Thursday 28 February 2013

"Peak water"

Spotted by Graeme at Huff Post:

In the keynote speech at London's annual City Food Lecture on Tuesday, Nestle CEO Paul Bulcke warned the world about the possible consequences of the global water shortage many experts believe will strike within the next several decades.

Noting that water scarcity could cut global cereal production by 30% by 2030, and that water needs already exceed supply, Bulcke called water scarcity the greatest threat to food security in the future. He urged global leaders to act soon to devise realistic solutions.

"It is only by working together with policymakers, civil society, agriculture and other stakeholders at local and international levels that we can develop effective, coherent and concrete action," Bulcke told the City Food Lecture attendees. "This is an issue that must be addressed urgently. I am convinced it can be solved. We should give water the right priority, the right value."

Or to translate that into English: I am head of a large farming business which would like governments all over the world to guarantee us cheap water supplies so that we can grow stuff on land which we have grabbed and then sell it back to the grabbees at a profit.

Bonus points for "possible consequences.. within the next several decades" and for missing the point that in most markets, "need" exceeds "supply", that's why very little gets given away for free (even if the people who grabbed a natural resource paid nothing for it in the first place).

A couple of notable absences, methinks...

Via Bob E from the BBC:

Viewpoints: The civil service and reform

Nick Herbert, former minister of policing and criminal justice:
"Whitehall Wars" makes for a good headline but a bad debate. I believe that the time has come to look again at our system of administration and consider the case for more radical reform...

Lord Bichard, former permanent secretary: Sadly the current debate about the civil service largely misses the point by focussing almost solely on the relationship between politicians and officials and whether it is at an all time low.

Dave Penman, general secretary of the FDA union: The civil service, like any large organisation public or private, is constantly reforming and adapting to respond to new challenges. The current government has tasked the civil service with delivering a radical reform agenda with significantly fewer resources. Already at its smallest size since the Second World War, the civil service is still only just over halfway through the job reduction programme planned to 2015, with further cuts to come beyond this date.

Peter Riddell, director of the Institute for Government: At the Institute for Government we have identified serious inadequacies in Whitehall that need to be addressed by both ministers and the civil service.

Alan Downey, head of government and public sector at KPMG: There are some specific reasons for the latest breakdown: for example, it is clear that a 30% reduction in the number of senior civil servants has cut deep into Whitehall's capacity, capability and morale. Yet, the problems underlying the recent outbreak of verbal hostilities have been brewing for many years. The last government's relationship with Whitehall followed a similar pattern: after a honeymoon period ministers began to complain about obstructive behaviour and the difficulty of getting their policy intentions translated into practice.

Yup, the BBC didn't ask Timmy Taxpayer or Joan Public what they think of all this, and none of the quangocrats interviewed even mentions them.

Alcohol Concern strongly denies existence of "embedded black ops teams"

Full story at the BBC.

Headline by Bob E.

It's not just me then.

From It's Grim Up North:

The recent trend of chilly winters has continued, with figures showing that this season has been the fourth in the last five years to be colder than average. As the 2012/13 winter draws to a close, Met Office statistics for the UK revealed the season was 0.4C cooler than mean temperatures.

Over the last five years, only last winter saw the mercury rise above the 3.3C (38F) average - taken from 30 years of statistics from 1981. The Met Office news blog said: "For the winter as a whole, the UK mean temperature of 3.3C makes it milder than 2008/09 (3.2C/37.8F), 2009/10 (1.6C/34.9F) and 2010/11 (2.4C/36.3F), but colder than 2011/12 (4.6C/40.3F).

All in all, I preferred global warming (like in the late 1990s, early 2000s) when everybody's lawn died in the summer, it was a small price and one worth paying.

UPDATE: Sobers says it's all something to do with the Atlantic Multidecadal Oscillation. Or perhaps this is the Atlantic Multidecadal Oscillation.

Maria Hutchings' CV...

... has been given a closer look by Ministry of Truth.

Wednesday 27 February 2013

"Officials step down after rape allegations misreported as blood poisoning"

From The Daily Mail:

Another hospital could be at the centre of a Mid Stafford-type scandal after 'discrepancies' were found in the way patient deaths were recorded.

Experts fear cases of septicaemia have been incorrectly listed at the Royal Bolton Hospital in Greater Manchester. Four times as many cases of blood poisoning were recorded than would normally be expected at the hospital in a year. Around 800 cases were recorded between March 2011 and April 2012 , although a similar-sized trust would expect to have just 200.

This has raised questions about whether some patients may have been recorded as dying from septicaemia when they also had other conditions that should have been treated or prevented.

Also from The Daily Mail:

Rape victims were pressured into withdrawing their allegations to help police meet crime targets, a damning report revealed yesterday.

Detectives from Scotland Yard’s specialist rape unit persuaded the women to say the attacks they endured were ‘consensual sex’... The shocking treatment was revealed in a report by the Independent Police Complaints Commission into the Southwark branch of Scotland Yard’s Sapphire unit, which investigates rape and sexual assault.

The police watchdog found detectives had adopted an approach of ‘failing to believe’ victims and, in a breach of the ‘first principle’ of Scotland Yard’s rules, had failed to investigate cases properly.

"Cristiano Ronaldo targetted during match"

From The Daily Mail:

Cristiano Ronaldo was targeted with an air rifle during last night's football match between Barcelona and Real Madrid prompting fears of a new trend of 'footballers attacking footballers'. In an attempt to put off Real Madrid's star man, the Portuguese forward had dangerous airgun pellets fired directly at him countless times by Ashley Cole who was in the stand at the Nou Camp in Barcelona.

Air rifles are commonly used at Chelsea's training ground but are now becoming widespread at football matches.

"Pilot badger culls in Somerset and Gloucestershire approved"

From the BBC:

After years of lobbying by the British Airline Pilots Association, culls of pilot badgers are set to go ahead later this year after final licence conditions were met, Transport Minister Owen Paterson has said.

The pilot badger culls, in and around airfields in Gloucestershire and West Somerset, were postponed amid fears they could not be carried out effectively last autumn. Ministers want to hold a pilot badger cull to enhance passenger safety on domestic flights. The RSPCA, which opposes the cull, said it wanted to help fund better training for the primarily nocturnal aviators.

Mr Paterson confirmed the cull at the Civil Aviation Authority's annual conference. He also announced that reserve pilot badgers will be culled in Dorset. Under the plans, the furry flyers will be shot if seen anywhere in the vicinity of an airport without first being trapped in cages, which is current practice. Pilot badgers are easily identified by their smart dark blue blazers with matching peaked caps, usually adorned with quasi-military gold braid.

The International Maritime Pilots' Association has called for the cull to be extended to pilot badgers plying their trade on river ferries and at UK harbours.

This is what you want, this is what you get. This is what you want, this is what you get.

This is what... hacks me off about right-wing think tanks like the Centre for Policy Studies. As far as facts and figures go, they are usually pretty reliable, but there is no intellectual coherence to the conclusions they draw; so in one context, a figure is seen as good news and in another it's seen as bad news:

• The quantity of UK sovereign bonds issued has increased by two and a half times in just five years, by £832 billion – the equivalent of £33,000 for every UK household.

• At the same time, monetary policy has been extremely loose: UK base rates at 0.5% are at their lowest in 300 years. QE has also been larger, relative to GDP, in the UK (at 22% of GDP) than in either the US (13%) or the Eurozone (4%).

• These policies, while extreme, have had unimpressive results. Since 2008, UK growth has been the weakest of any G20 nation (with the exception of Italy).

• The Bank of England and the Treasury promised that QE would be temporary, stimulatory, and non-inflationary. These promises have been broken.

• QE has punished the innocent parties of this recession to the benefit of the indebted*. QE has imposed a stealth tax on savers, who are losing an estimated £65 billion a year in interest foregone**. Pensioners and the young have also lost out.***

• The sovereign bond market is no longer a free market in the normal sense of the phrase. Low gilt yields should not be taken as a 'vote of confidence in the UK economy' (as the Chancellor has previously claimed).

If public spending had grown in line with nominal GDP since 2001/02, it would have been £150bn lower than it was in 2011/12. There would be no deficit. Despite claims of austerity, total spending is rising, not falling.

All of which is factually correct and good stuff etc. You get the impression that they are in favour of small government and low taxes and against subsidies - most of the subsidies (i.e. deficit spending) they rail against here are subsidies to the land owners and bankers.

But the CPS are also at the forefront of Home-Owner-Ism, they are the ones crying out for these subsidies and for low interest rates! Any self-respecting free market liberal would like to see an end to artificially low interest rates and those who have thought about it would also like to see taxes on income and output replaced with a user charge for benefits received by land owners (i.e. Land Value Tax).

* They merrily gloss over the fact that about 90% of all indebtedness relates to mortgages secured on or taken out to buy vastly overpriced land. These people and the banks and the really big landowners are the main beneficiaries of the ultra-low interest rate policies.

