Friday 29 November 2019

Bashar el- Assad on top form

From Paris Match:

Paris Match: If you sign an agreement with the Kurdish “People’s Protection Units,” and the army enters that region and recovers all this land, you’ll find that there are prisons, and in these prisons, there are 400 French Jihadists. What are you going to do with them?

Assad: Every terrorist in the areas controlled by the Syrian state will be subjected to Syrian law, and Syrian law is clear concerning terrorism. We have courts specialized in terrorism and they will be prosecuted.

Paris Match: So, you don’t intend to repatriate them to Europe as Recep Tayyip Erdogan has done, for instance?

Assad: Erdogan is trying to blackmail Europe. A self-respecting man doesn’t talk like this. There are institutions and there are laws. Extraditing terrorists or any convicted person to another state is subject to bilateral agreements between countries; but to release people from prison knowing that they are terrorists and sending them to other countries to kill civilians - this is an immoral act.

That's a bit depressing

From the BBC:

A master player of the Chinese strategy game Go has decided to retire, due to the rise of artificial intelligence that "cannot be defeated".

Lee Se-dol is the only human to ever beat the AlphaGo software developed by Google's sister company Deepmind. In 2016, he took part in a five-match showdown against AlphaGo, losing four times but beating the computer once.

The South Korean said he had decided to retire after realising: "I'm not at the top even if I become the number one. There is an entity that cannot be defeated*," the 18-time world Go champion told South Korea's Yonhap news agency.

Depressing either because AI is now cleverer than we are - or because Go wasn't as difficult as people thought.

* Presumably, sooner or later they will develop a new programme that can beat AlphaGo, but that's probably not what he meant.

Thursday 28 November 2019

Plastic bag tax - as expected, it didn't work as planned.

As I said eleven years ago, when the idea was first mooted in Wales:

4. [If the tax is] anything more than [0.1p per bag] we'd have a situation like in Ireland where people buy more, thicker bin-liners, nappy bags etc, so the overall environmental benefits are questionable to say the least.

I was initially taken in by articles like this (BBC, 2015) reporting "plastic bag use down 80%". Fair enough, I thought, I was wrong. With the benefit of hindsight and reading between the lines, Tesco were being a bit sneaky and didn't include 'bags for life' in their total.

So I was correct in principle, although my guesses on what substitutes people would buy were off the mark. From the BBC, today:

Sales of "bags for life" rose to 1.5bn last year as the amount of plastic used by supermarkets increased to 900,000 tonnes, Greenpeace research has found.

Campaigners are calling for higher charges for the bags or a complete ban as the research showed households bought an average of 54 a year... Bags for life must be used four times to be better for the environment.

On a human level, I really don't get it. I was caught out twice after the tax came in and paid the 5p for a disposable bag. Damn. Since then, I usually remember to take proper cloth bags with me to the supermarket. If I do a big shop, I'm with the* car anyway, so worst case I unload the stuff from the trolley straight into the boot, no biggie. If I pop in to the corner shop on the way home, I don't buy more than I can carry with two hands. (And what the hell does an average household do with their piles of bags for life?)

On the other hand, on a human level, I can understand it. If you're at the checkout with £50 of shopping for the family for the next few days, who cares about another 20p or 30p for the bags/convenience? Obviously, not very many.

So, the question is, should the whole thing be abandoned as a bad job, or should the tax be hiked ever higher? We can rule out a "complete ban", that's cloud cuckoo.

* Strictly speaking "with a car" as I have more than one, but that sounds odd.
This bit winds me up as well:

Waitrose was ranked top for cutting its packaging and trying out refill stations for products such as coffee, rice, pasta, wine and detergent.

Morrisons came second and was praised for setting a quantified target to increase reusable and refillable packaging, as well as making its loose and refillable products 10% cheaper than packaged alternatives.

Sure, they sell stuff 'loose'. Does that reduce the amount of plastic used? Does it heck. You are expected to put your 'loose' items into a flimsy plastic bag!

Being me, I don't bother with the flimsy plastic bag, I just hand the check out assistant three loose carrots (or whatever it is I only need a few of), they weigh up and charge me for the carrots. If you put them in a flimsy plastic bag, they weigh the plastic bag with contents and charge you for the bag as well.

