I found his farewell video shown on the news this evening rather moving. I can't track it down right now, so I'll just link to the BBC article.
Wednesday, 30 September 2009
Read this and make up your own mind:
House price bounce leaves Bank of England stunned
The Bank of England has been taken aback by the recent rebound in house prices and is watching the market carefully for any signs of excessive 'exuberance'...
From The Metro:
[Gordon Brown] paid tribute to chancellor Alistair Darling and joked about his 'special relationship' with Peter Mandelson but Gordon Brown made no mention of his arch enemy David Cameron during his speech to the party faithful.
He also had no warm words for his wife, Sarah - in public at least - after she welcomed him on to the stage. Instead, Mr Brown was keen to repeatedly condemn a Conservative party he ridiculed as 'wanting' not 'needing' to cut spending and return Britain to the 'cardboard cities' of the 1980s
From The Torygraph* (my numbering):
(1) One in 20 hospital admissions in England is due to smoking and treating illnesses related to the habit costs the NHS £5.2 billion a year, official statistics suggest.
(2) There were around 1.4 million hospital admissions in 2007/8 for diseases caused by smoking in people aged over 35, a report from the NHS Information Centre said.
(3) For people aged over 35, smoking accounts for five per cent of all hospital admissions and one in five deaths is attributed to smoking, the report said.
(4) An estimated 83,900 people died as a result of smoking in 2007/8 – 18 per cent of all deaths for adults aged 35 or over.
(5) The proportion of adults smoking has dropped slightly from 22 per cent in 2006 to 21 per cent in 2007 but many diseases take years to develop so ill health related to the high smoking rates of the 1970s and 1980s are only now manifesting.
(1) It is miraculous that the 'cost' has doubled in the space of a year - from £2.7 billion on 6 October 2008 to £5.2 billion now. Either way, this isn't costing the NHS a single penny, the cost is borne by taxpayers. Seeing as VAT and duties on tobacco raise about £10 billion per annum and smokers' shorter life expectancy cuts about £12 billion off the annual state pensions bill, non-smokers are making a handsome net profit on the whole thing. And is "official statistics suggest" a polite way of saying they're lying through their back teeth?
(2) OK, 1.4 million is a Big Scary Number, but it's the one-in-twenty that's relevant, which doesn't seem too terrible. There are (say) ten million smokers, so that would mean one-in-seven have to go to hospital once a year (possibly plausible, I suppose). Alternatively, we could assume that each of their alleged 83,900 deaths is preceded by seventeen hospital visits (which seems a tad on the high side). But the 83,900 figure is itself plucked out of thin air, so of the ones they actually know about (having treated them) the number of visits must be much, much higher (and hence even less plausible).
(3) Or we could assume it's true that "smoking accounts for five per cent of all hospital admissions and one in five deaths" (query WTF does "attributed" mean?) and compare 20% (deaths) with 5% (admissions) and conclude that three-quarters of smoking related deaths don't "cost" the NHS a penny.
(4) & (5) These factoids suggest either; that nearly all smokers die of smoking-related diseases (i.e. 21% smoke and 18% die of it, allegedly); or that only half of them do (because "ill health related to the high smoking rates of the 1970s and 1980s are only now manifesting"); or that in fact only a third of smokers die of smoking-related diseases (83,900 out of 250,000 smokers who die each year of whatever cause) NB, 250,000 = ten millions smokers divided by average life expectancy of a 35-year old smoker of forty years, i.e. ten years less than normal life expectancy of a 35-year old, which is fifty years.
* Via Tim W.
From The Metro:
A young Afghan girl has been killed after a box of public information leaflets dropped by an RAF aircraft landed on top of her, the Ministry of Defence has confirmed.
The box failed to break apart in mid-air and hit the young girl, who was taken to a hospital in Kandahar where she later died. The leaflets were dropped over a rural area of Helmand province by an RAF C130 Hercules on June 23...
Tuesday, 29 September 2009
The Advertising Standards Authority [ASA] have recently upheld our complaint about the HSE’s massive advertising campaign claiming that asbestos kills 4500 workers every year. That was further refined to claim that 9 plumbers, 9 carpenters, and 9 electricians will die every week from asbestos exposure. The HSE must now stop making these exaggerated claims.
The ASA, after an initial investigation, were satisfied that this was a commercial advertising campaign and not a government information promotion. The ASA asked us to provide evidence to support our complaint and below is the text of our submission using only HSE statistics...
Two pages of evidence follow, the highlights of which are this:
1. ... the main reason for our complaint is that 4000 deaths [or up to 5000 as claimed by the TUC] do NOT occur each year from asbestos related disease in the UK. The basis for the HSE to make this claim is a series of calculations contrived from a theoretical model based on a [linear] extrapolation that includes totally wrong data. The formula below is used by the HSE to justify the basis for the 4000 estimated deaths and 90% of the information in this formula is grossly inaccurate or just plain wrong.
2. A chart showing the relative nastiness of blue asbestos (somewhere up there with plutonium); brown asbestos (steer well clear) and white asbestos (perfectly safe once behind a coating of plaster and a couple of coats of paint; either way, it's better to leave well alone than to try and chisel it out again).
The HSE spent 9 months sending all [their] evidence and the ASA was not persuaded as to its accuracy and upheld all 5 of our complaints.
* Thanks to Bayard for the tip-off.
Here's the up-to-date chart showing sterling against a basket of other currencies since 1990. As you can see, it recovered a bit and is now heading back to it's all time low of nine months ago, but it's not an absolute disaster or anything (the UK economy is doing badly, but only marginally worse than the others). Click to enlarge:
The only currency to have done staggeringly well this year is the Australian dollar, as it happens. It crashed late last year when the JPY carry-trade bubble burst, but Australia was one of the few countries to have hiked interest rates slightly in response to the global property price bubble (rather than cutting them to keep it going) and so even though it has reduced its base rate (to keep the economy going - so far they have avoided a recession, allegedly), it's still much higher than in most countries. Click to enlarge:
From The Metro:
Violent men will be banned from their own homes to give abused partners "breathing space" under new police powers promised by Home Secretary Alan Johnson.
Domestic Violence Protection Orders, to be trialled in two areas, will apply for up to a fortnight in a bid to prevent women having to flee to emergency accommodation such as refuges. Instead they would be offered help and advice by caseworkers on the options open to them if they left the relationship - including securing a longer-term injunction...
OK, yet another gimmick from the government that dreamed up ASBO's and ABC's, so it will either never be implemented; or it will be implemented so badly that it just makes things worse etc. etc. (He knows where you live!). Moving swiftly on ...
... charity Refuge warned that the so-called "go" orders would only be effective if they were backed with sufficient funding and training of professionals...
Sandra Horley, chief executive of Refuge, said: "These new orders will protect women from further risk of domestic violence if they are implemented effectively. We hope the Government will underpin these positive initiatives with the funding and training needed to ensure this and, in doing so, alter radically the number of women whose lives are blighted by domestic violence."
The money shot!
Refuge's 2008 accounts show that total income of £8,215,265 includes £2,431,979 "rent" which is presumably a cross charge (the charity has no signifcant property assets on its balance sheet, heck knows to whom they pay it out again. Housing associations, themselves fakecharities, perhaps?).
Out of the remaining £5,783,286; "voluntary income" was £1,128,459 (their donors include the usual suspects like Children in Need and Comic Relief, Note 3); grants for "Supporting people" or "Floating Support" was £3,541,362 (all from the local authority/borough, Note 4); "Grants for services" was £784,010 (all from other government departments or local councils, Note 5); and interest income and "other income" (unspecified) was £329,455.
So that puts Refuge squarely in the "fakecharity" corner. But they'd like a bit more cash and more power anyway, thank you very much.
There was a write up of this press release in this morning's Metro:
Children whose mothers go out to work have poorer dietary habits than children's whose mothers are not in paid employment, according to a new UCL study. The children furthermore are more sedentary, and are more likely to be driven to school than children whose mothers do not work outside the home, according to research published today by Professor Catherine Law (UCL Institute of Child Health) in the Journal of Epidemiology and Community Health...
While the work patterns of fathers have changed relatively little in recent decades, those of mothers have, with around 60% of mothers with children under five in the UK and the US now going out to work, say the authors. Busy working parents may have less time to provide their children with healthy foods and opportunities for physical activity, say the authors, who cite previous research, suggesting a link between working mothers and a higher risk of obesity in their children.
