From the BBC:
Some farmers have said without long-term guarantees about future subsidy levels, farms could disappear from the landscape.
"We could be wiped out like the coal industry," said Roger Hobson, whose 4,500-acre farm near York qualifies for a subsidy worth £100,000 a year.
"What we fear is that in the future the farm industry will have to go to the government and compete for funding alongside the NHS and other public services."
I got chatting to an immigration lawyer at the weekend (friend of a friend) who told me that the whole thing is a futile waste of time and money.
The Home Office identifies citizens of EU Member States (who are actually entitled to be here) who are 'homeless' (as defined) and serves them papers asking them to leave the country or else they'll be deported.
Half of them ignore it, homeless foreigners being notoriously difficult to track down, and half of them fill in a 137-page form (I think he was exaggerating a bit here, but who knows?) applying for leave to remain (or whatever the technical term is), some of them get some of the trick questions wrong and are earmarked for deportation. Most of these then go to an immigration lawyer who knows how to fill in the form correctly and do the appeal cover letter, and then most of these people can stay.
And so on and so forth. Of the handful who are actually deported, most of them are back in the UK within days or weeks.
So far so good.
He also said that the HO identified a lot of people by bullying homeless charities into handing over data, which is easy to appeal against. This sounded like a conspiracy theory to me, but lo and behold, this morning's Metro covered the story.
There's a few people showing these two images on Twitter, I think a before and after photograph of Birmingham. Lots of people horrified at the destruction of fine old buildings by brutalism.
I was involved in another Twitter spat recently with a Faux Lib who insisted that high house prices are all about lack of supply.
Despite our best efforts, he was ignoring logic and facts, so I'll try to explain again why it is nonsense (for my own sanity and for future reference).
OK, first you have to understand the rent-setting process, which I covered here in a separate context (why a Universal Basic Income would not change rents).
It is easily observable that differences in average rents between different areas are pretty much equal to the difference in average wages between areas (plus or minus lots of other things, like nice/poor views, good/bad state schools, ease of commute, but average wages are easiest to quantify so let's stick with that).
To simplify the example, a country has a low wage Area A and a high wage Area B. Averages wages in Area B are £10,000 higher than in Area A, so average rents in Area B end up £10,000 higher than in Area A. This is because people will move from Area A to Area B to earn the extra £10,000, provided the extra rent they have to pay is no more than the extra wages of £10,000. If the difference were greater, people would move from Area B back to Area A, so there is an equilibrium where the higher rent soaks up the higher wages.
The location rent in Area A is zero; the rent you pay in Area A is just enough to justify maintaining existing stock with no surplus. Even in the wealthiest countries in the world (excl. city-states) you will find areas where the location rent is zero and you can buy homes for less than they cost to build, that's just a fact.
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Let's assume they build more homes in Area B. So people will move from Area A to Area B for the same reasons as before. Let's assume that this migration has no effect on average wages (agglomeration benefits mean that average wages will go up in the medium term; it could be argued that new comers will be slightly less skilled than current residents, so overall let's assume no effect).
The average location rent in Area A can't fall below zero and the equilibrium difference in rents is still £10,000, and there is no change in rents in Area B, despite the additional supply.
You can build as many new homes in Area B as you like. Even at peak capacity, new construction will only add a couple of per cent to existing housing stock and people can move just as fast as new homes can be built (at least ten per cent of the population move home each year, against a three per cent increase in housing stock, let's say) and the equilibrium will always re-establish itself.
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Circling back to real life, the Faux Libs claim that rents in London are only so high because of lack of supply. What they are saying is that people in London pay £15,000 extra in rent to be in an area where wages are only £10,000 higher. That is clearly nonsense - most people who move to London are in their twenties and they move there because they want to be better off. It is madness to say that people move to London to be worse off (they might take it on the chin short term, i.e. do an unpaid 'internship' but not medium or long term).
UPDATE, James Skillen posted this chart, saying it supports the idea that there is a need for more housing in London:
Maybe there is, maybe there isn't, that's not the issue here. If you do the maths, you will find that net incomes after paying rent are pretty much flat in absolute £ terms across the UK, which is a basic law of rent and the basis of the whole thing. For example, London wage £30,000 minus rent £15,000 (50% of wage) leaves £15,000 disposable. North East wage £20,000 minus rent £5,000 (25%) leaves £15,000 disposable.
