Jag har köpt en ny mobil telefon. En Motorola. Den ser vacker ut. Men jag kan inte skriva alla bokstävar. ”Å” och ”Ö” och ”Ä” saknas. Exempelvis kan jag inte skriva Håkan. Det är dumt eller hur? Mina gamla adresser kan jag inte överfors från min gamla mobil och jag kan inte ändra språket.
När jag anslöt telefonen till datorn, fick jag meddelande som sade att telefonen inte passar med datorns mjukvara. Jag sökte på internet men hittade ingenting.
Nästa dagen ringde jag telefonföretagets så kallade kundtjänst. Naturligtvis svarade en automat.
”Tryck knapp ett... Tryck knapp tre... Tryck knapp ett igen... Tryck knapp fyra... ” Sedan började tråkig musik som heter "When the revolution comes." Den hemska musiken fortsatte många minuter. Sedan sade en röst, ”Var snäll och vänta! Våra kunder är viktiga för oss.” Sedan fortsatte musiken och sedan sade rösten igen, ”var snäll”. Och igen. Meddelandet repeterades några gånger.
Kallas den här kundtjänst! Vilket slags kundtjänst?, tänkte jag.
Femton minuter senare hörde jag en ringning och sedan kom några inspelade svar. ”Alla samtal övervakas och spelas in för att utbilda vår personal.”
Äntligen svarade en mänsklig röst. Det var en kvinna. Jag förstod knappt henne därför att kvinnan talade med någon konstig engelsk dialekt som jag aldrig hade hört förut.
”Hej!” sade hon. Jag heter Tracy. Kan jag hjälpa dig?”
”Igår köpte jag en ny mobiltelefon och jag kan inte flytta mina kontakter och dagbok från den gamla till den nya trots att de både gjordes av den samma tillverkare. Min vän använde sin Apple dator men det var omöjligt. Vi försökte tre timmar igår kväll. Och jag kan varken skriva Å eller Ä eller Ö.”
”Nej, du kan inte använda en Apple dator.”
”Varför inte?”
”Därför att din ny mobil passar inte ihop med Apple datorer.”
”Men säljaren sade att eftersom min gamla mobile passade ihop med Apple datorer, passar den nya också om båda gjordes av samma tillverkare. Det skulle inte vara något problem. Varför blir det problem?”
”Det finns ingen lämplig mjukvara. Du kan köpa mjukvara till Windows. Du kan köpa det på internet. Mjukvaran laddas ner och du betalar på kort.”
”Är du säkert att det fungerar? Jag vill inte köpa den om det inte är säkert. Passar det med min gamla mobil? Passar det med både? Och hur kan man skriva svenska bokstävar?”
”Javisst.” Sedan kom en paus. ”Nej, egentligen är jag inte säker alls. Fråga tillverkaren.”
Sedan ringde jag tillverkaren. Igen var det ”tryck knappen.” ”Var snäll och vänta.” ”Våra kunder är värdefulla för oss.” Och äntligen svarade någon. Den var någon man som också talade med någon konstig dialekt. Han var mycket snäll men kunde inte hjälpa mig. Han sade att telefonen som säljes i Storbritiannien inte passar med Svensk därför kan den inte skriver svenska bokstävar. Trotts att Sverige är medlem i EU.
Jag såldes en telefon men fick bara ett smycke.
fredag 30 maj 2008
Railway electrification back in favour
In 1981 British Rail and the Department of Transport produced a report (Review of Mainline Electrification) which concluded that even on purely commercial grounds not only was 'a substantial programme of railway electrification financially worthwhile' but that the more extensive and faster options would be better propositions than the more modest ones. It also suggested that the most cost effective way to electrify railways would be by a rolling programme - a specialist team of experts would electrify one line and move on to the next.
Since then, the East Coast Main Line was wired to Edinburgh, and a short section of the Great Western main line has been electrified to Heathrow, but that is about it, and so the expertise has been dispersed. Nowhere else in Europe are there to be found busy lines such as the routes through Reading, operating entirely with diesel traction.
Last year there was a petition on the government's web site, referring to the 1981 report and proposing that a rolling programme of electrification be considered. This received a dismissive response from the Department for Transport, the contrary argument being put forward that there were new forms of traction on the horizon, probably based on fuel cells running on hydrogen. It was also emphasised that the main need was to increase capacity, ignoring the fundamental point that the most effective way to increase capacity is to electrify, as electric trains are lighter and have better acceleration than trains where fuel is converted into energy by some means or other, on board the train itself.
It is good to be able to report that since then, there has been a change in direction. In particular, it has been recognised that there are many short stretches of line, which, if electrified, connect with routes already electrified, making it possible to run under electric traction for long distances; this is the so-called "network effect". But it gets better, and Network Rail now is at long last talking about substantial projects which would bring electrification even to places such as Plymouth and Aberdeen.
There are, of course, lines which would never be worth electrifying and at some point a traction policy will be needed for these too. It is these considerations, together with the likelihood that optimum train speeds in Britain are well below 300kph TGV levels, that could lead eventually to a rational rolling stock policy.
Brighton line train services continue to get better
The train services on the Brighton line have gone on getting better under Southern, the Govia group company that holds the franchise.
It took over a mess from Connex, the company that was thrown out. New trains being delivered from Bombardier had a host of teething troubles and were - and remain - essentially unsuitable for this service, being a suburban design of train on a long-distance route. But the teething troubles seem to have been sorted out and with a few interior changes in specification from the originals, it is nearly always possible to find a comfortable seat outside the rush hour. The trains are always cleaned to a high standard, and the windows are not scratched. Punctuality is generally good as well. And the stations are clean and tidy too.
Problems with the ticket machines have also been addressed. This are primarily due to a poor interface and software, but apparently it is in compliance with some national standard which gives limited opportunities for the company to deal with what is wrong. But more machines have now been installed so at least passengers are not delayed behind people who are standing in front of them trying to fathom out how to buy a ticket, and there is no need to arrive ten minutes before in order to be sure of catching your train. A big improvement that could be made would be to modify the machine so that station names can be typed in from the keypad used for the PIN numbers (like a mobile phone keypad) instead of having to use the flakey on-screen keyboard.
A further improvement is due in the autumn with the introduction of trains transferred from the Bournemouth line and no longer wanted by South West trains. The train on the left in the orange SWT livery is in Brighton depot, presumably for staff training. If they don't try to cram in too many seats, the use of these trains - which at one time looked likely to go for scrap - should be a big improvement for passengers on the Brighton line
torsdag 29 maj 2008
In the beginning God created heaven and earth...
Some time after, those with the muscle grabbed most bits of the earth that were worth having, fenced them off, and then allowed their fellow humans onto "their land" only when they had paid the rent they could wring out of them.
The same people then took control of the political system, entrenched their position (literally so) and fixed the laws so the robbery was concealed in a cloak of respectable legality. In reality, it was nothing more than a polite form of chattel slavery.
Over the centuries, this theft led to accumulations of money in the pockets of landowners, who, when the industrial revolution came, were the only ones able to take on the role of suppliers of capital, thereby enriching themselves still further.
