Sunday, 31 May 2015

Noticed whilst on holiday..


Nothing to add really.

Saturday, 30 May 2015

NIMBYs Of The Week

Nominated by Steven L.

From Chronicle Live:

Up to 120 residents at Morpeth came out to show their opposition to plans for 280 new homes, a hotel, restaurant and road side services on the edge of the town.

The demonstration took place ahead of a meeting at which town councillors agreed to object to the application, on the basis that the site is outside Morpeth’s settlement boundary and has not been identified for development in a number of plans.

Irene Jones, a member of the Morpeth Northern Residents Action Group which organised the protest, said turnout had been “tremendous… I think it was a show of support for the neighbourhood plan because this development is obviously outside the neighbourhood plan, they do not want to see a commercial area outside the established town.

“They do not want to see a severe impact visually because it is outside the settlement boundary. There is the potential for severe environmental impact both for people and wildlife. She added there is concern over how services including schools would cope."

The development, on a 36-hectare site west of Lancaster Park close to the A1 and north west of Morpeth, would also include a new countryside park.

Back of a fag packet statistics - how it should be done.

Proglodyte in the comments to If you're going to make up statistics, at least make up laudable ones:

Comparing Greece, Finland and UK -

Similar life expectancy: c.81

Cigarettes smoked/adult/pa
Greece: 2,995
UK: 750
Finland 671

Alzheimer's/Dementia death rates

Greece: 1.8/100,000
UK: 17.1/100,000
Finland 34.9/100,000


Friday, 29 May 2015

If you're going to make up statistics, at least make up plausible ones, you twats...

From The Guardian:

From 2003-13 – a decade which saw the introduction of a ban on smoking in public places and a rise in cigarette prices – the proportion of all deaths in the 35+ age group estimated to be caused by smoking fell from 19% to 17%...

Fewer than one in five people over 16 smoked in 2013, the lowest proportion since recording started in the 1940s. More than a quarter smoked in 2003...

So if just under a fifth of all adults smoke, and just under a fifth die from smoking, that means that all smokers die from smoking, yes?


The British Heart Foundation said tobacco products still killed about half the people who used them and doubled a person’s chance of having a heart attack or stroke.

Unlike non-smokers, who live forever, presumably, placing absolutely zero cost on the social security system or the NHS or anything whatsoever.

Moving on:

The number of prescriptions for treating smoking dependency dropped from a peak of 2.6m in 2010-11 to 1.8m in 2013-14. Cheeseman [policy director at Ash] recognised rising use of e-cigarettes might be a factor, but said people who found quitting smoking most difficult would benefit from properly structured, evidence-based support from the NHS.

When a lot (i.e. all) of the evidence shows that smokers who start vaping tend to smoke a lot less - which is the whole bloody point of vaping - and very, very few non-smokers start vaping.

Mike Hobday [The British Heart Foundation's] director of policy, said: “These figures show current strategies to help people quit smoking aren’t going far enough... The government urgently needs a new strategy to help people stop smoking. With tobacco companies continually raising their prices...

Cigarette prices are dictated largely by the amount of duty on them; the cost net of taxes is around 50p wherever you go in Europe.

... this needs to include an annual levy on these companies to fund tobacco control and stop smoking services to help support people to quit.”

Actual tobacco company profits are a few per cent of the total tax already imposed on a packet of cigarettes.

Chris Woodhall, senior policy adviser at Cancer Research UK, said: “We want to see a tobacco-free country within the next 20 years – where fewer than five per cent of adults smoke. Falling smoking rates among adults and children show that we’re moving in the right direction, but we must do more to realise this ambitious public health goal.”

Tobacco free = fewer than five per cent smoke?


National Spelling Bee ends in a tie for the second year...

... as boy, 14, and girl, 13, spell tongue twisters 'scherenschnitte' and 'nunatak' with ease.

??? There are three e's in "scherenschnitte" but none in "nunatak".

Gokul Venkatachalam, 14, of Missouri and Vanya Shivashankar, 13, of Kansas tied as winners of the national spelling bee on Thursday

I assume that those kids got plenty of spelling practice learning to write their own names correctly. Having mastered that, everything else was a doddle.

The Guardian at its unbiased best.

From Comment Is Free:

The problem with referendums is that they can go horribly wrong.

Ten years ago to the day, on 29 May 2005, France held a referendum over whether it should ratify the proposed European constitution. Opinion polls had predicted an overwhelming victory for the yes camp (some expecting the vote for yes to be as high as 65%).

Yet the outcome was a resounding 55% in favour of no. The outcome effectively stymied plans for a single European constitution. Jacques Chirac, then president, had massively overplayed his hand.

How can a referendum possibly 'go wrong', provided the pro's and con's of something are explained to the electorate fairly and in an even handed manner? Not that they ever are of course, it will be hysterical unfounded gibberish from both sides and referendums are usually rigged anyway.

It's like asking somebody what they'd like to drink/where they'd like to go on holiday/what their favourite colour is, and then when they reply, following up with "Are you sure?" or even worse, telling them "No you don't."

"BBC uncovers 'aggressive' tax avoidance scheme"

From the BBC:

Anderson Group, one of the recruitment industry's most high-profile companies, is promoting an "aggressive" tax avoidance scheme which experts are calling "abusive".

The scheme was once expelled from school for stealing lunch money off younger children, has since been found guilty of a string of petty thefts and is currently trying to mug the government's Employment Allowance.

The scheme has cornered the Treasury in a dark alley and is demanding tens of millions of pounds of National Insurance refunds.

Anderson Group says that all of its services are fully compliant with UK tax laws. It says it is "totally incorrect" to say that Anderson Group is promoting the scheme and says the product arrived at its offices one day and "made it an offer it couldn't refuse".

When invited to comment, the scheme punched our reporter in the face and left abusive comments on his Facebook page.

We're all going to die.

Leg Iron takes a critical look at one such announcement.

Here's the other:

Fruit snacks 'contain more sugar than sweets'

Great! Then people who skip their 'five-a-day' and eat sweets will stay slim.

Thursday, 28 May 2015

Daily Mail on Top Form

From the Daily Mail

A former general secretary of the Cayman Islands Football Association.

The 58-year-old is an advisor to the CONCACAF president Jeffrey Webb and is a former CIFA general secretary.

The U.S. Department of Justice lists his nationality as United Kingdom and he is understood to have studied at Imperial College in London in 1970s.

He and his wife own a £500,000 home near Turnpike Lane tube station in North London.

Wednesday, 27 May 2015

Reader's letter of the day - Evening Standard 26/5/2015

Chuka Umunna "might pull out of Labour leadership again in the future"

From the BBC:

Shadow business secretary Chuka Umunna has not ruled pulling out of the running to lead the Labour Party again in the future - but says he hopes a vacancy does not arise.

Mr Umunna, who is backing Liz Kendall to replace Ed Miliband, said he had withdrawn from the last contest because his "heart wasn't in it". He previously cited the "pressure and scrutiny" that came with the role.

The Streatham MP told BBC Newsnight there were "no skeletons", adding: "By next time I will have worked up some smoother sounding but vacuous excuses like 'pulling together - not pulling apart' or 'passing the baton to the next generation' after being touted as a front runner for several weeks."

Discussing his future plans, he hinted that if he were ever elevated to the House of Lords, he would probably pull out of the running to be the next to lead the Labour peers.