So that's created a nice Climate Of Fear, trying to make people feel guilty for going out to work, it's all for the chi-i-ildren etc, that'll go down well with the hair shirt Christians and old school Tories as well as with the Greenies and bansturbators. And what's the solution?
"Our results do not imply that mother should not work," says author Professor Catherine Law. "Rather, they highlight the need for policies and programmes to help support parents...to create a healthy environment for their children. They suggest that dietary guidelines for children in formal childcare, similar to those already adopted in Scotland might be applied in England, for example."
Posted by Mark Wadsworth at 09:54
We've had our fulsome chuckle at the recent claim that "a 40p minimum unit price - coupled with a ban on promotions - would cut the number of alcohol-related deaths by about 70 in its first year", not least because there were - allegedly - only "8,724 alcohol-related deaths in 2007" in the whole of the UK anyway, so such a reduction would be within any sensible margin of measuring error.
But fair do's. Now, remember that Scotland represents less then a tenth of the population of the UK as a whole, so we'd expect the number of "alcohol-related deaths" (however defined) in Scotland to be in the order of a thousand or so and any cut to be in the order of, er, half a dozen to a dozen.
To my flabberstonishgaspment, I now read in The Torygraph, h/t Health Minister Dick, that"SNP ministers have published an academic report which indicates the measure would cut hospital admissions and deaths by 3,600 a year."
OK. When I'm in charge, I'll announce that I will ban conker fights (are they still legal?), which will "reduce the number of bruised knuckles and deaths by 3,600 a year" and I'll ban schoolboy soccer matches, which will "reduce the number of hacked shins and deaths by 36,000 a year" just to see if anybody is actually paying attention.
Monday, 28 September 2009
From The Telegraph:
Baroness Scotland immigration row: Sexism at heart, says Jack Straw
Strange really - when contrasted with Chris Grayling, who described her exoneration as a whitewash (itself a loaded term), she really has a winning hand at Victimhood Poker - she's fat, ugly and non-white as well. So I suppose Jack Straw is saving a few cards for the next round.
Richard Teather (who did a fairly decent 'flat tax' manifesto in 2005) did a 'think-piece' over at the Adam Smith Institute explaining why reintroducing Schedule A taxation, to broaden the income tax base and hence enable the income tax rate to be reduced, would be a good idea. Interestingly, this proposal was already in Patrick Minford's flat tax proposal of 2006.
Arguments against were invited today.
martinwc2 chimed in with the inevitable...
Surely the main argument against a tax on homes is that cash is demanded when there is no underlying cash flow? E.g. income tax arises upon cash income, even with capital gains tax, it falls due after a realisation. With houses, cash is extorted and funds must be taken from elsewhere. It's utterly irresponsible to force house sales to meet tax or force borrowing, especially when values fall as well as rise..."
Richard Teather replied rather nimbly with this:
As I said, we already tax people where there is no cashflow. We tax employees on non-cash benefits (company cars, private healthcare, etc.). A property tax is very similar - the company car saves you the expense of buying your own; home ownership saves you the expense of rent. There are other examples already in our tax system of taxing non-cash income, but the "benefit in kind" tax on employees is the main one.
I gave a more detailed reply:
@ Martinwc2. You are advancing what Winston Churchill and Henry George dismissed as the "Poor Widow Bogey" over a century ago.
There are four stages to the home-onwership life-cycle. Even if the property tax were an additional tax (I'd like to see any new property tax replace Council Tax, Stamp Duty and Inheritance Tax as a start, for example, and then use it to reduce income tax rates by broadening the base), then ...
1. People saving up a deposit to buy their first home. Any property tax acts like a higher interest rate, so prices would adjust downwards and their total cost of purchasing is fixed as a certain fraction of their net income. So they can obviously afford it.
2. First time buyers, who have a mortgage debt approx equal to the value of what they have bought. As they ought to have budgeted with a possible increase in interest rates of a few per cent (depending how pessimistic they are) the sensible ones will be able to afford a 1% or 2% charge on capital values, as it's no worse than a 1% or 2% interest rate hike. This would be easily affordable if such high tax rates reduced income tax by an equal and opposite amount.
3. People who have paid off or nearly paid off their mortgage, who thus have lower mortgage repayments than those in category 2, and hence can also easily afford it (esp. if income tax rates reduced).
4. Retired people. They could simply 'roll up' the tax to be repaid on death (which is why I would always recommend getting rid of IHT as a quid pro quo - IHT only raises £3 billion, about as much as the TV licence fee, but is a particularly spiteful tax in its own right).
Now, let's try and invent a system that treats all asset classes the same. Ideally, people save up some cash to live on in retirement (as well as paying off mortgage). If they are cautious, they only spend the interest element, so on death, the nominal value of the cash = the nominal value when they first retired.
Similarly, as the long run trend in house prices is to increase in line with wages growth (about 2% faster than RPI), as long as the annual tax is less than 4% of the nominal value of the house (a very, very high rate indeed!), the nominal value of the house minus rolled up tax [on death] would still be no less than its nominal value on retirement (taking a long run average sort of view). So the annual rental value is not actually taxed at all - this is earned and consumed while you are still alive - much like interest income (glossing over the fact that interest income is and should be taxed if we are to have the broadest tax base and hence the lowest overall rate).
From The Metro:
The catastrophic news that Jaguar Land Rover is planning to close one of its factories in the Midlands (report, Thu) is economic Armageddon for Birmingham and Britain as a whole.
This will result in thousands of people losing their jobs and a collapse in house prices throughout the region. It must not be allowed to happen and the government must step in to give the motor industry the same kiss of life it gave the banks.
ST Vaughan, Birmingham.
I don't agree that this is economic Armageddon for Britain as a whole; using taxpayers' money to engage in a subsidy war with other big European countries sounds more like Armageddon to me, but he is correct on the impact on house prices. This begs the question of whether he's more worried about unemployment or about the value of his home going down.
Y'see, this is yet another problem with the prevailing ideology of "Home-Owner-Ism" (wide-ish spread of home ownership coupled with high house prices); if you are one of many who lose their jobs, you suffer a huge income loss and a huge capital loss which makes it much harder for you to up sticks and look for work elsewhere (compared to tenants). (I'm sure that DBC Reed knows what I mean!)
With *ahem* Land Value Tax, there would be little or no capital loss, of course, because it would keep house prices low and stable; and in the bad years, you'd be compensated for being stuck with high mortgage repayments on a depreciating asset with a much smaller tax bill.
In last week's poll, I asked "Is pornography displayed at your workplace?", with responses as follows: No - 87%; Yes - 8%; I work in a shop that sells "lads' mag's" - 6%, i.e. even taking The Farrah Fawcett Society's wider definition, only 14% said that there was some pornography in their workplace.
In this week's poll, I asked "How much 'degrading imagery of women' is there at your workplace [compared to when you first started working]?". The results so far are "Less - 40%; About the same - 43%; More - 17%".
While this confirms my suspicion that there is no "endemic" of pornography in the workplace (if anything there is noticeably less than in days of yore), there's a bit of a mismatch here, because even if we interpret "About the same" to mean "None then and none now", if only 14% of workplaces have some (from the first poll) but 17% say there is more, then at least 3% of people aren't being consistent (but it's still within a reasonable margin of error).
From The Telegraph:
SIR – William Hague says that “Tories seeking a referendum will have to be patient” (report, September 26). No, we won’t. We will vote for someone who will give us a referendum or, better still, get us out.
Brian Gilbert, Hampton, Middlesex
It looks more like savage job creation. According to today's Metro, the starting salary for these completely made-up rôles is £36,100.
From the comments to a recent post:
"Mark - you will have noticed the delicious irony this morning that the two women involved are police officers.
According to Ofsted it is not safe or legal to leave your child with a police officer unless they've had separate registration and validation. The women are complaining that they thought that as they knew each other, they could just disregard the Childcare Act 2006 and the 2008 amendments.
I may wet myself laughing. Police complaining that the rules apply to them. Outrageous.
I have revised my "who dobbed them in" plan to include narked members of the public who may have come in to professional contact with them. On the plus side, Ofsted have admitted that so long as childcare takes place in the child's own home, the whole issue goes away.
