Classic Telegraph lies and propaganda

The Telegraph runs with the wildly misleading headline "New council income tax is best way to plug multi-billion pound gap in social care, says IFS". The Telegraph's motto is, of course, anything but Land Value Tax or reforming Council Tax. The linked IFS page says nothing of the sort, it just mentions it as a possibility.

Digging a bit further, IFS' own press release on the topic, from March this year, pokes gentle fun at their own report:

But implementation would mean overcoming some important challenges

A local income tax would raise significantly more in some areas than others. We estimate that revenues per person from a flat-rate tax across all tax bands would be more than six times higher in many richer parts of west London than in areas like Hull and Leicester.

A system to redistribute revenues between councils would be required in order to avoid this translating into huge disparities in funding for local services.

To sum up, it would end up as a 1% increase in the national rate of income tax. So not a 'local income tax'.

Income tax rates that varied across areas would be more complex for employers, taxpayers, and HMRC to deal with. Up-to-date records on where taxpayers live – which, at present, employers and HMRC don’t always have – would be needed.

Anything but a national tax hike would be administratively unworkable, in other words. Whatever the merits of a tax (and this has none), it has to be at least administratively workable. If it isn't, then that's usually a clue that it's a fundamentally terrible idea in the first place.

Other options for tax devolution come with more significant drawbacks though

Local corporation and value added or sales taxes would be much more difficult to administer and comply with. Moreover, differences in tax rates across councils would be more likely to distort taxpayers’ behaviour than they would for income tax.

Stamp duty land tax is much more unequally distributed – varying by a factor of more than twenty between richer parts of West London and places like Hartlepool and Blackpool. It is also a bad tax that should be abolished rather than entrenched via devolution.

Agreed to all that.

Substantial new powers over council tax, such as the ability to carry out local revaluations, could pose problems for the system of redistributing funding between councils...

Agreed. Drum-roll please...

It would be better to revalue and reform council tax at a national level – something which is overdue.

Agreed.
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In other words, The Telegraph is claiming the IFS said pretty much the diametric opposite of what the IFS actually said.

A veritable feast of Homey squealing.

Via Peter Smith/Facebook, from The Telegraph:

A Labour victory, or a red-led coalition, could be detrimental to the housing market, reducing the supply of homes and deterring overseas buyers from investing in London, property experts have warned.

Two thirds of UK landlords will leave the private rented sector if Labour wins the general election in May and a rent controls policy is introduced, limiting the number of affordable rental properties, according to new research from the Residential Landlords' Association (RLA).

There's no need to speculate about what might happen. The UK had rent controls in one form or other for most of the 20th century, and the result was indeed that private landlords nearly all packed it in and sold them for affordable prices to... the very same people who would otherwise have been forced to rent.

Which, was at the time widely heralded as a Very Good Thing.

Another classic bit:

According to research by Rokstone there are approximately 97,000 properties worth more than £2m in the capital. "Therefore if a mansion tax is introduced it will totally disable the London property market," Ms Fatemi added.

"Totally"? According to Savills, there are 3.4 million homes in London.

So the Mansion Tax might affect 3% of London homes. Hardly "totally".

"This could be the straw that breaks the camel's back...we need to be very careful we don't push people too far and seen to be anti-opportunity or, ultimately, investment will go elsewhere and into other asset classes."

If people invest in other asset classes, that's A Bad Thing because..?

Daily Telegraph in Treasonous Slur!

In a shocking departure from faithfully  reprinting corporate press releases word for word, as if that passes for journalism, the Del Tel has launched a scathing and treasonous attack on the Duke and Duchess of Cambridge.

Killer Arguments Against LVT, Not (236)

From The Telegraph:

House prices would be hit and many older people forced to sell family homes (1) by an increase in council tax to "fix the broken housing market", as proposed by an influential think tank today.

Many homeowners might question in what sense the housing market is "broken", when property is one of the few assets that has delivered decent returns (2) in a dismal decade or more for stock markets, pensions and other stores of value.(3)

Alternatively, rising numbers of younger people excluded from homeownership and trapped in ‘generation rent’, may feel that anything which tends to cause house prices to fall must be a good thing.(4)

1) So? Poor Widow sells family home and buys a flat; young family sells their flat and buys a family home. By and large and for many people, this might be just a straight swap with their own children or grandchildren (so the "family home" can "stay in the family", if that's what makes them happy). Why is that so terrible?

