Daily Mail on top form

Peaches [Geldof] had a house in the country, worth nearly £1million, bought on her earnings as one of the new breed of media blondes.

Hardly surprising.

From The Daily Mail, a table showing the amount of mortgage debt owed to members of the Council of Mortgage Lenders.

The council’s breakdown puts total mortgage debt at £897billion. Its figures cover three quarters of the market and exclude smaller building societies and other lenders.

In other words, total UK residential mortgage lending is about £1,200 billion, the same figure it has been for about six or seven years.

London - £229.5 bn
South East - £162.3 bn
North West - £81.3 bn
South West - £79.6 bn
Scotland - £64.2 bn
West Midlands - £61.9 bn
East of England - £60.6 bn
Yorkshire & the Humber - £58.3 bn
East Midlands - £44.7 bn
Wales - £28.6 bn
North East - £26.1 bn

This is hardly surprising because if you multiply up the number of homes by average selling prices for each region, then London is approx. one-quarter of the total, so all things being equal, you'd expect one-quarter of all mortgage debt to have been originated on London homes.

See also Wiki: "London generates approximately 22 per cent of the  UK's GDP". On most of these measures, London comes out at around one-quarter and London and the South East together are nearly half.

Reader's Letter Of The Day

From the FT:

Sir, I was fascinated to read the latest IMF research that estimates the subsidy that Britain’s largest banks still enjoy from implicit government guarantee equates to circa £66bn (1) (“IMF warns on too big to fail”, April 1).

Does this not fly in the face of the general understanding that the only reason for all of us taxpayers to continue this blind support of the highest and most grossly overpaid sector in society was because it provided some £60bn-£80bn (2) a year to the Treasury coffers?

Richard Guthrie, Captain, The Silver Rocket Ship Company, Scarborough, N Yorks.(3)

1) The Bank of England said the value of the guarantee (free insurance) was worth about £100 billion a year.

I'd argue that about three-quarters of banks' profits are the result of a deliberate policy not to collect taxes from the rental value of land, meaning that the banks can collect that rental value as mortgage interest instead.

And then there are actual subsidies, like Funding For Lending where banks can borrow at half a per cent from the government and lend it out again for as much as they can get, or the Help To Buy scheme.

2) The UK financial sector paid some accounting firm to publish a report saying that the UK financial sector paid over about £63 billion in various taxes in 2011-12.

UPDATE: the 'controversial' bank asset tax (0.156% of gross assets) raises about £2 billion a year, in other words, pretty much naff all. We ought to wack that up to 1% or 2% but levy it on UK lending only.

3) This rather splendidly named company isn't as exciting it sounds, according to ukbizdata.com, its main activity is "Security dealing on own account"

UKIP, landowners and windmills: You can't beat a nice paper trail

Well done, Autonomous Mind.

I do not know how he got hold of some of these documents, but this is the sort of bureaucratic digging I have to do at work.

Comments here disabled, join the convo at his.

Fun with numbers (2)

It's always sad when somebody close to you, or some public figure for whom you feel affection, dies but let's look at the numbers:

World population = approx. 7,000 million
Average life expectancy = approx. 50 years
Deaths per year = 140 million
Deaths per day = 380,000
Deaths per hour = 16,000
Deaths per minute = 270
Deaths per second = 4 or 5.

"Irish President Michael D Higgins in historic UK visit"

From the BBC:

Irish President Michael D Higgins has been welcomed to the UK by a keen local archaeologist at the start of the first state visit to Hadrian's Wall by an Irish head of state.

Later he is due to visit Stonehenge and Glastonbury in the south west of the country - two more historic firsts.

Ahead of the trip he said his interest in British history was at an all time high, but warned there was "significant work" to do before he had visited everything in the guide books.

His trip comes after the Queen became the first British monarch to visit Leighlinbridge Castle and St Kevin’s 6th-century monastic site in the Republic of Ireland three years ago.

Then Sinn Fein did not attend, choosing to spend the day paintballing instead, but on Tuesday Northern Ireland's Deputy First Minister Martin McGuinness, a former IRA commander, will take the afternoon tour at Windsor Castle, duration approx. 5.5 hours.

Fun With Numbers

From yesterday's City AM:

THE NIGERIAN economy is nearly twice as large as official estimates previously suggested, making it Africa's biggest, after a recalculation by the country's statistical agency.

The exercise has pushed the west African nation’s calculation of nominal GDP in 2013 to 80.2 trillion Nigerian naira (£295bn), far higher than the previous estimate of 42.4 trillion naira.

This new method, announced yesterday, means the country of 170m people is Africa’s largest economy, outstripping South Africa by £60bn, and is the 26th biggest in the world.

From today's City AM:

We are about to see a beautiful demonstration of this with the British economy, where the official statisticians will shortly entirely and drastically rewrite decades of history...

One change will see research and development spending classified as capital expenditure; at a stroke, this will raise the level of the UK's economic output by a cool £25bn.

That’s just the beginning: overall, the statistical deckchair shuffling will boost the size of the UK economy by between 2.5 and five per cent, a shockingly large amount (and a vast range that makes it hard for outside forecasters to be able to predict exactly what the Office for National Statistics (ONS) will come up with).

Killer Arguments Against LVT, Not (322)

Some Homeys get hysterical and say that introducing LVT would be "massive redistribution" and accuse you of being a Commie or something.

Well no, that's utter nonsense. There are other Homeys who argue that the "wealthy" would get off lightly and that the "hard-working homeowner" would be clobbered. It's all hysterical nonsense devoid of factual basis.