Are the women really so thick that they didn't read the act and amendments, which means that the arrangement has only been within the definition of 'reward' since September 2008?"
Glorious. It's a pity that childminding-without-a-licence isn't an arrestable offence, that would have been fun.
Sunday, 27 September 2009
Some posts take a lot of building up to, but here we go...
1. Somebody did a quizz a while back in which he typed some lyrics into an English-to-Japanese translation programme which translates the results back and forth until the result translates as itself. You then had to guess what the original lyric was. I can't find it again, not after an hour of scrolling and searching, but you get the idea. (I thought it was James Higham but he says it wasn't - see first comment).
UPDATE: t'was John B on 7 August, well done Tim W for remembering!
2. Ross was the Undisputed World Champion of the World Victimhood Poker Series earlier this month.
3. With a nod to the concept in (1), this prompted me to ask him "Can you reduce the whole process to a computer programme and sell it to Comment Is Free? Then we could play that game where you feed the CiF article back into the programme and see how long it takes before the 'opinion piece' translates into itself?", to which he replied "I've been doing that for years, you don't actually believe Julie Bindel & Gary Younge are real people do you?"
4. Tim Worstall discovered a New Phrase a week ago, being "Parody horizon", defined as follows: "When something has crossed the parody horizon, it becomes impossible to parody (that, of course, is a common idiom) for the simple reason that any parody would be indistinguishable from the original."
5. As I like reading about quantum physics and black holes and stuff, I left the following comment: "If “parody horizon” is like an “event horizon” in physics (something to do with black holes), then presumably there is also such a concept as “parody singularity”, which would be the technical term for something which is identical to a parody of itself. And which is, presumably, zero-dimensional and impossible to escape."
6. The whole concept turned full circle today. In James Higham's Brit Blog Roundup 241, under the sub-heading "Feminism" he links to a post titled Women still under-represented in climate debate, which kicks off as follows: "Out of 146 national delegations at the UN climate talks on Tuesday, only seven were headed by women. Oxfam says this is an example of how women’s voices are still absent from the debate on climate change and what to do about it, even though - particularly the poorest, most marginalised - women will be worst affected, IPS reports."
7. I assumed, from that excerpt, that it was a parody (and left a comment accordingly), but having read the full article, I'm just not sure any more. The article mentions, without apparent irony, "Ursula Rakova from Papua New Guinea, who formed an NGO, Sailing the Waves on Our Own, to relocate and build houses for people displaced by rising sea-levels."
Now, if there were such a thing as "rising sea levels" (as opposed to towns that are sinking in the mud, like New Orleans or Venice; or towns that are built far too close to the shore line, like Manila, or in areas prone to flooding, like Boscastle; or land masses that are tilting into the sea, like the South East of England), wouldn't our cousins on the other side of the North Sea, i.e. the Dutch, sixty per cent of whom live on land that is below sea level, be screaming blue murder?
8. To conclude, this has been an interesting journey, but I'm not sure where it's headed any more.
Over at The Optimistic Cynic.
From the BBC:
According to the government-commissioned study, a 40p minimum unit price - coupled with a ban on promotions - would cut the number of alcohol-related deaths by about 70 in its first year... Earlier this year, the chief medical officer for England, Sir Liam Donaldson, said such measures would save thousands of lives.
OK, everybody's allowed to make guesstimates and use round numbers, but that's still one heck of discrepancy. The latest made-up statistic is that there "were 8,724 alcohol-related deaths in 2007" (NSO). On the one hand, it would be impossible to "prove" that there were 70 fewer deaths; on the other hand, the only way they could get the number of deaths down by "thousands" would be to change the definition of alcohol-related ever so slightly (the same NSO figures say that there were 4,144 alcohol-related deaths in 1991, so the increase is almost certainly down to definition). In any event, the figure of 8,724 is barely one-and-a-half per cent of annual deaths in the UK.
I did like this bit as well:
Chief medical officer Harry Burns said: "All the evidence suggests that if you want to reduce alcohol-related harm, you need to look at price and availability, which are the key drivers of consumption. I've got to admit that initially I was sceptical about minimum pricing but when you look at the facts, it becomes a no-brainer."
Hmm. The strategy of reducing availability and hence increasing prices of things like, er, drugs has worked so-o-o-o well over the decades, hasn't it?
Saturday, 26 September 2009
From The Times:
“The assumption is that men find the recession worse, but women are worried not only about their own job but about the family’s finances, they are worried about whether their kids are going to get jobs.”
Ah yes, us blokes, wouldn't dream of spending a penny of our wages on family expenditure like mortgages or utilities or giving the wife housekeeping money or anything like that; and we don't give a toss whether our other halves lose their jobs or our kids never get one.
Also from that edition:
Two women who work part-time for the same company have been told that they cannot care for each other’s child unless they register as childminders and undergo Ofsted inspections.
The women, who wish to remain anonymous, gave birth to girls at similar times. They set up a job share, with both working half a week in the same post. They are also close friends, so when one was at work the other cared for both children.
Ofsted, however, has put an end to the arrangement. It said that, according to legislation, caring for another person’s child “for reward” was classed as childminding. This means that both mothers will have to register with Ofsted and follow the same regulations as normal childminders. The financial “reward” they receive is free care for their daughters.
Friday, 25 September 2009
The fact that some "Tory grandee" spouts shit like this would be bad enough, but the Great British Sheeple applaud him for it..? You really deserve what you get.
Meanwhile, on the other side of the planet, Richard Barnbrook says something that is equally untrue and gets hounded for it.
Hey, either we want politicians to lie or tell the truth, you can't have it both.
Like DBC Reed, I have very little to add to Martin Wolf's fine article on Vince Cable's "Mansion tax".
Even if you have to go through the rigmarole of registering for a free trial subscription to the FT just to read that article, it is well worth doing (and saves me the hassle of quoting bits and paraphrasing).
So, Martin Wolf, despite you haven't replied to my emails since I mentioned that I am a Ukipper*, have a rock!
* Update: he just replied to one of my emails, so fair play.
Posted by FarmerJohn at HousePriceCrash, this tempting offer:
Unique Forest in Bude for Sale
According to Bidwells, a UK agency specialising in various property services from sales of houses and land to estate management, a large forest, the territory of which counts more than 1,700 acres has been put on sale for more than £1.3 million.
Bidwells agents, responsible for the sale of Rhubodach Forest, which is currently privately-owned and located at the north end of Bute – a magnificent island of the west coast of Scotland, say that the forest is located in a “dream and magical” place, yet, still represents a wise “green and tax efficient investment”...
It is worth noting that one of the entrances to the Rhubodach Forest is 800 away from the the Rhubodach ferry slipway. Apart from the beauty and amenity of the forest, the site also offers great commercial use, as it has been noted already. According to the selling agent, forestry is considered a safe yet profitable type of investment these days.
Bidwells professionals claim that all forestry businesses in the UK are totally free of inheritance tax, and, moreover, are exposed to very low capital gain tax. As for commercial forestry, particularly – timber business – it is exempt from income tax.
Right, £1,300,000 divided by 1,734 acres = £750 per acre.
OK. I happen to know that the annual profit to be made per tree is about £1 (i.e. a fifty year old tree once chopped down goes for about £50), let's imagine the trunks are spaced ten yards apart, so you can fit 60 trees per acre, so the gross profits per acre are £60 per annum. It's not clear how much you get from the "Single Payment Scheme" but it must be at least £25/acre, so that's £85 per acre x 1,734 = so that's a nice steady income of £147,000 per annum for your investment of £1,300,000, a gross return of 11%, which is income tax-free as well so that's also your net return.
Hmm. Where's the catch ... ah ...
"... it should be noted that the place is a Site of Special Scientific Interest (SSSI). A number of important and rare bird populations, such as golden eagles, merlin, hen harriers, and black grouse, as well as several ancient woodland sites are located on the territory of the forest."
In other words, the NIMBY & Greenie Lobbies will prevent you from doing the obvious thing and building a nice little wind-surfing resort or nature retreat or whatever it is that people are prepared to pay for, instead, the owner has to tippy-toe gently through his own forest doing somebody else's bidding (at unknown cost).
