"British Gas urges customers to ditch David Cameron after he hikes taxes by more than 10%"

From The Evening Standard:

Struggling London families were dealt a huge blow two years ago when the Conservative-led government increased taxes on output and employment by 10.6 per cent.

The bombshell from Britain's biggest government reduced disposable incomes of an average household by nearly £1,000 and sent their annual total tax bill spiralling to a record £20,000 a year...

The VAT and National Insurance rises, which came into force in 2010, did not trigger a storm of protest and consumer groups did not accuse the Liberal-Conservative coalition of delivering a "big, nasty" shock to taxpayers that will force thousands to make a "heat or eat" choice over the winter.

British Gas chairman Sir Roger Carr today said the tax rises were "disappointing" and urged people to try to save money by switching governments.

Shadow energy secretary Caroline Flint said: "People are too feeble to stand up to the government. Britain's tax and welfare system is not working for ordinary families and businesses.

"Heck knows how we keep getting away with it."

Fun With Oliver Letwin

From The Daily Mail:

A senior Cabinet minister has been caught throwing away sensitive papers in park bins around Westminster.

In a clear security breach Oliver Letwin, David Cameron’s policy adviser, was spotted on five separate occasions disposing of correspondence about national security and terrorism in a public park. Some of the documents he threw away revealed private details of his constituents.

Exhibit One:

Spies have been known to use dead drops, using various techniques to hide items (such as money, secrets or instructions) and to signal that the drop has been made.

The system involves using signals and locations which have been agreed upon in advance. These signals and locations must be common everyday things to which most people would not give a second glance. The signal may or may not be located close to the dead drop itself.

The location of the dead drop could be a loose brick in a wall, a library book, a hole in a tree, or under a boulder etc. It should be something common and from which the items can be picked up without the operatives being seen by a member of the public or the security forces who may be watching.

Exhibit Two (h/t Woman On A Raft)

The government says it will make £250m available to help English councils keep or restore weekly bin collections... Conservative Chairman of the Local Government Association, Sir Merrick Cockell, welcomed the news.

He told BBC Radio 4's Today programme: "Any bid has to demonstrate the potential to increase recycling rates, which is one of the reasons a lot of councils went to every two weeks, and to provide other environmental benefits - reducing fly tipping, litter and all that side of good environmental waste collection. So, there's not one side to these bids."

On a lighter note: "... Labour's Caroline Flint said the money was effectively a bribe to councils to 'save Eric Pickles' face'". Crikey, if it costs £250 million to save the man's face alone, how many billions will it cost to save the rest of him?

[Alison Seabeck edition] Killer Arguments Against LVT, Not (141)

Another snippet from yesterday's meeting between Priced Out and Caroline Flint and Alison Seabeck:

I had briefly outlined why replacing other taxes with Land Value Tax would genuinely help, re-establish the balance between generations and so on. Ms Seabeck said that this was all well and good but what about people being 'forced to move away from their families, communities being uprooted' etc.

I forgot to mention that as things stand we already have this: there are a lot of young (and not- so-young) people who cannot afford to buy a house anywhere near they grew up; certainly nothing as nice as the one in which they grew up, so under current rules it is the young and not-so-young who are being 'forced' to move further away, to cheaper areas while all the Baby Boomers and pensioners stay put (and then complain that none of their children can be bothered to 'settle down', i.e. have grandchildren, or that their ungrateful children or grandchildren never visit them), and launched directly into the retort I had rehearsed:

I - much like Ms Flint or Ms Seabeck - have been round every street in my area, delivering leaflets at election time (I didn't mention for which party) and that, just like most places, there are big detached houses with big gardens; semis, small terraced houses (the ones where you can post a leaflet in one door and then lean over the fence to do the one next door); blocks with big, grand flats and blocks with much smaller flats - all within a radius of a few hundred yards.

So even if pensioners were 'forced' to downsize, they'd all be able to find something affordable within a few hundred yard radius (or certainly within a few minutes' drive, a couple of bus stops, or whatever), so they can give or sell their old house to their children and move into somewhere affordable close by, problem solved.

There wasn't much they could say to that, really.