All mainstream LVT supporters (apart from, admittedly, a few Fifth Columnists) agree that LVT would and should be a replacement tax, and for the sake of this discussion, we can assume that government spending/total tax revenues are kept pretty much constant, it is just a shift in who pays for it.

(It would be nice if the UK government pulled its finger out and got rid of all the waste and theft in the system, which must be about 20% - 25% of total spending, i.e. get spending back down to 35% - 40% of GDP, with which we managed quite happily until The Financial Crisis, which they used as an excuse to massively ramp up spending on their nearest and dearest, The Fog of War and all that, but that is also a separate topic. Suffice to say that government spending in the UK is not particularly redistributive downwards.)

Everybody has their own personal list of most-hated taxes (for many people, LVT is at the top of that list, of course), but the ideal candidates for replacement are existing taxes on land, buildings and wealth generally. Some of these are 'regressive' (Council Tax, the biggest chunk, and the TV licence fee) and some of which are 'progressive' (SDLT, CGT, IHT); and some are just a plain nuisance (Insurance Premium Tax, s106 agreements).

(Let's put Business Rates to one side for now).

Taken individually, all these taxes are 'unfair' in the emotional sense and downright stupid in the economic sense, but taken together, the 'unfairness' evens out (i.e. people in average homes pay nearly 1% of its value every year in Council Tax/TV licence but pay very little in SDLT and nothing in IHT - people in expensive homes pay bugger all as a percentage in Council Tax/TV licence but get smashed with up to 40% IHT once a generation). So once you net that off, what you are left with is a whole load of stupidity.

If you replaced the whole lot of them with a flat tax on site-premium rental values, the 'unfairness' would even out, and by and large, there would be relatively few identifiable 'winners' or 'losers' from the change. But that'd be a good first step in the right direction, one good tax replaces a shed load of bad taxes on a fiscally neutral basis.

(As it happens, the rate would average out at about 0.7% per annum on current selling prices, which is not uncoincidentally how Domestic Rates in Northern Ireland were recalculated back in 2005, or the rate chosen for the Annual Tax on Enveloped Dwellings introduced last year),

If we're somewhat more radical than this and start replacing or reducing the Big Three taxes - income tax (approx. £150 billion a year); VAT (approx. £100 bn a year) and National Insurance (also approx. £100 billion a year) it would be perfectly feasible to do it such a way that there are relatively few identifiable winners or losers.

(VAT is the worst and most economically damaging tax, but it is neither particularly progressive nor regressive; it just makes everybody poorer all the way up and down the income scale; puts the most businesses out of business and creates the most unemployment. The National Minimum Wage might be daft, but its impact, to the extent it can even be measured, is a tiny fraction of that, far better to reduce means-testing, but I digress. But the EU insists of a minimum standard rate of 15%, so there's not much we can do there, even if the pol's wanted to, which they don't. Ditto Employer's National Insurance.)

Higher rate income tax is clearly 'progressive' and Employees' National Insurance is clearly 'regressive'. They both raise similar amounts of revenue and higher rate tax kicks in where Employee's NIC tails off, so we could, for the sake of this discussion, get rid of both at a total static revenue loss of about £90 billion. Factor in a bit of Laffer Effect and you'd need to increase the LVT rate from approx. 0.7% to approx. 2% of current selling prices to be fiscally neutral.

So to the extent this would result in any "redistribution", it is merely from the 'land wealthy' to the 'income wealthy' or from 'rent collectors' back to 'rent generators' (which we LVT-ers refer to as predistribution), in the same way as tobacco duty is redistribution from smokers to non-smokers (to the tune of about £200 a year to each non-smoker!).

The two categories overlap to a large extent (most low earners live in small, cheap homes; most high earners live in nice big homes) so it is certainly not upwards or downwards redistribution, it would be sideways redistribution - the much eulogised "hard-working homeowner" would truly be better off and those who are currently hoping to inherit big time and then retire on the proceeds would have to become "hard-working homeowners" themselves - to the extent that this concept even exists.

Here endeth.

These "apologies" seem to be catching on

From the BBC, four days ago:

 

Culture Secretary Maria Miller has apologised to MPs for her attitude towards an inquiry into her expenses. 

 

The Commons Committee on Standards ordered her to repay £5,800 to cover over-claiming of mortgage expenses after she failed to cut her claims as interest rates fell.

 

It cleared her of making false expenses claims, but said her submission of "incomplete" evidence to the inquiry had breached the MPs' code of conduct.

 

The MP said the matter was now over. She said she "fully" accepted the committee's conclusions and apologised "unreservedly" to the House of Commons.

 

From the BBC, today:

 

An emotional Oscar Pistorius has apologised to the family of girlfriend Reeva Steenkamp, on the first day of his evidence at his murder trial.

 

In a trembling voice, he said he was "trying to protect" her and said he could not imagine the family's pain.

 

Mr Pistorius said he suffered "terrible nightmares" and often woke up smelling Ms Steenkamp's blood.

 

Prosecutors say he killed her in February 2013 after an argument. He says he mistook her for an intruder.

 

The athlete told Ms Steenkamp's relatives that there "hasn't been a moment since this tragedy happened that I haven't thought about your family".

"Meanwhile, in other high-altitude cow transportation news..."

Spotted by JuliaM at David Thompson's blog (scroll down a bit).

"If they learn how to make fire, we’re buggered."