** That £65 billion figure for "interest foregone" is most interesting. Assuming it is correct (it seems a bit on the high side to me), then there's your answer. If we introduced LVT (at about 3% of current house prices) and increased interest rates to where they "should" be, i.e. inflation plus two per cent (so three or four per cent higher than what they are now), then a genuine prudent home owner who holds the same amount in real cash savings as his house is worth would be able to pay the LVT out of his interest income. Sorted.

*** That's crocodile tear crap. Home-Owner-Ists couldn't give a stuff about "pensioners and the young", they are quite happy shafting the latter group via inflated house prices. If you only need to save up a small deposit to buy a sensibly priced house, then whether you earn any interest or not in the couple of years you are saving up makes precious little difference to anything whatsoever.

"Alcohol sales under-reported by fifty per cent"

From the BBC:

The amount of alcohol consumed in England is twice as high as reported sales figures, a study has decided.

Counting units

University College London researchers multiplied the population of the UK by four units of alcohol a day to estimate total consumption and then compared the result with actual alcohol sales figures. They found there was a significant shortfall with all the "missing" alcohol unaccounted for in the sales figures given by HM Revenue & Customs.

This circular logic confirms their pre-conceived notion that everybody in the whole country is drinking above the recommended daily alcohol limit.

Ounting cunits

The experts claimed that much alcohol use went unreported, because anybody who ever touches alcohol is incapable of keeping track and is probably a pathological liar anyway. People are also in denial about their drinking problem when have sobered up. And clearly breweries, importers, distillers, retailers and hospitality sector are running rings round the tax man.

Wildly misleading statistic of the day: "41% of homes sold at a loss since 2007"

This got an "oh woe is us" write up in some of the papers, but let's refer back to the original press release from Castle Trust:

Over 130,000 families have sold their homes at a loss since 2007, according to exclusive analysis of housing transactions by housing investment and shared equity provider, Castle Trust.

The initial research, which tracks the proportion of properties selling at a profit or loss, includes an analysis of properties in England and Wales which were bought and sold between January 2007 and January 2013. Of these properties, 40.7% (131,442) were sold at a loss, with the average shortfall being £24,430 (on average 11.0% of the house price).

Over the same period, 55.6% (179,689) of homes sold for a profit generating an average return of £45,199 per transaction (on average 20.4% of the house price) and the remaining 3.7% (12,051) sold for the purchase price.

Let's gloss over the fact that lower house prices do not represent "a loss" for the honest hard working population of this country: the result of lower selling prices is that the purchaser saves more in mortgage repayments than the vendor loses in (negative) return on the cash he invests from the sale. So from our point of view, that's a significant gain and it's only a loss from the banks' point of view.

Let's focus on those two headline numbers: "130,000 families" and "41 per cent".

Readily available statistics, for example HMRC's Property transactions completed in the UK with value £40,000 or above show that there were 5,433,160 sales in the six calendar years 2007 to 2012, plus an unknown number of sales for £40,000 or less.

So either 41% is correct and about 2,200,000 were sold at a loss; or 130,000 is correct and 2.4% were sold at a loss. Or, more likely, both figures are completely wrong.

RETHINK: unless of course they mean homes which were bought after January 2007 and then re-sold before January 2013, in which case the 41% figure is probably about right, seeing as on the whole across England & Wales, house prices have been flat for the last seven or eight years; we'd expect half to have re-sold for a higher and half to have re-sold for a lower price.

Peak wind

From The Register:

Both these assertions, however, have been called into doubt - and the first one, that there's plenty of wind power to meet all human demands, is particularly shaky as it ignores the thorny issue of cost. McElroy, Jacobson and their allies tend to make wild assumptions - for instance that it would be feasible to distribute massive wind turbines across most or even all of the planet's surface.

Professor Keith has some scathing criticism for these ideas. To start with, he says that most large-scale wind potential calculations thus far have simply ignored the problem that the possible massive wind farms of the future are going to result in much less powerful winds for long distances behind them. He and Professor Adams write:

"Estimates of global wind resource that ignore the impact of wind turbines on slowing the winds may substantially overestimate the total resource. In particular, the results from three studies that estimated wind power capacities of 56, 72 and 148 TW respectively appear to be substantial overestimates given the comparison between model results and the assumptions these studies made about power production densities...

To cite a specific example, Archer and Jacobson assumed a power production density of 4.3 W m-2... production densities are not likely to substantially exceed 1 W m-2 implying that Archer and Jacobson may overestimate capacity by roughly a factor of four."

I'd always wondered about that, by how much does a wind turbine slow down the wind.

Tuesday 26 February 2013

"Bullock in Darlington escapes cattle market"

From The Daily Mail:

Residents in a quiet cul-de-sac in Darlington, County Durham, were left stunned when the animal ran amok after escaping from a nearby cattle market. Police received reports of the rampaging young bull chasing people around the town centre at noon.

When the beast headed towards Tennyson Gardens, police warned residents to stay indoors as staff from a local farmers' auction mart worked to recapture it. By the time they caught up with the bullock half an hour later, it had been cornered in the close - using two cows as bait. Farmers and police then managed to usher the runaway into a vehicle.

No one was hurt during the incident.

It's not quite Pamplona yet, is it?

The Emperor's New Mobile Phone

From The Independent:

Nokia has launched a new mobile phone that needs charging less than once a month and costs just £13 to buy.

The Nokia 105 is a basic text-and-call phone aimed at mobile markets in the developing world where electricity sources may be scarce or unreliable, but it is likely to prove a hit in the west too as a back-up or emergency device.

The 105, which is set to go on sale in the next few weeks, comes with a full-colour screen, torch and FM radio, and can obviously make phone calls and send and receive SMS messages too.

But the key feature of the new Nokia is its incredible battery life which, according to the Finnish company’s press spokesperson Pekka Haverinen, is around 35 days on a single charge.

Haven't Nokia been making simple, reliable phones that retail for about £15 for at least ten years? Apart from the longer battery life, this is some sort of Great Leap Forward how, exactly?

Background: I bought my first mobile phone, a Nokia 1112, in late 2007 for £15 and it is still going strong, although the battery seems to need recharging more often than when it was new.

"Giant human weighing more than 67 kg reeled in off Shetland"

From the BBC:

A North Atlantic fish is celebrating after reeling in a giant human weighing more than 67 kg (150 lbs).

James Cod caught the 6ft-long human while swimming off Muckle Flugga on Saturday. Mr Cod is awaiting confirmation from the relevant authorities of its possible record-breaking status. The human is currently being kept in Davy Jones' locker.

"It was a very big fight," he said.

He said he would keep trying to catch an even larger human. He told BBC Scotland: "Muckle Flugga is renowned for big humans. It took about 20 or 30 minutes. I knew it was a big human but I didn't realised it was that size - I am 6ft 5in and it's nearly as big as me."

Mr Cod added: "It's at the bottom of the ocean. We had to make room for it by eating some people who drowned here last year. I am a local celebrity at the moment."

"Ranulph Fiennes pulls out of Saharan challenge"

From The Daily Express:

The 68-year-old cousin of acting siblings Ralph and Joseph Fiennes has been preparing to embark on the 2,000-mile (3,219 kilometre) adventure, dubbed the Hottest Journey On Earth, for blindness charity Seeing Is Believing by sun bathing at a base camp.

Fiennes recently took a tumble while returning from the beach side bar and was forced to use his bare hands to fix a vodka Martini in temperatures of around 30 degrees Celsius (110 degrees Fahrenheit) - and now he has been ruled out of the six-month challenge, which he was due to start on 21 March.

An expedition spokesman is quoted by the Derbyshire Times publication as saying, "Ran has suffered a nasty sun burn to his head and chest which effectively makes his continued participation in the expedition more of a liability than an asset. He remains fully dedicated to the project and as soon as he can actually bear to have clothing touch his skin again, he will continue to support The Hottest Journey by fundraising and promoting awareness of Seeing is Believing."

A statement from the charity reads, "He has very reluctantly decided with the support of the team doctor and in the interests of the success of the expedition and its associated aims, to withdraw from the Sahara while the possibility to do so still exists, before the onset of the African summer.

"This decision has not been taken lightly and it is, naturally, a bitter blow to Fiennes and his colleagues."

However, the star's evacuation from the area is being delayed because of excellent weather. The charity's statement continues, "This plan is currently being hampered due the gorgeous sunshine at their present location which is discouranging participants from lifting themselves from their sun loungers. Until there is a let up in the weather conditions, Fiennes will be unwilling to leave."

Fiennes previously lost several square feet of skin to sun burn during an attempt to set a world sun-tanning record in the Australian outback in 2000.

They own land! Give them money!

Spotted by Bob E at Inside Housing:

Ealing Council in London has offered the owners of empty homes £30,000 to make their properties suitable to rent.