2) Typical Home-Owner-Ist circular logic. Yes, houses are a good hedge against inflation. But what they don't mention is that it's Home-Owner-Ism which is the PRIMARY CAUSE of inflation in the first place (and something which I hardly mentioned before):
- Home-Owner-Ism needs credit bubbles to prop up land prices, some of this money spills out into productive economy without increasing output capacity, so this leads to price inflation. For example, a semi-retired person MEWs and buys a new car. This increases demand for cars without increasing amount of work done.
- When Homey bubbles pop, the government quite deliberately and maliciously tries to create inflation in order to mask real house price falls. This trick worked fine in the 1970s when we still had currency controls, it doesn't actually work without them, e.g. Japan over last twenty years, the UK today.
- Homeys just luuurv those ultra-low interest rates, which of necessity trigger speculative bubbles in commodities which tend to push up price inflation.
- If you can't tax the rental value of land, you have to tax production and output instead, these taxes tend to push up prices (at least, relative to net incomes) and reduce output.

So what these shits really are saying is "Home-Owner-Ism causes inflation. Inflation is bad unless it's in house prices. So we need even more Home-Owner-Ism."

3) Other "stores of value"* have done so badly precisely because of Home-Owner-Ism.

If we'd got it over with and shifted from taxing production and output to taxing the rental value of land ten or fifteen years ago, the dust would have settled by now. Houses would have performed badly, viewed as a speculative investment, but shares would have doubled, interest rates and hence annuity rates would be much higher, price inflation would be more or less non-existent (sure, food is getting more expensive but electronics are getting cheaper, it would cancel out to nothing), fewer unemployed, far milder recession etc.

Once LVT has bedded in (i.e. once all the Poor Widows In Mansions, of whom there are several thousand in the UK have down-sized), everybody will have got used to the idea that land is useless as a speculative investment; that debts will not be eroded away by inflation; that share prices tend to go up; sticking cash in the bank is a good way of saving; and that it's worth saving up for an annuity, because you'll get 10% a year.

When we tell our children and grandchildren that people used to believe that you could become rich without working, just by buying a bit of land and keeping your fingers crossed (and that a lot of people did become rich this way) they will think you are mad.

"Yes, but how did you pay the tax on the land if you were not working?" they will ask.

"There wasn't any tax on land in those days," you reply.

"Wot? So where did the government get money from?"

"Ah... they used to tax people who went to work instead, and give the money to the people who owned land... Jesus, this sounds really stupid now I say it."

* We can make an exception for gold, the gold price has done very well because a lot of the measures which governments are taking to subsidise land owners stimulate the economy spill over into higher gold prices.

4) Well, at least he admits that Home-Owner-Ism is inter-generational warfare. Remember: the person who starts the war doesn't necessarily win it.

Interesting choice of two different words to describe the same thing...

Another instalment of "We Own Land! Give Us Money!" over at The Telegraph:

Home buyers who need mortgage help may be forced repay state... hard-pressed home buyers who have paid their taxes for years but then fall on hard times may wonder why a country that can house political extremists from overseas cannot afford to help victims of the credit crisis closer to home.

So let me try and get this straight:

When the government, for narrow political ends, gives land owners money/soft loans, that's called "help", and when land owners are asked to repay these soft loans, they are being "forced"?

What about the third leg of the transaction, when other taxpayers (many of whom are not land owners) give the government money to pass on to people who have over-extending themselves in leaping on the Ponzi scheme and expect a free ride? Are these taxpayers "helping" or "being forced"?

And what relevance does the bogey man "political extremists from overseas" have to do with it? That's what we politely refer to as 'totally irrelevant'.

Via Quiet Guy at HPC.
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UPDATE: Interestingly, The Daily Mail gleefully reports that "More than half of us - 54% - think unemployment benefits are too high up from 35% in 1983". Let's not forget that "homebuyers who receive Income Support (IS), income-based Jobseeker’s Allowance (JSA), income-related Employment and Support Allowance (ESA), or Pension Credit (PC) may be entitled to help towards their mortgage costs, known as SMI and paid direct to the mortgage lender."