And it still goes on under a veneer of civilisation, with sufficient being conceded in welfare handouts - state charity - to stave off revolution.
In the 107 years of Catholic Social Teaching, this fundamental evil has scarcely been spoken of. But a new Social Teaching encyclical is due out later this year. Might it be that this Holy Father will remedy the omission?
måndag 26 maj 2008
The right to choose
When I worked for a London borough in the late 1970s, the union branch, NALGO, had been taken over by a Trotskyite group, the Socialist Workers' Party. Amongst the items on their agenda was the promotion of abortion rights, which they termed "Women's Right to Choose'. Since the union's purpose was to deal with terms and conditions of employment, such a campaign was well outside its remit, and I worked with others, without success, to get the policy overturned. Ultimately, the union branch destroyed itself in a futile and unnecessary strike engineered by the same group of militants, but that is another matter.
How abortion has come to be seen as a progressive cause is incomprehensible except in a world of newspeak where words mean the opposite of what they seem to mean. The photograph, taken just seven weeks after conception, shows that bones are clearly starting to develop. This is not surprising, as anyone who has kept tadpoles will know the speed at which they mature, and it is reasonable to assume that even at this early stage there is a developing nervous system and that the creature is capable of pain. It is, in fact, a human being and is so from birth. On a close look, it can be seen that there never is a blob of jelly.
Freedom to choose means choosing this which is almost unbearable to watch so be warned.
So why has the anti-abortion case made so little headway? One reason, I suspect, is that the running has been made by the so-called Religious Right, who are not known for taking a view on things like cluster bombs, nuclear weapons, economic injustice and all the other issues about which the Catholic Church has much of value to say, but which those people are inclined to selectively ignore, with the result that they are simply discredited whatever they talk about.
Illustration and video provided by the Centre for Bio-Ethical Reform
lördag 24 maj 2008
Ricardo's Law of Rent - every street busker knows it
Every street busker and Big Issue seller knows something about the economy that most politicians and their advisers do not. Location counts. Experts ignore this elementary fact. Karl Marx ignored it in most of his writings and so Marxist economies were run on the principle that location does not matter.
Assuming the busker is adequately competent and picks a good spot, the amount they will earn depends on where they set up their pitch. They will do well at busy stations like Oxford Circus and Victoria. They will do quite nicely at places such as Ladbroke Grove or Hammersmith. They will just about get by at somewhere like Highbury and Islington if they pick their time. It isn't worth bothering at quiet suburban stations like West Finchley.
These are exactly the sort of observations that led David Ricardo to formulate the Law of Rent at the beginning of the nineteenth century. The marginal location - somewhere like Highbury and Islington - sets the rent, since all earnings above the margin comprise the value of the location itself. People would be willing to pay quite a lot of rent at a location such as Victoria, so long as they were left with enough to make it worth their while to perform. In fact, if the rent is not collected in an official and orderly way, it opens the door to criminals who will do the job, as people will still be willing to pay. But nobody will pay rent to busk at a marginal location as then it leaves them with insufficient. In fact, any charge at at the marginal location will put the site out of use.
Modern tax systems ignore the advantages and disadvantages of location. And so those who work at marginal locations are taxed to the point where those locations are not places where anyone can work productively.
In this way, whole tracts of the country become non-viable as business locations. Of course there will always be marginal locations but Britain's system of taxation that ignores geography is a major reason why people drift to London and the South East in search of work, far more than would be the case if taxation took account of the Law of Rent.
And so street buskers and Big Issue sellers have an important lesson for those who are supposed to be making economic policies.
What will replace these trains?
The replacement programme for the Inter City 125, under the mismanagement of civil servants at the Department of Transport, continues to consume resources to no effect- several millions have already disappeared in consultancy.
The specification is calling for a train that can be both diesel and electrically powered, run at 140mph, comply with present safety requirements and weigh less than an HST. Alstom has already dropped out of the procurement programme and Bombardier looks likely to follow suit, which will still leave them with a juicy order for the Thameslink and London Underground replacement, so why should they bother. That leaves Siemens and possibly Hitachi in the running. Hitachi would probably offer a run-on of the train they have supplied for the Channel Tunnel Rail Link commuter services to Kent.
But the whole concept is looking increasingly un-feasible.
What is actually needed? It depends on what view is taken about the future of transport in a world of high energy prices in general and oil prices in particular. If cheap air travel is at an end and people are less inclined to use their cars, the need will be for higher capacity on the railways and speed will matter less. In fact, the railways themselves will also be under pressure to consume less energy, which will mean running at lower speeds.
So what would a sensible procurement policy look like? More rolling stock for 125mph maximum running and plenty of suitable traction. Electric locomotives would best be purchased off the peg, probably from a place like Japan whose standard narrow gauge designs would fit the UK infrastructure, and more electrification is needed to reduce oil dependency. For the rest, all options should be considered - the future might be the hydrogen fueled locomotive using a fuel cell, but that is always just over the horizon and it could be something else altogether.
What does the by-election result tell us?
A lot, yet very little, I would suggest. The Conservatives did not win the Crewe by-election. Labour lost it. Gordon Brown should never have become Prime Minister, and the fact that he wanted the job so much and has performed so badly since he got it is an good illustration of the point made by Plato, that an essential qualification for the leaders of a country is not wanting to do the job.
It is also the case the Labour has got its tax policies in a mess, but nobody else's are any better. All the Conservatives seem to be proposing is to make cuts and savings. Whilst the idea of savings is good in principle, in practice it has tended to lead to more spending as extra staff are taken on to oversee the cuts. In any case, the scope for cuts is limited when the government has so many domestic and overseas committments. An important one of which is to attempt to put right the collateral damage caused by the tax system itself.
The really worrying aspect of the result is that nobody appears able to move out of the present conceptual straitjacket that holds taxation and economic policy in its grip and prevents movement in a useful direction. One might not expect fresh thinking from a party of government caught up with the day-to-day management of events, but the parties of oppositon have no such excuse.
It is shameful that neither the Liberal Democrats or the Conservatives have produced coherent policy options which offer the British people plausible alternatives to the present mess.
It is also the case the Labour has got its tax policies in a mess, but nobody else's are any better. All the Conservatives seem to be proposing is to make cuts and savings. Whilst the idea of savings is good in principle, in practice it has tended to lead to more spending as extra staff are taken on to oversee the cuts. In any case, the scope for cuts is limited when the government has so many domestic and overseas committments. An important one of which is to attempt to put right the collateral damage caused by the tax system itself.
The really worrying aspect of the result is that nobody appears able to move out of the present conceptual straitjacket that holds taxation and economic policy in its grip and prevents movement in a useful direction. One might not expect fresh thinking from a party of government caught up with the day-to-day management of events, but the parties of oppositon have no such excuse.
It is shameful that neither the Liberal Democrats or the Conservatives have produced coherent policy options which offer the British people plausible alternatives to the present mess.
onsdag 21 maj 2008
Tax competition driving business away from Britain
Addressing the CBI annual dinner last night, the Chancellor of the Exchequer, Alistair Darling said:
"A few years ago, one of our airlines used to say, 'We never forget you have a choice'. Today, governments should remember that. Business does have a choice. Business is increasingly mobile.