The new empty property grant scheme has been designed to reduce the west London borough’s housing shortage. In return for the grants, owners must commit to letting their properties at an affordable rent for a minimum of five years.(1)

Under the scheme, owners can apply for a grant for up to 100 per cent of the cost of repairs – to a maximum of £30,000 – as long as the houses have been empty for more than six months.(2) The property must be ready to be occupied within 12 months of the grant being approved.(3)

The council will also offer grants of up to £25,000 for homeowners that allow their properties to be managed by a registered social landlord for five years.(4)

The overhauled empty homes grant scheme will also include the introduction of a free ‘matchmaking’ service to connect owners of empty homes in disrepair with people who want to buy and renovate them.

Hitesh Tailor, cabinet member for housing at Ealing, said:

"With a severe shortage of affordable housing available,(5) we need to do everything we can to bring empty properties back into use for those most in need of a home. By helping good landlords (6) to bring their properties up to scratch we are also dealing with problems such as anti-social behaviour or crime which can result from homes being left empty for long periods."(7)

1) So you can collect Housing Benefit for five years, topped up with the £30,000 gift and after five years revert to letting privately.

2) So if you want a house doing up for free, just wait until your tenants move out and then leave it empty for 6 months.

3) No pressure there, then.

4) The RSL does the work for you and gives you £25,000..? Don't letting agents normally work the other way round?

5) Which this policy will exacerbate.

6) Leaving a perfectly good home in a high-rent area empty and allowing it to fall into disrepair is the sign of a "good landlord"..?

7) Or is this the sign of a bad landlord?

I just wonder, will they extend this scheme to cars with no MOT or insurance left at the side of the road - after six months they will repair and insure it for you and give you it back? Cars are depreciating assets and cars and fuel are very heavily taxed, but we still look after our cars and we pay the Road Tax because we don't want them crushed. How about applying the same logic to housing?

In summary, this policy is precisely the opposite of Land Value Tax and will have precisely the opposite effect. If you want those homes brought back into use, slap them with LVT, that way nobody will be able to afford to leave homes standing empty, and as LVT is a fixed cost, it is no disincetive to getting the place made habitable. And the landlord doesn't really pay for the cost of improvements anyway, that comes out of the rent - the tenants are paying for it.

Monday 25 February 2013

"It would be wrong to assume"

These problems facing rural communities rarely get much coverage in the media. As a culture, we are in thrall to a sepia-tinted version of the landscape. The country is somewhere to escape to, or to watch on television; it is a place of fantasy. The BBC’s Countryfile now has impressive ratings of around seven million viewers.    It would be wrong to assume that those buying into TV’s rural dream are cosseted city-dwellers.
followed by a paragraph explaining why you don't have to assume it ....  as it is probably 'a fact' ...
An exodus to the country has already begun. The 2011 census revealed the startling statistic that there were 620,000 fewer white Londoners than in 2001, whereas everywhere else in Britain had seen an increase in equivalent groups. Explaining the trend, the BBC’s correspondent Mark Easton concluded that white families have cashed in on the property market, and bought cottages in the country or by the sea.
The trend is visible in many rural communities. Those with any professional or personal connection with the land are few. Not only are wages lower, but the shift from the towns has meant that property costs have increased, forcing young families to move away. The mindset in many small towns and villages is changing, too. It is becoming more urban.
So, exchange "cosseted in the city" by selling up (probably pocketing a nice windfall profit in the process) decamp to somewhere nice, but cheaper (thus extending the windfall) and be "cosseted there", and over time no doubt, hope to repeat the experience and to move on somewhere, even nicer ... especially when you no longer have to worry about the commute and can contemplate moving from your "countryside commuter dormitory" into the real thing ... Don't Channel 4 make a programme or two along those lines?

Terence Blacker "Stop treating rural life as mere fantasy"

Reader's Letter Of The Day

Over at the YPP blog.

Statisticians make shock discovery: There are more people in densely built up areas!

From The Daily Mail:

Police have lost track of almost 140 paedophiles, sparking fears(1) many may have left the country, it has been revealed. Government figures show a total of 137 child sex offenders have disappeared after signing the sex offenders' register, which requires them to inform police of their whereabouts or any changes to their details.

The shock figures show the Metropolitan Police has lost by far the most paedophiles, with 40 on the run from the authorities in London.(2)

1) Shouldn't that be "hopes"? If UK offenders clear off abroad, then that's good news from our point of view, and it's bad news when foreign offenders wash up on our shores.

2) According to the attached map, 40 went missing in London, 7 in Greater Manchester and 5 in Kent.

Population of Greater London = 8.2 million
Population of Greater Manchester = 2.7 million
Population of Kent = 1.5 million

There is no perfect correlation between the total population of an area and the number of sex offenders in it; or between the number of sex offenders and those who abscond, but it's not far off. The relative figures appear to be worse in larger cities, presumably because it's easier to disappear off the radar there.

Fun Online Polls: Fizzy drinks & Inappropriate advances

The results to last week's Fun Online Poll were as follows:

Should fizzy drinks be more heavily taxed?
No - 48%
No - 10%
No - 26%
Other - please specify - 17%

Thanks to everybody who responded.

Top "other" comment:

DBC Reed: Yes: beer becomes comparatively cheaper. No excuse not to drink it.
The media is currently thick with revelations about people abusing their positions of power to rape, molest and otherwise behave inappropriately. I'm sure that this isn't a modern thing, that's just the unpleasant side of human nature. What is worrying is that so many victims are too scared to say anything, but once a few have spoken out, the floodgates open. That's the really ugly side of "power". Not so much what the people with power do, but what everybody else is prepared to put up with.

For example:
Chris Rennard
Dominique Strauss-Kahn
Jimmy Savile
Kevin Webster
Keith O'Brien

So that's this week's Fun Online Poll, were you ever the victim of an "inappropriate advance" by any of the above?

Vote here or use the widget in the sidebar (multiple selections allowed).

BBC: fair and balanced reporting

Compiled by Bob E:

From the BBC 22 February 2013:

Property sales in the UK were slightly higher in January than during the same month a year earlier, HM Revenue and Customs (HMRC) figures show.

There were 64,490 completed sales during the month, up from 60,530 in January 2012. This was well down on December, although there is always a drop in the first month of the year. However, seasonally adjusted data shows that activity was similar to levels in December.

From the BBC 25 February 2013:

Poor weather in January curtailed mortgage approvals while borrowers continued to play safe on loans and overdrafts, the major banks have said.

There were 32,288 mortgages approved for house purchases during the month, down on December and 14% lower than January 2012. The British Bankers' Association (BBA) also said that loan and overdraft repayments outstripped new borrowing. Personal loan levels are almost half of their peak in 2007-08, the BBA said.

"January's severe weather impacted adversely on what was already a subdued picture of borrowing demand from households and businesses," said David Dooks, BBA statistics director.

It does seem slightly bizarre than only half of purchases (64,490) required a mortgage (32,288) ignoring the fact these are slightly different months. That can be explained by the fact that first time buyers have more or less dropped out of the market.

Airborne car attack

From The Daily Mail:

A speeding driver lost control at a turn, sped up a hill, and bounced off one house before going airborne and crashing upside down into the roof of another.

Emergency workers made it to the scene and the driver miraculously walked away with few, if any, injuries. But not until a 10 hour rescue effort to dislodge his vehicle from deep inside the home. A crew hitched a crane up to the truck and, slowly but surely, managed to lower it back to earth.

Keith McBride, who operated the rescue crane, expressed his disbelief to KTRK of Houston.

Sunday 24 February 2013

Economic Myths: Social housing in the UK is subsidised by the taxpayer

I always find it useful to look at the bigger picture and compare like with like.

Using data culled from various government sources, I have allocated government revenues from land, housing and wealth generally to households by tenure type. Some of the allocations are a bit arbitrary and you have to take into account that there are two layers of tax in the private rented non-claimant sector - taxes paid by tenants and taxes paid by landlords. Benefit spending is easier to allocate (having deducted about £2 billion Housing & Council Tax Benefit lost to fraud and error).

First, let's compare the cost to the taxpayer of claimants in the private rented sector with the overall cost of social housing. As we see, social housing is a break even; the rents paid by the one-third of tenants who are not claiming HB or CTB covers the full cost. The rent and Council Tax nominally demanded from claimant households is meaningless as it is equal and opposite to the HB and CTB nominally paid out. By and large, this is a purely paper exercise. It's like me giving my children £20 a week pocket money and also charging them £20 a week rent.

On the other hand, the cost to the taxpayer of paying for claimants in the private rented sector is enormous. The government spends more money on these 1.2 million households than it spends on 3.0 million claimants in social housing:

Secondly, we note that paying tenants in social housing pay about twice as much in tax (counting everything you pay to the government over and above the cost of services provided in return as tax) as owner-occupier households. They are not subsidised by the taxpayer; they are the ones effectively paying for the social housing for the other 3.0 million, and they don't get any tasty tax-free capital gains, interest rate subsidies and so on.

Thirdly, there is only one group here who is really losing out.