So do the Homeys want 'mortgage help' (paid to banks on behalf of unemployed people, as defined) to be increased or reduced? Or do they want IS, JSA and the like to be reduced and 'mortgage help' to be increased? Or what?

Killer Arguments Against LVT, Not (160)

Mollyxxx mackes a particularly cack-handed attempt at playing The Poor Widow Bogey over at The Telegraph:

The £1million property tax is another stupid and desperate idea and it's time governments stopped trying to take money from something which has already been taxed via stamp duty... Many people who bought their property years ago (1) simply wanted a family home.(2)

It's not their fault property values have increased. Neither is it their fault if their areas have become more "sought after". These people may have little cash.(3)

The Lib Dems will therefore force them to sell up and downsize (paying all the taxes like Stamp Duty on the way). (4) They will lose out by being forced to sell up at this time (5) so their "Pension Pot" (6) will be diminished (7) and they will have to rely on State Handouts (8) - thus joining the "ghetto". (9)

1. If they bought their house "years ago" then the chances are that they only paid 1% Stamp Duty on a very small amount, and as Stamp Duty depresses the price paid, they got their money back at the time. To be fair, the current potential selling price of such houses is now depressed by the 5% SDLT that would be due, but that's still a very favourable effective tax rate on a capital gain of £1 million or more. (It seems more than fair to me to scrap SDLT entirely as a quid pro quo for introducing the Mansion Tax, but hey).

2. Aha! Here she says "They only wanted a family home" but later on she refers to it as a "Pension Pot". Can she make up her tiny mind?

3. It is their fault that house prices went up - it's exactly these people who voted to get rid of Schedule A tax and Domestic Rates, it's exactly these people who constantly voted to restrict new construction to a trickle. It certainly is their fault if they have "little cash", it's called "not saving up while you are working". And if they wanted, they could be sitting on a huge great pile of cash, so this sort of poverty is entirely self-inflicted.

4. The only "force" involved here is market forces. What such a tax would do is encourage Poor Widows In Mansions to do the economically rational thing and down size a bit to somewhere costing "only" a few hundred thousand, freeing up huge great piles of cash for them to really enjoy their last few years!

5. Aha! The sentence "They will lose out by being forced to sell up at this time" suggests to me that these people don't look at their home as a home but as an investment, and our clairvoyant Mollyxxx appears to assume that prices will rise again the near future.

6. What is it? Home or Pension Pot?

7. If the value of their house is a Pension Pot, isn't the general idea that when they retire they cash in and start drawing an annuity? Or in housing terms, sell up and downsize? Or is this a special kind of Pension Pot which requires no contributions to be made but gets the tax breaks nonetheless and which is to be left to 'the next generation'?

8. That's an outright f-ing lie. As things stand, a Poor Widow in a £1m house with no savings is entitled to all sorts of extra benefits (Pensions Credit, Council Tax Benefit). If she did the economically rational thing and traded down, she'd have £100,000s in the bank and wouldn't be entitled to any of these extra benefits. (The welfare system is just as Home-Owner-Ist as anything else).

9. Ah yes, that special ghetto, where houses or flats sell for a few hundred thousand pounds and all the residents have hundreds of thousands more in the bank. Sounds like Hell On Earth.

Red Ed illustrates what Peter Oborne was talking about...

From the BBC:

Ed Miliband has blamed the riots that swept English cities on a "me first" culture - and accepted Labour must share the blame for creating it.

The Labour leader said his party had failed to tackle inequality and not paid enough attention to morality. And he linked the riots to a wider collapse in social responsibility exemplified by the banking crisis and MPs expenses scandal.

From The Telegraph, 4 October 2010:

Ed Miliband has made a series of shrewd moves in the housing market, which have made him more than £100,000 [ahem, rather more than that] in profit and taken him to a £1.6million house in a leafy area of north London.

Mr Miliband, 40, got his first foot on the property ladder when he was given a stake in his childhood home in Primrose Hill, north London. He and his brother, David, signed a “deed of variation” along with their mother, Marion, following the death of their father Ralph, an influential Marxist academic, in 1994.