"Tax rates have to be globally competitive. I am determined that British business will not be the fiscal fall guy. Business is the linchpin of the British economy. We need to ensure that the tax system is competitive and predictable, as well as ensuring that the business environment is attractive to increasingly mobile businesses."
Good. So what is he going to do about it? There is no need to tax businesses at all. The tax can be shifted on to land instead - an ad valorem tax on the assessed rental value of land. Taking the tax off business is the most competitive thing any Chancellor could do. The ultimate in competitiveness, in fact. And the act would in itself raise land values, thereby increasing the size of the tax base and initiating a benign cycle.
Will the Chancellor do such a thing? Of course not. The civil servants at the Treasury were not even prepared to give a hearing on the subject of land value taxation to Dave Wetzel , former deputy of Transport for London. Since there are no good arguments to be put up against it but there are powerful though numerically small vested interests who would be threatened, their mode of operation is by spreading fear, uncertainty and doubt. In a society that is numerically illiterate, there can be no better method. There is no need to attempt to argue the case.
In the meantime, the country's headlong descent into ruination continues unchecked and with no prospect of anything better from an alternative government, as they would just carry on with the same failed policies.
"A few years ago, one of our airlines used to say, 'We never forget you have a choice'. Today, governments should remember that. Business does have a choice. Business is increasingly mobile.
"Tax rates have to be globally competitive. I am determined that British business will not be the fiscal fall guy. Business is the linchpin of the British economy. We need to ensure that the tax system is competitive and predictable, as well as ensuring that the business environment is attractive to increasingly mobile businesses."
Good. So what is he going to do about it? There is no need to tax businesses at all. The tax can be shifted on to land instead - an ad valorem tax on the assessed rental value of land. Taking the tax off business is the most competitive thing any Chancellor could do. The ultimate in competitiveness, in fact. And the act would in itself raise land values, thereby increasing the size of the tax base and initiating a benign cycle.
Will the Chancellor do such a thing? Of course not. The civil servants at the Treasury were not even prepared to give a hearing on the subject of land value taxation to Dave Wetzel , former deputy of Transport for London. Since there are no good arguments to be put up against it but there are powerful though numerically small vested interests who would be threatened, their mode of operation is by spreading fear, uncertainty and doubt. In a society that is numerically illiterate, there can be no better method. There is no need to attempt to argue the case.
In the meantime, the country's headlong descent into ruination continues unchecked and with no prospect of anything better from an alternative government, as they would just carry on with the same failed policies.
Embryology Bill
I do not like the way this is going. The "safeguards" on research, for example, on hybrid embryos will be breached sooner or later, if only out of some scientist's curiosity.
I do not like the provision for artificial insemination of fatherless families. To lose a father from death is a misfortune. To lose a father from divorce is also unfortunate and generally has an adverse impact on the children. But people do not normally get married and have children with the intention of having a family split-up. And some conceptions are accidental. But to deliberately create a child in a situation where that child will definitely not have a father is plain wicked.
Then there is the matter of the abortion laws. I once met a doctor who had worked on a gynaecological ward in a hospital in the 1940s. He told me that the majority of cases were in hospital as a result of botched abortions. There is an understandable reluctance to return to that state of affairs. But killing a person is wrong. What, however, is a person? When does a human life begin? It is impossible to say that it begins at any other point than conception. But at that time, and for a short while afterwards, the person is a blob of jelly and most people would find it difficult to see the blob of jelly as a person.
Long before the time of normal birth, the unborn child is capable of leading, with medical intervention, an independent life. This has been the justification of the 24 week limit. But by that time, the fetus has fully developed nervous system and must undoubtedly feel agonising pain when being torn limb from limb, as happens in an abortion procedure at that stage. Anyone doing such a thing to an animal with that level of sentience would soon get themselves prosecuted by the RSPCA.
This points to a time after which abortion should on no account be permitted: when the unborn child is capable of feeling pain. It ought not to be particularly difficult to establish when that time is; the literature suggests that it is probably around the tenth week after conception, by which time the embryo is metamorphosing into a fetus and clearly recognisable as a little human being. Whilst such a limit would be vulnerable to proposals that the pain could be alleviated by sedation, this would be a good basis for establishing the time limit for abortion.
As it is, parliament has given continuing consent to the operation of extermination centres paid for out of NHS funding. This has a direct impact on our attitude to the living.
I do not like the provision for artificial insemination of fatherless families. To lose a father from death is a misfortune. To lose a father from divorce is also unfortunate and generally has an adverse impact on the children. But people do not normally get married and have children with the intention of having a family split-up. And some conceptions are accidental. But to deliberately create a child in a situation where that child will definitely not have a father is plain wicked.
Then there is the matter of the abortion laws. I once met a doctor who had worked on a gynaecological ward in a hospital in the 1940s. He told me that the majority of cases were in hospital as a result of botched abortions. There is an understandable reluctance to return to that state of affairs. But killing a person is wrong. What, however, is a person? When does a human life begin? It is impossible to say that it begins at any other point than conception. But at that time, and for a short while afterwards, the person is a blob of jelly and most people would find it difficult to see the blob of jelly as a person.
Long before the time of normal birth, the unborn child is capable of leading, with medical intervention, an independent life. This has been the justification of the 24 week limit. But by that time, the fetus has fully developed nervous system and must undoubtedly feel agonising pain when being torn limb from limb, as happens in an abortion procedure at that stage. Anyone doing such a thing to an animal with that level of sentience would soon get themselves prosecuted by the RSPCA.
This points to a time after which abortion should on no account be permitted: when the unborn child is capable of feeling pain. It ought not to be particularly difficult to establish when that time is; the literature suggests that it is probably around the tenth week after conception, by which time the embryo is metamorphosing into a fetus and clearly recognisable as a little human being. Whilst such a limit would be vulnerable to proposals that the pain could be alleviated by sedation, this would be a good basis for establishing the time limit for abortion.
As it is, parliament has given continuing consent to the operation of extermination centres paid for out of NHS funding. This has a direct impact on our attitude to the living.
tisdag 20 maj 2008
Sveriges flagga
I am not keen on flags but this one carries values about which I could have no reason to feel embarrassed for or in need to apologise about - in fact, precisely the opposite.
There is an amusing story about the curious and characteristic faded colours. Originally the blue was a deeper colour, more of a Royal Blue and a sample of the fabric was deposited for reference. But over the years the sample faded and the flag got paler and paler, until the present colours settled on in 1906 and eventually defined and fixed by spectral formula in 1983. See history of the Swedish flag
This freshly ironed one on the Södra Skärgård ferry looks as if it was on its very first day of use. Anyhow, I am always pleased to see it. It means a lot to me for a reason which I do not want to talk about.
måndag 19 maj 2008
I will never have another Motorola product
Motorola has brought out a smart new mobile phone, the V8, as a replacement for the stylish Razr3. It is solidly made and runs on Linux.