Now, contrast that £765 per acre with Knight Frank's Q2 2009 survey of residential land values:
Typical land values outside London now range from around £250,000 per acre for more peripheral sites in cheaper regions to over £1m per acre for the best sites in the South East and East of England. London prices are far more variable – over £3m per acre is typical in inner boroughs, but over £15m per acre is achievable in prime locations.
So to talk of "land value" is one heck of a misnomer, actually. Pure "land" in the UK is worth next to nothing, it's the planning permission that makes up ninety-nine per cent of the cost/value. And the value of the planning permission is in turn only a function of the value of all the amenities that are within reach (primarily job opportunities and spending opportunities, i.e. transport infrastructure, offices, factories, shops, schools etc and not just natural amenities like parks, beaches or a nice view).
Now, who created the value of that great rag-bag of amenities? To whom does the value of that huge great rag-bag of amenities belong? Anybody in particular or society in general? Why is there such a cliff edge between the value of "£250,000 per acre for more peripheral sites in cheaper regions" and agricultural land of a couple of thousand pounds on the other side of a fence? Who wins and who loses from all this?
On Radio 4 this morning (sometime between 7.10 and 7.30) they were chatting about the G20 Summit and one organiser said that the Summits would be held more often in future, when the G20 "pivots from crisis management to global governance"
Economic Voice asked in the comments to the previous post, "Isn't ASH a fakecharity?"
Well, duh. Fakecharities.org nail them, but woefully understate the level of taxpayer funding, of course.
ASH's 2008 accounts say: "The principal sources of project funding for the charity are the Department of Health Section 64 General Scheme, the British Heart Foundation (BHF) and Cancer Research UK. Both Cancer Research UK and BHF also provide the charity with core funding for our entire programme of work" (page 9).
Their total income is £638,332 (page 14) of which £595,362 was "grants" which consist of the following: Department of Health £191,000, ASH International £65,242 and two separate amounts described as "Supporting charities" which add up to £239,120. In the previous year ASH also received £110,000 from the Welsh Assembly Government (page 17).
ASH International is in turn funded by Pfizer, who are trying to create a market for all their 'smoking cessation products'.
ASH also holds a "Tobacco Control Alliance Fund" of £56,817. "The TCA fund represents the transfer of funds from the TCA on its cessation which have been set aside by directors to enable the continuation of the work within ASH." (page 20).
The British Heart Foundation is of course also a fakecharity, and received £4,266,000 of taxpayer's money in 2008, see note 5, page 44 to their accounts.
Cancer Research UK is a borderline fakecharity as well, of course.
Thursday, 24 September 2009
I had to take a day off today to look after The Lass (who is a poorly) and ended up watching BBC Parliament, which was broadcasting a debate in the Scottish parliament (or is it called 'assembly'? Does anybody know? Or care?) on a new law to make life even more difficult for smokers.
Several people parroted a statistic saying that there were slightly over 13,000 'smoking related deaths' every year in Scotland, which struck me as rather high, bearing in mind there were only 55,699 deaths in Scotland in 2008 (pdf)*. But it is true that those pathological liars ASH claim that "in 2004 an estimated 13,473 deaths in Scotland were attributed to smoking, which equated to 24% of all deaths."
Now, we also know that about a quarter of adults in Scotland smoke (slightly more than UK average, as confirmed here) and that 'passive smoking' is almost certainly a complete myth, so in other words, what they are saying is that absolutely every smoker dies of smoking related illness. Or when they are doing death certificates, they put a tick in the box for "Smoking related illness" if the deceased ever smoked.
* Obviously, I didn't know the total number of deaths off by heart, but I know the population of Scotland is about 5 million so I multiplied that by one per cent to give me an approx. number of deaths.
From The Metro:
GP told acne patient to perform sex act on him as 'cure'
A "narcissistic" GP who persuaded a teenage acne patient to perform a sex act on him at his surgery was struck off the medical register today.
Dr Ashenford struck up a friendship with the girl during appointments at the Sutton Hill Medical Practice in Telford, Shropshire, to treat her acne and a bad back. During one consultation in March 2007 he touched her breasts and remarked "that was nice". A week later he told her to remove her top and perform oral sex on him at the surgery, the General Medical Council hearing was told. He went on to buy her an iPod for her birthday and meet up in cafes where they "snogged and kissed".
Dr Steven Ashenford abused his position of trust to gain gratification in a "most reprehensible way" with the sexually naive 17-year-old girl, a disciplinary panel ruled.
I dunno. Is "sexually naive" the new PC-term for "mentally subnormal" or "a bit of a go-er" or something?
Did the doctor tell her that sperm is good against acne? BTW, I once had a girlfriend who was a nurse who told me that, so it is quite possibly true.
From The Telegraph:
Global warming has caused a new El Nino weather pattern to form in the Pacific known as 'Modoki' that could cause havoc across the world, according to scientists.
El Nino occurs every two to seven years when the surface ocean waters of the Eastern Pacific are unusually warm. The tongue-shaped recurring patch of warm water can make wind patterns over the ocean change, causing cyclones.
However new studies suggest El Nino is gradually being replaced by a phenomenon in the centre of the Pacific known as "Modoki" – a Japanese word meaning "similar but different". This weather pattern is characterised by a horseshoe-shaped region of warm ocean flanked by unusually cool waters and causes storms in the same way as El Nino.
The study in Nature predicts that while El Nino becomes less frequent, Modoki is likely to be occurring five times more often by the end of the century because of climate change. What effect this will have on global climate is unclear, but one outcome could be worsening droughts in India and Australia. It could also cause more severe hurricanes in the Caribbean and US, since El Nino is known to hamper the development of tropical cyclones.
The changing ocean events may even have an impact on the UK and northern Europe, as there is a link between strong El Ninos and heavier than normal spring rainfall over central Europe and southern regions of the UK.
H/t Christina Speight.
I cross posted Sarah Teather's (rather dumb) Parliamentary question and John Healey's (even dumber) reply over at HousePriceCrash. STR2007 scrolled further down the Hansard page and stumbled across these further questions/answers:
Grant Shapps: To ask the Secretary of State for Communities and Local Government how many full-time equivalent employees the office of the Independent Housing Ombudsman employs; what its budget for 2009-10 is; and how much it will receive in support from his Department in 2009-10.
Mr. Malik: The Independent Housing Ombudsman (THO) currently employs 35.5 full-time equivalent employees. Its budget for 2009-10 is £3,326,734. The IHO does not receive any financial support from the Department.
Grant Shapps: To ask the Secretary of State for Communities and Local Government how many full-time equivalent employees the Leasehold Advisory Service employs; what its budget for 2009-10 is; and how much it will receive in support from his Department in 2009-10.
Mr. Malik: LEASE currently employs 19 full-time equivalent staff. The expenditure forecast by LEASE for 2009-10 is £1,468,851. Communities and Local Government expects to provide a grant-in-aid amount of £1,325,000 for the year 2009-10.
Grant Shapps: To ask the Secretary of State for Communities and Local Government what remuneration the Chief Executive of the Leasehold Advisory Service received in the most recent year for which figures are available.
Mr. Malik: The remuneration for the chief executive of the Leasehold Advisory Service with effect from 8 October 2008 is equivalent to £72,235 per annum.
Wednesday, 23 September 2009
From The Evening Standard:
Squalid camps next to the derelict Hoverport in Calais are in danger of mushrooming into a new "Jungle" full of Britain-bound illegal migrants, it emerged today.
Just 24 hours after a notorious camp was cleared of hundreds of mainly Afghan young men, the town's mayor said she had spotted "between 15 and 20 squats" nearby. Natacha Bouchart said that many were close to the Hoverport - a disused collection of buildings which closed in 2005 after the last hovercraft sailed from Dover to Calais...
"I've warned the regional authorities about this," said Mrs Bouchart. "The buildings are dangerous to migrants, with just one match all it would take to start a fire."
Hansard, 1 September 2009:
Sarah Teather: To ask the Secretary of State for Communities and Local Government what the average length of time was between a home being placed on the market and being sold in the latest period for which figures are available. .
John Healey: We do not collect the data requested.
From the Rightmove website: "Rightmove has over 650,000 properties for sale throughout the UK..."*
HM Revenue & Customs (Table 16.1): Number of residential property transaction completions with value £40,000 or above: 755,000**
So, shouldn't the answer to Ms Teather's question have been "About a year. You could have found that in ten minutes on the Internet"?