This gave them each a 20 per cent stake in the four-storey house in Edis Street, reducing the inheritance tax eventually payable on the estate. The brothers then moved into a house nearby in Chalcot Square, which their mother had bought for their grandmother in 1981.

David turned the ground and first-floor flats into one home while his younger brother, then a Labour researcher after studied PPE at Oxford, is said to have spent about £100,000 on the leasehold for the flat above...

By then a Government minister, in 2004 David decided to buy out his family’s stakes in the Edis Street house and moved in with his wife, Louise Shackelton. Ed received at least £160,000, on which he is said to have paid a “significant” amount of Capital Gains Tax.

In May 2005, at the same time as he became the Labour MP for Doncaster North, Ed sold his Chalcot Square flat for £342,000, about three times what he paid for it. Using the proceeds of the sale together with the money he had received from his older brother, Ed bought a flat in neighbouring Chalcot Road for £648,500.

Just three years later, in December last year, he sold it again for £740,000, making a profit of almost £100,000. By then he had moved in with his girlfriend, Justine Thornton. She had sold her own flat in Maida Vale, west London, for £630,000 – making a profit of £274,000 in less than a decade.

The couple moved to a £1.6m house in Dartmouth Park, near Hampstead Heath and close to Ed’s key supporter Lord Kinnock.

Peter Oborne on top form

From The Telegraph:

... there was also something very phony and hypocritical about all the shock and outrage expressed in parliament. MPs spoke about the week’s dreadful events as if they were nothing to do with them.

I cannot accept that this is the case.

Indeed, I believe that the criminality in our streets cannot be dissociated from the moral disintegration in the highest ranks of modern British society. The last two decades have seen a terrifying decline in standards among the British governing elite. It has become acceptable for our politicians to lie and to cheat. An almost universal culture of selfishness and greed has grown up...

Our politicians – standing sanctimoniously on their hind legs in the Commons yesterday – are just as bad. They have shown themselves prepared to ignore common decency and, in some cases, to break the law.

David Cameron is happy to have some of the worst offenders in his Cabinet. Take the example of Francis Maude, who is charged with tackling public sector waste – which trade unions say is a euphemism for waging war on low‑paid workers. Yet Mr Maude made tens of thousands of pounds by breaching the spirit, though not the law, surrounding MPs’ allowances."

If only he had the nerve to point out that his own newspaper perpetuates the "something for nothing" culture with its endless celebrations of house price increases, a kind of legalised theft in which the bulk of the UK population is implicated, and it actively promotes NIMBYism, whereby the majority uses force to oppress the innocent minority.

Emailed in by MBK.

Killer Arguments Against LVT, Not (151)

The Daily Telegraph propaganda piece then opens with this:

Cash-strapped governments (1) have long wanted to grab a bigger share of the wealth we hold in housing (2), now the Organisation for Economic Co-operation and Development (OECD) says Britain should adopt a Continental European-style property tax.

Today let's move on to laughable contention number 2.

There seems to be some confusion over what 'housing wealth' is. A sane person would say that a country which has large, modern, attractive houses has more housing wealth than a country with old, small, ugly ones, but Home-Owner-Ism in England and the UK is so ingrained that we don't seem to care about physical housing, all we care about it keep house prices as high as possible, regardless of the cost to the economy.

In any other country, if a new house is built, people say "Great, we are now wealthier by one house." In England, if a new house is built, people say "Boo! We existing home owners are now slightly poorer because the scarcity value of our houses has been diluted". If an earthquake or other natural disaster hits any other country, they put an effort into rebuilding houses and are pleased when people can move out of camps and back into proper houses; in England, existing home owners would be delighted if e.g. Birmingham were flattened by a tornado or earthquake, because it would be good for house prices elsewhere.

Home-Owner-Ism in it nascent form became the dominant political ideology in about 1970 when the % of households who were owner-occupiers passed the 50% mark; ever since then, the NIMBYs and latterly the Greenies have always elected governments who will do their bidding and minimise the amount of physical housing wealth we have; in return, the government has rewarded these protectionists by gradually reducing recurring taxes on housing and increasing stealth taxes on work and enterprise, this increases the £-s-d value of our housing stock, but is that real wealth?

I would volunteer a "no" in reply to that.