And there is a trade-off between food waste and packaging waste. To a large extent, the packaging is there to reduce food waste. Think egg boxes. Just because the packaging is thrown away does not mean that it hasn't served a useful purpose.

Wednesday 27 November 2019

Your occasional reminder...

From Professional Pensions:

The government will pay out £21bn in income tax relief for pension contributions this tax year, while national insurance relief payments will rise to £18.7bn, according to statistics from HM Revenue and Customs (HMRC).

The estimated figures - published yesterday (10 October) - reveal the cost of income tax relief for registered pension schemes in 2019/2020 will be higher than the year prior, estimated at £20.4bn, and five years ago at £17.9bn.

This covers relief on contributions, relief on investment returns, and tax paid in retirement - but the figures do not provide estimates on the total receipt in tax when pensions are in receipt.

That last bit isn't quite clear - isn't "tax paid in retirement" the same as "receipt in tax when pensions are in receipt"? But hey, let's run with the headline figure. 'Cost' for these purposes is the equal and opposite of the value of the tax saving to the individuals, it's the same thing.

As ghastly as taxes on earnings (income tax and National Insurance) are, if I were in charge, I would chuck the 'focused' tax savings for pensions contributions (focused on older and wealthier people, including Yours Truly; and ultimately on the insurance companies which siphon it all off again) in the bin and share out the savings more equitably:

1. Increase the NIC thresholds (primary and secondary) to £12,500 (same as the personal allowance for income tax). Tax saving per employee earning more than £12,500 = £950 or so, call it £25 bn all in. That's an important first step towards a Basic Income. The Employment Allowance and Apprenticeship Levy can go in the bin as well.

2. Reinstate the personal allowance for those earning more than £100,000 (which results in a marginal income tax rate of 60%), tax saving maybe £3 bn. Either you believe in universal entitlements or you don't, and I do.

3. Harmonise Employees' primary NIC (currently 12%) and self-employed Class 4 NIC (currently 9%) at 11%, an overall tax saving of £6 billion or so. The self-employed will squeal, but so be it. Lower earning self-employed will be up to £370 better off, and those at the upper end will be paying £300 or so more (paying £3,724 = 11% x £46,350 - £12,500, instead of £3,413 = 9% x £46,350 - £8,424), hardly a life changing amount. Employees at the upper end will be saving £800 or so a year. There are more of the latter than the former.

4. Depending on how much is left over (it gets circular and there is guesswork involved), we can start chipping away at Employer's Secondary NIC, get it down from 13.8% of wages to 12% or something...

Shocking stuff, the audience cries, but a government would just have to do it and damn the torpedoes. (As far as I am concerned, the flat rate state pension of £160 covers it, there's no need for more endless tinkering on top).

By the next election, which party would be brave, stupid or corrupt enough to pledge to reverse this? How's that going to go down on the doorstep: "We pledge to hike tax rates for most people for the benefit of large corporations who make large donations to our party and offer us cosy jobs when we retire"?

Saturday 23 November 2019

The Guardian confuses capitalism with feudalism*, yet again.

* For clarity, I bracket feudalists; corporatists and monopolists together, i.e. those sources of income which require the protection of the government.

'Capitalism' on the other hand, isn't an '-ism'. It's just normal human nature expressing itself. People invent and use labour saving devices, those are true 'capital'. (Clearly, some really large scale labour-saving devices, like the National Grid or the road network can only be provided by the State, but they are still capital).

People like having nice stuff, so they want to earn as much as they can for a given level of risk or effort (or minimise risk for a given level of income etc). Somebody else has got to make that nice stuff. People like to keep their earnings rather than seeing them siphoned off in tax or rent or by a monopolistic employer. Human nature.

Sorry for the length of this footnote :-)
The article is headed: It’s not thanks to capitalism that we’re living longer, but progressive politics.

In recent years prominent pundits including Steven Pinker, Jordan Peterson and Bill Gates have invoked the progress in global life expectancies to defend capitalism against a growing tide of critics.

Pinker is a decent sort (even though he's based his whole career on padding out one chapter from a Jared Diamond book); Peterson is a right wing lunatic; and Gates is a monopolist-corporatist masquerading as a capitalist.