* Plus an unknown figure not advertised on Rightmove, for example properties sold privately or by auctioneers.
** The DCLG (Table 530) gives a figure of 725,000 for 2008 Q3 to 2009 Q2, which includes "some transactions of non-market housing including, Right-to-Buy sales and large scale stock transfers between Local Authorities and Registered Social Landlords". Note 5 says "HMRC estimate that by applying the £40,000 threshold 12% of residential property transactions ... are missed."
Thanks to the 104 people who took the time to vote in last week's poll, the results were as follows:
Is pornography displayed at your workplace?
No - 87%
Yes - 8%
I work in a shop that sells "lads' mag's" - 6%
The taxpayer-funded Farrah Fawcett Society boldly claimed that "the presence of degrading imagery of women in UK workplaces has never been more endemic." The above figures hardly suggest "an endemic" to me, but to try and sort this all out, this week's Fun Online Poll asks: "How much 'degrading imagery of women' is there at your workplace [compared to when you first started working]?"*
Vote here or use the widget in the sidebar.
* Let's ignore the fact that some people like having girlie posters (or indeed posters of buff young men) at work, others presumably don't.
From the BBC:
A Scottish banknote has sold for a world record price at auction. The £1 note, dated 1836, sold for £9,000 at the charity auction held by the Clydesdale Bank, beating the previous record of £7,000 set in 2001.
That sounds like one heck of a return, but actually they only beat inflation by 2.7788% per annum.
Assuming that the note was held by somebody who had withdrawn it from the bank, i.e. it actually cost him £1 (rather than being a note that was printed put never put into, or already taken out of circulation), if you index £1 in 1836 up to 2008 using the Retail Price Index, you would have ended up with £78.51. If you divide £9,000 by £78.51 to adjust the profits for inflation, the compound rate of interest you would have needed, over and above inflation and after tax to end up with £9,000 exactly in the bank, would be 2.7788%. The Excel formula is =(9000/78.51)^(1/173).
That's still a very good long run rate of return, but it's not quite as spectacular as it first sounds, is it?
Tuesday, 22 September 2009
Damn and blast!
I was looking forward to a nice bit of Victimhood Poker in this this article on the BBC website about the staggering levels of rape and murder in South Africa, but it appears to split the blame three ways between "The legacy of apartheid, social deprivation and corruption within the police force...".
Wot? The "legacy of apartheid" only has to take one-third of the blame? This just isn't up to the high standards of an article from three months ago:
South Africa has the highest number of reported rapes in the world. Most experts say this is a result of its violent past and the legacy of apartheid, which often forced men to live in single-sex hostels away from their families.
But to be fair, as well as the dig at apartheid, which ended in, er, early 1994, today's article sneaks in the inference that it was racist for that white guy to be granted asylum in Canada, so that's a 50/50 split in the blame stakes. Phew! Can't have those poor downtrodden South Africans being asked to shoulder too much responsibility, can we?
I wonder how long it will be until The Righteous are up in arms about this story, as reported in The Metro:
Beyoncé branded ‘immoral and unclean’
Beyoncé has been branded 'immoral and unclean' after announcing plans to take her bootylicious world tour to Mormon Utah.
The singer, who was denied the chance to hold a concert in the state in 2007 after protests from conservatives, should be banned from perfoming, the Church of Jesus Christ of Latter Day Saints (the LDS Church) said. "We oppose the holding of such concerts and we will take action to prevent it," a spokesman said. "Her skimpy attire and behaviour onstage are immoral and lead to unclean behaviour."
Beyoncé, 28, has vowed to go ahead with the October 25 'I am...' tour date in Salt Lake City. The LDS Church has in the past forced Gwen Stefani to cover up on stage. Her saucy act was "not suitable for Christians", it added.
From The Metro:
Help offered by the NHS to people wanting to give up smoking may have saved 70,000 lives over the last 10 years, it has been claimed (1). Researchers at the Department of Health based the figure on the two million successful quit attempts (2) recorded since the introduction of NHS Stop Smoking Services. Reformed smokers are considered to have quit if they have kept away from cigarettes for a month.(3)
... Studies have shown that ... 60% of current smokers have made a serious attempt to kick the habit in the past five years (4).
Ho hum, something tells me the figures are wildly exaggerated. There are two ways of looking at this: a) Just take the figures in the article at face value, which suggest that three-fifths of those that the NHS have "helped" to quit in the last ten years would have died by now, or b) Look at relative life expectancy tables and so on, which suggest that the NHS would have to have "helped" three times as many smokers to quit as actually did so.
Method a), taking the article at face value:
(1) Note the use of the words "may" and "has been claimed", which is press release-speak for "we are parroting questionable figures".
(2) OK, maybe there were "two million successful quit attempts", but "attempting" and "succeeding" are two quite different concepts...
(3) To consider everybody who "kept away from cigarettes for a month" as a "successful quit attempt" is pathetic, as the relapse rates are enormous...
(4) ... there's a good clue here. If on average a quarter of adults in England smoke, that's ten million. If 60% of them, i.e. six million, have made (say) two "attempts" in the last five years, that's a total of twelve million attempts. And how many gave up? If there are 1.4 million fewer smokers than five years ago (from the article, smokers as a % of adult population down from 28% to 21% over ten years, so divide that by two to get the five year decrease), about half of whom may simply have died or be young people who were never seriously addicted anyway, then maybe 700,000 stopped smoking as a result of quitting; each actual quit must follow an "attempt"; so out of twelve million "attempts" one-in-seventeen was successful.
So, out of the two million NHS-assisted "attempts", only about 118,000 will have led to somebody stopping smoking permanently, so to claim that 70,000 of them (59% or three-fifths) would otherwise have died in the last ten years is laughable.
Method b) is to look at life expectancy tables.
A thirty year old in England had a remaining life expectancy of 55 years in the middle of the ten year period (from Table 18). Let's assume it is true that smokers live ten years less than non-smokers, so an average thirty year-old smoker has a life expectancy of 50 years (2% chance of dying each year) and a thirty year-old non-smoker has a life expectancy of 60 years (1.7% chance of dying each year), so if you smoke, your chance of dying goes up by 0.3% (in absolute terms).*
Assuming the same number of quitters each year and a cumulative figure for "lives saved", we can break that 70,000 down into 1,273 in the first year; 2,546 in the second year (being 1,273 "saved" in the first year plus another 1,273 "saved" in the second year) and so on (tip: 1+2+3+...+10 = 55 and 1,272 x 55 = 70,000).
If the chance of dying in any year goes down by 0.3% as a result of giving up, then the number of lives saved in Year 1 (1,273) = the number of people who quit ("Q") x 0.3%. Turning that round, Q = 1,273 ÷ 0.003 = 424,333 people, i.e. 424,333 people would have to quit in Year One (and each subsequent year) and that would "save" 424,333 x 0.3% lives in Year One (being 1,273, the figure derived by dividing 70,000 by 55); 2,546 in Year Two and so on. Over ten years that would be 4.2 million quitters.
While it is true that 2.8 million people appear to have stopped smoking over ten years (ten million x 28% minus 21%), let's say half of them died or were young people who were never seriously addicted anyway (as above), so that's 1.4 million quitters. So for the "70,000" figure to be true, the NHS Stop Smoking Service would have to claim credit for getting 4.2 million people to have stopped smoking, as against the 1.4 million who actually did, i.e. three times as many.
Just sayin', is all.
* The even more scientific approach says that if a thirty year smoker old has a remaining life expectancy of 50 years, after 50 years half will have died. Assuming the same survival rate every year, 98.6% of that cohort survive each subsequent year (=0.986^50=0.5) and with a 60 year life expectancy, the survival rate is 98.9% (=0.989^60 = 0.5), which also gives an 0.3% better survival rate for non-smokers.
From the BBC:
Bans on smoking in public places have had a bigger impact on preventing heart attacks than ever expected, data shows.
Smoking bans cut the number of heart attacks in Europe and North America by up to a third, two studies report...
Earlier this month it was announced that heart attack rates fell by about 10% in England in the year after the ban on smoking in public places was introduced in July 2007 - which is more than originally anticipated. But the latest work, based on the results of numerous different studies collectively involving millions of people, indicated that smoking bans have reduced heart attack rates by as much as 26% per year.