And as I explained last Friday, the reason that the UK government is so cash-strapped is precisely because it taxes the productive economy to within an inch of its life and uses the proceeds to push up house prices; the notion that the UK government now wants to stop focusing on paper wealth and enable/encourage real wealth creation is fanciful in the extreme.

Killer Arguments Against LVT, Not (149)

Let's chop that Daily Telegraph propaganda down into manageable chunks, starting with the headline:

House prices would be hit by 'revolutionary' property tax proposed by OECD

The use of the word "hit" panders to the notion that "High house prices are good for us", which is patently not true:

1) Best case, the older generation's loss is the younger generation's gain, so it's zero-sum.

2) Most people have children, and nearly all children have parents. Unless parents actually hate their own children, don't they want their children to be able to afford a house?

3) Apparently, a lot of parents try to "help their children onto the housing ladder" by dipping into their savings or even re-mortgaging to be able to give or lend to their adult children a deposit for an over-priced house. No doubt there are some couples somewhere who say "Luckily, our house had gone up in value, so we could remortgage to raise the money for our children to buy a house" but there's no helping people as stupid as that.

4) While the parents might be sitting on a paper capital gain, that's not real money. But the additional money which their children have to borrow to pay the higher prices is real money; it has to be repaid with interest, month in, month out.

5) Excel tells me that the total amount of repayments on a 25-year mortgage at 6.2% APR is double the amount of the initial loan [=PMT(0.062,25,100)*25]. So for every £1 of the parent's paper capital gain, there's a real £2 cost on the children.

6) One man's expense is another man's income, of course, so who are the real beneficiaries of this - the people getting the big bonuses at banks? The taxpayer who then has to bail out the banks when it all goes wrong? Who?

Killer Arguments Against LVT, Not (146)

From The Daily Telegraph:

Mr Padoan argues he should scrap many VAT exemptions – including food, passenger transport and domestic fuel – and abolish council tax and stamp duty in favour of “a property tax based on market values.”

... Instead of HM Revenue & Customs taxing property via stamp duty land tax (SDLT); inheritance tax (IHT); and – in the case of second homes – capital gains tax (CGT); annual liabilities would be calculated, based on estimations of house prices. But Mr Padoan argues that his reforms would “dampen fluctuations in house prices” and are essential to put the British economy on a more stable long-term footing.

I can't find the actual OECD report, but there's a brief summary of it here.

Jolly good, that list of taxes to be replaced will look familiar to regular readers. And then the Home-Owner-Ist shit storm is unleashed; in quick succession we get "would hit house prices", "unpopular", "tenants would face higher costs", "the need to value every property", the "Poor Widow Bogey" ("Any plans to increase the bands for council tax or introduce wealth tax are always accompanied by an outcry about elderly ladies living in large houses on limited incomes").

Yawn, been there, dealt with those.

Then the Homeys shift up a gear and start gibbering "... the more you tax something, the less you get of it. Taxing people’s homes would discourage home ownership and all the benefits that go with that", merrily ignoring the fact that the Home-Owner-Ist policies (heavy subsidies to and light taxation of owner-occupation or rental income) pursued by the UK government over the last ten years has led to a dramatic fall in the number of owner-occupiers (down from 72% to 69% if my memory serves correctly). The flipside is more buy-to-let landlords, more second homes and more vacant homes - homes which would become owner-occupied again if we had such a tax.

But the fun part is the very first comment, it appears that Homeys suffer from a terrible variant of dyslexia which prevents them from being able to take in the list of Bad Taxes which the OECD said should be replaced, and they launch straight into this:

For F**KS sake! More taxes? We're already massively over taxed. We pay tax from the second we're born to the moment till after we're dead. It's utterly disgusting. I'm sick of this endless BS form the state. It costs a f***ing fortune, provides bugger all and is next to incompetent in the dictionary.

I wonder, do these people go into a shop to buy something, do they just accept the goods and then start effing and blinding when the shopkeeper demands payment? Are their short term memories so bad that they forgot that they have just been given something which they wanted and are now being asked to provide something of equal value in return?

Roger Bootle On Top Form

Writing in The Telegraph, of all places:

Since 1946, UK residential property prices have risen by almost 12,000pc, equivalent to an average annual compound increase of about 8pc. In real terms, the respective figures are 280pc and 2pc.