England test selectors back on top form

Here are the names of the current England eleven:


For good measure, the ECB chairman is called Graves.

As I pointed out five years ago, nearly all those names are everyday nouns, verbs, adjectives or job descriptions. Which is probably why they got rid of Pietersen. That's not just clearly a 'name' but a foreign one, and Anderson and Ali ought to go next.

(Footballers on the other hand tend to have names which are clearly just names, and more unusual or exotic names at that, even the English ones.)

Tuesday, 26 May 2015

School Catchment Areas

From the BBC

The University of Birmingham School will have new buildings, a strong academic ethos and will benefit from links to the university and its staff and facilities.

And if it used a conventional admissions system, based on distance, it would be very likely to become a magnet for middle-class families and be accused of poaching pupils from existing schools.

But the school is actively trying to do something different.

It is basing its admissions for 11-year-olds on how close families live to four "nodes" across the city. One of these will be the school site in Selly Oak and the other three are in Small Heath, Hall Green and the Jewellery Quarter.

And that will make little difference.

I went to an all-boys school. It's a school that did really well. It was based in quite a nice bit of town, so had lots of boys from the nice areas nearby going there, but as it was also an all-boys school, it also had a catchment area of the whole of town. I knew boys who lived 4 miles away who caught a bus there.

Personally, I thought the school was quite good. There were a number of excellent teachers, and a few duffers. But looking back on it, most of the kids did about as well as their background. Sending poor kids to what was thought an excellent school, with the best results in town, didn't seem to do anything for them. They still left with maybe a reasonable CSE in metalwork and not much else. The sixth form was mostly stuffed with the middle-class kids.

And I've seen this with one of our neighbour's kids. These people aren't rich, but the dad works really hard. The daughter went to a school that's not well regarded and is now doing Maths at university. The eldest son is on track for really good A levels from the same school. How come these kids do well, and there's so many other failures out of that school?

The other thing of note is that good schools are nearly always in "nice" places. Either in large, middle-class villages, or in leafy suburbs. You never find a new school being created in a modern estate that does any better than any other school in a modern estate.

So, how much is a school about the teaching, and how much about the intake? And if it's about the intake, what do you do?

Price rationing.

From The Daily Mail:

Tourism bosses have claimed that a ban term-time breaks is costing the holiday industry £87 million a year.

The new rules, introduced by former education secretary Michael Gove in 2013, mean families can be fined up to £60 a day for taking their children out of school. Parents who don't pay up can be prosecuted and face a £2,500 fine and three months in prison...

Previously, head teachers were allowed to grant up to ten days leave for children to go on holiday outside school breaks - when prices can be considerably higher... The figures come from research by the Nationwide building society, which also found the current system means a family can expect to pay an extra £1,347 for a foreign break in Spain.

Caveat 1. I would argue that prices are not 'higher' during school holidays, but that they are 'lower' during term time.

Caveat 2. To the extent that you agree that taking children out of school during term time disrupts their and other children's education and should be discouraged...

Solution: Just allow parents to 'buy' days off school, on a sliding scale, let's say £50 for each of the first five days per academic year, £100 a day for the next five and so on; possibly with a discount for families who holiday in the UK.

So if you take two children out of school for a week, that costs you £500 'fines' but you save £1,347 on your jaunt to Spain, so still well worth doing.

Having criminal penalties strikes me as absolutely outrageous; if the parents ensure that the child catches up with missed lessons (or gets them printed out in advance to take on holiday), then where is the harm? Surely this is far less bad than parents who consistently don't bother making sure that their children do their homework and revision etc.

"Forget pensions as bank accounts, your home is a cash machine"

Emailed in by MBK from CityWire: Forget pensions as bank accounts, your home is a cash machine.

Quite where that is supposed to leave younger people who can choose between handing over all their spare income as rent and/or mortgage repayments for the rest of their working lives was unclear at time of going to press.

Something like: "Forget pensions and bank accounts; you are your landlord's cash machine"?

Monday, 25 May 2015

And STILL they don't get it...

From here.
"The favourite for the leadership even defined the word, saying that it was about “giving every single person the dream of a better life, about helping all of our businesses, small and large, to get on and grow”.

Everyone already has a 'dream for a better' life.  But what you do, you utter bunch of twerps, is take away that dream.  They cannot get away from the mindset that everyone 'needs help'. They don't.

Then 'helping business'. I can tell you absolutely they only businesses that 'need help' are those that are either
(a) not viable,
(b) seeking crony advantage or
(c) just looking to consolidate their rent seeking.
What proper businesses want is for you go right away and leave us well alone.

Just what part of 'fuck off' don't you understand?

Sunday, 24 May 2015

Killer Arguments Against LVT, Not (359)

Ian B, in the comments a few years ago here:

… and then Mr Georgist Tax Assessor comes along, slaps a massive tax bill on the nature reserve or the rose garden, and it has to close. For the Greater Good, you see.

That is why I’m a Libertarian. And more than that, a Propertarian Lbertarian. In so many crucial respects, liberty stems from property. Without property, liberty tends to be in rather short supply. For the Greater Good, of course.

All right, let's row back a bit.

In an ideal world, having a secular, democratic and free-trade capitalist society enables total freedom to be maximised - freedom from religious oppression, despotism, hunger and want; the freedom to choose what sort of job you want to do; an equal say in who gets the keys to Number 10 Downing Street; and of course the state-protected right to occupy certain bits of land undisturbed by others.

That last 'property liberty' is only one of many mutually-supporting freedoms, it is not the be-all and end-all; the notion that a person is entitled to have exclusive, state-guaranteed occupation of land without having to pay anything for the privilege is not on the list.

The minute you start restricting some people's individual, subjective freedom in order to increase other people's individual, subjective freedom then the sum total of freedom has gone down, not up. If one man's liberty comes at a cost to others, that is not true liberty.

(NB - these generalisations do not not apply to some one-sided restrictions of course - if they allow gay marriage, that increases the freedom of gay people without restricting the freedom of heterosexual people; if they legalise soft drugs, then that enhances the liberty of people who wish to trade in or consume them without in any way restricting the liberty of the majority who wouldn't touch the stuff.

Neither do they apply to trade-offs like speed limits in residential areas. A 5 mph hour speed limit is a huge benefit to residents but a huge burden on people who want to get from A to B. A 70 mph speed limit is the opposite, so there has to be a liberty maximising speed limit of 20 mph or 30 mph).

For example, let's look at the right to vote, which is given for free and as of right to (nearly) every adult over 18 in this country. We have decided that this maximises our total freedom. We could turn the clock back a century and only allow men to vote; this clearly reduces women's liberty a heck of a lot but only increases the liberty of men by a smaller amount. The sum-total of all liberty has gone down.

A more extreme case is slave-ownership. If you allow it, then those who own slaves are clearly more free than those who don;t; and those who don't are more free than the slaves. But the sum total of all freedom is increased when slave-ownership is abolished - slaves gain the most; they are now more productive (as they work for pay) so those who didn't own slaves end up better off (more output to go round more equally) and former slave-owners end up worse off. This is why the Union states beat the Confederate states - they had industrial might on their side.