[Caroline Flint edition] Killer Arguments Against LVT, Not (140)

As background: this evening I attended the 'round table discussion' (the table was distinctly long and rectangular) which Priced Out had organised with Caroline Flint and Alison Seabeck.

The topic turned to subsidies aimed at 'helping first time buyers onto the ladder' and one attendee (Gary F) pointed out that this was futile - in Australia, they had introduced a $7,000 First Home Owner Grant, the result of which was merely to inflate the selling prices of homes to first time buyers by $7,000. We have observed exactly the same wherever this has been tried (and the reverse where it has been withdrawn), it's fairly basic economics.

Everybody seemed to agree with that.

I asked Ms Flint whether she'd heard from the Labour Land Campaign (and clearly she didn't know who they were) and explained that if we reduced other taxes (I mentioned VAT and Employer's NIC as the worst taxes and Council Tax because it is a poll tax) and replaced the shortfall with LVT, this would discourage land-hoarding, over-occupation, speculation etc. and hence lead to more efficient use of land and housing, everybody gets what they pay for, problem solved.

NIMBYism wouldn't really be an issue, because if the NIMBYs drove up the price of housing then they'd be shooting themselves in the foot because this would merely drive up their own LVT bills.
----------------------------------------
So far so good, people seemed to agree with that as well, but Ms Seabeck then went for the old fallback: "If we had LVT, then surely landlords would just 'pass it on' to the tenant in higher rents?"

After the meeting ended I pointed out to her that Gary's example illustrated that subsidies to housing merely result in higher prices and do not help first time buyers; and seeing that a tax on something is the opposite of a subsidy, then quite clearly (as borne out by real life evidence) if a subsidy increases the price then a tax reduces the price, so tenants (or indeed first time buyers) would not be affected.*

* To be fair, scrapping Council Tax and reducing VAT and Employer's NIC would increases people's disposable incomes and some of this saving would result in a higher total amount being devoted to housing costs, so some of the LVT would be borne by tenants, but so what? It's only a small proportion of people who rent privately or who buy their first home every year and LVT would still function as an admirable rationing measure.

Also thanks to Dana C for the pint afterwards.

Simple answer to a stupid question

From the Blue-Yellow Corner: Councils in England will be allowed to keep the business rates they collect rather than paying them into Treasury coffers, under new government plans.

Deputy PM Nick Clegg said councils had no financial incentive to boost growth and prosperity in their areas. But he said changes would be "fair" and poorer areas would not get less money than they do under the current system. Business rates are charged on most non-domestic premises, including warehouses shops, offices, pubs and factories.

This is a very good idea, as I explained when The Morbidly Obese one suggested it back in March (it was of course in the UKIP manifesto as well, and I should know because I wrote those bits).

From the Red Corner: Caroline Flint MP, Labour's Shadow Secretary of State for Communities and Local Government, responding to Nick Clegg's speech at the LGA Conference, said:

"Nick Clegg must explain how he intends to localise business rates without pulling the rug from beneath the finances of councils in Britain's most deprived areas. If business rates were completely localised, Westminster Council would gain over a billion pounds*, the City of London would gain half a billion, but many other areas would lose hundreds of millions in vital funding."

That's the easy bit.

Remember that local councils get (say) 75% of their funding from Whitehall and 25% from Council Tax, so keeping it 'fair' is quite simple; on Day One of the transition, each council's central grant is reduced by the amount of Business Rates it could or should be collecting and in future years, the grant is kept constant and it's up to the council to collect as much in Business Rates as possible (any further 'equalisation' makes a mockery of the whole thing, of course).
--------------------------------
So far so good.

What former Housing Minister Ms Flint overlooks is that her successor-but-one, John Healy applied the same good logic to social housing receipts (please read my crash course for an overview of the topic) as the current lot apply to Business Rates, and proposed that instead of councils collecting rents and handing over the proceeds to Whitehall, only for Whitehall to hand it back to pay for the running costs, he would simply allow councils to keep their own rents and pay their own running costs.

So we could do the same exercise with social rents - deduct the amount which councils could or should be collecting in rents and deduct the notional running costs to arrive at a net figure**, which they also knock off each council's current grant and then it's up to each council to maximise rental income/minimise running costs.