It’s a familiar story. The prevailing narrative is that capitalism was a progressive force that put an end to serfdom and set off a dramatic rise in living standards. But this fairytale doesn’t hold up against the evidence.

Serfdom was a brutal system that generated extraordinary human misery, yes. But it wasn’t capitalism that put an end to it. As the historian Silvia Federici demonstrates, a series of successful peasant rebellions across Europe in the 14th and 15th centuries overthrew feudal lords and gave peasants more control over their own land and resources.

Those serfs wanted to run their own small businesses (farms). Life under feudalism (or Communism) is miserable and there is no point in working any harder than you are forced to. So this was a revolt by people wanting to run their own small businesses for their own benefit i.e. a revolt by capitalists against feudalists.

The fruits of this revolution were astonishing in terms of wellbeing. Wages doubled and nutrition improved. It was a period of dramatic social progress by the standards of the time.

Hardly surprising. Capitalism works better than feudalism.

Then the backlash happened. Upset at the growing power of peasants and workers, and angry about rising wages, a nascent capitalist class organised a counter-revolution. They began enclosing the commons and forcing peasants off the land, with the explicit intention of driving down the cost of wages.

Those weren't capitalists, those were feudalists re-asserting themselves.

With subsistence economies destroyed, people had no choice but to work for pennies simply in order to survive. According to the Oxford economists Henry Phelps Brown and Sheila Hopkins, real wages declined by up to 70% from the end of the 15th century all the way through the 17th century.

Yes, the employers in towns and cities took advantage of the cheap labour (most quite cruelly so, but if all your competitors do it, you have to do it as well). Better to eke out a miserable living in a town that starve in the countryside.

Famines became commonplace and nutrition deteriorated. In England, average life expectancy fell from 43 years in the 1500s to the low 30s in the 1700s. In short, the rise of capitalism generated a prolonged period of immiseration.

For sure, we've established that. Successful peasants' revolt = wages doubled and nutrition improved. Feudalists re-assert themselves = the opposite happens.

He's also jumping the gun a bit here. The industrial revolution started sometime after 1760, depending how you define or measure it.

Drawing on a wide range of studies, Szreter shows that populations directly affected by industrial growth in Britain experienced a steady decline in life expectancy, from the 1780s through the 1870s, down to levels not seen since the Black Death in the 14th century.

Yes, that was because of poor nutrition (see above); employers exploiting the cheap labour that the feudalists had turfed off the land (see above); and appalling living conditions in towns and cities...

It wasn’t until the 1880s that urban life expectancies finally began to rise – at least in Europe. But what drove these sudden gains? Szreter finds it was down to a simple intervention: sanitation.


And yet progress toward this goal was opposed, not enabled, by the capitalist class – libertarian landlords and factory owners refused to allow officials to build sanitation systems on their properties, and refused to pay the taxes required to get the work done.

Their resistance was broken only once commoners won the right to vote and workers organised into unions. Over the following decades these movements leveraged the state to intervene against landlords and factory owners, delivering not only sanitation systems but also universal healthcare, education and public housing. According to Szreter, access to these public goods spurred soaring life expectancy throughout the 20th century.

OK, broadly correct.

Democracy is inherently a good thing, and it leads to universal healthcare/education which are clearly also good things (why the government should get involved in these rather than 'leaving it to the markets' is a separate topic). But proper free-market capitalism (as opposed to corporatism and cronyism) is part and parcel of democracy, each requires the other. I don't think it's possible to have one without the other. PR China is a totalitarian system which does not have free-market capitalism; it has crony capitalism.

But the interventions that matter when it comes to life expectancy do not require high levels of GDP per capita. The European Union has a higher life expectancy than the United States, with 40% less income.

The '40% lower' appears to be true. GDP in Europe has flat-lined since 2008, in the USA, it rebounded quite nicely, so well done them! (glossing over the fact that incomes/wealth are even more unequally distributed in the USA than in Europe, so median American is not better off than in 2008 either). I think the point here is that European countries spend on average 8% of GDP on price-regulated healthcare. For a similar level of service, the medical-industrial bloc in the USA is allowed to charge two or three times as much.