So overall, there is an increase in total liberty when slaves are freed, given the vote and put on an equal footing with everybody else.
OK, if you hadn't grasped the analogies yet:

- any form of taxation other than taxation of land and monopolies reduces total freedom, business and job opportunities and reduces total output i.e. wealth.

- 'Land ownership' and 'the nation state' are synonymous, you cannot have one without the other. Land only has value because the cost of defending title is minimal - society as a whole is conditioned to respect it and the state will (or should) enforce exclusive occupation the owner's behalf in case of trespass and burglary etc.

- The rental value of any plot of land is equal and opposite to the total burden placed on others who are excluded. That's extra 'liberty' for the owner but reduces the liberty of 'everybody else'. Unlike income tax, having to pay for the value of land you occupy is a break-even on the liberty front.

- There are currently four classes of citizen.

1. Those at the top are landlords or bankers who are basically extracting ransom from tenants and mortgage payers. The income tax they pay is roughly equal to the cash subsidies they receive. These are akin to slave owners.

2. There are welfare claimants and pensioners, whose income is funded out of the burden placed on the next two classes (income tax, NIC, VAT etc).

3. There are owner-occupiers, most of whom are working. By and large, the income tax they have to pay exceeds the rental value of the land they own/occupy. These are like non-slave owning citizens in a slave owning society.

4. There are working tenant households who suffer two huge impositions - income tax paid for the benefit of the first two classes and land rent paid for the benefit of first.

If extending the vote to women or abolishing slavery increases overall, total freedom or liberty (or indeed wealth), then so does taxing land values instead of earned income. The total tax payable by the last two classes will plummet and the wealth extracted by the first class will plummet by the same amount and the people in the second class would probably more or less break even.

- Two wrongs don't make a right.

1. The slave-owners said they should be compensated for giving up their slaves, but wouldn't slaves be entitled to compensation for having been kept slaves? The same applies with votes for women, men could have said they should be compensated for sharing the right to vote, but women could have counter-sued for all the years that they weren't allowed to. All you can do in these circumstances is call it quits and everybody gets on with their lives.

2. The sob story trotted out is somebody who "paid taxes all his life, bought his house out of taxed income and wants to be left in peace". Well sorry, that's the way the cookie crumbles. It is highly regrettable that people had to pay income tax in the past; that's no excuse for imposing the same injustice on all future generations.
Being more prosaic about this, I am a working age owner-occupier and if we had full on LVT the selling price of our house might fall by hundreds of thousands of pounds but my wife and I would pay tens of thousands of pounds a year less in tax; after ten or fifteen years or so, our total 'wealth' will be the same, it's just that more of it will be spendable, encashable wealth (unless she spends it all on shoes and handbags) and less will be a paper capital gain.

More importantly, my children would grow up in a society with more and better paid jobs and will have a fighting chance of being able to afford to buy a house within five or ten miles of where they grew up. Increasing my personal subjective 'liberty' to be able to retire a few years earlier is naught compared to all the extra years it will take for my children to pay off their mortgages etc.

And, in a very real sense, if we stick with the current nonsense, it will restrict my personal freedom when my children are in their 20s and 30s and they are constantly tugging our sleeves and trying to persuade the Bank of Mum & Dad to remortgage to provide them with a deposit so that they can "get on the property ladder". Maybe we'll give in and plunge not just them but ourselves into debt fro the rest of our lives; maybe we'll hold firm and have them resent us for ever more/move abroad in protest. I don't really think that either of those options increases our 'freedom' as parents.

Saturday, 23 May 2015

I bought a new 'phone today

Friday, 22 May 2015

Mad Max: Fury Road Trip

From and

An apocalyptic story set in the furthest reaches of our planet, in a stark desert landscape where humanity is broken, a group of raucous, college buds living the Frat life decide to have a blowout with a Road Trip of insane proportions.

Almost everyone is crazed fighting for the necessities of life: Dad's car, hard partying, nubile and Nubian Princesses and a boa constrictor.

Within this world exist two rebels on the run who just might be able to make a videotape and mail it to Tiffany. There's Max, a man of action and a man of few words, who seeks peace of mind after the wrong tape gets sent in the aftermath of the chaos.

And Beth, a sexy blonde going to college with Josh who believes her path to survival may be achieved if she can make a great trip down comedy lane back to her childhood homeland.

Burger King's rather puzzling pricing policies.

Yesterday I bought a "Bacon double cheese XL burger" meal*, which is £6.99, plus 60p to 'supersize' it, in other words get a few extra chips and a drinks cup the size of a bucket.

It wasn't really enough, so today I just got two of their £3.79 "Big King" meals, as a result I got a lot more food (four burgers and even more chips) for one penny less. The lass behind the counter happily swapped the two normal sized cups for a bucket-sized one.

Strange. You'd expect the reverse to apply.

* Off limits for Hindus, Jews and Muslims!

Thursday, 21 May 2015


What puzzles me is that banks are adopting two diametrically opposed strategies regarding how much interest they pay on deposit balances.

See e.g. This Is Money.

In the red corner

- Nationwide pays 5% on first £2,500; no further interest on larger balances.

- Tesco Bank pays 3% on the first £3,000; no further interest on larger balances.

in the middle

- Lloyd's pays 1% on the first £2,000; 2% on balances between £2,000 and £4,000 and 4% on balances between £4,000 and £5,000, no further interest on higher balances.

In the blue corner

- Santander pays zero % on the first £1,000; 1% on balances between £1,000 and £2,000; 2% on balances between £2,000 and £3,000 and 3% on balances between £3,000 and £20,000.

Clearly, having lots of small balances gives you a more stable overall figure but is more actual work/hassle; having a few large balances is a riskier business model but is less actual work/hassle.

But why do the different banks place such different values on these things? It's like one supermarket offering "3 for the price of 2" and another one offering "2 for the price of 3".

PR China clearly not too fussed about 'dangeous sea level rises'.

From The Guardian, November 2012:

Sea-level rise is occurring much faster than scientists expected – exposing millions more Americans to the destructive floods produced by future Sandy-like storms, new research suggests...

The faster sea-level rise means the authorities will have to take even more ambitious measures to protect low-lying population centres – such as New York City, Los Angeles or Jacksonville, Florida – or risk exposing millions more people to a destructive combination of storm surges on top of sea-level rise, scientists said.

Scientists earlier this year found sea-level rise had already doubled the annual risk of historic flooding across a widespread area of the United States. The latest research, published on Wednesday in Environmental Research Letters, found global sea-levels rising at a rate of 3.2mm a year, compared to the best estimates by the IPCC of 2mm a year, or 60% faster...

Yada yada blah.

From The Daily Mail, May 2015:

Beijing is rapidly building several artificial islands in disputed waters...

It's difficult to tell from the aerial photographs, but those artificial islands are only a metre or two above sea level, so if the warmenists are right, they'll be unusable in a couple of decades and the problem sorts itself out.
The artificial islands also neatly illustrate the point that 'land ownership' and 'the nation state' are synonymous.

Basically, whichever country is prepared to fight hardest gets to control the land and the surrounding sea; the country which controls the land gets to decide who 'owns' it. Let's say PR China built an island just for the heck of it of no military use and decided to sell ownership to private entities; the US government could, in its private capacity, acquire the freehold title, but the land is still part of PR China and would not become part of the USA

Economic Myths: The government needs to run a deficit to enable private saving.