But the facts about commercial property – offices, shops and industrial buildings – are less well-known. Over the same period, commercial property prices have risen by only 800pc, or 3pc as an annual average. That means that in real terms, they have fallen, by 70pc in total, or 2pc as an average annual rate. So the ratio of residential to commercial property prices is now about 13 times what it was 65 years ago.(1)

What explains these radically different trends in the two types of property? Residential living space is something that we demand more of as we grow richer. Indeed, even without the current huge tax privileges to owner-occupiers, (2) the proportion of our income that we wish to spend on it probably rises as we become richer. (3)

1) He suggests other reasons for this divergence, but overlooks the impact of Business Rates, which is like Land Value Tax for commercial land and buildings (it's a flat percentage of the total rental value - and what's left is subject to income or corporation tax). If residential land and buildings were subject to the the same tax rates we could replace a huge chunk of taxes on income and output - the calculation is a virtuous circle, as lower VAT or income tax means that people have more money to spend on rent, which increases total rental values, which increases the tax take therefrom, allowing further reductions in VAT, income tax, more or less ad infinitum.

2) Bonus marks for that sideswipe.

3) Yup, that's as predicted by Ricardo's Law of Rent as modified by Henry George: as the economy grows, an ever larger share goes into land rents. If that growth is capitalised into higher selling prices we then get house price/credit bubbles, each followed by financial crisis, recession.

I'm surprised to see this in The Telegraph...

Perma house price bear Roger Bootle on top form.

He points out the idiocy of trying to sustain the house price bubble at all costs. The whole thing is worth a read, but my favourite bit is this:

"If the Government wanted to be really radical, though, it would end the ludicrous subsidies to owner-occupiers – the exemption from capital gains tax and the absence of tax on the imputed rent from living in a property.

This would stop the ridiculous spectacle of single people living in large houses because they think that it is the most tax-efficient way of increasing their wealth."

Spotter's badge: Drewster at HPC.

Missing figures round

Some property ramping from The Torygraph:

Home buyers who are already on the property ladder are finding mortgage payments even more affordable, the CML figures showed. They typically needed only 10.6pc of gross income in November 2009 to cover mortgage interest payments. Other than a brief low of 10.2pc in the middle of 1996, this was the lowest debt burden for home movers since the CML started recording this data in 1974.

First-time buyers spent an average of 14.4pc their of gross income on mortgage interest in November, the lowest figure since May 2004, according to the Council of Mortgage Lenders (CML).

OK. What are the missing figures?

1. What interest rate are they paying now compared to then,
2. How high their incomes are now, compared to then. FTB age has gone up from late 20s to mid-30s over last ten years, and there are far fewer FTBs nowadays (just the richest few), so in relative terms, FTB wages are much higher.
3. How big their mortgage (as a multiple of income) is now compared to then,
4. How big their deposit/equity is now compared to then,
5. What type of home are they buying now compared to then.

It's not much consolation if:

a) An FTB in the 1990s could buy a three-bed house for 2.5 times income with a 10% deposit @ 6% interest = 14% of income (i.e. average earnings £12,000 x 2 x 2.5 = average house price in mid-1990s £60,000) and

b) Today's FTB is buying a two-bed flat costing 4.5 times income with a 25% deposit (from The Bank of Mum & Dad) @ 4% interest = 14% of income (i.e. earnings £20,000 x 2 x 4.5 = £180,000).

I've exaggerated a bit, of course, but you get the general idea.

Rehashed fake statistics of the week

From The Torygraph* (my numbering):

(1) One in 20 hospital admissions in England is due to smoking and treating illnesses related to the habit costs the NHS £5.2 billion a year, official statistics suggest.

(2) There were around 1.4 million hospital admissions in 2007/8 for diseases caused by smoking in people aged over 35, a report from the NHS Information Centre said.

(3) For people aged over 35, smoking accounts for five per cent of all hospital admissions and one in five deaths is attributed to smoking, the report said.

(4) An estimated 83,900 people died as a result of smoking in 2007/8 – 18 per cent of all deaths for adults aged 35 or over.

(5) The proportion of adults smoking has dropped slightly from 22 per cent in 2006 to 21 per cent in 2007 but many diseases take years to develop so ill health related to the high smoking rates of the 1970s and 1980s are only now manifesting.