The 4.2 million households who are living rent free have nothing to complain about. Paying tenants in social housing have affordable rents and security of tenure, so they are doing OK. Owner-occupier households are only paying half as much tax as paying tenants in social housing, plus they are getting five times as much back in direct and indirect subsidies (interest rate subsidies, tax-free capital gains, no tax on rental values etc), so they are doing much better.

The ones who are being shafted are paying tenants in the private rented sector, on top of the £2,000 in housing and wealth taxes they pay each year, they pay on average £8,000 a year in rent, which exceeds the costs of providing that accommodation by £5,000 a year - so they are paying directly in cash for their landlords to scoop up £5,000 of national wealth each year for nothing in return.

Finally, the Homeys then wail about paying tenants in the social sector paying "below market rents". What the Homeys really mean is that these tenants shouldn't just pay for the bricks and mortar running costs (which they are clearly paying two or three times over), but they should also pay for the "location rent" on top of that. But when invited to do the same (i.e. to pay LVT on their own homes instead of paying taxes on their earned income), the Homeys politely decline.

There are no jobs

I don't often go to Oxford, but had to go shopping there yesterday in a particular shop, and one thing I noticed was that they were after a sales assistant. But this wasn't just some small ad in the window, it was also prominently behind the till.

"So, you're a bit desperate for shop staff"
"We've put the thing in the window, in the paper, and had almost no-one coming in".

OK, they had a slightly specialised requirement, but we're talking fitting experience rather than brain surgery.

As I continued around Oxford, I noticed just how many other retail outlets had jobs. McDonalds, WH Smith, a couple of bookshops, a couple of cafes.

Now, you might think that this is some Oxford-specific problem. Expensive town and all that (but then again, estates like Blackbird Leys are very chavvy).

But then I started looking around the web at the McArthur Glen outlet centres. The one at Bridgend has 8 jobs, or around 1 job for every 10 shops. The one at Swindon, a cultural desert, has 7 jobs, or around in in 12 shops.

And of course, the last time that we were told that there were no jobs for the million-odd unemployed, lots of Poles came over and filled them.

The problem is not that there aren't jobs, it's that the job means a loss of benefits by so much that they'd rather shag their girlfriend/play Call of Duty/watch Jeremy Kyle than go to work for £1-2/hour. They're not lazy, they're just not stupid. As someone who works for themselves, I sometimes get call for people with £150 for a website, and in most cases, I politely decline, because my hourly rate will fall below £5/hour and I'd rather spend my time on training to help get higher paying clients than that.

The answer is the Citizen's Income. Get a fixed income for being an adult, enough to keep you from starving, but that's fixed rather than means tested. Go and get a job in WH Smith, you keep your Citizen's Income and get your WH Smith pay.

Saturday 23 February 2013

"Ability to pay"


It strikes me that this is one of the most abused phrase in the whole debate about taxation and housing.

The dawn of social housing a century ago was based on the simple observation that the working man (or woman) was paying £1 rent, but that it only cost the landlord a few shillings to provide, the rest was pure profit/land rent. So the governments of the day decided that it would be better for social cohesion and so on (i.e. they didn't want a revolution) if they built social housing which you could rent for five shillings, this still made a modest profit for the government and the uncollected land rent stayed in the pockets of the working man for him to spent as he pleased.

So the whole rationale for social housing was not so much "ability to pay" but "leave the working man's earnings in his own pocket, don't let the landlords snaffle it". It's hard to disagree with that.

Fast forward a century to Home-Owner-Ism, there is a complete schism:

1) On the one hand, social housing is seen as incontrovertibly bad, something to be sold off or given away as fast as possible to whoever happens to be in it. Renting out social housing at "below market rents" (even though overall rents cover the cost of providing it, and the cost to the taxpayer is precisely fuck all divided by six) is evil, but selling it off for "below market value" is seen as a the ultimate act of benevolent liberation by any government.

2) On the other hand, when it comes to taxes on housing, such as Council Tax, or Heaven forfend, Mansion Tax or even Land Value Tax, the Homeys are up in arms. "But it doesn't relate to ability to pay!" they screech.

Well, here's a hot tip, if you can't afford the Council Tax, Mansion Tax or Land Value Tax, then get yourself on the waiting list for a council house.

Oh... the waiting lists are too long, it'll be years before you're allocated a home. Well what a surprise, it's because you Homeys have made sure that no social housing has been built for forty years and all the nicest stuff has been given away.

Grave, dug, lie in it.


"Osborne 'humiliated' by rating cut"

From MSN Money:

The UK's Director George Osborne has been accused of having suffered a "humiliating blow" after Britain was stripped of its "18" rating.

Ed Balls, shadow director, said the announcement by The British Board of Film Classification downgrading the country's "18" rating to "15" was a "very, very bad moment" for Mr Osborne following the Director's assertion that losing this status would be a humiliating blow.

"The Director said this would be a humiliating blow and the first test of his choice of screen play and camera angles was to avoid it, so clearly for him artistically, it is a very, very bad moment," he told BBC Breakfast. "I think in terms of box office, the rating decision itself makes no difference at all. What the Board is doing though is reflecting the reality and the reality is movies with less swearing and less gratuitous nudity, a weak ending, moderate violence and an executive producer who is ploughing on regardless with a plan which is not working - saying 'the moderation is not working, let's cut out the moderate violence as well' that is completely crazy cinematics."

The attack by the shadow director came after Mr Osborne said the production team was determined to stick by its plan for theatrical recovery after the rating was lowered by a notch to "15".

The BBFC warned that "subdued" swearing and a "high and rising amount of weak farce and tired slapstick" were weighing on cinema takings. Mr Osborne said the loss of the gold-plated status did not mean the production team should change course.

"We have a stark reminder of the problems facing our cinemas - and the clearest possible warning to anyone who thinks we can run away from dealing with those problems," he said. "Far from weakening our resolve to deliver decent family-friendly films, this decision redoubles it. We will go on delivering the plan that has cut swearing and nudity by a quarter, and given us record ticket sales and record numbers of cinema visitors."

Friday 22 February 2013

Nick Clegg learns a few valuable lessons

From The Independent:

Older people affected by the Liberal Democrats’ proposed “mansion tax” could have payments deferred until after death if they are unwilling to pay up during their retirement, Nick Clegg has suggested.

Good. That's always KLN #1 and you need an answer to that. The roll-up deferment option is not perfect solution, but it's the least imperfect.

... the caller explained that his home in the up-market St John’s Wood had “sky-rocketed” in value since he bought it.

He said: “I earn a reasonable salary. I do not earn as much as Mr Clegg but I’m happy with what I earn, but no way could I afford to buy a house now for anything like £5m." He said he would face a £30,000 annual payment under the tax, which he could not afford and which would take his total tax rate to 78 per cent. “My only option would be to sell the house my family and I have lived in for 20 years and withdraw my children from school,” he told the Deputy Prime Minister.

Mr Clegg agreed that John would indeed be better off if he moved out. He said: “I’m obviously not urging you on selling your home but if you were, as your children get older and so on, to decide to sell your home, you would be millions of pounds better off... That’s one thing which I don’t know whether you’re prepared to do anyway.”

John retorted: “It’s my home and I have to move out of the area.”

That's a tricky one, politically, there are infinite variations on the retort and Clegg appears to have gone for a middle of the road one.

The more extreme retort would be: "For fuck's sake, man, any couple on above-median wages is paying £30,000 a year in various taxes (check the figures here), and what do they get for it? The privilege of spending half their net income on the mortgage on a semi-detached somewhere; you pay £30,000 a year and get to live in 'desirable' St Johns Wood."

Or possibly, if you've had time to check on Rightmove: "For fuck's sake, man, you can get a perfectly decent 4-bed house in St Johns Wood for less than £2 million, there's no need for your children to change schools - by the way, you'll get into trouble with the authorities if you just withdraw your children from school, as a good parent I hope you know that - and that still leaves you with a handsome cash lump sum of well over £2 million. And you're complaining?"

Or possibly: "For fuck's sake, you Home-Owner-Ist. It's your kind who have engineered things so that a whole generation is priced out of the area in which they grew up. Do you imagine that your children will be able to afford to buy in the same street as they grew up?"

But politicians get into trouble if they say things like that. I don't think they're allowed to say "For fuck's sake."

The other valuable lesson to learn here is that people hate transitions. Quite realistically, if they did introduce a Mansion Tax, people like "John" would end up moving. If the rate is nudged up in future, people like "John" will be complaining all over again, that they are now cruelly forced to trade down to a humble £1 million home in the less desirable part of St Johns Wood etc.

So actually, it is better to go for broke and start with a fairly full-on LVT (which on a £5 million house would be £100,000 a year or more) and make it clear that over the next five or ten years, all other taxes are going to be phased out and the LVT rate bumped up accordingly. "John" has to do his sums carefully, the same as every tenant or mortgage borrower, and trade down to whatever frees up enough cash to enable him to pay [a large chunk of] the LVT on his next house for the rest of his working life and he is, politically, out of the picture.