Caveat: I whole heartedly agree with the basic tenant of Modern Monetary Theory i.e. that there is no real direct link between government spending, taxation, borrowing and debt repayments; in the very long run they sort of match up in accounting terms is all.

But then they go off on a complete tangent e.g. here:

It may not be apparent from perusing mainstream newspapers or watching the evening news, but the private sector’s capacity to save and pay off debt is inextricably linked to the government’s use of fiscal policy.

Attempts to slash budget deficits will actually work against private-sector efforts to get debt under control. By directly subtracting from demand, fiscal contraction will have a negative impact on output, employment, income and therefore private saving, frustrating private-sector attempts to pay off debt.

The following accounting identity shows an aggregate relationship that must hold by definition for a closed economy, such as the global economy as a whole:

(G – T) = (S – I)

In this identity, G is government expenditure, T is tax revenue, S is private saving and I is gross private investment.

Somehow or other, government deficits are spun as being a good thing as they enable private saving or enable the private sector to pay off debts.

This is all robbing Peter to pay Paul; if you allocate government debt back to the individual taxpayers who have to pay the interest and principal, it all cancels out. Admittedly, government debt is usually never paid off, it is just rolled forward indefinitely, that's the key to all this but a separate topic.

More importantly, if the government is running a balanced budget, then G-T = 0 and we are left with...

S-I = 0
Hence S=I
In other words, private (i.e. household) saving = Private (i.e. business) investment.

(The distinction between 'saving' and 'investment' should not be under-estimated, see my earlier post).

Overall, the optimum savings ratio for each individual and hence the population as a whole is zero but the overall optimum amount of business investment is positive.

So that means that S-I could be a negative number; if we want the equation to balance, then the government has to run a surplus i.e. G-T<0, i.e. T>G.

This strikes me as complete nonsense, ergo the original equation must also be nonsense; common sense tells us that lower taxation would, all things being equal, lead to more business investment (as long as it doesn't spill over into higher land prices - let's assume a sane tax system which taxes production less and land more).

Newsthump nails the gay cake story

From Newsthump:

Judge Johnson declared that not only were the bakers a pack of twats for denying the commission based on a person’s sexual orientation, but also that the bakery should “check out its own shop-front sometime”.

“Seriously, I’ve walked past it, and it looks camper than Dale Winton admiring a row of tents” said Johnson. “So where exactly they get the nerve to tell someone else that their gayness is inappropriate for something covered in pretty icing is absolutely beyond me.”


Left-wingers love to talk about "investment" but rarely talk about what investments they want. I wrote on this before, but here's 2 ideas for government investments that have been knocking around in my head:-

  1. Dual-carriageway across Wales. Actually, a bit more than Wales. Link up from Gloucester to say, Aberyswyth including Hereford. About 100 miles, total cost, around £700m. Reduces the journey time from around 2.5 hours to 1.5 hours. Opens up new avenues for tourism and for business to trade better with the rest of the UK. Much better idea than shaving a tiny amount off Birmingham to Manchester by rail. Might also want one from say, Stoke to the same point, but I've not worked it out.
  2. A container railway, linking the ports with major cities. Fully enclosed, automated high-speed trains, Containers are loaded at ports and do most of the work getting them to cities where they can be unloaded and locally distributed. No idea of cost and benefit, but seems like a better idea than having lots of small lorries being driven around.

Wednesday, 20 May 2015

Michael Meacher's excellent summary of Indian Bicycle Marketing.

I would disagree with his conclusions as to what the UK government 'should' be doing, but apart from that, his reader's letter is an excellent summary of the Indian Bicycle Marketing practised by Tories and Labour in the run up to the General Election.

The clever bit is that under the Home-Owner-Ist consensus, Labour aren't allowed to state the bleedin' obvious, that the 'financial crisis' was caused by unbridled land price speculation and rent seeking (the modest deficits the previous Labour government had been running were very regrettable but not in in themselves fatal), so they engaged in an entirely phoney and fictitious war over who would keep deficits down.

From The Guardian letters:

Labour didn’t lose because it failed to support a New Labour business agenda. It lost because it never nailed the Tory lie that Labour left behind a dreadful economic mess – as though the banks and the international recession had nothing to do with it.

And it never challenged the Tory canard that Labour was profligate, when in fact the Thatcher-Major governments in 10 out of their 18 years ratcheted up deficits bigger than Labour’s in any of its 1997-2008 pre-crash years. That left millions of undecided voters at the end who were sympathetic to Ed Miliband’s positive reform programme, but who, faced with the relentless barrage of negative Tory propaganda about Labour’s economic record, felt they couldn’t risk a vote for Labour.

Miliband was right that the banks, the corporate elite and the media had too much power and had abused it by inflating their own incomes and wealth at the expense of everyone else and by seeking to suppress all those forces, notably the unions, that stood up for the vulnerable and dispossessed. He was right that a deregulated predatory capitalism needed reform.

By contrast the New Labour approach was that big cuts needed to be made to pay off the deficit, but slightly more gently, by cutting less far and less fast. However, that was the worst of all worlds. It implied that Labour accepted the Tory framing of the election that Labour caused the financial crash, that the deficit was the central issue and that deep cuts in pay, benefits and public services were the right way to deal it.

All these claims are fundamentally wrong, The right response, which Labour sadly never argued for, was to use public investment to expand the economy, not shrink it. And by increasing jobs and wages, raise tax receipts so the deficit could be paid off faster. It is tragic that this far better alternative was never argued for.

Michael Meacher MP, Labour, Oldham West and Royton.

So, just how inefficient is local authority housing administration?

I can't find national statistics, so I will use the figures provided by my local council, which I guess is a reasonably good guide to the average.

The accounts include two different profit and loss accounts for their council housing, on pages vi and 38; total income is around £34 million and real cash expenses are around £18 million, including employee costs of £3.7 million. So unless more than half their income is from Housing Benefit, that's a nice little profit for the taxpayer.

It doesn't say how many people work in their housing department, but let's guess each employee costs £30,000 a year, so that's 125 employees. Neither does it say how many units of housing they look after, but let's call it 7,000 (£34 million divided by £100 a week rent).

So that means it one council employee looks after fifty-six homes. That includes managing the waiting list and allocating vacant ones; sorting out the repairs; collecting the rent and council tax; and administering housing-related benefits etc.

Ho hum.
How does that compare with the 'private' sector?

According to the ONS there are 422,000 estate and letting agents (construction is a quite separate category) and [as Mombers points out in the comments] around 1.5 million private landlords.

There are 1,285,000 people working in finance and insurance, let's assume that half of those working in finance and insurance are involved with mortgages and home insurance, this means that there are 3 million people making a living from/looking after 22 million or so privately owned homes.

That means on average, in the private sector, one worker looks after about seven homes.

Going by that simple measure, local authorities are eight times as efficient as the private sector.

Interesting Eurovision Hopeful (also, I am not dead!)

From the Telegraph
Held this year in Vienna, Austria, the singing competition sees dozens of European countries battle it out for the coveted crown.   
San Marino's Eurovision host John Kennedy O'Connor thinks Italy, Sweden and Australia are in with the best chance.
*Update* Actually it appears the joke is on me and Australia actually are in the Eurovision! I thought this was a play on all those souvenirs you get in Austria gift shops that say "no kangaroos in Austria".