Here we go again. Note how "by up to a third" has become "by as much as 26%" further into the article?
Even ASH (who had supposedly carried out the research in England) have admitted that there was no evidence to support the "about 10%" claim, but presumably they are gambling on the public being dumb enough to just read the headlines and fall for the 10% story, and if they fall for that. no doubt a few will fall for 26% or 30%. I suppose that's how propaganda works, it's the constant drip-drip as much as anything.
Today's bonus round: take a look at the numbers behind this claim in the Metro Stop-smoking scheme 'saved 70,000' which is almost undoubtedly untrue as well, but those poor dears have to try and make sure that they aren't the first thing the next government axes.
Monday, 21 September 2009
Commenting on the consensus between the two major parties that government spending will have to be reduced ...
Now, everyone wants to cut. But who is going to get to do it?
The Conservatives’ pitch seems to be: let us do the cutting, because we thought of it first. Also, they will slash the deficit by hiking the price of a plate of fish and chips in the House of Commons canteen, which is roughly equivalent to an attempt to save Lehman Brothers by fishing out the spare change from down the back of Dick Fuld’s sofa.
Labour’s bid is subtler, or at least more baffling: both of us will cut, but only the Tories will enjoy it. Better, apparently, to have a machete taken to the undergrowth of the public sector by someone with a tear rather than a glint in his eye. Mr Brown’s Calvinist instincts are evident: don’t let anyone do anything they might conceivably take any pleasure from.
Yup, more-or-less identical policies, different spin. That sums up UK politics today.
Reason alerts us (in the comments here) to the existence of a "charity" called Eaves Housing For Women Limited.
A quick squizz at Notes 3a to 3d on pages 20 and 21 of their 2008 accounts confirms that about ninety per cent of their total income of £5,220,603 is from various other government departments - most notably £1,200,000 from The Home Office - and local councils, with a smidge of investment income, truly voluntary donations and grants from private charities.
If that's all too technical for a Monday evening, their website gives it away as they use the classic fakecharity template, with tabs for Home, Support Us, Resources, Press Office, Vacancies, Volunteers, About Us and Contact Us.
Well spotted, Reason!
I read the first couple of dozen comments on Guido's thread on the Lib Dem's plans to have a half-a-per cent annual tax on residential property values in excess of £1 million. While admittedly the Lib Dem's have done this in a totally cack-handed fashion (at the very least they could have said it would go hand-in-hand with exempting residential property from IHT and reducing Stamp Duty Land Tax on the most expensive properties from four per cent to one per cent; and the £1 billion it might raise is a drop in the ocean anyway), at least they have set the hare running, er, in completely the wrong direction...
Douglas McWilliams, chief executive of the Centre for Economics and Business Research, points out that it would hit the property market hard, because prices well below the £1 million level would be knocked as well... "Unfortunately the current crisis is not a time for clever-clever ideas for screwing additional tax out of the already hard pressed middle classes at a time when property prices have already fallen sharply"
Ah yes, all those hard-pressed middle class households in their £1 million mansions...
Nick at comment 160 really has his finger on the pulse:
"So I owe £900,000 on a £1,000,000 house how does that make me rich Vince?"
If somebody has a mortgage of £900,000, is it not reasonable to assume that they have a six-figure salary and are bright enough to have factored in interest rate hikes of a couple of per cent to make sure they can really afford it? If they can afford an interest rate hike of a couple of per cent, is it unreasonable to assume that they can afford a tax of half a per cent on the value of their home in excess of £1 million? Which in Nick's example would be £nil anyway, of course.
Anycolourbutbrown at comment 28 chimes in with the inevitable:
...what about the person, who is now a pensioner and who inherited a house, perhaps 40 or 50 years ago. That house may now be valued at well over a million. Why should he have to pay tax on a valuation he has absolutely no control over? Don’t forget, that he may only be getting a state pension or a small private supplement (think of them having retired 15 -20 years ago).
OK. If such people don't want to pay taxes on up-to-date values, how would they like to make do with a state pension frozen at the rate it was when they retired 15 - 20 years ago as well, i.e. between £44 and £58?
From The Daily Hatemail:
The Muslim woman was staying at the Bounty House Hotel in Liverpool, which is run by the Vogelenzangs, when a conversation arose between the hoteliers and their guest about her faith.
It is understood that among the topics debated was whether Jesus was a minor prophet, as Islam teaches, or whether he was the Son of God, as Christianity teaches. Among the things Mr Vogelenzang, 53, is alleged to have said is that Mohammad was a warlord. His wife, 54, is said to have stated that Muslim dress is a form of bondage for women.
Guess which of the parties is now "charged with breaching Section 5 of the Public Order Act – causing harassment, alarm or distress. If convicted [could face a fine] of £2,500 ... and a criminal record."
When Leytonstone have their Car Free Day in September, the parish church usually opens up for guided tours, the exciting bit being going up the church tower and having a look down from the top (it is amazing how 'leafy' the place is).
I went a couple of years ago - the spiral staircase is very low, so you had to wear a helmet to protect your head from bumps (being quite tall, this came in handy, as I did indeed bump my head on a low door frame on the way up). We tried again yesterday, but were told they no longer allowed people to the top "for health and safety reasons".
From The Metro:
The son of former health secretary Patricia Hewitt has been charged with possession of cocaine. Nicholas Hewitt Birtles, whose father is Judge William Birtles, will appear in court later this month after he was charged with possession of a class A drug.
Sunday, 20 September 2009
The $1 billion cash-for-clunkers scheme was introduced on 1 July 2009 and ran for seven weeks until 24 August 2009 (although it may well be revived). Did the 'Car allowance rebate scheme' (acronym CARS, natch) increase overall sales or merely accelerate them, thus leading to an even sharper drop in sales in the months after the scheme ends?
Matthew has put together a chart, which seems pretty conclusive to me:
Here's where we go from the sensible-but-timid to the downright evil.
I'm sure that it isn't news to anybody that saving (i.e. spending less than you earn, i.e. deferring consumption until later to smoothe out peaks and troughs) is pretty much the opposite of borrowing (i.e. spending more than you earn, i.e. accelerating consumption or acquisition in the hope that there won't be any troughs later on). Nonetheless, the CSJ manage to conflate the two in the introduction to Section 4.4 (pages 121 - 129 of 370, zip/pdf):
We have argued that the system is unfair in the amount of support it gives to different groups, and also that it discourages choices which are by and large in the interests of individuals and their children: the choice to work and the choice to stay in a couple when there is a child. Placed side by side, they highlight further the confusion that surrounds the welfare system.
Yup. All good stuff so far. Then they go on to claim that black is white:
There are other aspects which encourage what we might term ‘imprudence’. If a claimant has made some effort to save or to take a mortgage, then that effort is punished with decreased benefit. This effectively sends the wrong message: that one should not save and be prudent with money, as the Government will claw it back.
They discuss the 'savings penalty' at length and explain that benefit claimants who admit to having any savings end up considerably worse off than if they had none. They reckon that scrapping asset-based means testing would only 'cost' £1 billion a year and their final objective is "Over time, the savings penalty should become less stringent"
Wot? Why so timid? I would scrap any form of any asset-based means-testing on Day One, and seeing as the total cost of the welfare system is the best part of £200 billion, we can recover the 'cost' by simply reducing all flat rate benefits by half a per cent (or indexing them up by half a per cent less than inflation), job done. What's not to like?
So much to the timid. They also discuss the 'mortgage penalty' at length (i.e. the fact that Housing Benefit doesn't cover mortgage interest - which is true; but the present government has invented half a dozen schemes that amount to the same thing - which they cheerfully overlook) and throw in a few irrelevant facts and downright lies in their conclusion (the numbering is mine and is cross referenced to my analysis below):
"... the ultimate aspiration remains home ownership...(1) Given the attention paid to, and historic Government support for, helping first-time buyers secure a foothold on the property ladder (2), it is unfortunate that at the same time it is unwilling to support the lowest earners who are left in poverty as a result (3). Those with low earnings who are trying to get onto, or stay on, the housing ladder are just as in need of support (4) as those in rented accommodation (5). We support reducing the mortgage penalty for low-earning households, not currently eligible for WTC, particularly in the current economic environment.
Objective: reduce the mortgage penalty for low-earning households.