As it happens, Council Tax, total (potential) rental income from council housing and Business Rates are of the same order of magnitude - about £25 billion a year each, which would mean that local councils are about 75% self-funded - and all out of taxes and rents on or from land and buildings. If we then doubled Council Tax we could reduce the central grants to more or less nothing and we'd be half way there.

* City of Westminster is a special case, its annual expenditure appears to be about £1 billion a year anyway, in other words to keep things even on day one, if it were allowed to keep all Business Rates receipts (£1.1 billion, as it happens) its theoretical central grant would be negative, so in future it would then have to hand over a net figure to Whitehall, or even better to Transport for London.

** Whether you count 'Housing Benefit' as a reduction in income or as an expense is a separate topic (at present, it's an expense to one government department the DWP and income for another branch of government, local councils), but as far as I am concerned, they might as well scrap it completely and leave it up to local councils to charge below-market rents if they so choose but at their own cost.

What's £14.73 between friends?

From Yahoo:

Plans to reinstate weekly bin collections have been shelved by the Government after a row between Cabinet ministers. Environment Secretary Caroline Spelman has announced the findings of the Government's Waste Review - a cross-department examination of how to tackle waste. It contains a u-turn on the Communities' Secretary Eric Pickles' pledge to bring back weekly rubbish collections...

Caroline Flint, shadow communities secretary, said: "This latest evidence of the Government in chaos is a personal humiliation for Eric Pickles. He has spent years leading people on with overblown promises to restore weekly bin collections, despite Labour's warnings that he would never be able to deliver. The Local Government Secretary should learn the lesson that chasing headlines is no substitute for properly worked out policies to make communities cleaner, greener and better places to live."

Estimates of the costs of reinstating weekly bin rounds have been put at £140m in the first year alone...

Ho hum.

I personally am perfectly happy with fortnightly for normal rubbish and weekly for kitchen/garden waste (which is what they have where I live), others clearly are not.

But if you divide £140 million/year by 9.5 million households, that works out at a princely £14.74/year per household (28 pence/week!), which is hardly unaffordable, even in these straitened times.

I left in the rant from Caroline Flint because it is another fine example of DuckSpeak (Labour politicians seem to be better at this than Tory ones), it sounds quite fluent and sincere when she says it, but it's actually completely devoid of any meaning or relevance to anything whatsoever.

Question Time: The EU & international terrorism

I don't normally watch QT, but Nigel was on yesterday so I gave it a whirl. Towards the end, either Caroline Lucas (of the Green Party) or Caroline Flint (of the Labour Party) was saying that one of the reasons the UK needed to be in the EU was because it somehow helped in the fight against international terrorism.

Hmm.

At the risk of generalising, as I don't have time or inclination to research all this down in infinite detail...

Let's look at places in Western Europe that aren't in the EU; that's the Isle of Man, Channel Islands, Switzerland, Norway, Iceland. Hotbeds of international terrorism? Nope. Austria joined the EU as recently as 1995, was it the epicentre of international terrorism before that? Nope.

Now, think about the countries where most terrorists live. The UK is probably top of the list due to its open-door immigration policies for people from Somalia and Pakistan, for example (and due to France waving them all through Sangatte), but Germany and Spain (and maybe The Netherlands) rank fairly high as well. If a terrorist with an EU passport rocks up at the border of another EU country, they more or less have to let him in (unless it's a dangerous lunatic like Geert Wilders, of course).

From the point of view of all the other countries, they'd probably be safer from terrorism if the UK left, to be honest, as then they'd be able to turn back people they didn't like the look of, even if they were waving a British passport.

She doesn't smoulder quite like she used to do

That's one heck of an admission

Pinched from Witterings:

From Hansard 19th May 2009 - Column 1327:

Mr. Evennett: Can the Minister confirm categorically that any changes to the Lisbon treaty for any country would mean that the treaty needed to be re-ratified? Would the Government then hold a referendum on this matter?

Caroline Flint: I think that it is dead if people vote against it.

Is this the sort of behaviour we expect of our 'Europe Minister'?