The futility of R&D tax credits.

From the official government statistics on R&D tax credits:

- The total amount of [R&D tax credits paid or credited to companies] rose to £1.4 bn – an increase of £150m from the previous year. The cost of support for the SME scheme rose by £170m from £430m to £600m, while the cost of the large company scheme declined by £20m from £790m to £770m.

- The total R&D expenditure against which claims were made amounted to £13.2bn in
2012‐13, an increase of 10% from the previous year.

1. The maths of the claims is tortuous, but you can easily express the value of the subsidy/refund as 10.6% of total cost/spend - £1.4 bn divided by £13.2 bn.

2. I know from experience that approx. 90% of all the R&D expenditure for which the subsidy is claimed are the wages and salaries of people carrying out the research.

3. The UK has a stupid extra tax on wages and salaries called "Employer's National Insurance contributions" of 13.8% on top of wages and salaries and this is included in the costs for which companies receive a subsidy.

4. So here's a thought - assuming that such micro-meddling is a good idea in the first place - just exempt researchers' wages and salaries from Employer's National Insurance - the net cost after tax/subsidy would remain much the same, with a modest cash flow/timing advantage to the companies concerned.

Maths lesson:

Current rules
Total R&D spend/claim £100.
Includes £10 other costs and £90 of wages and salaries incl. NIC.
That £90 = net wages and salaries of £79.09 plus £10.91 Employer's NIC.
Refund average 10.6% of £100 = £10.60.
Net cost of R&D = £89.40

Simplified system
Net wages and salaries, NIC-exempt £79.09
Other costs £10
Total R&D cost = £89.09.

I realise that my 90% is just a guesstimate and that the first few thousand pounds of a person's wages and salaries are NI-exempt, but let's not get bogged down in details.

I wouldn't Deutsche Bank on it...

From The Guardian:

Deutsche Bank would consider whether to relocate some of its UK operations if Britain left the EU, according to reports.

The German lender is said to have established a working group to assess the consequences of a possible “Brexit” following an in/out referendum that David Cameron has pledged to hold by 2017..."

Jolly good.

The question is, will DB also shut or scale back its operations in other non-EU countries, such as New York, Buenos Aires, Mumbai, Hong Kong, Beijing, Tokyo and Sydney?

Tuesday, 19 May 2015


Spotted by MBK in The Telegraph:

Aldi apologises after black pudding is incorrectly labelled as halal-certified

Here we go again...


Principles or income? Hmmm.

Given the re-election of the Tories and the news flow I am going to have to seriously consider re-establishing the mortgage arranging bit of my business. There will be money to be made. At least I know that we will do it right.

But really, dude, WTF?

Cattle news

Via JuliaM from Chronicle Live:

Police shot dead an escaped cow following a massive operation involving armed officers and a helicopter.

The beast was one of three to escape from a farm in Wallsend yesterday afternoon. Northumbria Police deployed marksmen, aerial support and, eyewitnesses said, 15 to 20 cars, closing roads in a bid to keep the animals off the busy A1058 Coast Road...

Glorious article, worth reading in full. Keystone Cops.

From The Daily Mail:

A hiker enjoying one of the most beautiful national parks in the French Alps was gorged to death by a bull in front of his terrified wife, it has emerged.

The horrific killing took place close to the idyllic mountain village of Reallon as the unnamed 59-year-old victim was enjoying a Sunday morning stroll.

As he and his wife crossed a field full of cows in the Ecrins National Park, in south east France, the bull came charging towards them...

Gruesome, gruesome article. Read at your peril.

Monday, 18 May 2015

Irish Traveller Case

From the Standard

Today Judge John Hand QC ruled that members of the group had suffered discrimination and awarded them £3,000 damages each - a total of £24,000.

He said that Wetherspoon thinking was “suffused with the stereotypical assumption that Irish Travellers and English Gypsies cause disorder wherever they go.

Utter bollocks. If they'd not been allowed in for being Irish or English, that's racism. Being a traveller is not a racial definition. It's a lifestyle. You might as well create a race for "Scottish Farmer" or "Welsh Football Fan". We allow pubs to ban people for being football fans, despite the fact that many football fans are perfectly decent people. What's the difference between that and being a traveller? And what do they mean by "gypsy"? A nomadic or free-spirited person, or someone descended from South Asia? Because again, the former isn't racism, the latter is. And if they're referring to people from South Asia, shouldn't the judge be using the correct name, Romani?

And I think it's fair I mention all my non-stereotypical experiences with travellers....

Oops! Redwood lets slip flagship tory economic policy...

...over at his blog, the Rt Hon. John Redwood MP has been busy deflecting criticism on his post about UK productivity.

A few of his pesky readers have been pointing out that the UK runs a big trade deficit and questioning the sustainability of borrowing (public and privately) circa 10% of GDP to keep the party going.

When a fed up sounding JR snaps back to 'Ken Moore'

"[Running a trade deficit year on year] has proved to be sustainable as many people wish to invest in the UK or buy assets here. Germany sells rich people expensive cars they do not need, and the UK sells them expensive flats so they can have additional homes."

And that's it in a nutshell, the UK exports its land (and rents) so people like John Redwood can swan about in expensive motors.  This isn't just coincidence, it is actually an economic policy.

"Warning over fake make-up which contains eye of newt and toe of frog"

From The Evening Standard:

Disgusting ingredients such as eye of newt, toe of frog and even wool of bat have been found in fake make-up and perfume that is flooding the UK market, the Witchfinder General today warned.

Lipgloss, foundation, eyeliner and mascara produced in filthy, unofficial factories can also contain dangerous substances such as tongue of dog, adder's fork and blind-worm's sting, while knock-off hairdryers and straighteners carry the risk of powerful trouble like a hell-broth boil and bubble.

The Inquisition's intellectual property crime unit this week launches a campaign to warn online shoppers away from buying counterfeit beauty products, which they say put souls at risk of eternal damnation.

Christian fundamentalists estimate that UK shoppers unwittingly pour £90 million into witchcraft - which advertises products claiming to be from big brands on sites like eBay and Amazon - every year.

"Some Motherfuckers Do 'Ave 'Em"

From Wikipedia

Some Motherfuckers Do 'Ave 'Em is a BBC television sitcom, written by Dizzee Rascal and starring MC Harvey and Lisa Maffia.

It was first broadcast in 2003 and ran for three series, ending in 2008. The series follows the accident-prone petty criminal Frankie S and his tolerant, if accident-prone drug-dealer girlfriend, Bitchy, through Frankie's various attempts to break into the music business as a DJ and rapper, which frequently end in disaster.

The sitcom was filmed in and around the council estates of South Norwood in London. It was noted for its gratuitous swearing, performed by MC Harvey himself, as well as featuring various well-remembered expletives that have become part of hip hop culture.

In a 2004 poll to find Britain's Best Grime-related Sitcom, 'Some Motherfuckers Do 'Ave Em' came 22nd.

That Tesco 'property' write-down

SG emailed in: "To what is [Tesco's massive reported loss] attributable (since land values are generally on the rise)? Is it mere accounting finesse?"

Yes, partly, new management likes to 'clear the decks' by having massive write-downs, which it can blame on the outgoing management; they then gently reverse these to flatter future profits etc etc.

As is widely known, see e.g. Robert Peston goes shopping...

