"BAA to raise airport landing fees"

Obviously, the Tories made a big mistake when they sold off BAA as a job lot, any sensible government would break up this monopoly, which is of course inimical to free markets and competition, that's a no-brainer.

As to landing fees* generally, part of the MW manifesto is of course that the local councils should auction off landing/take-off slots and retain the proceeds themselves. As this is a user-charge rather than a tax, it would not impede workings of the free market unduly, while being a valuable source of revenue to balance out competing interests, in other words, the proceeds could be used to pay for extra sound insulation for local residents and for extra infrastructure like better transport links to and from airports. There is a natural upper limit to what councils can charge, of course, if they get too greedy, then 'planes will stop landing/taking off and receipts will fall.

A form of airborne Land Value Tax, if you will.

* It appears that landing fees are far too low anyway, as a 23.5% increase would only lead to a £2 increase in ticket prices. So we needn't worry about whether to charge VAT on fuel or international flights (a cornerstone of my tax policies is to scrap VAT); flat-rate landing/take-off fees would affect budget airlines (who cram their 'planes full - the Air Passenger Duty of average £15 per passenger would go of course) a lot less than more expensive airlines; flat-rate fees would make international flights cheaper relative to domestic flights, so people would be more likely to take the train for domestic but more wealthy international travellers would use the UK as a hub; the charge would be neutral between domestic and overseas airlines (who don't pay UK corporation tax); and so on and so forth. 

Better transport links to/from an airport have a huge influence on whether people want to fly from/to that particular airport, and better local infrastructure makes it relatively more attractive to live near an airport, so it would be easier for the airport to find people willing to work there, so if the rates were set correctly, and the proceeds invested sensibly, such user-charges would lead to a virtuous circle.

** For another take on all this, see here.

*** I have done some rough workings as to potential total receipts, based on grey market price of slots here.

"The Waste of Nations"

The Adam Smith Institute have come out in favour of 'Pay-as-you-throw'.

"the report stresses that PAYT must not be used as a 'bin tax' and that its introduction must be accompanied by a corresponding fall in council tax ... The report also calls for the full liberalization of the refuse collection sector, so that private companies would have to compete for customers"

Woah! Slightly wrong on all counts!

The whole topic of refuse collection is a lot of sub-issues, you have to deal with these on a 'divide-and-conquer' basis.

1. Some things are worth recycling, there is a market for waste paper, used aluminium and steel cans and so on. Councils have to rely on the good conscience of their residents to put these into separate bags or boxes, and councils can sell these to private companies for market value, the proceeds should come off the costs of waste collection. Those people who are too lazy or inconsiderate to do this are hardly going to change their behaviour as a result of tweaks to the tax system.

2. Some stuff burns, like plastic, cardboard, polystyrene. This should be taken to incinerators as cheap raw material for electricity generation. Again, this must have some market value to the company that runs the incinerator, so it reduces the cost to the council and hence to households of refuse collection*.

3. Some stuff rots, which the council can use to make into compost for free use at its allotments (like in Waltham Forest) or, remembering that methane is a far more powerful greenhouse gas than CO₂** for methane generation, which in turn can be used to generate electricity or even as an alternative to petrol in cars***.

4. There's glass. Hmm. Seeing as most of our bottles and jars came from abroad, there is more than enough waste glass to provide domestic producers, and it seems a bit mad to sail crushed wine bottles back to South America or Australasia. I suggest we chuck the excess into the ocean where it can turn back into nice shiny sand.

5. There's poisonous stuff, like batteries, oil, paint and the like, this has to be dealt with separately.

6. There's bulky stuff, mattresses, fridges and so on.

7. As to the Adam Smith Institute's final point, privatising refuse collection and allowing companies to compete for customers, they tried that in New York and it got taken over by organised crime who just dump everything in the river. And what do I do if my neighbours 'opt out' of waste collection and just let it pile up in the street? Refuse collection is not just for the benefit of an individual household, it is for the benefit of your neighbours as well, the local council does have a rôle to play here as final arbiter, even if the council itself sub-contracts to private bidders (as most of them do).

Right. Now we can look at taxation.