Costa Rica and Cuba beat the US with only a fraction of the income, and both achieved their greatest gains in life expectancy during periods when GDP wasn’t growing at all.

So why are people trying to flee Cuba and get to Florida, and not the other way round?

So let’s give credit where credit is due: progress in life expectancy has been driven by progressive political movements that have harnessed economic resources to deliver robust public goods. History shows that in the absence of these progressive forces, growth has quite often worked against social progress, not for it.

How is Cuba 'progressive'? LOLZ.

He's missed the point anyway; the optimum is proper democracy and proper free-market capitalism, where the government restricts itself to doing what it does best (e.g. providing; or subsidising and  regulating privately-provided universal healthcare and education) and lets the private sector to do what it does best (anything it wants, basically).

We do not know what the Industrial Revolution would have looked like if it hadn't been fuelled by cheap labour/peasants driven off the land. Factories would have had to offer much higher wages to tempt people off the land, for a start, so it might have been slower, but with much more favourable outcomes for all concerned.

Traffic lights

As I drove home, I noticed that the traffic lights at a fairly busy crossroads at one end of the main road in our village-suburb were turned off and traffic seemed to be flowing smoothly.

I parked at home and walked back and watched for ten minutes. Traffic is at its heaviest on Saturday afternoons, and when the lights are working, there is usually a queue of ten or twenty cars on each of the four approach roads. The longest queue that formed was no more than three or four cars on one approach road if the car in front wanted to turn right (the most awkward turn on those particular cross roads). Within a few seconds, there would be a gap or somebody would just slow down and let them in.

Drivers also stopped more or less immediately for pedestrians who wanted to cross; buses could plough straight through. I crossed at the pedestrian crossing (Pelican crossing) a little further up the hill. Even though those lights were turned off as well, cars stopped for pedestrians more or less immediately

It filled my heart with joy. I wonder whether the council (or whichever authority is in charge) will see sense and leave them turned off permanently? If they want to do 'something', I think a yellow box wouldn't go amiss.

Wednesday 20 November 2019

Labour appears to be getting it right (although they are trying hard to conceal the fact).

There is much ballyhoo in Labour's manifesto about building 100,000 new affordable homes, but you have to dig really quite deeply to find out what these "affordable homes" consist of. A read through their green paper elicits the fact that the vast majority of these affordable homes will be new social housing (hurrah!) and a small minority will be new homes for sale on subsidised land.

However, even here, "Labour have got it": from the green paper, Housing for the Many:

48. Low-cost ownership homes. FirstBuy homes will be a new type of home to buy, discounted so the mortgage payments are no more than a third of average local household incomes. The discount will be locked into the home so that future generations of first-time buyers benefit too. These homes will be aimed at working families on ordinary incomes, key workers and younger people. Shared-ownership and rent to buy homes will be other low-cost options included in this category.

49. A FirstBuy home in Warwick could be sold to first-time buyers at a 17% discount to the going market rate, allowing a first-time buyer almost £5,000 off a deposit as well as lower mortgage repayments. In Exeter, a FirstBuy home could mean a 26% discount and £7,000 off the money needed for deposit.

So well done Labour for presenting an economically literate housing strategy in a way that looks to the lazy like a Tory style get-rich-quick sell-off of undervalue land.

Monday 18 November 2019

Yeah! Go Lib Dems!

Jo Swinson doesn't seem to grasp the logic behind LVT, she's mis-selling it, but good stuff nonetheless from The Daily Mail:

Ms Swinson told delegates:

"The Liberal Democrats are committed to supporting small businesses who are the engine of our economy. That's why the Liberal Democrats would scrap business rates and replace them with a commercial landowner levy. It will shift the burden from the tenant to the landlord so that we can breathe new life into our high streets... It is time for clear action that will give proper help to our small businesses."

Ripping up business rates was mooted by the party in August 2018 by the then leader Vince Cable in a report called Taxing Land, Not Investment. It made clear the levy would be paid by owners, not tenants, and that 'non-residential stamp duty should be scrapped to improve the efficiency of the commercial property market.