Now [Tesco] could offer even lower prices because it was operating on a bigger scale, enabling it to buy in bulk and sell cheap. This was due to another canny move by Tesco. It bought vast amounts of [cheap] property during the recession of the early 90s, acquiring sites for a new generation of out-of-town superstores.

Clearly, making windfall gains on land prices can delude businesses into thinking that their actual business model is better than the competition's. It isn't, it's a one-off thing which does not serve as a guide to future performance. But they only discover this once land prices have gone up again and expansion becomes very expensive or they have to pay rent for their new stores.

So how much of the write-down actually related to their freehold land and buildings..?

From page 4 of Tesco's preliminary results to 28 February 2015:

One-off items
Plant, property and equipment impairment and onerous lease charges - £4,727m
Goodwill and other impairments - £878m
Stock - £570m
Restructuring - £416m
Reversal of commercial income recognised in prior years - £208m
Other - £223m
Total one-off items - £7,022m

Note 12 on page 30 onwards shed a bit more light on things; it appears that most of the £4,727m 'property' write-down relates to new stores they planned to open, not their existing freeholds, so it is sub-divided into onerous lease contracts (where Tesco overbid on the rent); assets under construction (mothballed new stores); etc etc.

Suffice to say, the net book value of their land and buildings has 'only' fallen from £20.7bn to £17.8 bn. Because of accounting practice, they cannot do an equal and opposite write-up of the land and buildings which are now worth more than cost (clue: there is no revaluation reserve on the balance sheet); the chances are that the market value of all their freehold stores is rather more than £17.8 bn.

Glad to have cleared that up!

New Labour Funding Plan

As the unions are getting itchy about funding, this is the new plan:-

  1. Allow anyone to vote for the Labour leader for £3.
  2. Hundreds of thousands of Conservatives pay to put the worst candidate in the job
  3. Election is lost
  4. New leadership election
  5. Repeat

Sunday, 17 May 2015

This afternoon I have mostly...

... been replacing the rotten bits of wood on this bench with new ones. Took me four hours, it did:

The little lass and I made the executive decision to rebuild the table using alternative old/new or dark/light slats.

Saturday, 16 May 2015

Land Reform in Scotland.

Could this be why the Tories are so keen on the Union?

Friday, 15 May 2015

"Dog walker trampled by cattle escapes with cuts and bruises after teenagers helped to distract animals"

From The Daily Mail:

A dog walker who was trampled by a herd of cows says she owes her life to quick-thinking teenagers.

Sharn Thomas, 59, spent two days in hospital with severe abdominal bruising, 'hoof prints' on her body, a deep gash on her groin and a haematoma after the ordeal.

She was taking a well-used short cut through a field when the herd of cattle charged and trampled her in Llanbedr, Gwynedd, Wales.

But a group of youngsters witnessed the attack and rushed to the rescue, managing to distract the cows long enough for Sharn to get to safety and receive urgent medical attention.

I'd say that is about as typical as it gets for a 'cow attack' story - walking a dog across a field full of cattle. Ho hum. Well done, that 'group of youngsters' though!

The man appears to be an idiot.

From The Evening Standard:

The Conservatives lost four seats in London because the city is “turning into Paris” with poorer people being pushed out from the gentrifying centre, a senior Tory MP warned today. He saw four colleagues beaten in the city, Nick de Bois in Enfield North, Lee Scott in Ilford North, Angie Bray in Ealing Central and Acton and Mary Macleod in Brentford and Isleworth.

“The reason we lost Nick and we lost Ange and we lost Mary and we lost Lee is that London is turning into Paris,” he told the ConservativeHome website. "The centre is gentrifying and pushing poorer people out. There is a natural demographic challenge there.”

In case the contradictions inherent in that are not obvious, here's the electoral map of Greater London:

Thursday, 14 May 2015

Yet Another Gem

From here
An obvious solution would be for unions to reinvent themselves as service providers to their members as part of a reborn mutual movement for self-help. As David G Green of Civitas has pointed out, most working people used to belong to such organisations in the 18th, 19th and early 20th centuries. In 1910, 6.6m people belonged to friendly societies, 2.5m to co-operatives and just 2.5m to unions. Instead of wasting money on supporting unelectable socialist politicians, opposing progress in education and health or trying to ruin commuters’ lives, the unions need to withdraw from party politics, make their peace with capitalism and carve out a new role for themselves as service providers.
As the state rightly retrenches, they could run free schools, enter house building and provide low cost-insurance based welfare. The only certainty is that, without reinvention, the union movement will be destroyed, and sooner even than in its worst nightmares.
Good Grief!  Between cronyism and rampant socialism from 1910 (ish) onwards the Unions and the 'professions' (especially doctors and insurers) destroyed the functioning private support networks based on Friendly Societies and similar.  And now the very people whose warped beliefs precipitated this destruction are being suggested as those capable of re-establishing what they destroyed.
Surely the irony cannot be lost on them.  Surely?
You really couldn't make it up.  Well actually yes you could.  You could call it 'Twenty eighty- four'.

Causation is not correlation

The ConHome article (which Lola linked to recently to make a different point) says that there is a significant geographical overlap between 'former mining areas' and 'areas returning a Labour MP' at last week's elections.

Ho hum.

More to the point, there is, and always has been, a large overlap between 'relatively densely built urban areas' and 'areas with a Labour MP' i.e. Manchester/Merseyside; West/South Yorkshire; Tyneside; and central/inner London.

It just so happens that most towns grew where they did because coal was needed to power industry during the Industrial Revolution; the landless peasants (90% of the population) moved to these areas during the Industrial Revolution; these areas then became towns and cities; and for whatever reason, people in these areas tend to vote Labour to this day, while the Tories are the party for rural areas and outer suburbs.

The only reason that London is where it is, is because that's as far upriver as the Romans could get with their boats i.e. it has always been the centre of government and a major centre of trade. For slightly different historical reasons, about half the population are tenants (private or social), and again, these people will tend to vote Labour, even though London is about as far from a coalfield as you can get.

And all of this is not UK specific, as a general rule and in most democracies, people living in towns tend to vote more left wing/liberal and people in the countryside vote right wing/authoritarian.

Wednesday, 13 May 2015

LVT is the flying pig of politics

From the comments on Stumbling and Mumbling: Wanted, a new Blair:

I actually like Luis's idea a lot, but I think it's got about as much chance of happening as (say) a UBI supported by LVT.

"The Tories' Secret Weapon... loyalty."

Above is an electoral map of the country showing last Friday's result and the result if all the people who did not vote had voted for the same party, with that party's seats shown in pink.

That was then, this is now...

A good article at the BBC about the history of Home-Owner-Ism:

In 1966 the Conservative party manifesto made a promise. A Tory government would "get the houses up and keep the prices down".

Fast forward to the present day. UK house prices rose 8.4% in the year to January 2015. In London they went up by 13%. There's widespread concern that this is far too fast. That young would-be buyers are being priced out of the market.

And yet the idea that either a Conservative or Labour government would pledge to hold down prices today would be regarded by virtually everyone as far-fetched...

Unfortunately, the author appears to have fallen for the lie that higher land prices = more wealth; they do not.

Higher land prices mean primarily that there are or will be larger net transfers from non-landowners to landowners.

