Tuesday, 28 March 2017

"Qatar to invest £5 billion in UK over next few years"

From The Daily Mail:

Theresa May hopes to deepen ties with Qatar after the oil-rich Gulf state announced it will invest £5 billion in the UK over the next few years...

Sheikh Abdullah said: “Over the next three to five years, Qatar will invest £5 billion in the UK economy through various investment funds and relevant parties in Qatar – which will constitute another addition to its already successful investments in the UK.

“Our investments in the UK will focus on energy, infrastructure, real estate, services and other sectors.”

Qatar already has more than £40 billion invested in the UK, including ownership of London’s tallest building The Shard, Harrods department store and the Olympic Village.

This is not "investing" in any meaningful sense, they are collecting rents from the UK economy and subsidies from the UK government (like snapping up the Olympic Village for half price, or buying into top-down privatisations of public services).

Which is what happens when you tax the productive economy and subsidise land (or provide government guaranteed income). Why bother with proper, productive investment (factories, new businesses, innovation etc) when you can just tap into existing government-backed rental streams?

Nobody move… or the French tourism industry gets it.

From The Evening Standard:

The EU chief leading the Brexit negotiations has painted a bleak picture of an “undoubtedly worse off” Britain if the two sides cannot agree a deal.

Good, start with some veiled threats.

Writing two days ahead of Theresa May’s expected triggering of Article 50, Michel Barnier said failure in the talks would lead to “severe disruption” at airports and “long queues” for tourists and lorry drivers at Dover.

He apparently wants to discourage British tourists from visiting France, ah well, plenty of other countries in the world. As to "lorry drivers", the French already treat them like shit, it's time we sorted out an alternative route via a country that doesn't go on strike every week and is prepared to police immigrants properly, maybe Belgium or The Netherlands?

In an article in the Financial Times he also warned business would be hit by “disruption of supply chains” that could even include “the suspension of nuclear material” to Britain, which gets around a fifth of its energy from nuclear reactors.

More open threats this time. He wants France/the EU to actually impose an embargo on us.

The 66-year-old Frenchman, a former European Commissioner, insisted the remaining 27 member states would find it easier to adjust as they would still benefit from the single market, the customs union and 60 trade deals with other countries.

As to the "60 trade deals", I trust he's aware that as a general rule of international law, those treaties will continue to apply as between the other countries and the UK.

He also said that the first phase of negotiations would be dominated by three “significant uncertanties” that need to be resolved before talks on a trade deal can begin.

Firstly, the rights of the 3.2 million EU citizens in living in the UK and the 1.2 million British born residents of Europe. Mr Barnier said EU negotiators were “ready to discuss this issue from day one.”

It's none of their business, that is the beauty of the system. EU rules say that EU Member States have to treat each other MS's citizens the same, fine, but each MS is free to make its own decisions re people from non-EU countries. As the UK will soon be a non-EU country, we can discuss this directly with other governments, which will save a lot of time.*

And has bugger all to do with trade deals anyway.

Secondly, the need for Britain to “honour its commitments” to the European budget…

Blackmail. Their clever lawyers say we have to keep paying for several years after we leave, ours say we don't.

… and third, ensuring that peace and dialogue in Northern Ireland are not weakened.

WTF does that have to do with us leaving the EU? Is he just making up stuff?
* People genuinely appear to ignore this obvious point, e.g. PaulC in the comments:

[The UK government] may need to agree... the status of existing EU workers to even get to the point of discussing a future deal with the EU on more general trade terms.

From the day we leave, there is no such thing as an "EU-worker" from the British point of view. They are German, French, Polish etc.

To give an analogy, UK immigration rules do not recognise the status of "ASEAN worker", they are Malaysians, Filippinos, Vietnamese etc. The Malaysians get slightly more favourable treatment as it's a Commonwealth country; the NHS actively recruits nurses in the Philippines (shame on us); the Vietnamese get no special treatment etc. The UK does not care what sort of arrangements the ASEAN countries agree between themselves, that is not binding on us in any way, shape or form.

From the day we leave, the EU has no power whatsoever to negotiate with the UK as to what rules we agree individually with Germany, France, Poland etc.

Monday, 27 March 2017

Fun Online Polls: Post-Brexit trade deals & Encryption

The results to last week's Fun Online Poll were as follows:

Post Brexit, the UK should…

Impose trade barriers and tariffs - 1%
Remain in the Single Market/EEA - 10%
Rejoin EFTA - 6%
Try and negotiate a custom deal with the EU - 10%
Revert to trading on WTO terms - 13%
Abolish trade barriers and tariffs unilaterally - 58%
Other, please specify - 2%

Good, I was with the majority on that one. Thanks to everybody who took part.
There has been some mumbling along the usual lines about whether the services like Whatsapp should be forced to provide the police with 'encrypted' messages if the police obtain a warrant. See e.g. PC World (the magazine, not the shop):

"It used to be that people would steam open envelopes or just listen in on phones when they wanted to find out what people were doing, legally, through warranty,” [Amber Rudd, Home Secretary] said “But on this situation we need to make sure that our intelligence services have the ability to get into situations like encrypted WhatsApp."