If mortgages continue to be penalised, the Government will increasingly find that low-earners will opt for rented accommodation. This potential surge in the Housing Benefit bill can be avoided through supporting those who want to try to own their own home (6).
OK. Let's look at those irrelevant facts and lies in turn:
(1) Irrelevant. I'm sure a majority would like to drive a new Mercedes, send their kids to private school or go on three holidays a year.
(2) Lie. The government has done its best over the last thirty or forty years to restrict new construction to the bare minimum, in other words, they deliberately want to strictly limit the total number of home owners, and by restricting supply, push up prices for new entrants. Sure, we used to have MIRAS, but all that did was to push up house prices by an equivalent amount.
(3) Irrelevant. If people are "left in poverty as a result", then as a result of what exactly, pray tell? My answer would be "As a result of overestimating their future incomes and their willingness to accelerate consumption by borrowing money". I don't see why any government would feel that it is up to other taxpayers to subsidise them, that creates moral hazard, to say the very least.
(4) Lie. No, they're not "in need of support". I'm completely in favour of having a bit of redistribution that's enough to pay for people's utilities and food and a few quid for the odd trip to the pub or the cinema (of course I'm paying for it, but it's like insurance - if I never lose my job, I'm happy; if I lose my job and get some of my taxes back as welfare, I'm happy) BUT I passionately object to the idea of paying extra so that people can afford to buy/own houses, which, as mentioned is a negative sum game.
(5) Lie. I have already pointed that the CSJ fail to understand the fundamental difference between paying Housing Benefit to private landlords (which is another form of mortgage subsidy, is hugely expensive and should be scrapped forthwith) and some accounting tomfoolery between the DWP and local councils or Housing Associations. The overall cash cost to the taxpayer of keeping people in social housing is negligible (or might even make a small profit).
(6) Lie. There wouldn't be a "surge in the Housing Benefit bill" if we just scrapped Housing Benefit. Sure, everybody has to live somewhere, but seeing as the cash cost of social housing (as badly run as it is) is minimal, why not just use the saving to build loads of new social housing, and run it on commercial lines? As a free marketeer (and Land Value Taxer) I don't really like the idea of letting out state-owned assets at below market rents*, but if they built enough social housing, then by definition market rents would fall anyway, so ultimately, social rents would be market rents, making a sizeable contribution to the Exchequer. What's not to like?
So, as I predicted, the Tories are just as bad as Labour and will do anything to prop up house prices and protect the hallowed home-owner, remembering always that for every low income family who can only keep their homes because of subsidies, there's slightly more than one other family who ends up priced off the ladder (and who has the dubious privilege of being forced to pay for the, er, dubious privilege).
* To avoid hardship cases, those on low incomes could have the rent they pay capped at twenty per cent of their income, i.e. they would live 'rent-free' and pay an extra twenty per cent PAYE on their earnings, which, administratively, is an absolute doddle. I have thought this through, you know.
Saturday, 19 September 2009
Rumours now abound that Lloyds Banking Group failed the FSA stress test*:
Some commentators suggest the bank failed in its efforts to withdraw from the [Government's asset protection] scheme following its inability, allegedly, to raise sufficient capital to meet the Financial Services Authority capital adequacy requirements...
Press reports indicate the FSA rejected [Lloyds'] proposal, citing a stress test failure and reminded the bank of its obligation to meet lending targets detailed within the insurance scheme agreement made earlier in 2009.
The government currently owns 43% of LYG stock.
OK. There are several vested interests here; the government; the FSA (a vast bureaucracy imposed on the banking system by, and controlled by, the government); and Lloyds Banking Group (which is said to be 43% owned by the government, which is highly misleading** but let's assume it's correct). The Labour Party is currently in government, but the Tory party is likely to win the election next year and has already indicated that it would scrap the FSA.
The question is, seeing as it must have been pretty clear for years that UK banks were racking up huge losses via their reckless lending policies (duly encouraged by the government), I wonder, which of the following explanations is most likely:
1. The government (via its agency the FSA) wants to show that Lloyds is not 'strong' enough to be freed from government control. This enables the government to force it to continue lending into a falling housing market in yet another desperate attempt to reflate the housing bubble (which appears to be the only economic variable that voters care about). The excerpt above hints at this: "... the FSA ... reminded the bank of its obligation to meet lending targets detailed within the insurance scheme agreement"
2. The FSA has to try and justify its continuing existence in the face of a Tory threat to disband it. The Tories can easily point to the FSA's total and abject failure to deal with the credit bubble over a period of years as a reason for doing so (not that the Tories would have done things any differently, as it is the Blue Wing of The Home-owners' party, but hey). So now the FSA are trying to show the world how tough they really can be.
3. Other banks may be very happy with this outcome, as it keeps one of the competition on the government leash. These other banks can encourage riskier borrowers to re-mortgage with Lloyds and clean up their own balance sheets.
4. Employees at the FSA department concerned are trying to wangle jobs at banks other than Lloyds, see point 3, who will look kindly on the FSA staff concerned when it comes to future recruitment (there is a revolving door policy as between banks and the FSA, even though on the surface they are supposed to hate each other as institutions).
5. It is quite possible that Lloyds failed the test deliberately. At present, they have a cushy existence as they can rely on the government to prop them up ad infinitum (using taxpayers' money, of course) even if they make idiotic lending decisions. The bankers can continue paying themselves handsome bonuses and live out their lives as overpaid quasi civil servants.
6. Thinking that last one through, it is possible that the employees at the FSA department concerned are trying to wangle jobs at Lloyds.
If anybody can think up any other permutations, please leave a comment.
* Via Lola. I believe that this is the stress test they carried out over three months ago, so they are not exactly fast.
** The government's economic interest may be vastly higher than that because it is insuring Lloyds' assets; or it may be lower as Lloyds is largely funded by bonds, not share capital, and the government only owns 43% of its share capital and not 43% of its bonds as well).
Over at Captain FF aka ManWiddecombe.
From a reader's letter in the FT:
Lehman Brothers senior secured debt is currently trading at about 15 per cent of its face value, indicating that the bondholders are likely to lose 85 per cent of their investment. This indicates that those ranked below the senior bondholders, including equity holders, will lose everything.
However, Lehman Brothers equity, which is traded on the over-the-counter market, is currently trading at 15 cents, which indicates that equity traders believe that after all outstanding claims are paid off there will be cash remaining for the equity holders.
As the reader points out, "the price is not always right": the people trading in shares are considerably more optimistic about the outcome of the liquidation than those trading in the bonds. The first group assumes that enough assets will be recovered so that bonds will be repaid in full and the second group assumes that they won't. Although both may be making a reasonable guess, they can't both be right.
So, assuming that the facts as stated in the letter are correct, what's the arbitrage opportunity? Click and highlight to reveal:
Sell the shares short at 15 cents and buy the bonds at 15 cents.
The first 100 cents that the liquidator collects will be used to redeem your bonds. If he collects less than 15 cents, you lose on the bonds but win a larger amount on the short sale as the shares will fall to nil. The next 85 cents are used to redeem the bonds, reaping you a potential 85 cent profit on the bonds and a 15 cent profit on the short sale.
If the liquidator collects more than 115 cents, then you start losing money on your short sale, but he would have to collect 200 cents before you actually make a loss overall, which is at least fifteen times as much as the markets are expecting so this would seem highly unlikely.
Friday, 18 September 2009
Cut and paste in its entirety from www.obamaers.com on a take-it-or-leave-it basis:
Land value taxation is free market taxation. Under a land value taxation system, individuals choose how much government they want, and correspondingly, how much they wish to pay in taxes. How do they choose? Simply by moving closer or further away from areas where governments provide services.
Do you want government in your life? Do you want asphalt roads, do you want your ditches mowed, do you want snow plows to clear the road in the winter? If you do, move to a location where government provides those services; beware that others also want to be near these services, you will have to compete with them, which will result in a tax liability.
Do you want to be left alone? Are you content to live without government services? Move to a location where government provides little or no services, your taxes will be little or nothing; if you settle on land which nobody else wants, you need pay nothing in taxes, regardless of your level of production or consumption.
Do you want the government to educate your child? Do you want access to health care? Do you want the government to provide health care? Move to locations where those services are provided, just understand that those services are likely to increase the demand for land in the areas where they are available, competition for that land will result in an increased tax liability.