So for example, if we knew that in five or ten year's time LVT would be (say) about 6% of what houses sell for now, "John" could settle for a £1 million home, spend £2 million on an annuity to pay the LVT for the rest of his life and still have £2 million play money.

"Top maths pupils fail to keep up with world's best"

From the BBC:

The ablest 16,348 primary pupils in England almost match those in Taiwan (pop. 23,305,021) and Hong Kong (GDP $244 billion) in maths but fall back by the time they are 5,844 days old, a 37-page study suggests.

The top 519,248 of English secondary pupils also drop behind those in Australia (area 2,969,907 sq miles), Scotland (unemployment rate 8.2%), Slovenia (major ethnic group Slovenes 83.1%) and Norway (output 1,752,240 barrels of oil per day), analysis of 438,693,742 international test scores indicates.

But the bottom 523,485 catch up slightly with their 438,170,257 peers overseas according to the Institute of Education research (tel. +44 (0)20 7612 6000).

"Female Oxford Street workers purposely adopt 'high street' look in written dress code that scruffiness signals a lack of interest"

From The Daily Mail:

They are some of the hardest working women in the country. But Oxford Street's female shop assistants fear they will not be taken seriously if they don't look feminine, it has been claimed.

They are said to adopt a 'high street' approach to clothes because of a dress code which dictates that scruffiness is a sign of lack of interest in the type of clothes they want their customers to buy. Shenda Collins, an image consultant, heard the comments from Oxford Street employees while running a course there. She said she met "PhD students doing shift and weekend work who are scared about looking in any way unfeminine or unattractive.".

One told her: "If I wear Tesco T-shirts and jeans, then I just won't be taken seriously." Another wanted to know whether a pair of flat boots were 'not enough' for work. A third woman admitted she was 'comfortable' with the idea of wearing a jacket since that would make her 'look like a shop assistant' and easy for customers to recognise.

Mrs Collins told the Times Higher Education magazine that the women were highly intelligent but "did not feel free to choose how they dress". She added: "They are restricted by the dress code their employers have imposed. It is written clearly into their contracts and they hear it loudly."

Mrs Collins is the author of a previous study which revealed that serving soldiers have a tendency to wear green or khaki clothing and heavy boots when on duty and City workers tend to wear suits and ties.

We've had our chips/I'll drink to that

From The Daily Mail:

Men who eat fried foods more than once a week may increase their risk of prostate cancer by a third. New research suggests that junk food staples such as chips, fried chicken, battered fish and doughnuts may play a significant role in the formation of aggressive and life-threatening forms of the disease.

Although previous studies have suggested poor diet can affect a man's chances of getting prostate cancer, this is the first to indicate that deep-fried convenience foods in particular pose such a big danger...

Nearly 40,000 cases of prostate cancer are diagnosed every year in the UK and 10,000 men die from it - the equivalent of more than one an hour. The risks increase with age, with men over 50 more likely to develop a tumour, and there is a strong genetic element to it.

So about one male death in twenty-five is caused by prostate cancer (a surprisingly large figure), i.e. your risk of dying from it is 4%, let's call it 3.5% for non-chip eaters and 4.5% for chip-eaters, and in absolute terms, your additional risk of dying from it (rather than from anything else) is about one-in-a-hundred if you tuck into the tastiest food known to mankind. Seems like a small price to pay.

From News Track India:

As coffee drinking increased, the risk of death decreased. This is what a large study of nearly half a million older adults followed for about 12 years has found.

Study author Neal Freedman, PhD, MPH, National Cancer Institute, discusses the significance of these findings and the potential links between coffee drinking, caffeine consumption, and various specific causes of disease in an interview in Journal of Caffeine Research, a peer-reviewed journal from Mary Ann Liebert, Inc., publishers.


Has anybody gone to the bother of doing a meta-study of all these bits of research, half of which say coffee is slightly bad for you and half of which say coffee is good for you, which averages out to a nice round "it has no effect whatsoever".

Thursday 21 February 2013

"The 'leftover' girls: Afghanistan defines official age for females being left on the shelf as 13"

From The Daily Mail:

Afghanistan has upset its young female population by labelling those who have not been married off by the time they are 12 as 'left over girls'.

The Islamic government ordered its All-Afghanistan Women's Federation to use the derogatory term in several stinging articles about the growing number of uneducated, urban and single females aged 13 or over who have 'failed' to find a husband and are now  deemed 'undesirable'.

'Pretty girls do not need a lot of education to be married into a rich and powerful family. But girls with an average or ugly appearance will find it difficult and will probably be sold to slave traders,' reads one article titled 'Leftover Women Do Not Deserve Our Sympathy'...

The conservative country is going under rapid changes with more girls shunning the tradition of being forcibly married and raising a family early. But the government wants to shame them into marrying young to counter the growing and serious gender imbalance among the of 35 million population.

Selective abortions means far more males are born than females - 1,392 boys to 100 girls. The government is also worried that hordes of unmarried men roaming the country could spark social havoc.

Nope. He doesn't get it.

JimS has left a new comment on post 4G Auction Is Yet Another Blow For Osborne

"Mark, so the existing telecos decide that they can charge £50 and the infrastructure cost is £20 and they would like a profit of £10. By your model that is £50 less £30 or £20, which they are prepared to bid for. That £20 is effectively paid by the customer."

Correct, of course it is. The telecos are not charities. Whether they get the licence for free thanks to some back room deal with the regulators, or whether they win the auction makes no difference. The £50 stays the same.

And from the customer's point of view, that £20 does trickle back to him via higher government spending (or lower taxes) or a smaller deficit or whatever.

"A potential new market entrant sees that existing services sell for £40. He suspects that the existing telecos will add a premium for the new services and if he pitches his offer at that price he will have nothing to differentiate his offer and it will be unknown against known, not a good scenario.

"How to break into the market? He offers the new service at £40. His infrastructure cost is £20 and he wants £10 profit. That leaves a margin of £10 for his licence bid. The treasury receives a bid for £20 and one for £10. It goes for the higher bid. Competition is stifled, customer cost is pushed up and you think nobody pays!"

Well, the café next door sells coffees for £2 and I'd love to break into the market by selling coffees for £1.50. So that means I have to pay lower wages, haggle the rent down and ask the coffee wholesaler to sell me coffee for a lower price than he charges the café next door. But the staff insist on working for higher wages, the landlord demands a market rent and the wholesaler refuses to sell me coffee at a loss.

Competition is stifled, customer cost is pushed up and you think nobody pays?

"As I said earlier this 'tax' is up-front a non-recoverable 'capital' cost."

It is recoverable - the telecos recover it from their customers! He said that in his first paragraph!

"(It isn't a given that the licence is transferable, the government might impose a 'fitness to bid' condition)."

Yes sure, but even if the licence itself not transferable, the teleco can sell whichever subsidiary owns the licence to another teleco.

"High entry costs kill innovation which is surely bad if you want 'growth'."

I think you'll find that the telecos are at the cutting edge of innovation, with all their satellites and stuff. I am constantly amazed at how well the whole thing seems to work.. The cost of that innovation is included in the £20 figure he mentioned.

And there is a limited amount of spectrum. If there is enough space for five telecos, then no sixth firm can ever break into the market - unless they buy out an existing licence. If the government gave away five licences for free on the basis of some back room deal, then there is still no space for six telecos. If a potential new entrant wants to get into the market, he would have to pay £10 or £20 to buy an existing licence.

And whichever teleco sells it to him has banked a handsome £10 or £20 windfall gain - privately collected tax.

"My point about the resource is that it needs management but it isn't 'owned' by anyone, an external power might flood Europe by satellite for instance so we need the ITU or the like."

Yes, there is always a higher power. But why should the government go to all the trouble of reserving and protecting broadcasting rights merely in order to increase the profits of the telecos?

That would be not only morally corrupt but would lead to less innovation, because the incumbents can make a profit more easily.

"(Still doesn't stop all the 'Pakistani' FM stations in the Midlands that block BBC R3 and R4 though!)."

Exactly. Here, the government appears to be failing in its duty to clamp down on pirate broadcasters, so if they want to auction off radio licences in the Midlands, they will get a much lower bids.

Ten questions

Pinched from The Metro:

Question one: ‘You have defined the defence of marital coercion on page five of the jury bundle and also explained what does not fall within the definition by way of examples. Please expand on the definition, provide examples of what may fall within the defence, specifically “will was overborne” and does the defence require violence or physical threat?’

Answer: ‘The pressure applied by the husband need not involve violence or physical threats. The law requires that a husband was present and coercion was to such an extent that she was impelled to commit an offence because she truly believed she had no real choice but to do so.’

Question two: ‘In the scenario that the defendant may be guilty but there may not be enough evidence provided by the prosecution at the material time when she signed the notice of intent to prosecute to feel sure beyond reasonable doubt, what should the verdict be, not guilty or unable or not safe to bring a verdict?’