Ms Swinson added: "Let's remember what the issues are that we're trying to solve here - businesses on the high street have been struggling for many years now and they find the business rates can be a crippling cost and this is at a time when they're already having to deal with footfall falling, competition from online competitors where they aren't having to pay the same type of rates.

"So I think this is an important change, and clearly it being borne by landlords - some of that may well be passed on but we also recognise it will not all be - and this will provide a significant boost for businesses."

Friday 15 November 2019

We own land! (near a good state school. Labour wants to) give us money!

Labour wants to ban private schools. Well, not all private schools, nurseries, private tutors, and universities will still be able to charge fees, but most of them and all of those that are misleadingly called "public" schools, and especially Eton, yes, most especially Eton.

Quite apart from the fact that the main reason for doing this appears to be based on a fallacy (the same wealthy, privately educated families keep hold of the top jobs down the generations, not because they are privately educated, but because they are descended from the elite), such a measure would fail to convert what is effectively a privately collected tax, i.e. school fees, into a publicly collected one.

Much is made of "redistributing", actually confiscating, the private schools' assets, but the income derived from these forms only a tiny proportion of private schools' income, mostly because the rich schools are a very small minority of private schools, and the vast majority of the extra £3.6Bn needed to educate the 615,000 pupils currently educated by the private sector would have to come out of the state education budget.

Where would the £10.5Bn currently spent by parents each year on school fees go? The most likely answer is into higher land prices near good state schools, as parents move to be in their catchment areas. The inevitable result of such "edugentrification" would be that poorer families would be gradually priced out of these catchment areas and the "good" state schools would become publicly funded versions of the private schools they replaced.

Indeed, with some plans for the abolition of private schools proposing the subsuming of the private schools into the state sector, together with all their facilities, the new upper tier state schools could be exactly the same schools as the current private schools.

The only difference would be that the billions that went to fund education under the old system would go to fund higher land prices under the new.

"Climate change may be behind fall of ancient empire, say researchers"

From The Guardian:

The [Neo-Assyrian] empire emerged in about 912BC and grew to stretch from the Mediterranean down to Egypt and out to the Persian Gulf.

But shortly after the death of the king Ashurbanipal around 630BC, the empire began to crumble, with the grand city of Nineveh sacked in 612BC. By the end of the seventh century BC, the empire’s fall was complete. Now scientists say the reversal in the empire’s fortunes appears to coincide with a dramatic shift in its climate from wet to dry – a potentially crucial change in an empire reliant on crops...

Baldini added that the past can hold important lessons for the present – where fossil fuel use drives climate change.

That's hardly a blinding new insight. There are loads of examples of this happening in history, individual civilisations rising - and falling - as the weather became more - and then less - suitable for food production. The end of the Roman Warm Period ended the Roman Empire (probably).

Food production was the cornerstone of any empire until modern times, because if a few people can grow enough food for everybody, it frees up labour for empire-building (soldiers, administrators etc). Their downfall was usually a fall in food production in the areas they ruled over.

We note that:

a. That's not such a problem with a global economy, as it all evens out. Vikings in Greenland couldn't just export electronic components and then import food from somewhere else, they had to grow the food themselves or die.

b. The climate has always been changing, for better or for worse, independently of CO2 emissions, and we have muddled through somehow. Quite why "man-made climate change" (to the extent it even exists) is somehow worse than natural climate change (which clearly does exist) is never made clear.

c. What if it turns out - not that the Alarmists would ever admit it - that modest changes in global average temperatures have entirely natural causes, which are far beyond our control? Would it be panic over? Which strategies would scientists and economists be recommending then? Probably "muddle along and wait and see".

Thursday 14 November 2019

Yeah, right.

From The Register:

As many as 20 per cent of UK businesses are axing contractors completely in order to ensure they are fully tax compliant ahead of IR35 changes next year, according to a survey.

Recruitment consultancy and IT outsourcer Harvey Nash interviewed 350 businesses employing a significant number of IT contractors. It also found that 83 per cent said IR35 will negatively affect their industry.

From 6 April 2020, it will be the contracting body's responsibility to determine whether the contractor should fall within the scope of the "off-payroll working" rules, IR35.