But it will not sync with the Mac and the manfacturer's policy is not to support Mac, unlike their earlier models some of which ran iTunes and which synced with not problems. It gets worse. You cannot sync it with Windows XP without buying extra software from Motorola so you would have to type in all your contacts by hand, which is also no good as the phone does not do the character Å which I have quite a few of in my names list. It has no backwards compatibility and will not work with the older version of phone tools, a new version is not supplied nor can one be downloaded from the Motorola web site. Oddly, the phone is recognised as a camera by both XP and Linux, but the "detect phone" process refuses to register the thing. They seem to have gone to considerable effort to ensure incompatibility. They have even replaced the standard mini-USB socket with some fancy special one so a special cable is needed. Amazing, in its way.What are the people in the company thinking of? Or where they all high on some substance or other?
Has the firm got a death wish or is this the usual USA corporate arrogance? Anyway, I am taking it back to Carphone Warehouse. The assistant, not unreasonably assumed that if the earlier model would work with the Mac, then its successor would also. Why would anyone produce a bit of kit and lock out a significant chunk of its potential user base? Motorola's so-called help line is useless and so other than as a mantelpiece ornament, I have no use for it so and I am changing it for a Sony-Ericsson.
I will never buy a Motorola product again.
Proposed stupid legislation item #6
NHS reform is a hardy perennial and here it is back again. There seems to be new legislation every couple of years. Hospital funding to depend on performance, it promises. But how is performance to be measured? By some kind of performance indicator. But then the indicators become targets, and once that happens, actions are distorted so that the targets are met, with all sorts of bizarre consequences.
Proposed stupid legislation item #5
The government is proposing to introduce a new form of savings account for poor people, with money to be matched by government.
Here is more soft-headed and badly thought-out legislation. Poor people are poor primarily because of the tax system. It is the poor who are hardest hit by the "ability to pay" principle, because as soon as they are not quite poor, the system hits them hard and knocks them back down again, so in the end a lot of them not unreasonably give up and make the best of things by surviving on benefit.
This is another example of dealing with the symptoms and not causes. And whose money is the government giving away and what will the "poor" do with it, and when?
Here is more soft-headed and badly thought-out legislation. Poor people are poor primarily because of the tax system. It is the poor who are hardest hit by the "ability to pay" principle, because as soon as they are not quite poor, the system hits them hard and knocks them back down again, so in the end a lot of them not unreasonably give up and make the best of things by surviving on benefit.
This is another example of dealing with the symptoms and not causes. And whose money is the government giving away and what will the "poor" do with it, and when?
Proposed stupid legislation item #4
Reduced welfare dependency is another plank in the government's legislative programme, but how is it going to achieve that?
The entire shape of the tax and benefits system positively encourages people to do nothing rather than something. And the same applies to the property tax system as well, with proposals of levying rates on empty commercial buildings being met by threats of de-roofing which would relieve the owners of the tax.
Another case of things not being thought through properly.
The entire shape of the tax and benefits system positively encourages people to do nothing rather than something. And the same applies to the property tax system as well, with proposals of levying rates on empty commercial buildings being met by threats of de-roofing which would relieve the owners of the tax.
Another case of things not being thought through properly.
Proposed stupid legislation item #3
Another item on the agenda is the proposal to allow councils to levy a supplement to the business rate. The problem is that, first, this is taxation without representation and second, owners of vacant and underdeveloped sites do not make their proper contribution to the business rate in relation to the potential or actual benefits enjoyed by those sites, which are held speculatively or negligently out of use.
The solution to this one is land value taxation, in which sites are valued on the assumption that they are at the optimum permitted use, and subject to the same RATE OF TAX regardless of use - in other words, differences of use are taken into account at the valuation, which is based on current market evidence.
With this tax, it would be possible to have both national and locally determined elements so that people are not making decisions at other people's expense.
The solution to this one is land value taxation, in which sites are valued on the assumption that they are at the optimum permitted use, and subject to the same RATE OF TAX regardless of use - in other words, differences of use are taken into account at the valuation, which is based on current market evidence.
With this tax, it would be possible to have both national and locally determined elements so that people are not making decisions at other people's expense.
Proposed stupid legislation item #2
Changes in banking regulation are another item in the government's programme. All sorts of measures are proposed such as depositor protection. But they key problem is lending for land purchase, which stoked up land values way beyond what was reasonable in the light of their actual values, which are the current annual streams of rental income that properties can yield.
If those streams of rental income were subject to a substantial ad valorem tax, banks would stop lending money for property (land) purchase and land would be useless as collateral for loans. So banks would have to change their mode of operation to cope with the different conditions and the whole land price bubble phenomenon could not happen. And so, by dealing with the cause of the problem most of this proposed regulation would be unnecessary.
If those streams of rental income were subject to a substantial ad valorem tax, banks would stop lending money for property (land) purchase and land would be useless as collateral for loans. So banks would have to change their mode of operation to cope with the different conditions and the whole land price bubble phenomenon could not happen. And so, by dealing with the cause of the problem most of this proposed regulation would be unnecessary.
Stupid proposed legislation item #1
The government is proposing to introduce a mass of new legislation in the next session. On item is improved employment rights, especially for temporary workers.
On the face of things, this is a good idea. What could be better than giving employees more rights? Indeed, what could possibly be wrong with such legislation?
First, employers cannot be forced to employ anyone. If they find the terms of employment onerous, they will just not take anyone on at all. And since, due to the tax system, an employer must pay about 80 pence to the government in tax, for every £1 that the employee receives in take-home pay, which is all that an employee is ultimately concerned about, government already imposes a heavy burden on employees, to the point that labour is mistakenly seen as a COST of production and not a CAUSE of production, which it obviously is. Wages, properly speaking are the share of production that goes to labour, and labour-related taxes are nothing more than an impost on employers; effectively, they are a complicated sort of payroll tax. And to that extent, by adding to labour costs, these taxes act against the interests of workers by creating an artificial scarcity of work.
Which leads to the question of employee's rights. If jobs are plentiful, then labour does not need to be protected by legislation. And if they are scarce, then the legislation is of marginal benefit anyway. And since the tax system is the main cause of scarcity of jobs, the government would do more good to address this problem instead.
Will they? Of course not. They can only tinker, and the Conservatives promise nothing better.
On the face of things, this is a good idea. What could be better than giving employees more rights? Indeed, what could possibly be wrong with such legislation?
First, employers cannot be forced to employ anyone. If they find the terms of employment onerous, they will just not take anyone on at all. And since, due to the tax system, an employer must pay about 80 pence to the government in tax, for every £1 that the employee receives in take-home pay, which is all that an employee is ultimately concerned about, government already imposes a heavy burden on employees, to the point that labour is mistakenly seen as a COST of production and not a CAUSE of production, which it obviously is. Wages, properly speaking are the share of production that goes to labour, and labour-related taxes are nothing more than an impost on employers; effectively, they are a complicated sort of payroll tax. And to that extent, by adding to labour costs, these taxes act against the interests of workers by creating an artificial scarcity of work.