A cornerstone of my tax policies is to get rid of VAT, which'll be the first thing on the agenda once we've left the EU, just to set the scene ... 

Let's start with bulky stuff, that's easiest. It is pointless trying to make people pay for the council to remove bulky stuff, you just end up with fly-tipping - but for every fridge that is chucked out, a new one is bought. So why not levy the tax on the purchase of new mattresses or fridges instead? If it costs the council £20 to dispose of a fridge, then there should be a £20 tax on new fridges. And it will make second-hand fridges cheaper relative to new ones, so there's your recycling/re-use thrown in!

If the value of recyclable waste (aluminium, paper) exceeds the cost of collection, the council is breaking even. There is no need for any further tax.

It costs about £100 to incinerate a ton of rubbish, so there should be a £100/ton tax on plastic, cardboard and polystyrene at the point of production or import. A plastic bag weighs one-third of an ounce, so that's a tax of one-tenth of a penny per plastic bag, and so on.

The same principles apply to every other category. Assuming that domestically produced waste glass can be sold back to domestic producers, that is cost/raw material neutral. If it costs £10 to transport a ton of excess imported glass to the middle of the ocean and dump it, then you'd have a tax of £10/ton on the imported glass bottles or jars. An empty wine bottle weighs about 1lb, so the tax on that would be half-a-penny. The nasty stuff, like batteries, engine oil, electronic stuff costs £400 a ton to 'process'. An AA-battery weighs half-an-ounce, so there'd be a tax of half-a-penny on an AA-battery, 50p on a Mac Mini, about £5 on a PC, and so on.

Finally, there'll always be residual stuff that goes to landfill. Landfill Tax is one of the most insane taxes we have. £32 a tonne! What are the real costs of landfill? Well, one acre of agricultural land sells for anything up to £5,000. That's £1 a square yard! If you pile waste ten yards deep, you can easily squeeze ten tons of waste on every square yard. So to protect something worth £1, the government wants us to pay £380? Are they completely mad?

I accept that there is some hysteria about the whole country ending up as a giant landfill site, but fear not, fellow citizens! Total waste per household is about 1.3 tons, surely half or three-quarters**** of this can be dealt with as above? That leaves 0.3 tons x 25 million households = 8 million tons per annum, which, piled ten yards deep would cover about a quarter of a square mile. Provided you dig the holes deep enough, you can cover 'em up again afterwards, job done. Even if we didn't cover them up, it would take four millennia before even one percent of the UK were covered with residual household waste.

* As I posted on Blog Action Day "... the proposed waste incinerator at Belvedere, East London, will be able to burn over 500,000 tons of waste a year (the waste generated by about 400,000 households in a year) and generate 66 megawatts of electricity, or enough for 66,000 homes." And all these greenies can shut up - of course, part of the planning permission has to be that they separate out the really poisonous stuff and have proper filters and so on. There has been a massive waste incinerator in the middle of Munich for decades and you can't smell a thing. Fact. And if people don't want to live near them, then build them in the middle of the countryside or something.

** To the extent that you believe in this man-made-climate-change stuff at all, of course. Many don't.

*** The funny thing is that Waltham Forest gives you a separate brown wheelie bin into which you put all your organic kitchen and garden waste, whereas the council where we now live asks you to put kitchen waste into the normal wheelie bin, and asks you to put out garden waste separately. I think that Waltham Forest is correct on this one, but hey...

**** Ten years ago, we used to fill up our wheelie bin every week. Now that we separate out glass, plastic, cans and paper, it takes us one month to fill it with whatever's left (they do alternate fortnightly collections where we live now, but they missed us out two weeks ago and it was just about full). So if they asked us to put organic kitchen waste separately, we'd be down to about one-fifth of the volume of ten years ago.

"Council bids to run post offices"

Fundamental to the whole debate about the survival or closure of rural post offices is the question, are post offices...

1. Businesses like any other, which should not be getting subsidies and have to survive or fail like any other, or

2. Providers of 'merit services', like child nurseries or public libraries, i.e. services that would be provided by private businesses if demand were there, but which ought to be subsidised/publicly provided to make them available to more people. In the case in hand, we do have to at least consider old people who refuse to get involved in internet banking and so on and may not be able to travel miles to the next nearest bank or cash machine etc.