Under a land value taxation system, you pay for what you get in a competitive market. Competition between governments leaves little room for corruption, and government has no incentive to grow beyond its role as a service and infrastructure provider.
From The Metro:
Businesses could be banned from claiming back tax on corporate entertainment visits to lap-dancing clubs, after Equalities Minister Harriet Harman denounced the practice... At present, companies can claim back VAT at 15% on money spent taking staff out for the evening for team-building purposes (1), as well as offsetting the cost of entertaining clients against corporation tax (2). But Ms Harman said that going to lap-dancing clubs should not be regarded as a legitimate business expense (3).
She told a meeting on Thursday ... "Why should you be able to get tax relief for a night out at a lap-dancing club where effectively you are discriminating against women employees (4) in doing so?"
Hey! Let's make complete tits of ourselves by trying to change the rules without knowing what the rules are in the first place! From Taxation Web:
DON’T claim the VAT on entertaining clients and prospective clients, including that on the staff doing the entertaining (but DO claim the VAT paid on entertaining your staff, such as a summer barbecue or Christmas party)
So to summarise:
(1) You can indeed reclaim VAT on staff outings, but you cannot reclaim VAT on the expense of entertaining clients anyway, so that statement is misleading.
(2) You cannot deduct the cost of entertaining clients from the profits for corporation tax (s577 ICTA 1988), so that statement is a lie. Conversely, the employer can deduct the cost of staff outings, but any expenses above a de minimis then go on the employees' forms P11D, so it's six of one and half a dozen of the other (the PAYE and NIC are roughly equal to the corporation tax deduction and VAT reclaim - there is no overall tax relief).
(3) Firstly, she used the s-word, thus invalidating her own argument under the usual rules. Secondly, a business expense is something which the owner of the business thinks will further the interests of his business, however strange that may seem to others.
(4) What about female employees in lap-dancing clubs? The changes are clearly intended to harm their employment prospects.
This has got to be up there with Harriet's suggestion that witnesses in domestic violence cases be given anonymity.
From The Metro:
A postal worker who spent 10 years hoarding packages of pornographic DVDs and female lingerie in his attic is facing jail...
Y'see? That proves it! If only The Farrah Fawcett Society had had their way, then this poor chap would never have been led into temptation.
From The Metro
Mahmoud Amadinejad claims Holocaust is a 'lie'
He said that Iranians had a religious duty to confront the "falsehood". "The pretext (Holocaust) for the creation of the Zionist regime (Israel) is false ... It is a lie based on an unprovable and mythical claim," he told worshippers at Tehran University at the end of annual anti-Israel "Qods (Jerusalem) Day" rally. "Confronting the Zionist regime (Israel) is a national and religious duty."
So it's only a matter of time before Austria puts out a warrant for his arrest, I suppose. And I can't wait for the first CiF article to denounce Madman Inadinnerjacket's speech as a "renegade view that gains legitimacy and currency every time he is invited to speak".
Their report has a good section on the 'couple penalty', which looks at the £-s-d differences and the maths; discusses airy topics like the difference between the 'financial penalty' and the 'material penalty' (which is the financial penalty on an equivalised basis, natch); looks at the correlation between the size of the couple penalty and the incidence of single-parenthood in different countries; and assesses the impact of the Tax Credits system, which exacerbated the couple penalty (pages 108 - 121, zip/pdf).
(Here's my crash course on the couple penalty. To cut a long, a couple with two children can improve their total net income by up to £225 a week by splitting up, pretending to split up or by not getting married/admitting to co-habiting in the first place.)
There are three main reasons to oppose the couple penalty, which are not mutually exclusive. First, the old-fashioned paternalistic Tory-Christian view that it's best for children and society in general if they are brought up by their natural parents as a couple (for which there is a lot of evidence, but the problem is distinguishing between cause and effect, or even correlation). Secondly, the libertarian-pragmatarian view that it shouldn't be up to the government to dictate how people should live or to discriminate in favour of some relationships and against others - if people see a benefit in living together they will do so, else not. Finally, the simplification campaigner's point of view that it is almost impossible to distinguish between various blurred categories, so there is just no point in trying. The latter two camps would of course also oppose any incentives for marriage for much the same reasons, of course.
So, having done all the lovely background research, the report then completely wimps out and falls at the final hurdle, yet again:
This chapter [Chapter 14, page 247 onwards] analyses four options aimed at reducing the couple penalty:
• Individualising benefits that are currently given and withdrawn on a household basis;
• Increasing the award value of Working Tax Credits for couples;
• Increasing the earnings disregard on Working Tax Credits for couples;
• Introducing a transferable tax allowance.
Working backward to the Big Anti-Climax, they rule out a transferable tax allowance (despite this being a shoo-in among right-wingers) because "... despite our earlier support for the idea of increasing the personal allowance, the Working Group does not regard them as a particularly effective way of helping the poorest couples, certainly compared to available alternatives. Rather, they concentrate the rewards on the high earners." I completely agree with that for the reasons stated.
Their specific proposals are to tinker yet again with the fundamentally flawed Working Tax Credits system, i.e. "raising the Working Tax Credit amount for couples to 1.6 times the amount for single adults" and "a more modest change to the WTC disregard for couples, by setting it to be 1.6 times that of a single person. The 2009-10 level is £6,420, so the couple disregard would be £10,270. As with the current system, it is evaluated at a household level, thus making it transferable."
Er, if we're agreed that a transferable tax allowance is a bad idea, why is having a 'transferable income disregard' any different? Isn't it exactly the same thing, only more complicated? It also leads to an added distortion that couples will then choose to work at just below the new threshold (which leads to this sort of problem). As a simplication campaigner, I can rule that out straight away.
We then *drumroll* get to the grand finale, The Charge Of The Light Brigade, Custer's Last Stand, Paulus at Stalingrad and a retreat-that-would-make-Dunkirk-look-like-a-picnic-interrupted-by-rain ...
There are three possible ways of [individualising benefits]:
1. Raising the couple value of benefits to twice that of singles – which would dramatically increase the overall benefit bill. There are quite negative employment incentives as the out-of-work position is considerably strengthened. Furthermore, there is a large static cost associated with increasing the amount given in support by so much.
2. Rebalancing the value of couple and single benefits by reducing single benefits and simultaneously raising couple benefits – without increasing the overall benefit bill. This would be very difficult to implement, given the likely opposition to decreasing out-of-work benefits.
3. Using the inflationary up-rating process to fund all increases of couple benefits. This approach somewhat reduces the cost and the political pressure, but it would take a long time to fully implement.
Again, I agree, we can rule out Option 1 for the reasons stated. Option 3 is a complete fudge and I'm not even sure what it means.
So, to paraphrase Sherlock Holmes, once we have ruled out the worst options, what we are left with must be the best option, i.e. Option 2, which is to decide how much we want to spend on poverty-alleviating measures as a total figure (in which I include the tax-free personal allowance and tax relief for pension contributions, not just actual cash welfare payments), divide it by the number of qualifying adults and Bob's your uncle. Of course some people will gain more than others and some might even end up worse off - but that is only a notional loss. If a kindly uncle always used to send you £100 on your birthday but now he only sends you £75, are you really £25 worse off? Or are you still £75 better off?
If we just look at Income Support, for example, that would mean an £9 cut for a single adult and a £9 increase for a couple*, the quid pro quo being there's no disincentive to moving in and sharing costs (which will enable single people to recoup their losses at a stroke, even if on a non-romantic basis) and the disincentive to finding a job will be greatly reduced (their proposals are to remove disincentives on an administrative rather than on a financial level, but hey).
Wake up people! We're in a recession! Tens of thousands of people are - quite undeservedly - losing their jobs every week and are suddenly hundreds of pounds a week worse off and we have no choice but to expect them to adjust somehow, don't tell me that unemployed single mum deserves the kid-gloves treatment.
* Current rates, aged 25 or over, single £64; couple £101. So a couple currently lose £27 per week if they move in together (or admit to having done so). If Income Support were individualised, it would be (say) £55 per person (£64 + £101 = £165 ÷ 3 = £55). So a single person would be £9 worse off (moving from £64 to £55) and a couple would be £9 better off (moving from £101 to £110) and there would be no financial disincentive to co-habitation, and, using their terminology, a 'material' advantage.