Which leads to the question of employee's rights. If jobs are plentiful, then labour does not need to be protected by legislation. And if they are scarce, then the legislation is of marginal benefit anyway. And since the tax system is the main cause of scarcity of jobs, the government would do more good to address this problem instead.
Will they? Of course not. They can only tinker, and the Conservatives promise nothing better.
lördag 17 maj 2008
British tax system unfit for purpose
Since the beginning of the year, problems with the tax system have been continually in the news.There have been the row over non-domiciles - still not finally resolved; the Lichtenstein tax avoidance affair; the Capital Gains Tax changes and partial retreat; proposed changes in the taxation of profits earned by UK business overseas; relocation of companies to countries with more favourable tax regimes; the threat and partial abandonment of a bin tax; the now widespread realisation of the extent to which fuel prices are inflated by taxation as prices of crude oil go up; and the expectation of significant general inflation, which is effectively a tax on people with sterling balances since it reduces government debt in real terms.
At the same time, there seems to be no limit in the growth of expectations of what government should provide: pensions and care of the elderly; food security; fuel affordability as prices rise; and the continuation, in changing circumstances, of public services which have long been taken for granted. It is also apparent that those public services which have been funded generously are still not living up to people's aspirations.
The tax system, allegedly progressive and based on "ability to pay", is unfit for purpose. It needs to be rebuilt from the ground up, on the benefit principle. What is the benefit principle as it would applied to taxation? It obviously does not mean that those who receive the most in social security benefits should be paying most. The most valuable benefit that people receive from government is protection of their right to property title (land) through the making and enforcement of the law, and of the sustaining and enhancement of the value of that land though the establishment and sustenance of a peaceful society, the construction and maintenance of supporting infrastructure and the provision of public services. This value, variously termed location value or land value, is created by the presence and actions of the community. It is the principal benefit that people receive from the polity at large. The tax that would most closely conform to the benefit principle would be one levied on the rental value of land.
Sadly, such a tax is off the agenda, so much so that it nobody is prepared to publish in the national press a statement that the UK tax system is not fit for purpose. There seems to be an implicit acceptance that the present system is OK, needing only is a bit of tweaking for all to be well.
At the same time, there seems to be no limit in the growth of expectations of what government should provide: pensions and care of the elderly; food security; fuel affordability as prices rise; and the continuation, in changing circumstances, of public services which have long been taken for granted. It is also apparent that those public services which have been funded generously are still not living up to people's aspirations.
The tax system, allegedly progressive and based on "ability to pay", is unfit for purpose. It needs to be rebuilt from the ground up, on the benefit principle. What is the benefit principle as it would applied to taxation? It obviously does not mean that those who receive the most in social security benefits should be paying most. The most valuable benefit that people receive from government is protection of their right to property title (land) through the making and enforcement of the law, and of the sustaining and enhancement of the value of that land though the establishment and sustenance of a peaceful society, the construction and maintenance of supporting infrastructure and the provision of public services. This value, variously termed location value or land value, is created by the presence and actions of the community. It is the principal benefit that people receive from the polity at large. The tax that would most closely conform to the benefit principle would be one levied on the rental value of land.
Sadly, such a tax is off the agenda, so much so that it nobody is prepared to publish in the national press a statement that the UK tax system is not fit for purpose. There seems to be an implicit acceptance that the present system is OK, needing only is a bit of tweaking for all to be well.
The curse of the sound-bite
I was looking at the back numbers of a magazine yesterday, dating from the late 1940s. What struck me was, first, their dull appearance - a mass of grey text with no illustrations, photographs or diagrams; and second, the high quality of the content, well written and with the points carefully made with closely supporting arguments. Today, such a presentation would just be cast aside.
By contrast, I was discussing the content of an email to be sent to Any Answers, the response to the discussion programme Any Questions. I once attended the latter programme live, and it was apparent how closely controlled the questions were. An informal but effective censorship is at work here. It is clear that some subjects would have been absolutely off-limits and for a email to stand chance of being read out, it would have to be reduced to a bare minimum. There is no real opportunity for developing an argument in this kind of forum; discussion can only take place within the boundaries of an accepted agenda.
This is part of a more general pattern. The same can be said of the press, and it has a terrible impact on the quality of public discourse. But perhaps the media should not be blamed. The mass of the British public appear to be satisfied with the limited content of the majority of newspapers, which they are happy to buy and read. The sound-bite culture works strongly to the advantage of those who are anxious to preserve the status quo.
By contrast, I was discussing the content of an email to be sent to Any Answers, the response to the discussion programme Any Questions. I once attended the latter programme live, and it was apparent how closely controlled the questions were. An informal but effective censorship is at work here. It is clear that some subjects would have been absolutely off-limits and for a email to stand chance of being read out, it would have to be reduced to a bare minimum. There is no real opportunity for developing an argument in this kind of forum; discussion can only take place within the boundaries of an accepted agenda.
This is part of a more general pattern. The same can be said of the press, and it has a terrible impact on the quality of public discourse. But perhaps the media should not be blamed. The mass of the British public appear to be satisfied with the limited content of the majority of newspapers, which they are happy to buy and read. The sound-bite culture works strongly to the advantage of those who are anxious to preserve the status quo.
tisdag 13 maj 2008
U-turn on 10p tax rate
There is no shame in making a U-turn if one is going in the wrong direction. The government is to be congratulated on amending its proposals for abolishing the 10p tax rate by raising thresholds. The cost of this, said to be £2.7 billion, is about 0.6% of annual government expenditure of £589 billion. This must be well within the margin of error for budgets. In that taxation of wages is ultimately paid by employers and forms part of labour costs, the longer term effect of this change will be to cut unemployment and the total amount of benefit that has to be paid out. It will also result eventually, though again not in the short term, in a cut in government expenditure insofar as it cuts the cost of employing people in the public sector.
Tax thresholds should be linked to the minimum wage. Minimum wage legislation should not be necessary; the fact that it is needed indicates that something else is wrong that ought to be dealt with properly instead of being merely tinkered with. However, since we have it, a good principle to follow would be that people earning less than 40 hours' pay at the statutory minimum wage should not be liable for income tax.
More fundamentally, the current row shows yet again that the tax system is broken beyond repair. The money needed to run the country should not be raised by soaking the poor, under a system laughably described as being "progressive" and based on "ability to pay". Fresh, and lateral, thinking is needed to devise a replacement. The whole ramshackle structure needs to be demolished and rebuilt from the ground up.
Tax thresholds should be linked to the minimum wage. Minimum wage legislation should not be necessary; the fact that it is needed indicates that something else is wrong that ought to be dealt with properly instead of being merely tinkered with. However, since we have it, a good principle to follow would be that people earning less than 40 hours' pay at the statutory minimum wage should not be liable for income tax.
More fundamentally, the current row shows yet again that the tax system is broken beyond repair. The money needed to run the country should not be raised by soaking the poor, under a system laughably described as being "progressive" and based on "ability to pay". Fresh, and lateral, thinking is needed to devise a replacement. The whole ramshackle structure needs to be demolished and rebuilt from the ground up.
