNA technology and the extension of pre-charge detention to 42 days."

Freedom and liberty? "Thought Police", more like.