High land prices are not even a zero-sum game. In the grander scheme of things, higher land prices lead to there being less wealth overall in the same way as high rates of taxes on earnings and output lead to lower overall earnings and output and hence wealth.

Daily Mail on top form.

Ex-public schoolboy, 19, found dead by his barrister father in his £2million London home after injecting lethal cocktail of drugs

On the bright side, they've just made a massive tax free windfall capital gain.

More Not Seeing the Bleedin' Obvious


So this implicitly recognises that tax cuts boost economic activity. So why not extend that thought and cut taxes everywhere?

Now we know that this is about making some areas less tax costly than other areas. Fair enough. I can see what they are trying to do, but the way they are going about it...?

Since the prime tax cost difference area to area is 'rent' - which reflects itself through the productive factors of production - labour and capital - you'd thunk it bleedin obvious just what to do nationally.

Or have I missed something, again?

Tuesday, 12 May 2015

Oh really?

This will not help.

Instead of getting a criminal record for refusing to pay the telly tax you'll get a CCJ.  Which can be very damaging to your credit history and ability to obtain a mortgage.

Blissex nails it

Blissex, in the comments to the second post on the question of whether people underestimate commuting costs when deciding whether to buy/rent somewhere small but close to where they work or somewhere larger but further away…

Well, either many men don't even think of women's influence on them, or are too politically correct to point out the obvious.

Usually the dominant influence on house location and type is the female partner (after all both before and after divorce she considers it *her* house), and usually the male partner somehow gets the longer commute.

Perhaps the male partner would rather like the 3 bed flat near *his* workplace, but the female one will just fall in love with the 5 bed detached with the big garden in the outer suburbs. And it would be misogynist for the male partner to be abusive to the point of disregarding her needs :-).

Avengers: Age of Adaline

From imdb and imdb:

After miraculously remaining 29 years old for almost eight decades, Tony Stark tries to jumpstart a dormant peacekeeping program but things go awry.

Earth's Mightiest Heroes, including Iron Man, Captain America, Thor, the Incredible Hulk, Black Widow and Hawkeye have lived a solitary existence, never allowing themselves to get close to anyone who might reveal their secret.

A chance encounter with charismatic philanthropist Ellis Jones puts them to the ultimate test as the fate of the planet reignites their passion for life and romance.

As the villainous Ultron emerges, a weekend with his parents threatens to uncover the truth and it is up to the Avengers to stop him from enacting his terrible plans, and soon uneasy alliances and unexpected action pave for a decision that will change their lives forever.

Monday, 11 May 2015

UKIP and The Election

From the Daily Echo

Ukip is well placed to replace Labour as the natural party of the north, its only MP has said.

Douglas Carswell told the BBC Sunday Politics programme the party's success in winning more than 100 second place finishes at the general election showed where its future was.

OK, everyone's been talking about this point. Paul Nuttall's 2020 strategy is based on winning lots of 2nd places, to be the rival party for the next election. In many seats, there's some wisdom to this strategy. Under FPTP, people group around the top 2 parties in a constituency. If you're running say, the Labour party and you can get above the Lib Dems in a seat, next time, you'll be the non-Conservative party that people will vote for. You'll be the rival that can win the seat. Amongst all the crap in party election flyers, this is one thing that's emphasized: "we're the only party that can stop the Tories" with a chart showing them above the Lib Dems.

So, using the Guardian's map, I'm going to pick 20 constituencies at random that have UKIP in 2nd. 10 Labour, 10 Conservative:-

Rother Valley: 7,300 Labour majority over UKIP.
Liverpool Walton: 28,000 Labour majority over UKIP
Doncaster North: 11000 Labour majority over UKIP
Oldham West and Royton: 14,800 Labour majority over UKIP
Rotherham: 8400 Labour majority over UKIP
Normanton, Pontefract and Castleford: 14,500 Labour majority over UKIP
Houghton and Sunderland South: 12,900 Labour majority over UKIP
Blyth Valley: 9,200 Labour majority over UKIP
Heywood and Middleton: 5,200 Labour majority over UKIP
Liverpool West Derby: 27,300 Labour majority over UKIP
Dorset North: 21,100 Con majority over UKIP
Surrey South West: 28,500 Con majority over UKIP
Worcestershire Mid: 20,500 Con majority over UKIP
Hereford and Herefordshire South: 16,800 Con majority over UKIP
Rochester and Strood: 7,100 Con majority over UKIP
Surrey Heath: 24,800 Con majority over UKIP
Wiltshire South West: 18,000 Con majority over UKIP
Christchurch: 18,200 Con majority over UKIP
Rutland and Melton 21700 Con majority over UKIP
Cambridgeshire North East 16800 Con majority over UKIP

Of the seats randomly picked, there's really 3 that have any hope of swinging anytime soon. Swinging by more than 7,000 would require a Lib Dem level meltdown or New Labour level victory in that seat. Which might happen, but doesn't look likely any time soon.

As far as I can tell, all they really have is Farage in South Thanet, who is a couple of thousand behind.

"According to economics..."

James James in the comments here:

"According to economics, the burden of commuting is chosen when compensated either on the labour or on the housing market so that individuals’ utility is equalized. However, in a direct test of this strong notion of equilibrium, we find that people with longer commuting time report systematically lower subjective well-being."

There are endless studies by estate agents showing that each extra minute's walk from the nearest Tube or train station in London = £A off the rent or £B off the price of a home; that each extra minute's commute time from London overground stations = £C off the average rent or £D off the price of a home etc.

It's a bit presumptuous of these psychologists to say that all this numbers are "too low". Nearly half of people in London rent and most new arrivals rent; the rental market is very fluid so if people were really so hacked off with commute times, they can move somewhere else in six months' time. We have to assume that £A, £B etc. are roughly correct.

We can reasonably assume that if we have two same aged people with same amount of savings, who both start a new job at the same place in central London with the same pay and working hours will make that difficult trade-off between walking time, train time, ticket cost and rent. This tells us the value in £'s per hour that people place on shorter commute times.

But you can bet a pound to a penny that the psychologists haven't equivalised for all these factors.

So on the whole people with longer commute times will probably be younger people on lower pay with high rents; and those with shorter commute times will be older people with a small or no mortgage who had the luck to buy nearer the centre more than fifteen years ago. So the latter group has shorter commute times, lower effective housing costs and lower travel costs and it's hardly surprising that the former group has a systematically lower sense of well-bring.

(And we also know that plenty of people who move out of London into the Faux Bucolic Rural Idyll end up bitterly regretting it; they just can't survive out in the real world any more, just like zoo-raised animals released into the wild.)

Saturday, 9 May 2015

No, people are not that stupid

Emailed in by MBK from The Times

Ap Dijksterhuis, the Dutch psychologist, once famously conducted research which showed that people often underestimate the effect of commuting when buying property.

When given two properties to choose from, a three-bedroom flat located in the centre of a city that would give them a ten-minute commute, and a five-bedroom house in the suburbs that would require a 45-minute commute, most people chose the big house, because it’s easier to conceptualise quantifiable facts, such as an extra room, than future emotions, such as how you’ll feel when you’re stuck in a long traffic jam on the commute home.

But maybe some psychologists are.

He didn't need to ask people, all he had to do was look at the relative prices of a three-bed city centre flat and a five-bed house in the suburbs, as in "what people are prepared to pay in real life after having thought about it long and hard".