Rudd told Sky News that end-to-end encryption has its place, but it is not incompatible with providing a system for law enforcement agencies to have access to information with a warrant, if absolutely necessary."

I personally don't see a problem, surely we can accept that a judge can sign off a warrant to tap your 'phone, steam open your letters or search your house if the police make a reasonable case.

Why should Whatsapp messages be any different? That's far from saying that the police should be able to routinely view all messages, emails and so on. The police have always been able to obtain warrants to search houses - that has not led to a situation where they routinely enter people's houses on a whim and have a rummage, has it?

Vote HERE or use the widget in the sidebar.

Saturday, 25 March 2017

Daily Mail on top form

The Daily Mail has pieced together the steps towards radicalisation:

Over the next two decades the burly bodybuilder was convicted of a catalogue of offences including assaults, grievous bodily harm, possession of weapons and public order offences, and was jailed twice.

He drifted from job to job, working as a sales rep and running a television aerial installation business, before meeting his long-term partner Jane Harvey, 48, a successful businesswoman, in 1991.

He then moved into her £700,000 gated home in the village of Northiam, near Rye in East Sussex.

Glorious stuff. After a crime is committed, the press usually say "the police are calling for witnesses", they should add on "… and the Daily Mail are calling for any house price info related to the case, however tangentially".

Friday, 24 March 2017

A good turnout at the Scottish Land Revenue Group event

About 70-80 people attended. A good day out.

Daily Mail on top form

Spotted by MBK in The Daily Mail:

English teacher Khalid Masood, 52, a 'lone wolf' attacker, who was living in the Birmingham area, had a series of convictions for assault and other crimes.

Scotland Yard revealed how Masood was known by a number of aliases and MailOnline can reveal he was born Adrian Elms to a single mother in Kent before his religious conversion. Masood has used the names Khalid Choudry and Adrian Ajao among others.

He grew up in a £300,000 house in the seaside town of Rye, East Sussex and had a long criminal history…

Landlord Farhad Makanvand said he didn't know who had been staying at the flats above his curry house as it was rented out by a separate letting agents.

Mr Makanvand, who also owns the next door curry house Shiraz, said: "I wasn't at the scene last night, I don't live there. I bought the property six years ago for over £300,000. It is contracted to the letting agents so I have no idea who lives there or how many people."

Thursday, 23 March 2017

Anti-Business Rates propaganda doesn't even make sense.

From page 8 of Monday's City AM:

SIX OUT of 10 firms facing increased business rate bills are already planning cutbacks, new figures reveal.

The revaluation of business rates is due to come into force next week, and amid building pressure chancellor Philip Hammond introduced some transitional protection for firms in his spring Budget. However, a survey of London’s firms has now laid bare the number of businesses forced to find savings.

A poll of 500 firms commissioned by the London Chamber of Commerce and Industry (LCCI) has found 60 per cent of businesses facing bigger bills will make cutbacks, including downsizing or relocations. Just over one in four of the London firms planning savings expect to look at reductions to capital investment, while a fifth say they plan to look at reducing staff numbers.

And 17 per cent say the increases, which are expected to hit firms in London and the south east hardest, could see them move some activities outside of the capital...

Yes, Business Rates are inferior to proper LVT in many ways (the legal liability is on the tenant not the landlord; they include the value of the building; revaluations are too infrequent etc), but they're the closest we've got.

Anybody whose done more than five minutes of micro-economics knows that proper businesses try to maximise profits (including a notional cost for proprietor's own time, effort and capital). Decisions on staffing levels, pricing, opening hours, whether to do up the premises etc are all geared up to this.

A change in fixed costs (rent and rates) does not change the profit-maximising mix of staffing levels, pricing, capital investment etc one iota. Why would it? So an increase in fixed costs does not change it either. Day-to-day business decisions remain unaffected, unless the increase is so large as to make the whole business unviable (which will only happen in 0.1% of cases).

In some cases it would make sense to relocate to cheaper premises or start selling online. Great, that means more jobs in lower rent/wage areas (hello Amazon!) and more profitable businesses move into the newly vacant premises in high rent/high wage areas. Win-win, what's not to like?

I could understand if a small business owner on The High Street says "Shit, I'll have to extend my opening hours to generate enough money to keep my business afloat" that's not so nice for him, but good for his customers and the economy overall, so still a win-win.

Wednesday, 22 March 2017

"Universal income would make inequality worse, say people who don't do numbers or logic"

Emailed in by MBK, from The Times:

A Labour proposal to replace benefits with a universal basic income would increase inequality and lead to billions of pounds in extra taxes, an independent review has concluded.

Let's just bathe in the warm glow of that self-righteous non-logic for a minute...

Would a fiscally neutral UBI paid equally to all mean that some small segments of the population receive less in benefits than they do at the moment? Yes, of course (mainly unemployed single mothers - many of whom might well have an undeclared live-in partner).