Old people's care problems
Ideally, one carries on as normal until one's very last day, then wakes up one morning feeling a bit dozy, manages to say goodbye to everyone and breathes one's last in the afternoon.
For most of us, it does not work like that. Typically, one is liable to spend two years in some kind of care home. That means at any one time, around 2.5% of people are in care - about 1.5 million at any one time if the population is taken at 60 million. With care costs of around £40,000 a year, that works out at an annual cost of £60 billion. Bearing in mind that over one-third of this is tax, if all the cost was to be paid by the government the net annual cost would be just under £40 billion, which is just under 10% of annual government expenditure.
If payment for care is means-tested, people have an incentive to spend their last penny. But within the lifetime of those who have just retired, inflation has reduced the value of money by a factor of 30 since they began work. Inflation is in effect the taxation of savings, and governments cannot expect people to save unless they are firmly committed to maintaining the purchasing power of money, which they clearly have not been. This is only to be expected as inflation enables governments to borrow money and pay back in depreciated currency, which is the easy way out when people expect more of the government than they are willing to pay for through their taxes.
Underlying this is the fact that tax systems worldwide are not fit for purpose, but until that situation is acknowledged and dealt with, paying for the care of people who are too frail to look after themselves will be a chronic problem.
For most of us, it does not work like that. Typically, one is liable to spend two years in some kind of care home. That means at any one time, around 2.5% of people are in care - about 1.5 million at any one time if the population is taken at 60 million. With care costs of around £40,000 a year, that works out at an annual cost of £60 billion. Bearing in mind that over one-third of this is tax, if all the cost was to be paid by the government the net annual cost would be just under £40 billion, which is just under 10% of annual government expenditure.
If payment for care is means-tested, people have an incentive to spend their last penny. But within the lifetime of those who have just retired, inflation has reduced the value of money by a factor of 30 since they began work. Inflation is in effect the taxation of savings, and governments cannot expect people to save unless they are firmly committed to maintaining the purchasing power of money, which they clearly have not been. This is only to be expected as inflation enables governments to borrow money and pay back in depreciated currency, which is the easy way out when people expect more of the government than they are willing to pay for through their taxes.
Underlying this is the fact that tax systems worldwide are not fit for purpose, but until that situation is acknowledged and dealt with, paying for the care of people who are too frail to look after themselves will be a chronic problem.
söndag 11 maj 2008
A fortieth anniversary
Just 40 years ago the last locomotive to be overhauled in Britain left Crewe Works. A photograph was released with all the works staff posed in front of that locomotive, seen above last week newly overhauled. And that should have been the end of the story.
Such is the appeal of these machines that the locomotive, now 57 years old, most of them in preservation, has once more just received it latest overhaul. Who would have expected it in 1968?
But construction of steam locomotives has never quite stopped. It continued on a large scale in China until the 1980s, and there was a handful of new locomotives built by DLM in Switzerland for mountain railways in Switzerland and Austria in 1993, as well as individual machines built for miniature and narrow gauge lines, and of course the replica Tornado.
Shall we ever see large scale construction resume? Bearing in mind that developments since the 1970s has pushed up their efficiency somewhat and that they will run on just about anything that will burn, I don't think we might not have seen the last of them.
Burma
An economics journalist, Samuel Brittain, once attempted to explain the curious fact that some of the best developed countries in the world, such as Japan, were poorly endowed with natural resources, whereas many richly endowed countries were characterised by large numbers of extremely poor people.
In his view, the reason was that natural resources create rent and the powerful try to get their hands on it, hold on to it and use it for their own benefit. I think the term is kleptocracy. This seems to be the case in Burma. It is rich in natural resources.
On the other hand, the Burmese government cannot be altogether blamed for not wanting to let the west in. No doubt there are all sorts of factions in corporate America who would like to get their hands on the goodies, so say nothing of outfits like Bechtel and Halliburton, and well-funded evangelical Christians who must be itching to try to convert the poor benighted Buddhists to their scripture-based religion.
"Burma is a resource-rich country with a strong agricultural base. It also has vast timber, natural gas, and fishery reserves and is a leading source of gems and jade. Tourist potential remains undeveloped because of weak infrastructure and Burma's international image, which has been damaged by the junta's human rights abuses and oppression of the democratic opposition. Due to Burma's poor human rights record, the U.S. imposed a range of trade sanctions, including bans on the importation of Burmese products into the U.S. and the export of financial services from the U.S. to Burma. In response to the September 2007 crackdown, President Bush announced on September 25, 2007 that the United States would tighten existing economic sanctions on the regime leaders and their supporters. On October 19, 2007, President Bush expanded sanctions to include individuals responsible for human rights abuses and public corruption, as well as individuals and entities who provided material or financial support to designated individuals or the Burmese military government. Australia, Canada, and the EU also have imposed additional economic sanctions on the Burmese regime in response to the crackdown.
"The regime's mismanagement of the economy has created a downward economic spiral. The state remains heavily involved in most parts of the economy, infrastructure has deteriorated, and no rule of law exists. The majority of Burmese citizens subsist on an average annual income of less than $200 per capita. Inflation, caused primarily by public sector deficit spending and the eroding value of the local currency (the kyat), have reduced living standards. The Asian Development Bank estimated in December 2006 that inflation in Burma could reach 30% in 2006-2007, in contrast with official estimates of 10%.
"The military's commercial arms play a major role in the economy. The limited moves to a market economy have been accompanied by a significant rise in crony capitalism. A handful of companies loyal to the regime has benefited from policies that promote monopoly and privilege. State-controlled activity predominates in energy, heavy industry, and the rice trade. Agriculture, light industry, trade, and transport dominate the private sector.
"Burma remains a primarily agricultural economy with 50% of GDP derived from agriculture, livestock and fisheries, and forestry. Manufacturing/industry constitutes only 15% of recorded economic activity, and state industries continue to play a large role in that sector. Trade and services constitute 35% of GDP.
"Foreign investment has declined precipitously since 1999 due to the increasingly unfriendly business environment and political pressure from Western consumers and shareholders. The government conserves foreign exchange by limiting imports and promoting exports. Published estimates of Burma's foreign trade (particularly on the import side) are greatly understated because of the large volume of off-book, black-market, illicit, and unrecorded border trade.
"In the near term, growth will continue to be constrained by government mismanagement and minimal investment. A number of other countries, including member states of the European Union, Canada, and Australia have joined the United States in applying some form of sanctions against the regime.
"Government economic statistics are unavailable and unreliable. According to official figures, GDP growth has been over 10% annually since FY 1999-2000. However, the rate is likely much smaller; the IMF estimates that the growth rate in 2007 was 5.5%. Burma's limited economic growth results largely from its natural gas exports, which account for over half of Burma's export receipts and foreign direct investment. Natural gas exports will increase significantly once production begins from the offshore Shwe and Shwephyu Fields, estimated to hold 5.7-10 trillion cubic feet of natural gas. In 2005-2006, the oil and gas sector accounted for $69 million in foreign direct investment. Corporations based in China, India, South Korea, Thailand, and Malaysia have interests in the exploration and development of several offshore blocks.