Answer: ‘Turning to page three of my written directions, the direction is combining the burden and standard of proof with the need for a majority verdict. If, having carefully considered all of the evidence, at least ten of you feel sure of the guilt of the defendant then it would be your duty to return a verdict of guilty. On the other hand, if after careful consideration at least ten of you were feeling less than sure of guilt, then it would be your duty to return a verdict of not guilty. And so it follows that if at least ten of you are not sure, the appropriate verdict is one of not guilty.’

Question three: ‘If there is debatable evidence supporting the prosecution case can inferences be drawn to arrive at a verdict? If so can inferences/speculation be drawn on the full evidence or only where you have directed us to do so?’

Answer: ‘The drawing of an inference is a permissible process. Speculation is not. In this case the evidence on which the prosecution relies is largely undisputed, and where you are willing to draw inferences from that is entirely a matter for you.’

Question four: ‘Can you define what is reasonable doubt?’

Answer: ‘The prosecution must make you feel sure beyond reasonable doubt. A reasonable doubt is a doubt that is reasonable. These are ordinary English words that the law does not allow me to help you with, beyond the written directions [he had already given them]‘.

Question five: ‘Can a juror come to a verdict based on a reason that was not presented in court and has no facts or evidence to support it?’

Answer: ‘The answer to that question is a firm no. That is because it would be completely contrary to the directions I have given you.’

Question six: ‘Can we infer anything from the fact that the defence didn’t bring witnesses from the time of the offence, such as the au pair or neighbours?’

Answer: ‘You must not, as I have now emphasised many times, speculate on what witnesses who have not been called might have said or draw inferences from their absence. Her evidence is that no one else, other than Mr Huhne, was present when she signed the form.’

Question seven: ‘Does the defendant have an obligation to present a defence?’

Answer: ‘There is no burden on the defendant to prove her innocence and there is no burden on her to prove anything at all. The defendant does not have an obligation to present a defence, in this case the defendant has given evidence and it is for you to judge the evidence from her in the same way you would any other witness.’

Question eight: ‘Can we speculate about the events at the time Miss Pryce sent the form or what was in her mind when she sent the form?’

Answer: ‘The answer to that is an equally firm no. The position in a criminal is that no one must speculate. There is a difference between speculation, which is not permitted, and inference, which is the drawing of common-sense conclusions from the facts of which you are also sure. Speculation is guesswork. That is not the same as inference at all.’

Question nine: ‘The jury is considering the facts provided but is continuing to ask the questions raised by the police. Given that the case has come to court without answers to these questions please advise on which facts in the bundle the jury should count on to determine a not guilty or guilty verdict.’

Answer: ‘You must decide the case on the evidence [put before the court]. It is for you to decide which you consider to be important, truthful and reliable then decide what common-sense conclusions you can safely draw. It is not for me to tell you which piece or pieces of evidence are important and which are not. That is a matter for you to decide.’

Question ten: ‘Would religious conviction be a good enough reason for a wife feeling she had no choice i.e. she promised to obey her husband in her wedding vows, he ordered her to do something and she felt she had to obey?’

Answer: ‘This is not, with respect, a question about this case at all. Vicky Pryce does not say that any such reason formed any part of her decision to do what she did. Answering this question will not help you in any way whatsoever to reach a true verdict in this case. I must direct you firmly to focus on the real issues in this case.’

Wednesday 20 February 2013

"4G Auction Is Yet Another Blow For Osborne"

From Sky News:

If you cast your mind back to George Osborne's boasts of last December, there was one moment in the playground debate that stood out: when young Osborne of Class 4G tripped over his words in his response.

Ed Balls, the bully from Class 5L, was thrown by George Osborne's announcement that, even after a whole load of accounting changes were ignored, George would save more of his pocket money this year than the year before. To be precise, it was £110 more, should he hit his target for re-selling unwanted Xmas gifts in 2012/13.

Balls had expected Osborne to acknowledge that due to increases in the amount he was planning to spend on X-Box games, Osborne would save up less that last year's £121. He had not reckoned on the fact that his elder brother Oliver "The Budgie" would include the proceeds of the auction of his unwanted Xmas gifts in this year's saving figures. It was thanks to that extra money, estimated at £35, that Osborne would be able to claim his savings were rising rather than falling this fiscal year.

All of which is why the final tally of the proceeds from the 4G auction will come as a real fiscal, not to mention political, blow for young Osborne. All else being equal, he will end up saving less this year than last because the 4G auction only generated £23 rather than that expected £35. Now, this does not mean he will break any of his fiscal rules - or to be precise the one he's still got left to break - but it is nonetheless a political disappointment.

It is particularly so, given that some within the Osborne family had been quietly hoping for a far bigger figure.

Killer Arguments Against LVT, Not (302)

I've been compiling these on my other blog for the time being. This week's mutterings from The Two Eds has really flushed out the idiots but we've heard it all before:

1. Boris Johnson in The Telegraph:

What about someone who owns several houses, all of them worth £1.9 million: why should he or she pay nothing, while someone who owns just one pricey home gets totally clobbered?

What about someone who lives in a home worth a million, but happens to have a load of Van Goghs and Cézannes on his kitchen wall, or gold bars under his bed? Why should he get away with paying nothing, while the taxman pulverises the little old lady still living in the former family home next door?

This is what we refer to as The Diagonal Comparison.

2. Allister Heath, who never read Adam Smith, also in The Telegraph (via CK):

Yet regardless of its intellectual origins, a tax on people’s assets is ethically wrong, economically destructive and would damage growth and job creation, with the poor and middle classes suffering intense collateral damage.

A tax on productive assets or the income therefrom, or a tax on the free exchange of output is indeed enormously destructive. Which is why our economy is in such a mess: most of our taxes are raised from output, employment, income, profits. For the economy to grow, people need to specialise and this means that there have to be ever more exchanges between ever larger groups of ever more specialised people who each do what they do that tiny little bit better than anybody else.

But land is not a productive asset, it is merely a government protected license for the unproductive sector to collect money from the productive sector ("rents" or "mortgage interest"). So a tax on those rents has no negative impact on the productive sector. Heath's argument is so fucking incredibly stupid that I didn't even bother to cover it on the KLN blog, so you'll have to make do with this rebuttal.

3. Dominic Lawson in The Independent (via BE):

The point of principle here is that tax is generally paid on property when income from it is available – for example, on rent accruing; and the reason why stamp duty works is that in the great majority of cases a person has cash available from the sale of an existing property, when buying a new one.

Therefore, if there were to be an additional property tax, it would be much fairer to decide that capital gains tax should also be charged on the primary residence, when it is sold, rather than levy a tax simply on the fact that someone – whether or not a little old lady – happens to be living in a home above a certain value. Such a change, however, would affect all home owners making a profit on sale and would, therefore, not meet the politicians’ objective of seeming to be nasty only to rich bankers.

This is basically the twisted argument that my land doesn't generate income, which is nonsense - or else we could say that all fines and penalties imposed are void because "Breaking the speed limit doesn't generate income". With just a sprinkling of Poor Widows In Mansions.

He rounds off with this:

if it’s windfalls you’re after taxing, Ed, Nick, Vince, here is a helpful suggestion: there is a group of 3,000 millionaires who, over the past 20 years or so, have had a total windfall of £8.5bn – that’s an average of £2.8m each. None of them did a stroke of work for that sum and yet, when it landed in their laps, entirely at random, they were not obliged to pay a penny in either income or capital gains tax on it. I am referring, of course, to Britain’s Lottery Jackpot winners.

LVT is not a tax on wealth, of course, so I am surprised to see a second generation hereditary Tory propose such a tax, but he misses the point. Lottery winners pay their tax when they buy the ticket; buying a ticket is an entirely voluntary transaction and the deal is that most lose a small amount and a few win a big amount. That is quite different to the land ownership system where everybody has to buy a ticket, whether they like it or not, and the same people at the top are always the winners.

4. But a special place in Hell must be reserved for a Blue Socialist troll called Newsbot9 in the comments to an article in the New Statesman, variously:

Ah yes, another attack by Lucas on the poor... Higher rents and lower net incomes. People "downsizing" to homeless. Your plan... As magic doesn't exist, [Land Value Tax is] passed on. There is a hard minimum income to rent, thus, and we have a massive housing shortage... How are you going to handle the fact that it, as a council tax replacement, will be passed on to poor tenants who might formerly have claimed council tax benefit..? And you have no problem with closing over over a million flats, many in multiple occupancy, then. Rents will soar further. Your version of a LVT is indeed targeted, against the poor - rents will rise sharply under it. It will simply help control land ownership under your model, where there are no safeguards. And I see, your answer is social cleansing. Purge the poor. Got it. Tory. And I understand why you support it now, it's a way for you to deprive millions of shelter.

I referred him to the article and embedded spreadsheet here showing that private tenants would be a lot better off, even if the LVT were passed on in full, but he dismissed these as "magic" numbers.