The point is that the self-employed pay much less in National Insurance contributions (basic rate 9% and higher rate 2%) and employees pay much more (basic rate 25.8% and higher rate 15.8%). The actual income tax is much the same. So businesses and workers can save themselves a lot of money by treating people as self-employed rather than as employees.

In its infinite wisdom, instead of HRMC aligning the NIC rates (and preferably phasing out NIC entirely), they are obsessed with finding employees who are being treated as self-employed, reclassifying them as employees and collecting three year's worth of PAYE, plus penalties, plus interest. All very unpleasant and messy.

Do we really expect businesses to sack all their supposedly self-employed workers and leave everything undone? Do we really expect all the contractors to become unemployed? Or do we expect that most businesses will bite the bullet and only treat people as self-employed if they really are, and if in doubt, put contractors on the payroll and pay the extra NIC..?

Major employers including Barclays and GlaxoSmithKline have reportedly already told contractors that they will only employ them as on-payroll workers.

Which is what exactly what we expect. For sure, businesses and former contractors will have to share the extra NIC, that's an absolute cost to them.

The employer will also deduct the expected cost of certain statutory rights (holiday pay, pensions, sick pay, redundancy pay and rights, as well as less measurable things like employees having a better credit rating than contractors); all these things are of approximate equal and opposite value to the contractor/employee, so in the grander scheme of things, former contractors who are now employees won't really end up much worse off (apart from the extra NIC).

What's wrong with leaving the tea bag in the cup?

Boris Johnson got grief for doing this, but as he says himself, "‘This really is how I make my tea. ‘It lets it brew and makes it stronger."

I usually pour in the milk before removing the bag so that I can see whether it looks strong enough; if  it doesn't, I leave the bag in and take it out when it does (or add more hot water and milk). I also do it if there's no spoon handy or tea bags are running low.

Putting milk in first before the hot water, now that is weird.

Tuesday 12 November 2019

"University to be turned into student housing"

OK, The Daily Mash is exaggerating, but there is a lot of truth in this.

The student's landlord makes a lot more profit than the universities they attend, who, taken as a whole together with Student Loans Company and the taxpayer, probably make a cash loss (which is fine, as long as higher education benefits society as a whole).

The Lad is now in halls on campus (two minute walk from front door to lecture theatre or laboratory block), cost £5,000 a year rent plus £9,250 tuition fees, and I'd rather the university makes the profit (or taxpayer takes a smaller loss) than some slumlord cashing in on owning something near a university.

But the university might as well just charge an all-in-price of £14,250, like at boarding school, where the fees cover education and accommodation, and have done with it.

"Sweden's 100 explosions this year: What's going on?"

Headline by the BBC.

Everybody is totally baffled, as am I. Stumped. The whole thing is a mystery.

Monday 11 November 2019

Classic Telegraph lies and propaganda

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

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

But implementation would mean overcoming some important challenges

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

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

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

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

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

Other options for tax devolution come with more significant drawbacks though

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

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

Agreed to all that.

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

Agreed. Drum-roll please...

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

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

Sunday 10 November 2019

Fun With Numbers

From The Daily Mail:

Why it pays to do maths A level: Analysis shows qualification adds £6,000 to a salary in just six years compared to geography or biology

So, if a child is considering whether to do A-Levels, and if so which subject, they should choose Maths?


To a large extent, this is confusing cause and effect and ignoring self-selection.

Some people are more numerate than others; and those who are are, are more likely to earn more . Either because their job required advanced numeracy (very few jobs, if truth be told); because numerate people are more likely to be more efficient and hence be promoted; or because they are clued up enough to choose a job/career that will pay more in the long run (so they waste a few years studying or doing a low-paid apprenticeship in exchange for higher pay later on).

People who are numerate are also more likely to do a Maths A Level, obviously, even though the maths involved is insanely arcane and probably only of use in 0.1% of jobs.

So... numerate people are more likely to end up in higher paying jobs. They will be over-represented among applicants (which they would have been anyway); will be slightly better at them (as they would have been anyway); and employers will tend to prefer applicants who have done 'hard' A-Levels (however pointless, and as much as I love numbers and maths, even GCSE is way more than most people ever really need in real life).

Or to turn the question round, a child is not so numerate. Should they choose Maths A-Level and almost certainly fail? Hell no. Better to pass in something else a bit softer.