You can consider that A Good Thing or A Bad Thing, and say that it would "increase inequality" if you wish. In my book, treating everybody the same reduces inequality, the same as everybody gets one vote at elections, the right to vote is free and neither contributory nor means-tested.

In the next breath, the author is wailing about "billions of pounds of extra taxes", implying that people would be worse off all the way up the income scale, which in turn would reduce inequality.

Put the two together, and he is saying that everybody would be worse off, which is mathematically impossible.
If you read the full report by Bath University's Institute for Policy Research, you notice that they have indeed played fast and loose with the numbers and ignored their own logic.

Let's go with their Model 2.4, page 20, which is fairly full-on "UBI set at the level of existing benefits" which they consider to be £67/week per child; £73/week per working age adult; and £156/week per pensioner. The gross cost of this would be £288 billion.

This would be part funded by eliminating the personal allowance for income tax, the basic state pension, Pensions Credits, Child Tax Credits and Child Benefit, Working Tax Credits and the various categories of unemployment benefit (Carer's Allowance, Employment Support Allowance, Income Support, Jobseeker's Allowance etc). They say the shortfall would be £76 billion, to be made up with higher taxes.
Let's iron out the easy mistakes first, if you divide total Child Benefit and Child Tax Credits by the number of children in the UK, it works out at about £50 a week, so let's stick with that. No need to worry about funding it.

The same goes for a Citizen's Pension replacing state pensions (basic and earnings-related) and Pensions Credit. Add up current cost, divide by number of pensioners, comes out at about £156/week, job done, no need to worry about funding that.

Next, paying all UK resident working age adults who hold a British passport £73/week would cost £141 billion. The bulk of working age adults have a job and earn more than £11,000 a year, the intention is not to make them better or worse off.

This can be achieved quite simply by scrapping the personal allowance for income tax and the lower limit for NICs and halving the lower limit for Employer's NICs. The extra tax and UBI net off to nothing, so no problem funding this.

This leaves maybe ten million adults who are unemployed, students, low-wage/part timers earning less than £11,000, and non-working spouses. Nearly all these people currently get something or other - unemployment benefit, Working Tax Credits, Statutory Maternity Pay, Statutory Sick Pay, student loans and grants etc. These people break even if they get a flat £73/week.

We could shave off a few billion by sticking with current rules and paying people under 25 a lower weekly amount. The report ignores the current cost of SMP, SSP and student loans/grants or the under-25 savings, but clearly no problem funding this.

For sure, a couple of million low- and non-earning adults in the UK currently get zilch in benefits (mainly spouses of people with a full-time job), paying them £73/week is an extra cost of maybe £10 billion. But it costs about £10 billion to run the DWP and next to nothing to run a Citizen's Income scheme, so that extra cost covers itself.

So overall nobody knows what the additional cost or saving would be, it's all within the margin of error. Their headline figures of £76 billion and at least 4% on income tax are clearly miles out.

As to higher tax rates, most people would face the same marginal tax rate, a few low-earning non-claimant spouses would face a slightly higher tax rate and several million claimants (and people with children earning more than £50,000) would face much lower marginal tax rates if they find some paid work/increase their earnings.

Added to that is the fact that all this complying and claiming, notifying of change in circumstances, worrying about being overpaid and having to pay it back etc, all the hours wasted filling in forms, traipsing to the job centre, being on hold with a call centre etc falls by the wayside. That's not necessarily a cash cost, but a massive benefit to people in the bottom couple of deciles.

I work in Pensions and Still I Think that this is Wrong headed.

Here ....and it's not a 'raid' you numpties.  You haven't got anything to 'raid' until you've made the contribution.

The fact is that higher rate taxpayers mostly use pension contributions as 'tax planning'.  Given the new access freedoms for pension funds this will likely lead to obtaining contribution relief at higher rates and tax payments on benefits taken at the basic rate and a potential double benefit of tax free transfers on death.

In fact only a relatively small number of taxpayer benefit from higher rate relief for pension contribution.

I for one would wholly support restricting pension contribution tax relief to the basic rate.

Tuesday, 21 March 2017

Fun Online Polls: Immigrants, expat's & trade deals.

The results to last week's Fun Online Poll were as follows:

Citizens from other EU Member States currently living in the UK should…

… all get permanent residence visas automatically - 13%
… apply for British citizenship if they want to stay - 11%
… be made to reapply for work permits every few years - 13%
… given the same rights as other EU Member States give UK citizens - 58%
… be told to leave the UK soonest - 4%
Other, please specify - 1%

Good, I was with the majority on that one, I've absolutely no grudge against foreigners living here (being half a foreigner myself, married to one etc) and in truth I would not like to see any of them made to leave (apart from the crims and the scroungers), but fair's fair and all that.

A good turnout of 104 votes, thanks to everybody who took part.

The gimmick being, this is not actually an EU competence - while the UK (or any other non-EU country) cannot strike trade deals with individual EU Member States, it can very much agree specific rules on immigration/emigration with each individual MS.
While we're on the topic, I'm not sure if we've done what kind of post-EU trade deals we'd like to see, so that's this week's Fun Online Poll.

Vote HERE or use the widget in the sidebar.