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What is slightly more interesting is to look at Area A once some people have moved away. There are now more households than homes.
Two things can (and do) happen:
a. People spread out a bit; people leave home at a younger age; unhappy couples are more likely to split up etc. So the average number of people per home goes down a bit, and you can now rent more home for the same money - which discourages people from moving to Area B, so the effect is weak.
b. Less desirable homes in less desirable parts of Area A are simply abandoned. Once a couple of homes on a street are left empty for long enough, there is a domino effect and after a few years the whole street or whole estate is almost empty. For every new home built in Area B, one home is abandoned in Area, so the process is only gradual.
These abandoned homes simply fall out of the equation; they are no longer homes and can be ignored - it would be like including the selling price of beat-up MOT failures in a scrap yard when calculating the average price paid for second hand cars. The remaining people in Area A all end up occupying the same amount of housing and paying the same rent as before in the parts which have not been abandoned. The equilibrium rent difference between Area A and Area B is maintained.
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Whichever way you twist it, either you accept the simple logic of the rent-setting process which is easily observable in real life (comparison of average wages and average rents) - or you believe that people will move to a high rent area, knowing full well they will be permanently worse off; or will not be tempted to move to a low rent area if it made them permanently better off.
The Evening Standard has launched a laudable campaign to get cannabis legalised in the UK, hooray, nonetheless, the article highlights some cases of extreme twattishness:
Nova Cannabis, just down the road from Hunny Pot, was the third brick and mortar [cannabis] store to open in Toronto, and I pitched up to find the owner, Heather Conlon, looking shell-shocked in her first week of business.
The 50-year-old was one of 58,000 people to enter the licence lottery, and her win has turned her into an instant multi-millionaire. “My husband and I run a locksmith so running a cannabis business is totally new to us,” she said.
The Toronto government should have auctioned off the licences rather than turning a random few people into 'instant multi-millionaires'. It is a protection racket, after all - you pay us, and we'll lock out the competition. Or they could have handed out more licences, or imposed an annual tax on licensed premises, such that the value of the licence is minimal.
“Our competition is not the other legal shops like Hunny Pot, it’s the prolific number of illegal dispensaries that operate without the same restrictions we have,” said Conlon. “They can undercut us on price because they don’t pay tax. It’s unfair. I hope they will make arrests and shut the lot of them down.”
The mark-up for anything illegal, like cannabis, is enormous because of the risks (being shot by a rival dealer or going to prison), the overheads (mainly bribes and hush money) and the fact that a lot of supply is confiscated (by the authorities or other dealers). So unlicensed dealers will have to drop their prices significantly to compete, not the other way round. Dealers aren't paying tax to the government as such, but a bribe to a government official is still a kind of tax.
And if unlicensed dealers have drop their prices significantly, that in itself is A Good Thing. The trade is now less attractive to criminals, so attracts fewer of them and acquisitive crime falls. If the government wants to shut them down, it just has to keep dropping the tax until illegal supply is simply not a commercially viable enterprise.
From The Guardian readers' letters page:
Nuclear power is helping to drive the climate crisis
Has the Confederation of British Industry got its head in the sand, or in the record levels of carbon-intensive concrete just poured at the Hinkley C nuclear site (Build more nuclear reactors to help climate crisis, says CBI, 28 June)?
Nuclear power, apart from destroying biodiversity throughout its life cycle, produces up to 37 times the CO2 emissions of renewable energy sources, owing partly to the mining and refining of uranium. The impact of this process on people and the environment is not included in the rationale for nuclear power in the UK...
Linda Rogers, PAWB (Pobl Atal Wylfa B/People Against Wylfa B)
Let's go with the prevailing narrative that today's temperatures are outside the normal range of fluctuations for the past hundred (or thousand, or whatever) years, and that carbon dioxide is causing them - and focus on that "37 times" number.
I don't know what she means by 'renewable energy', but presumably the net carbon dioxide emissions from these is close to zero - thirty-seven times close to zero is still a small number, and surely a few orders of magnitude less burning oil or gas (coal is hardly used any more in the UK).