Friday 8 November 2019

Car hits house

From, accompanied by the picture of the wreckage:

Words fail.

Thursday 7 November 2019

Ex-HMRC head goes through revolving door; forgets everything he ever knew (or should know)

From The Guardian:

The former head of HM Revenue and Customs has called on the government to scrap a controversial tax break designed to help entrepreneurs, which he said was costing the country £2bn a year in lost tax yet provided “no incentive for real entrepreneurship”.

Sir Edward Troup, who was executive chair of HMRC from 2016 until January 2018, said whichever party won the general election on 12 December should abolish the “entrepreneurs’ relief” applied to capital gains tax (CGT).

Troup’s intervention on Wednesday came in response to a Guardian report on Tuesday showing thousands of the country’s richest people were exploiting the policy to pay as little as 10% tax on billions of pounds’ worth of capital gains...

Troup, who is now a consultant at McKinsey, said there was a “very strong case for [whichever party won the election] to ramp down entrepreneurs’ relief immediately”.

Whatever your view, gut instinct tells me that if people build up a business from scratch and sell it, such gains ought to be taxed at a lower rate (aka Entrepreneur's Relief) than straight investment gains, which of necessity mainly accrue to the already wealthy. We can argue about the finer details later on (the £10 million limit for Entrepreneur's Relief seems excessively high to me, why not go back to retirement relief and just exempt the first £1 million or so and tax the rest at full rates?).

For some reason, this ex-HMRC head is homing in on Entrepreneur's Relief while missing the obvious targets.

1. Investor's Relief, which is a 10% CGT rate for people who in subscribe for new shares in the right kind of company, and

2. SEIS, EIS and VCT reliefs, which include a 0% CGT rate on shares (among many other goodies).

It's those two items which are designed to - and do - benefit the already wealthy, not Entrepreneur's Relief.

How the heck he ended up running HMRC is a mystery to me, he'd have failed the most basic tax exam. And presumably McKinsey took him on for his other marketable skills. Maybe he knows how to unblock paper jams in printers or something?

Tuesday 5 November 2019

Pumpkins at Hallowe'en - Instant tradition

I had a tub of Haribo packets ready last Thursday, The Lass was home first and made the effort of lighting candles in two lanterns to put on the front windowsill.

As I popped out on a shopping jaunt, a group of children (accompanied by responsible adults, it's that sort of suburb) were hovering about in front of our house in a rather indecisive fashion, so I went back inside to get the tub for them. I saw plenty more such groups on the way there and the way back, and had to repeat the exercise of bringing out the tub when I saw another such hovering group on my return.

The Lass told me that only one further group had plucked up the courage to knock on the door while I was out. At the post mortem, Her Indoors and The Lass confirmed solemnly that there is a rule that if you have sweets ready for trick-or-treaters, you have a lit up pumpkin visible from the street; and if not, children assume you are some sort of Hallowe'en Grinch and won't bother knocking.

I told them that this was new to me, we've didn't display a pumpkin in previous years, but kids still knocked. I went trick-or-treating with my own kids when they were younger (and I was the responsible adult waiting on the pavement), they just knocked at every door and hoped for the best, there was no concept of just knocking where a pumpkin was on display, some dished out sweets and some didn't.

They both remained adamant that this is - and by inference, somehow always has been - an unwritten rule. I did a quick and unrepresentative survey at work, nobody had ever heard of it.

So that's my question - is there such a rule? Or were Her Indoors and The Lass imagining it into existence? Did I miss something?

Monday 4 November 2019

Killer Arguments Against LVT, Not (473)

Physiocrat reminded me to dismantle the Scottish Land Commission - Investigation of Potential Land Value Tax Policy - Options for Scotland - Final Repor.

A lot of it is fairly positive, but they are in a muddle on valuations, making it seem far more difficult than it really is, probably deliberately or perhaps out of intellectual laziness.

From page 30:

Land needs to be valued. This should ideally be undertaken using the comparison approach i.e. by analysing market evidence of comparable land sales. However, evidence of undeveloped land may be scarce.