"Burma remains the world's second-largest producer of illicit opium--although it amounts to only 12% of the world's total. Annual production of opium is now estimated to be less than 15% of mid-1990 peak levels. Burma is also a primary source of amphetamine-type stimulants in Asia. Although the Burmese Government has expanded its counternarcotics measures in recent years, production and trafficking of narcotics and failure to adequately prosecute those involved remains a major problem in Burma."
Source - Background notes: BurmaUnder Secretary for Public Diplomacy and Public Affairs > Bureau of Public Affairs > Bureau of Public Affairs: Electronic Information and Publications Office > Background Notes
lördag 10 maj 2008
Man deported after wife dies from NHS negligence
I find the following story disturbing. A Filipino man whose wife died after being given an epidural in the arm rather than the spine during childbirth has lost his fight to stay in the UK. Before Mayra Cabrera's death, Arnel Cabrera, 38, was permitted to stay in Swindon because she was a nurse. But Alex Rook, lawyer for Mr Cabrera, confirmed the Home Office had refused his application to stay.
An inquest ruled Mrs Cabrera died unlawfully killed as a result of the actions of the hospital. The coroner also said the Swindon and Marlborough NHS Trust and the midwife who administered the injection was guilty of gross negligence manslaughter. Mr Cabrera was said to be "too upset to speak" and was "devastated and shocked at this decision."
Speaking of the Home Office ruling Mr Rook said: "This is an absolutely dreadful decision. If Mayra hadn't been killed, the family would still be living here. I will be writing to the relevant Home Office ministers asking them to reconsider their decision."
Mr Cabrera came to the UK in 2003 after his theatre nurse wife was recruited by the NHS to work at Great Western Hospital in Swindon. But on 11 May 2004, she died at the same hospital when the potent epidural anaesthetic Bupivacaine was mistakenly injected into her arm rather than her spinal cord, as she was giving birth to the couple's son Zachary. The health trust admitted liability for the error as soon as it realised what had happened.
Speaking about the deportation decision, the Wiltshire coroner, David Masters said: "This is extraordinary. "In view of the verdict reached by the jury following a long and detailed inquest and in view of my comments, I find it difficult to appreciate how the Home Office has reached this decision."
Mr Cabrera's letter of refusal from the Home Office's UK Border Agency said: "It is considered that [Mr Cabrera] has not established a family life with his son in the United Kingdom. As his son [Zachary] remains in the Philippines there are no insurmountable obstacles to his family life being continued overseas."
Mr Cabrera has been fighting a deportation order since her death, and had sent his other son Zachary back to the Philippines as the inquest and legal proceedings took place. However, he had decided to give immigration authorities until next Wednesday before he flew home and effectively give up on his dream of remaining in the UK. In a statement, he said: "I have been unable to return to the Philippines during this difficult period and I desperately miss my young son, Zachary.
Mr Cabrera was subsequently informed after his wife's death that because she was no longer working in the UK he could no longer stay here.
A spokesman for the Home Office said: "All applications for leave to enter or remain are carefully considered on their individual merits."
Read the story here
Who are these vile people in the Home Office who make decisions like this? They should be named and shamed. But come to think about it, the man may well be better off not living in a country where people in authority have such a mind set.
An inquest ruled Mrs Cabrera died unlawfully killed as a result of the actions of the hospital. The coroner also said the Swindon and Marlborough NHS Trust and the midwife who administered the injection was guilty of gross negligence manslaughter. Mr Cabrera was said to be "too upset to speak" and was "devastated and shocked at this decision."
Speaking of the Home Office ruling Mr Rook said: "This is an absolutely dreadful decision. If Mayra hadn't been killed, the family would still be living here. I will be writing to the relevant Home Office ministers asking them to reconsider their decision."
Mr Cabrera came to the UK in 2003 after his theatre nurse wife was recruited by the NHS to work at Great Western Hospital in Swindon. But on 11 May 2004, she died at the same hospital when the potent epidural anaesthetic Bupivacaine was mistakenly injected into her arm rather than her spinal cord, as she was giving birth to the couple's son Zachary. The health trust admitted liability for the error as soon as it realised what had happened.
Speaking about the deportation decision, the Wiltshire coroner, David Masters said: "This is extraordinary. "In view of the verdict reached by the jury following a long and detailed inquest and in view of my comments, I find it difficult to appreciate how the Home Office has reached this decision."
Mr Cabrera's letter of refusal from the Home Office's UK Border Agency said: "It is considered that [Mr Cabrera] has not established a family life with his son in the United Kingdom. As his son [Zachary] remains in the Philippines there are no insurmountable obstacles to his family life being continued overseas."
Mr Cabrera has been fighting a deportation order since her death, and had sent his other son Zachary back to the Philippines as the inquest and legal proceedings took place. However, he had decided to give immigration authorities until next Wednesday before he flew home and effectively give up on his dream of remaining in the UK. In a statement, he said: "I have been unable to return to the Philippines during this difficult period and I desperately miss my young son, Zachary.
Mr Cabrera was subsequently informed after his wife's death that because she was no longer working in the UK he could no longer stay here.
A spokesman for the Home Office said: "All applications for leave to enter or remain are carefully considered on their individual merits."
Read the story here
Who are these vile people in the Home Office who make decisions like this? They should be named and shamed. But come to think about it, the man may well be better off not living in a country where people in authority have such a mind set.
Tesco tax dodging
The Guardian is threatened with legal action from Tesco's for writing about its exploits in avoiding Stamp Duty Land Tax. It is indeed deplorable that a large company should threaten journalists with libel action for questioning its activities - in this case, its exploitation of loopholes in Stamp Duty Land Tax. But to argue, as the Guardian does, that democratically ordained tax laws should be obeyed in the spirit intended by parliament is to defend legislation that is flawed in its conception and sloppy in its implementation. Such criticism is certainly true of SDLT.
This tax was the subject of a consultation exercise in 2002. The Land Value Taxation Campaign was one of the respondents. It argued that Stamp Duty should be abolished, on the grounds that it was already a significant barrier to the transfer of land and, as such, must act against the efficient workings of the economy. The Campaign pointed out that Stamp Duty achieved no social, economic or political benefit, nor was there any moral justification for it except in so far as it was a small occasional tax on land. As regards transfers of land, the Campaign proposed charges just Sufficient to cover the costs involved in running the Land Registry.
The Campaign argued instead for an annual tax on the rental value of the land element of all property, based on market assessments. Continued holding of land titles would be conditional on payment of the tax. Under such a system, avoidance is impossible; compliance is readily enforced with the ultimate right to sequester rent payments or even seize the land, which cannot be transported to a tax haven or demolished.