So to sum up his shite:

- LVT will be passed on
- rents will rise
- tenants will be unable afford the rent and will become homeless

- greedy landlords will snap up all the land and buildings, demand rents which nobody can afford and then happily pay the LVT for all the vacant homes they own, while out on the streets the masses huddle? Where will these greedy landlords get the money from to pay the LVT with no tenants?

He also overlooks the point that a proper comprehensive package of taxes on the poor include would include things like:
- reducing benefits
- increasing means-tested benefits withdrawal
- reducing the personal allowance
- introducing a Poll Tax
- increasing regressive taxes like National Insurance, VAT or taxes on booze, fags and petrol.

(The Coalition have been guilty of some of these and quite good on others, overall bad but no worse than Labour)

This is pretty much the opposite of the LVT package:
- flat rate non-means tested Citizen's Income/personal allowance, which is a negative Poll Tax
- reducing taxes on earned income, especially regressive ones like National Insurance or VAT (flat rate income tax is OK).
- more social housing (and hence lower rents)

Or have I missed something?

"Red Arrows to be scrapped in 2015"

From the BBC:

The future of the Red Arrows is safe as long as David Cameron is prime minister, Number 10 has said...

Tuesday 19 February 2013

"Dozen homes rocket in value after the ones in front of them collapse into the sea"

From The Daily Mail:

It could be Britain's most profitable property collapse after a dozen houses, once worth over £6million, finally crept towards destruction after of one of the wettest years on record.

Residents on the other side of the road who originally did not have a sea view or direct access to the cliff tops in Sidmouth, Devon, are delighted that the crumbling coastline finally gave way.

John Badford, 62, who has owned 2 Cliff Road in the resort for 35 years is the street's second longest-standing resident. He says a pair of massive landslips in the space of a few weeks decimated the houses blocking his view - and he hopes that the erosion will now stop.

Sidmouth is part of the UNESCO Jurassic Coast World Heritage Site, which is important for its sequence of Triassic, Jurassic and Cretaceous rocks. And the landslides which have hit the cliffs there look set to provide owners of the surviving houses with significant windfall gains.

Mr Badford said: "Our houses are now much more sellable and mortgageable. The people who own them are laughing all the way to the bank. I was inspired to buy this sort of house after seeing the first Superman film. So, thanks for the hot tip, Lex Luthor!"

Monday 18 February 2013

"Yes We Vati-can!"

When I saw this in The Metro last week, I initially assumed it was a spoof, but it is actually a gloriously tasteless genuine advertisement:

Fun Online Polls: The EU Budget and Taxes on fizzy drinks

The responses to last week's Fun Online Poll were as follows:

Did David Cameron get a good deal in the EU budget negotiations?

Oh come off it, it's all just posturing - 46%

No, the EU's budget should be re-set to zero - 25%
No, because the UK's net contributions will probably go up anyway - 13%
Yes, he got a reasonable deal - 9%
No, he should have pushed for deeper cuts - 2%
No, with these savage cuts he is endangering the European project - 2%
Other, please specify - 4%

I was with the majority on this one, the whole thing is smoke and mirrors like anything else to do with the EU budget. There was a good turnout of 141 voters, thanks to everybody who took part.
They're at it again:

Fizzy drinks should be heavily taxed(1) and junk food adverts banished until after the watershed, doctors have said, in a call for action over obesity. The Academy of Medical Royal Colleges, which represents nearly every doctor in the UK, said ballooning waistlines already constituted a "huge crisis"(2). Its report said current measures were failing and called for unhealthy foods to be treated more like cigarettes(3)...

1) That's this week's Fun Online Poll, vote here or use the widget in the sidebar.

2) These people don't understand their own terminology. A "crisis" in medical terms is:

1. the turning point of a disease for better or worse; especially a sudden change, usually for the better, in the course of an acute disease.
2. a sudden paroxysmal intensification of symptoms in the course of a disease.

I'm not even convinced that obesity is a "disease" as such and even if it is, it is a "chronic" rather than an "acute" disease, but at least the article doesn't refer to an "obesity epidemic".

3) So people who want to eat chocolate or crisps are going to have to go outside, regardless of the weather, I suppose.

"I'll mix my metaphors on benefit tourists, says IDS"

From The Daily Mail:

Ministers will ‘shut the door’ to migrants wanting to come to Britain to live on benefits, Iain Duncan Smith claimed yesterday.

He said he was determined to tighten the rules around eligibility for welfare benefits before a predicted influx of migrants from Romania and Bulgaria next year. The Work and Pensions Secretary also suggested new rules to stop so-called benefit tourists could be applied to all migrants, even those from the rest of the European Union. The measures could include requiring people to show they had put down roots here before claiming state help...

He acknowledged he faces a ‘big battle’ with the EU, which is already threatening to sue Britain over existing rules on how quickly migrants can claim benefits. The issue is wrapped up in the free movement of labour rules, which are jealously guarded by Brussels. But Mr Duncan Smith said ministers were building a powerful alliance with countries such as the Netherlands, Sweden and Germany, which also want to see changes...

He suggested that both issues would form part of David Cameron’s demands as he tries to claw back powers from the EU. The planned crackdown will be discussed at Chequers this week by the Prime Minister, Chancellor George Osborne and the Tories’ new election chief Lynton Crosby, who wants to put immigration and welfare at the heart of the 2015 election campaign.

Righty-ho, just to summarise: at the heart of the Tory 2015 manifesto will be forming a powerful alliance with other countries to go into battle against Brussels in order to claw back our right to shut the door on a flood of benefit tourists who haven't put down roots in this country.

Oops they did it again.

Spotted by Bob E in The Guardian:

Atos, the company contracted by the Department for Work and Pensions to carry out medical assessments of people claiming benefits, has subcontracted elements of the work back to a number of NHS trusts in England.

The subcontracting of the NHS by Atos in Scotland prompted questions last year from MPs over whether it represented value for public money for the state to contract work to a private company if the work was then outsourced back to the state sector...

It emerged last October that Atos Healthcare had appointed the Scottish healthcare provider NHS Lanarkshire's occupational health arm, Salus, to help carry out assessments for Pip.

Lanarkshire NHS will receive £22m from Atos to carry out the work until July 2017... Atos is receiving £238m for work in Scotland, north-east and north-west England, according to the Department for Work and Pensions.

Sunday 17 February 2013

Town Planning: The Developer's Decision

(This is all old hat to Lola, but it's worth restating the case for general consideration)

1. Let's imagine we are advising a tax-exempt, long term investor who wants to get into the (more or less untaxed) residential market (a pension fund or insurance company, for sake of argument), they have acquired/are thinking of acquiring empty Site 1 shown on this plan. Three neighbouring sites were used to build four semi-detached houses and two neighbouring sites were used to build blocks of ten flats. The white bits are roads and pavements. We are pretty confident that the local council will be happy to grant us planning permission for either four semi-detached houses or a block of ten flats:
So off we toddle to local estate agents and builders, and establish the following facts:
- it costs £75,000 to have a semi-detached house built, so £300,000 for four.
- it costs £500,000 to have a block of ten flats built.
- rents for flats are sixty per cent as much as rents for semi-detached houses, therefore, the gross rental income from ten flats is one-and-a-half times as much as the gross total rent from four houses.

We eagerly report back that it's much better to have the block of flats built... or is it?

The top dog at the investor's residential division says that they are happy to invest in land for a paltry return of 2%, because that is risk-free and always beats inflation but that there is a higher hurdle rate for construction costs - they have to show at least a 7% return.

So before he can make a decision on what to build or whether to build at all, he needs to know how much rent you can get for a house (the lower-risk option), and this is what swings the decision. If houses can only be rented out for £4,000 a year, then it is best to leave the site vacant; if houses can be rented out for £6,000 a year, then building houses is worth doing and building flats is marginal; if houses can be rented out for £8,000 a year, then building flats is the better option (better option is bold underlined):

2. So far so good.

It turns out that houses rent for £8,000 and flats for £4,800 so building the block of flats is the better option. The same investor has now acquired/is thinking of acquiring Site 2 across the road, which has four houses on it with sitting tenants paying market rent, and again asks us for advice:

We check our earlier workings and report back that building flats is the better option... or is it?

The top dog explains to us that this time we have to do a marginal calculation. The rental income from the four existing houses is money in the bank; we have to compare the additional rental income you can get from the flats with the cost of demolishing the four houses, getting the planning, getting rid of the sitting tenants (call it £50,000) and building the flats (£500,000, as above). So if houses rent for £8,000 a year each, the extra £16,000 income you can get from the flats is less than the required return on construction costs of £38,500. Even if the houses rent for double that amount, £16,000 each per year, it is not worth doing.

It is only if Site 2 is in a very high rent area and the houses rent for £24,000 each and flats for £14,400 each that it is (just about) worth knocking down the houses and building a block of flats:

3. Bonus round: would the optimum decision be any different if we had full-on LVT on residential land?

No of course not.