The alternative is to use an approach whereby evidence of the value of land and buildings sold or rented as an ‘entity’ is analysed to extract the value of the land.

This is not 'an alternative', this is how it's done. The site premium of the few plots of bare land in urban areas is inferred from this (assuming in same area with same planning).

Undertaking this can be problematic as the ‘residual’ method, whereby build costs and other adjustments are subtracted from the total value of the development to arrive at a ‘residual’ land value, can produce confounding results...

We should be using rental values, not selling prices, but for the initial valuations, it's good enough.

... For example, take two dwellings side-by-side. One is three-storey and developed to highest and best use (market value = £1m, build and other costs = £0.5m, so land value = £0.5m), the other is two-storey (market value = £0.7m, build and other costs = £0.3m, so land value = £0.4m).

The land value (and therefore the LVT) of the first property is higher. The relationship between property value and build cost is penalising the development of land to highest and best use, which is counterintuitive as far as a land value tax is concerned.

Initial valuations can be based on actual use, as this is a good proxy for 'optimum permitted use'. At the time any building was built, it probably was the optimum permitted use.

That might change over time, but only gradually; if nobody's applied for change of use on his own plot, we can reasonably assume that the current owner considers this still to be the optimum. If somebody build a larger home ab initio; or bought a smaller home, knocked it down and built something bigger; or bought a smaller home and built an extra storey, that is clearly his opinion of optimum use.

Whose opinion is a better indicator? Nobody knows. Does it matter? No. Valuations are always going to be a bit arbitrary, what matter is consistency of approach.

1. We shouldn't ignore the past and what's already there, so we could just assess the smaller house plot at £400,000 and the larger house plot at £500,000 and have done with it.

Similarly, we shouldn't ignore demolition costs and hassle (as the report does) and practicalities. What is the optimum permitted use of the smaller home? It's probably "leave it as it is".

If you want a larger home on that street but none are for sale, you could buy a smaller one for £700,000, knock it down at a cost of £50,000; build a larger home for £500,000, you've ended up spending £1.25 million for a home worth £1 million, which ain't going to happen. So £400,000 is still a fair assessment.

2. Or maybe you can just buy a smaller home and spend £150,000 on an extra storey; half of the value uplift from £700,000 to £1 million. In which case, if it's a mixed street with equal numbers of easily extendable smaller and larger/already extended homes, it makes sense to assess them all at £450,000. If there are ninety smaller homes and only ten larger ones, assess them at the weighted average of £410,000.
Whichever method is chosen, it will be good enough for initial assessments (I am heartily indifferent), and the % rate would simply be based on the total revenue required to replace existing taxes are replaced, so not huge £££ amounts. Over time, we can be a it more sophisticated; use rental values not selling prices, and so on.

Sunday 3 November 2019

Vote Lib Dem for a steel-free future

From BBC:

The [new] Woodhouse Colliery would extract coking coal from the seabed off St Bees, with a processing plant on the former Marchon site at Kells...

Tim Farron, the Liberal Democrat MP for Westmorland and Lonsdale, who asked for the "call-in" described the news as "a kick in the teeth in the fight to tackle climate change".

He said: "Cumbria has so many renewable resources to provide energy - water, wind and solar - and we should most definitely not be taking the backwards step of opening a new coal mine."

Which raises the obvious question, can the world produce steel without using coking coal?

To which the answer appears to be "No".

UPDATE: Or possibly "Yes", if you believe the clever scientists.

Friday 1 November 2019

Reader's Letters Of The Day

All from today's Metro:

As the LIberal Democrats are now the Remain party, I'm expecting 48% of voters to back them - unless, of course, they feel British party politics is more important than remaining in the EU.

Richie, London.
In reply to Julian Self (MetroTalk, Thu), Boris Johnson never pledged £350 million to the NHS, he stated it 'could' be used by the NHS - a bit of a difference.

John Nightingale, London.
I'm looking forward to six weeks of Conservative MPs answering questions by criticising Jeremy Corbyn.

Where Art Thou, London.
To Tom, the short, fat, badly dressed guy on the Hertford North line who says he is despondent about never being the subject of a Rush-Hour Crush (MetroTalk, Thu). Your bags are in the front garden.

Tom's Wife, Enfield.