3. Public goods, i.e. a core function of the State like law'n'order, protection of private property rights or defence, for which there is no real free-market solution, and which must be paid for out of general taxation.

If the answer is 1, then of course Post Offices should not get subsidies, end of debate*.

If the answer is 2, then remembering that the state is lousy at actually running anything, this is a case for local taxation, i.e. there should be a separate line on your council tax bill showing your share of the subsidy paid to the local Post Office, and of course the council should also publish details of how much subsidy each individual Post Office receives. Then every council tax payer can make up his or her own mind whether it's worth it or not.

If your answer is 3, then I'm afraid you haven't understood the question.

* Yes, I know that EUsceptics like to blame the closure of rural post offices on the EU, who are officially against state subsidies (unless it involves French farmers or German banks, of course) but all-in-all I am against subsidies as well, so there! If council tax payers are happy to pay the subsidy, then this is no business of the EU!

Alcohol, licensing and sensible taxes

With all this blah-di-blah about the UK's fine and ancient tradition of binge drinking, let's look at some numbers:

1. Total alcohol duties are around £8 billion a year* (table C4), with as much again for VAT. That's £16,000 million.

2. There are about 60,000 pubs in the UK, paying an average of £300 for a licence to serve alcohol. That makes £18 million, i.e. bugger all compared to alcohol duties and VAT. The forms are ridiculously long and complicated, of course.

3. There are basically three places where you can drink - at home (which causes no bother to anybody), on the streets (which is up to local councils to allow or forbid under local by-laws**) or in the pub (which causes little bother in itself, it's outside the pub and on the way home where things can turn nasty - violence, vandalism and drink driving etc).

4. The turnover of all UK pubs is about £15 bn, or 60,000 x £250,000 a year. The VAT on that is somewhere over £2 bn, or £40,000 per pub.

5. Good taxes are more like user charges, and help balance the interests of different parties, in this case, publicans, drinkers and local residents.

6. So why not scrap VAT on alcohol - whether sold in the shop or in the pub - and fundamentally reform existing licensing laws? We should allow local councils to auction off the licences for market value instead! If an average pub no longer has to pay £40,000 in VAT, it can happily bid at least half that much for a licence - maybe much more - and stay in business. For people who drink at home, causing no bother to the general public, booze gets cheaper, of course.

7. For every additional hour opening time in the evening (which is what causes the perceived problems) a higher rate would emerge, via the auction process. So the pubs that shut at 11 o'clock end up paying (say) £20,000, those that shut at midnight end up paying (say) £30,000 a year, and so on. The local council can use that extra £5 million income (average 200 pubs x average £25,000 licence) to pay a bit of overtime to policemen to sort out the troublemakers, catch the drink drivers and to ambulance crews to get people to A&E; as well as clearing up the broken glass and other minor acts of vandalism***.

8. We then also have a simple and fair way of measuring and dealing with the 'external costs' of binge drinking. Local councils can say exactly what the licence income is and have a pretty good idea of the direct costs.

9. And of course, from a libertarian-but-considerate-smoker's point of view, local councils should also be allowed to auction off a restricted number of smoking licences, say one for every four pubs in the area. If that increases a pub's takings by one-third, they'd be worth at least £10,000 a year****, so that's another half a million quid for the local council for sweeping up cigarette butts and so on.

* That £8 bn is considerably more than the cost to the NHS of £3 bn for alcohol related injuries and illnesses.

** The same general principles could be applied to supermarkets and off-licences of course - if a local council is happy to allow drinking in the street, it can auction off 'off-licences' to local shops.

*** Let's say four hours a night overtime for 50 additional police officers/medics x £50 per man/woman hour x 365 nights a year = £3.7 million a year, with £1.3 million left over for clearing up broken glass and so on.

**** Average turnover per pub £250,000 x one-third = £80,000, on which gross margin 20% = £16,000

"Tolls removed from Scots bridges"

Headlines like that always remind me of this speech by Winston Churchill (scroll down to the section entitled 'The error of public tollways')