Had the government and its advisers treated the consultation seriously and taken notice of what had been said, the Tesco situation, and the many others like it, would never have arisen. Criticism should be directed not so much at private companies and individuals who take advantage of loopholes and anomalies in the tax laws, but at the politicians and civil servants who persistently saddle the country with legislation that is unfit for purpose. Until these people do their job properly, we must expect taxpayers to look for ways to run rings round the system.
onsdag 7 maj 2008
Numerical illiteracy strikes yet again
A news item this morning explained that local authorities had been introducing lie detectors in an effort to reduce benefit fraud and it had already saved 100,000s of pounds ie 10 to the power of 5 - a figure followed by five naughts. That is the price of a few terrace houses.
Benefit fraud it was said, is estimated to cost the government £400,000,000 a year, though this can only be a guesstimate. That is 4 x 10 to the power of 8 ie three orders of magnitude more than the amount saved. In other words the saving is trivial. Not worth a mention in a news programme when tens of thousands have just been killed in a natural disaster.
Total government expenditure is just under £500 billion a year, that is 5 x 10 to the power of 11 so is three orders of magnitude more than the fraud. Now although the cost of the fraud would purchase a tram system for a medium sized town, it too becomes trivial in within the overall picture.
But now look at some other figures. The cost of running the tax system is £25 billion a year, which makes it about 5% of the total. That is serious. It would pay for a High Speed Rail line from London to Scotland and still leave some change over. Then there is legal avoidance of tax. Various figures are bandied about but the concensus is that this is also around £25 billion - again, roughly 5% of the total. But there is no need to get fixated on the exact amounts because all of these are dwarfed by the deadweight cost to the UK economy caused by the tax system - that is economic activity that would take place were it not for tax. This is an astonishing £136 billion (IEA figures for 2006) - which is about 12% of Gross Domestic Product. Now that really is something to get concerned about. That means that everyone who actually is working is doing a day's more work every week just for nothing.
The table below, in very round figures, shows the relative scales of the problem.
Benefit fraud it was said, is estimated to cost the government £400,000,000 a year, though this can only be a guesstimate. That is 4 x 10 to the power of 8 ie three orders of magnitude more than the amount saved. In other words the saving is trivial. Not worth a mention in a news programme when tens of thousands have just been killed in a natural disaster.
Total government expenditure is just under £500 billion a year, that is 5 x 10 to the power of 11 so is three orders of magnitude more than the fraud. Now although the cost of the fraud would purchase a tram system for a medium sized town, it too becomes trivial in within the overall picture.
But now look at some other figures. The cost of running the tax system is £25 billion a year, which makes it about 5% of the total. That is serious. It would pay for a High Speed Rail line from London to Scotland and still leave some change over. Then there is legal avoidance of tax. Various figures are bandied about but the concensus is that this is also around £25 billion - again, roughly 5% of the total. But there is no need to get fixated on the exact amounts because all of these are dwarfed by the deadweight cost to the UK economy caused by the tax system - that is economic activity that would take place were it not for tax. This is an astonishing £136 billion (IEA figures for 2006) - which is about 12% of Gross Domestic Product. Now that really is something to get concerned about. That means that everyone who actually is working is doing a day's more work every week just for nothing.
The table below, in very round figures, shows the relative scales of the problem.
Benefit fraud saved by lie detectors........£500,000
Cost of benefit fraud...................£400,000,000
Cost of running the tax system.......£25,000,000,000
Loss due to tax avoidance............£25,000,000,000
Deadweight loss due to tax system...£136,000,000,000
Gross Domestic Product............£1,000,000,000,000
Cost of benefit fraud...................£400,000,000
Cost of running the tax system.......£25,000,000,000
Loss due to tax avoidance............£25,000,000,000
Deadweight loss due to tax system...£136,000,000,000
Gross Domestic Product............£1,000,000,000,000
The Conservatives and that 10p tax band
The Conservative leader, David Cameron, is saying that he would reinstate the 10p tax band. This is worrying. The 10p tax band should never have been introduced in the first place. The solution must be to raise the tax thresholds so that there is no taxation at all on low pay. If the same amount is going to be raised from Income Tax, it will mean higher rates but most people will end up paying just a little more and the low paid will be better off. A further advantage of raising thresholds is that the poverty trap bites less severely, giving an added incentive to work rather stay on benefit, thereby cutting the cost of the government's welfare bill.
Sadly it seems as if the Conservative leader is suffering from numerical illiteracy just like most of the other politicians appear to be or he would have seen the point, which really isn't difficult to put across.
Sadly it seems as if the Conservative leader is suffering from numerical illiteracy just like most of the other politicians appear to be or he would have seen the point, which really isn't difficult to put across.
lördag 3 maj 2008
The Last Routemaster
So the new Mayor, Boris Johnson, wants to get rid of bendybuses and bring back an up-to-date version of the Routemaster, complete with conductor. Excellent idea but he will have his work cut out. The most difficult task will be the accessibility regulations, originating from the EU, which mean that buses must be wheelchair-accessible.
This needs to challenged and derogation sought. It is motivated more by political correctness than a desire to make sure everyone can get about easily and affordably. Apart from anything else, a bus in which people can move about in wheelchairs will be a hazard to other people, for example those who are unsteady on their feet and need plenty of poles and things to hold on to, because grab rails cannot be placed where they are needed. Having had relatives and friends who were confined to wheelchairs, I am aware of the problem but I would certainly not have wanted to take them on any bus. For this, a good special taxi service is needed, using vehicles with proper anchorage points so that the wheelchairs can be held securely. And of course trained drivers.
But making wheelchair spaces on buses means that the vehicles need to be about 3 metres longer than they would otherwise be; a modern bus is about 50% heavier than a Routemaster, and in these days when we are supposed to be using energy more efficiency, this is unacceptable. The bendybus is an unsatisfactory attempt to satisfy the conflicting requirements but it's the rules that need to bend. The concept only works properly as a tram, and if the powers insist, then the money must be found to construct new tramways.
If Johnson manages to secure a victory for commonsense, a further battle will lie ahead in achieving a satisfactory engineering solution. The front-engine rear-entrance bus is, or should be, a simple and robust unit, but whether a manufacturer will actually succeed in producing an adequate design is another matter.
Why Ken Livingstone lost
In addition to the obvious reasons, like the Labour government's generally poor performance for the past nine months, and the huge cost over-run on the Olympic stadium, I suspect that one of the factors which lost Ken Livingstone the election for Mayor of London is that people resent the fact that the Routemasters were replaced by these bendybuses. These are a daily misery not just for the people who have to use them, but for other road users who now have to take extra care to make sure they do not get in the way.
Labour had promised to keep the Routemasters and a substantial amount was spent on giving them a thorough overhaul before they were suddenly withdrawn in 2005.
It is still possible to travel on a Routemaster in London but only on sightseeing services. This one is in service in Helsinki.
torsdag 1 maj 2008
Assets are underpriced
According to Sir Mervyn King, Governor of the Bank of England, assets are underpriced already.
This is interesting. The house next door is up for sale for £389,000. It has been let for about £1200 a month, around £12,000 a year net. That makes the yield just over 3%. You can get 6% by putting your money in a building society. Northern Rock pays 6.15%. So the house next door is not underpriced.
So where are these underpriced assets?
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