Selling prices are the best measure of people's preferences; the two homes mentioned sell for similar amounts; therefore on the whole, people make their own trade-off between saving 35 minutes commute and all the extra space and by and large, decide that they are of equal value. People do not automatically prefer the larger home in the suburbs.

This is why the average selling price of all flats in England & Wales is the same as the average selling price of all semi-detached houses - because flats are in city centres where the location is much more favourable and the land correspondingly expensive.

Thursday, 7 May 2015

Vested Interest letter of the day

  1. As MW has successfully demonstrated, there is no taxpayer subsidy in council housing. Rents cover building and maintenance costs.
  2. This guy proposes means testing council housing. Are marginal tax rates not high enough? With the mountain of benefit withdrawals now in place, any substantial means testing on council housing will bring marginal rates so close to 100% that you can just avoid it by putting money into your pension or other changing your behaviour in other ways, like working less, evasion, etc.

Wednesday, 6 May 2015

Nigel Farage on top form

Emailed in by MBK from The Sunday Times:

What aspect of the tax system would you change?

I would scrap inheritance tax. The very rich don’t pay it, anyway. But if your mum and dad own a semi-detached house in south London and get killed in a car crash, the first thing you have to do, even before you finish grieving, is sell your house to pay the tax.


Paying by instalments on a house

If you plan to sell the house, you only need to find 10 per cent of the Inheritance Tax due by the six-month deadline...

If you plan to keep the house and live in it, you may prefer to pay by instalments because you only need to find 10 per cent of the Inheritance Tax each year (plus the interest), rather than having to pay all of it up front in one lump sum.

So there is no pressure to sell and it's still a lot cheaper than renting or paying a mortgage. I'd rather pay up to 4% in IHT each year for ten years than pay a mortgage for 25 years or pay rent for ever.

City AM on top form

1. Pub and restaurant group Greene King yesterday blamed recently tightened drink-driving laws in Scotland for flat sales.

The company, whose brands include Old Speckled Hen and Abbot Ale, plus the Hungry Horse and Loch Fyne chains, reported just a 0.4 per cent increase in sales for the 51 weeks to 26 April, but said sales were up 0.8 per cent, stripping out the effect of the rule change.

2. ... nestling among the thickets of algebra, there was an article entitled “Mansion Tax: the Effect on the Residential Real Estate Market”.

The authors, Wojciech Kopczuk and David Munroe, are both members of the prestigious economics department at Columbia University in New York. The article contains its fair share of technical material, but the main points are conveyed by some straightforward charts. The paper describes a detailed analysis of residential real estate transactions since 2003 in New York City and in the neighbouring state of New Jersey.

The taxes on high value property which they examine are nowhere near as punitive as the annual levy envisaged by Ed Miliband. But their impact has been both dramatic and detrimental. A so-called mansion tax has been in force in New York since 1989 and in New Jersey since 2004. It applies not on an annual basis to the property, but simply to transactions of $1m and over. The tax rate is 1 per cent and is imposed on the full value of the property – so that a $1m sale is subject to a $10,000 tax liability, while a $999,999 transaction is not subject to the tax at all.

a) So that tax is just like our Stamp Duty, but at much more tolerable rates. It is not a 'mansion tax' as the term is used here.

b) Of course the authors didn't look at 'annual levies' in New York or New Jersey, which on the whole are considerably higher than Ed's proposed Mansion Tax, both in absolute terms and as a percentage of the value without an upper limit. If they'd done so, they'd have been forced to admit that they can't see any detrimental effects whatsoever.

Tuesday, 5 May 2015

Readers' Letters Of The Day

Both from The Guardian:

• The latest Labour pledge to abolish stamp duty for first-time buyers is not the policy it should adopt to help people to buy or rent their homes.

This latest subsidy proposal will push up house prices. History shows that all government subsidies ultimately capitalise into land value and go into the pockets of landowners. Enterprise zones, common agricultural policy payments, rate-free periods for new businesses, housing benefit payments for private tenants, wind farm subsidies – all have ended up as unintended subsidies for landowners paid for by all of us as taxpayers, with the poorest of people subsidising the richest.

It is shameful that politicians and their economic advisers do not understand how land wealth arises and how a shift in taxes off earned incomes on to land value and other natural resource wealth will not only right the historic wrong of our land being held by a minority but will return land wealth to the public purse to use to maintain and develop our public services.

Land value is not created from owning land. It is created from our public and private investments that benefit all residents and businesses in the immediate and wider areas and thus raise the rent and price of land which private landowners collect as an unearned income. Land speculation and monopoly land ownership is actually what makes homes unaffordable to rent or to buy.

Heather Wetzel, London.

• Contrary to your leader (Editorial, 28 April), we do not have a choice about our corrupt housing system, which degrades the whole economy by not allowing people to move where there’s work; or leave them enough to spend in the shops after the rent or mortgage has been paid. All the major parties subscribe to home ownerism, the name given by radical land taxers to the policy of deliberately encouraging house price inflation to secure elections by bribing homeowners with unearned capital gains in house prices (while wages can go hang).

There has already been something of a riot about house price inflation in Brixton. Only a return to an era like the 1950s to 1970s when the house price graph was flat in the UK can defuse a potentially revolutionary conflict between the interests of the housing haves and have nots.

As the cause of the evil of house-price inflation (so much worse than wage inflation) is land price inflation, it is merely a matter of introducing the age-old land value tax to keep land prices and house prices flat forever.

DBC Reed, Northampton.

Saturday, 2 May 2015

Cars "Threaten horse-riding skills"

From the BBC

Horse-riding skills are under threat because of a growing reliance on cars, experts say.

The Royal Institute of Horse Riding (RIHR) said increasing dependence on technology means people are losing the ability to get around on a horse. The RIHR wants schools to encourage the teaching of basic horse-riding because few pupils can ride one. Its president, Roger McKinlay, said society is "sedated by steering wheels".

Mr McKinlay added: "It is concerning that young people are no longer routinely learning at home or school how to do anything more than press an accelerator pedal to get anywhere.

"Many cannot put on a saddle, canter, gallop or get to their destination with just a horse, let alone wonder at the amazing role straw plays in looking after horses.

"Instead, generations are now growing up utterly dependent on the internal combustion engine and petrolget around. The RIHR believes that horse-rising can develop character, independence and an appreciation of biology and shovelling shit.

Friday, 1 May 2015

Oxford University's Department of Economics concurs.

Emailed in by TBH, from page 29 of this:

If one is interested in the spread of owner-occupation per se, it is necessary to consider not only the two million plus houses built in the interwar period for owner-occupation, but also the large number of houses – estimated to be in excess of one million – transferred out of the privately-rented sector by sale to owner-occupiers.

In a large proportion of these cases, landlords sold their properties in response to the low returns imposed on them by the rent restriction legislation. (Conversely, they were concentrated in the 1920s.) In many cases they could only realise low prices for their properties, and they often sold to the sitting tenants.

Although there is little information on these sales – Merrett refers to them as the ‘hidden history’ of the interwar period – it is likely that many of them involved working-class households. In other words, many more working-class households became owner-occupiers in the interwar period than Swenarton and Taylor allow, not only because they bought many of the new houses built during the 1930s, but also because they also bought a significant number of pre-war houses, particularly during the 1920s.