Therefore, the headline that "Nuclear power is helping to drive the climate crisis" is nonsense. By all means, oppose it for other reasons (rightly or wrongly), but please accept that overall, it reduces carbon dioxide emissions.
An article in (at? I'm never sure) Somerset Live contrasts the almost pristine state of the field after this year's festival with the amount of tents and rubbish left behind last year, and explains the difference thusly:
Climate change and the environment has been a central theme for this year's event, with organisers urging people to bring sturdy tents that they take home, and it appears that the message has been getting through.
The Love the Farm, Leave no Trace pledge, which launched in 2016, is believed to have resulted in an 81 per cent reduction in tents left at Glastonbury in 2017.
Nope.
Those pop-up tents are easy to pop up, but very fiddly to fold up and put back in the bag. If you are tired, cold, muddy and dying to go home and your tent is covered in mud (and possibly sewage), you won't be in the mood to struggle with it for ten minutes and are likely to abandon it. Having spent £200 on a ticket and £50 on travel, and having got used to paying £8 for a can of warm lager, who cares about the £40 you spent on a pop-up tent?
If, as happened this year, you and your tent are dry and the weather's still nice, you're happy to faff about for ten minutes, work out how to pack up your tent and take it with you.
The same goes for all the plastic rubbish. Most people won't be willing to gather up plastic bottles embedded in mud (and possibly sewage) while it's pouring down. If it's nice weather, filling up a couple of bin liners with loose plastic items is no great sacrifice, if you're doing it with a few like-minded, it can even be quite satisfying.
Let's see what happens to people's new-found environmental awareness next time it's been raining.
It's the first bullet point in yesterday's article on the death of a stowaway:
First picture of Oxford graduate sunbather who had miracle escape when frozen stowaway plunged 3,500ft from Kenya Airways jet and landed just THREE FEET from him in London garden
* John Baldock was in garden of £2.3m home where he lives in Clapham, London
* Man's body fell 3,500ft from landing gear of Nairobi to London Heathrow flight
* Neighbours say the body landed just feet from Mr Baldock on Sunday afternoon
* Mr Baldock is a software engineer from Exeter who has a master's from Oxford
Sorry to return to the ASI dirge of two years ago, but I saw this excerpt trotted out elsewhere as the inevitable 'but...' in an otherwise fairly favourable article:
One false claim made in favour of the LVT is that it would force the land to be used ‘more productively’. But there is already a sort of ‘tax’ on owning land and not using it as productively as possible: opportunity cost.
If you choose to use your land as a garden instead of a block of flats to rent out, you are ‘paying’ the cost of doing so in the rent you’re forgoing [sic].
LVT and planning is indeed a bit of a red herring. The main benefits are the social and economic benefits of using it to replace taxes on output and employment.
He misses the point by yapping on about people selling their back gardens for housing (how many people have a back garden big enough? One in a thousand? How many of those would bother applying for planning? How many councils would grant it?) The additional value of a back garden beyond a certain size is minimal, so the LVT on a home with a big back garden would be barely more than the LVT on the house next door with a normal back garden; nothing happens.
But there is clearly a big difference between actual cash costs and opportunity costs. Consider two examples:
1. Poor Widows In Mansions
Our first Poor Widow owns and lives in a large/expensive home. She could rent this out, bank £20,000 a year rent and rent herself somewhere for £5,000 a year. I'm sure that some Poor Widows do this, but most of them don't. Her heirs aren't too bothered either, because if they kept nudging her to do this, she might get sick of them and cut them out of her will.
Our second Poor Widow rents the large/expensive home next door for £20,000 a year. Oh no, she doesn't, she traded down to renting somewhere for £5,000 a year decades ago when her husband died/she retired.
They are both getting the same benefits from living at that location (nice neighbourhood, near the shops, good GP, whatever); one has a notional cost and the other a real cost.
So with a real cash cost, housing is being used more efficiently, the larger/wealthier family is living in the large/expensive home and she is living in the smaller, affordable one.