Economic illiterates of the day (8)

First up is Prof Stephen Nickell:

A year ago he was bravely forecasting that house prices would rise to ten-times-income by 2026. Six months ago he had toned this down slightly and solemnly told the House of Lords that prices might 'only' rise to over nine-times-income by 2026. Here's the same chap again, solemnly predicting that house prices are now on the slide (oh, so he noticed!). And, apart from being wildly out with his original predictions and not apologizing for that in any way, he appears to think that house price falls are a bad thing: "Families must wait until 2015 for the property market to start booming again". For young couples who'd like to start a 'family' these price falls are a most wonderful thing!
.............................................
Next up, Kate Barker:

She is the Government stooge who wrote the Barker Report back in 2004 and came up with the 'target' of 240,000 new homes a year*. The delectable Caroline Flint** referred to this as if it were Gospel in her recent FT interview with the FT:"The need to get up to 240,000 homes a year is as relevant today as it was yesterday and will be as relevant in the future, based on very detailed evidence Kate Barker pulled together demonstrating that we hadn't built enough homes."

Kate Barker has had four years to come out and distance herself from her earlier crap*** - but not much chance of that happening, is there?
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What is so terrifying about all of this is that Prof Stephen Nickell and Kate Barker have both served on the Bank of England's Monetary Policy Committee.

Jumping Jesus H Jack F***ing Flash, with knobs on, are these really the best people they can find?
.............................................
* To be fair, there is a lot of useful research in the original report, you can sort of imagine her sitting back and saying "F*** it, what we need is liberalisation of planning laws and/or Land Value Tax" but like that other government stooge Sir Michael Lyons, she only dared mention these possibilities very briefly.

** Yes of course she's an economic illiterate as well - she's a Labour politician, what do you expect? Her bright suggestion is "pressing ahead in the area where she believes she can make a difference - using the clout of public sector bodies to help housebuilders, not only by buying thousands of new-build homes from them, but perhaps by changing payment terms so registered social landlords pay more upfront. The move will be welcomed by the beleaguered industry, even if it is not enough radically to transform its fortunes."

Nice one, Caroline! And seeing as sales of cars, holidays, furniture etc will no doubt fall as well, how about doing something to help the "beleagured" car manufacturers, travel agents or furniture shops?

*** For a pleasing contrast, see Lord Joel Barnett, who has spent half his life "actively campaigning for a reform of his own formula".

Fun with numbers (4)

From The Times:

"... last year there were 95,374 court orders for mortgage repossessions; but only 27,100 actual repossessions."

"Caroline Flint, the [bootylicious] Housing Minister, will today pledge an extra £9 million over three years to fund debt advice and legal support for families facing repossession."

OK! £9 million divided by 3 years divided by 100,000 repossession orders per year = £30 for each household. That'll pay for about ten or fifteen minutes of solicitor's time.

Wringing even more irony out of this:

1. It is meaningless to compare the number of actual repossessions in any year with the number of repossession orders in that year; you have to compare them the number of orders in the previous year, as these cases drag on for a year at least.

2. The state-owned Northern Rock will no doubt be at the forefront of lenders applying for repossession, so we've got three different taxpayer funded bodies battling it out (the bank, the CAB and the Courts).

3. That £30 per case is laughable, no doubt it will soon blossom to hundreds or thousands of pounds per case, and they'll have to set up a quango; a regulatory body; a funding agency and an ombudsman etc. to deal with it.

4. The idea that a Nulab minister could be physically attractive is rather weird.

H/t Taffee at HPC.

Dice.

Pushing a piece of string

Per today's FT, UK homebuilders have thrown in the trowel*...

Persimmon ... yesterday became the first to admit publicly that it was shelving plans to develop new sites, raising the prospect of sites lying undeveloped for years ... Persimmon said sales in the past three weeks were down more than a third compared with last year

Our noble govenment's response?

Caroline Flint, [the very tasty] housing minister, appealed to housebuilders not to be driven by short-term problems. "It is essential - and in their own interest - for housebuilders to base decisions on the economic fundamentals and longer-term trends."

Er ... since when it committing commercial hari kiri in homebuilders' own interest? I suspect that they know just a leedle bit more about these things than you do.

Oh, and by the same logic, Alastair Darling, you moron, just because you lend the banks cheap money doesn't mean that they'll lend it on cheaply against rapidly depreciating assets. Twat.

* ^(TM) Edwin Greenwood.

Women in politics

Serious, non-schoolboy type debate over at LabourHome.