With Site 1:
- if houses rent for only £4,000 a year, the LVT is £zero.
- if houses rent for £6,000 a year, the optimum use is four houses, so the LVT would be [just under] £3,000 a year for the site. So houses are worth building, flats aren't.
- if houses rent for £8,000 a year each and flats for £4,800 each, the optimum use for the site is flats and the LVT is [just under] £13,000 a year. So flats are worth building, the houses aren't.

With Site 2:
- if houses rent for £8,000 or £16,000 a year, the extra rental income (most of which would flow to the council as higher LVT) is less than the required return on investment (£38,500) so investor and council taken together would be worse off by re-developing. The investor doesn't even bother applying for change of planning permission.
- if houses rent for £24,000 each, the extra rental income earned by re-developing (£48,000 a year) is marginally more than the required return on construction costs (£38,500), so investor and council between them would be better off (and people looking for flats would be better off) if the houses were replaced with flats.

But the LVT would go up by £34,000 a year, so the developer would end up £24,500 a year worse off by developing. So the investor/developer is in a good bargaining position with the council and can ask for a cash contribution towards the building costs of (say) £400,000.

As a result of this, the investor/developer's extra income per year is £48,000, his extra cost of capital is £10,500 [7% x [£550,000 minus £400,000]] and his extra LVT is £34,000. He ends up £3,500 a year better off. In return for the £400,000 cash contribution, the council receives £34,000 extra LVT and gets its money back within twelve years. Or instead of making a cash contribution to tip a marginal decision in the right direction, the council could exempt the site from LVT for four years from the date that the last tenant leaves the existing houses, or something like that.

Not a sweeping claim of no substance whatsoever based on his own particular prejudice, or anything like that...

Spotted by Bob E at the BBC:

The work and pensions secretary has criticised people "who think they're too good" to stack supermarket shelves on back-to-work government schemes(1). On the BBC's Andrew Marr Show, Iain Duncan Smith suggested that many "smart people" overlooked the importance of effective shelf-stacking.

A geology graduate recently won a legal victory over the back-to-work scheme... Commenting further on the case, Mr Duncan Smith said: "I understand she said she wasn't paid. She was paid jobseeker's allowance, by the taxpayer, to do this. I'm sorry, but there is a group of people out there who think they're too good for this kind of stuff. Let me remind you that [former Tesco chief executive] Terry Leahy started his life stacking shelves."(2)

... Mr Duncan Smith argued that "most young people love" their work experience placements.(3)

1) It is a verifiable fact that neither the number of shelf-stacking jobs available to non-work programme participants nor the wages offered was in any way reduced.

2) Ahem. No disrespect to Terry Leahy, but as his Wiki entry makes clear:

He began working (including a job stacking shelves at Tesco) and went on to study at the University of Manchester Institute of Science and Technology (UMIST) where he gained his BSc (Hons) in Management Sciences and graduated in 1977.

Following his then girlfriend to London, he applied to become a product manager for Turkey Foil but was turned down. He applied for a job at Tesco, but lost out to another candidate. After that candidate was quickly reassigned upwards, Leahy returned to Tesco in 1979 as a marketing executive.

So the relevant BSc is what helped him get on in life; it just happens that one of the fill-in jobs he did before he went to university (or possibly it was a polytechnic back then) was at Tesco.

3) Great. As long as the number of "most young people" is greater than the number of all those additional jobs exclusively created for and offered to work programme participants, what's the problem? Why foist such a job on somebody who doesn't want it rather than offer it to one of the grateful thousands who do?

My ex-wife's first published work [Fun with Google translate]

My ex-wife informs me that she has had her first book published!

Let's stick the blurb into Google translate and tidy it up a bit:

This selection of thematically diverse, legally relevant and in part exciting excerpts from Mardin's [town register 247] gives the reader an overview of the social, legal and historical circumstances in the region around the north Mesopotamian city of Mardin in the 18th century. Through their analysis can, inter alia, conclusions be drawn about the degree of autonomy of the region around Mardin, whereby the macro-historical perspective is illuminated. Transcription, translation and commentary of the respective texts deepen the case-specific backgrounds.

Based on this and other micro-historical and micro-ethnological studies, [we] can finally generalise about (and check, create, and question) legal opinions, legal practice and the social situation in the region. It is thus possible to accurately analyse the reasons for the decline of the former region around Mardin.

So now you know!

Saturday 16 February 2013

"Actually, I think even Miriam has a sneaky regard for them....

... whereas I of course despise the place, absolutely... we Lib Dems prefer "traditional" sources of funding and not from City Spivs. Not of course that they are all spivs... some are thoroughly decent upstanding donors, I mean people."

Electoral Commission report of August 2012:

The Liberal Democrats' largest donation was £250,000 from Brompton Capital Limited, a property development company owned by entrepreneur Rumi Verjee, who last year dined with party leader Nick Clegg at his grace and favour residence Chevening, in Kent. The largest individual donor was Lib Dem peer Lord Loomba, who gave £100,000.

The Guardian, February 2013:

Nick Clegg: Labour and Tories 'bewitched by Square Mile'

But actually despite what you might read into that headline (completely unintentionally of course, the G doesn't do misleading headlines after all!), he isn't launching an attack on the place or its morals, no not at all.

Emailed in by Bob E.

Friday 15 February 2013

Meanwhile, on Planet Home-Owner-Ist...

From today's Evening Standard Letters page:

If Miliband has any sense, there is no way he will actually implement a mansion tax that would alienate an important element of middle-class Labour support. In the London property market, the likely £2 million threshold is hardly a fortune(1): perhaps buying a two-bedroom flat in a leafy, but not super-prime, inner London area,(2) and there are plenty of properties in this bracket that were bought for relatively little years ago.(3)

A mansion tax would have a profound effect on the dynamics of the market: a lot of people would sell up(4) and court cases would be certain as others try to revalue their property.(5) Foreign investors(6) have already been hit by the Coalition’s clumsy levy of 15 per cent stamp duty in the last Budget,(6) and a mansion tax would only magnify their problems; why are we trying so hard to repel them?(7) A far more plausible, consumer-friendly approach is to bring in a range of higher council tax bands above Band G.(8)

Trevor Abrahmsohn, Glentree Estates.(9)

Who or what is "an important element of middle-class Labour support" Does he mean multi-mansion owning Tony Blair? If I were Cameron and Clegg, I'd introduce Mansion Tax (or even better Land Value Tax) just to spite Tony Blair and Chris Huhne.

1) Do these people not listen to themselves sometimes? Do they not think about how their outpourings of Homey bile "resonate" with the ordinary sort of reader? According to the Homeys, £2 million... is hardly a fortune"?? That sounds like a life-changing sum of money to me and probably to most people reading this.

2) That's an outright lie. Even in the most expensive part of super-prime London, i.e. Mayfair, there are plenty of two-bedroom flats available for rather less than £2 million.

3) Poor Widow Bogey. He does not specify how many is "plenty" or what "relatively little" is or how many "years ago", but so what? It might be true that there are a few thousand current owners of £2m-plus homes who bought them thirty or forty years ago for £10,000 or £100,000 or whatever. They've massive windfall gains on which they have not paid a single penny in tax. They didn't even pay off the original mortgage out of "taxed income", they paid off half of it out of the rent they were saving by owning not renting and inflation paid off the other half.

4) Great - and others would buy. The people who spend £2 million on a two-bedroom flat are not the sort of people to be bothered by a few thousand quid a year "Mansion Tax", it comes off the price anyway.

5) Fine, let them go to Court (strictly speaking, a Tribunal but this man knows shit about fuck, he doesn't do "facts") and argue that their home is only worth £1.5 million. Maybe it is only worth £1.5 million, in which case we introduce a mini-Mansion Tax for homes worth between £1 million and £2 million.

6) Nobody invests in land values. They are just there.

6) Agreed, SDLT is a tax on transactions and a very bad tax. The 4%, 5% and 15% rates are shameful. Now, notwithstanding that the SDLT paid probably "came off the price", as a gesture of goodwill there's nothing to stop the government giving people credit for any SDLT paid; if you paid 5% SDLT, you are exempted from Mansion Tax for the first five years from the time you bought it; if you paid 15%, you are exempt for the first fifteen years (or whatever).

7) A Mansion Tax would attract rich foreigners to London; for every whining Poor Widow who moves out, a wealthy oligarch or kleptocrat and his or her partner and family move in. They aren't keen to pay £2 million for a flat; they are keen to live in London; the Mansion Tax would be small change to them and selling prices would fall accordingly anyway (it acts like a higher interest rate). Subsequent purchasers would not give a toss. And every £1 that these people spend in the UK reduces our woeful trade deficit by £1. What's not to like?

8) This is how stupid the man is. The highest Council Tax band is H, not G (in Wales, they go up to I).

9) To cap it all, the man works for a firm of estate agents. If they knew what was good for them, they'd be rubbing their hands with glee at the thought of a Mansion Tax.