*Ahem*

(1) It is miraculous that the 'cost' has doubled in the space of a year - from £2.7 billion on 6 October 2008 to £5.2 billion now. Either way, this isn't costing the NHS a single penny, the cost is borne by taxpayers. Seeing as VAT and duties on tobacco raise about £10 billion per annum and smokers' shorter life expectancy cuts about £12 billion off the annual state pensions bill, non-smokers are making a handsome net profit on the whole thing. And is "official statistics suggest" a polite way of saying they're lying through their back teeth?

(2) OK, 1.4 million is a Big Scary Number, but it's the one-in-twenty that's relevant, which doesn't seem too terrible. There are (say) ten million smokers, so that would mean one-in-seven have to go to hospital once a year (possibly plausible, I suppose). Alternatively, we could assume that each of their alleged 83,900 deaths is preceded by seventeen hospital visits (which seems a tad on the high side). But the 83,900 figure is itself plucked out of thin air, so of the ones they actually know about (having treated them) the number of visits must be much, much higher (and hence even less plausible).

(3) Or we could assume it's true that "smoking accounts for five per cent of all hospital admissions and one in five deaths" (query WTF does "attributed" mean?) and compare 20% (deaths) with 5% (admissions) and conclude that three-quarters of smoking related deaths don't "cost" the NHS a penny.

(4) & (5) These factoids suggest either; that nearly all smokers die of smoking-related diseases (i.e. 21% smoke and 18% die of it, allegedly); or that only half of them do (because "ill health related to the high smoking rates of the 1970s and 1980s are only now manifesting"); or that in fact only a third of smokers die of smoking-related diseases (83,900 out of 250,000 smokers who die each year of whatever cause) NB, 250,000 = ten millions smokers divided by average life expectancy of a 35-year old smoker of forty years, i.e. ten years less than normal life expectancy of a 35-year old, which is fifty years.

* Via Tim W.

Compare and contrast

The Telegraph appears to be the only paper to have covered the rumour that the FSA will only allow banks to grant mortgages of up to three times salary. I personally doubt whether a) this is true, b) this is administratively enforceable and c) even if it were, whether our benighted government - who have desperately spent the last two years trying to reflate the property price and credit bubbles - would allow it, but never mind:

Spread over two or three articles:

Exhibit One: Melanie Bien, at mortgage broker Savills, said: "If you insist on putting a limit of three times salary, you will end up with as a subdued market as you have now. Prices will have to come down even further for first time buyers to afford a property."

Exhibit Two: why does the Government feel the urge to intervene in the mortgage market so crudely? It will make life tougher for first-time buyers.

Doth not compute.

If the measure were to bring prices down (which it almost certainly would), that would make like easier for first time buyers. But simultaneously, by a miracle of DoubleThink, it would also make like tougher for first time buyers. Don't the two more or less net off in the short term, with the overall long term effect being a reduction in the debt burden on the first time buyers?

Or does the avowedly right-wing Telegraph in fact favour the nominally left-wing government's original plan to do absolutely anything within its powers to reflate the property price and credit bubbles? Or what?
------------------------------------
Now I think about it, this is another good example of a marginal situations where you can choose between policies that make it easier to become wealthy and policies that make it easier to remain wealthy.

As there is a fairly fixed supply of housing and a fixed amount of space where it's worth building them, changes in house prices do not affect the overall wealth of the economy one bit - policies that keep prices up merely enable the already wealthy to remain wealthy, whereas restricting the amount of money that is funnelled into property, must, all things being equal, increase the amount of money that can go into more productive things, thus enabling people who aren't already wealthy to become wealthy.

Life in a police state

From The Telegraph: "Police watchdog investigates claims that three officers attacked war veteran"

Also from The Telegraph: "Police shoot man dead outside Guildford Cathedral"

Er, also from The Telegraph: "Damian Green accused of 'grooming' Whitehall mole, claim police"

Ah ... another one from The Telegraph: "Ian Blair poised to publish a book about his years at Scotland Yard" ...Sir Ian Blair is negotiating a book deal worth an estimated £150,000 to reveal all about his turbulent years as head of Scotland Yard.