2. Land speculators
Our first land speculator inherited some fields at the edge of a growing town years ago, mortgage free. He knows that its value is increasing by 5% or 10% a year compound (or, the chances of getting planning gradually approaches 100%). He can only earn 1% interest by selling up and putting the cash in the bank. So he will only ever sell the fields if he really needs the money.
Our second land speculator bought some fields nearby, financed with a large mortgage which makes the exercise cash negative. He will be keen to get planning as soon as possible, bank the uplift and pay of the mortgage and interest years. If he leaves it too long, the compound interest will wipe out any gain.
They are both getting the same benefits from owning those fields (steadily increasing likelihood of banking a nice fat planning gain); one has a notional cost and the other a real cost.
So with a real cash cost, land is being used more efficiently, the mortgaged fields are sold and developed, bricklayers get jobs and people can live there.
With LVT in place
LVT doesn't just turn a notional cost into a cash cost, focusing people's attention on optimising land use short term, it would, if handled correctly, keep land/housing selling prices very low and stable, thus discouraging people from hanging on as long as possible.
The heirs of the Poor Widow In A Mansion from the first example can't console themselves with the fact that the longer she remains there, the more they can sell the house for in future. If she really wants to 'pass on her hard earned wealth to her loved ones', she will trade down. If she doesn't care and prefers living there, she rolls up the LVT and her heirs can whistle for it.
Our lucky landowner from the second example will not be sitting back, waiting until he can realise a tasty windfall gain. His fields will never be worth more than a few thousand pounds per acre; when the council lifts planning restrictions, the higher LVT will cancel out most or all of the planning uplift. There will be no incentive to keep his fields out of use as long as possible and he will be sell it on to an actual builder or develop it himself ASAP.
Emailed in by MBK, from The Spectator, in among the shite are these classics:
The report’s editor, George Monbiot, has not thought through the unintended consequences of the proposals.
Well yes he has.
Just one example and perhaps the most damaging is the desire to reduce land prices. With government (national and local), institutions and pension funds and religious organisations being the most prolific landowners, often on our behalf, this would be an economic disaster.
It would undermine the nation’s ability to pay for any of the measures they propose, by reducing our ability to borrow efficiently.
If people already own land, why do they need to borrow? I thought the idea was, take out a mortgage, buy a home and pay it off as quick as possible. The only reason for borrowing on land you already own is to leverage up and by more land etc.
The 'nation' raises the money to pay for by collecting taxes (such as the report's suggested 'Progressive Property Tax'), borrowing is just deferred taxation.
I'm not aware that land speculation is a major source of government finance. With a PPT, land values would continue to be a major source of government finance, only better.
Pensions would see a reduction in their value too.
So what? It's a negative sum game, and one man's pension is another man's poverty.
Replace Council tax with ‘Progressive Property Tax’
This is the idea that won’t go away. In another guise, the Mansion Tax is back. Except it won’t just be mansions caught by this pernicious change. Forget the cost of local services. Or how much you earn. The more valuable your house, or flat, the more you would pay in council tax under Labour’s plans.
Nobody has forgotten the 'cost' of local services; we have to collect taxes to cover that cost. Most services are local services - it's not just mowing the grass verge and emptying the bins. Schools, hospitals, police, roads etc are all local to somewhere and maintain local land values, total cost approx. £250 billion a year.
In ideal world, LVT (aka Progressive Property Tax) receipts would at least be enough to cover the cost of all this stuff; a flat PPT at 3% on current values should just about cover it. The more benefit you get from such local services, the more you pay. Seems like a perfectly fair free-market solution to me.
And these nutters hate income tax, so surely they would welcome a tax not based on 'how much you earn'? It's one or the other.
Getting a mortgage
After a big fall in house prices has been achieved, expect to find it more difficult to get a mortgage as LTV, Loan To Value, rates are tightened.
After a big fall, people won't need to borrow so much (so an LTV cap is probably unnecessary anyway) and it will be easier to get a mortgage large enough to buy a home.
It is simply easier getting and paying off a two-times salary mortgage than getting and paying off a five times salary mortgage (especially if taxes on wages are reduced and potential borrowers have higher disposable incomes).
So this one is really fucking stupid.
To ‘discourage land and housing from being treated as financial assets’ is beyond bonkers.
It is the most sensible thing I have ever heard.
