The Senior Lecturer tells us of the future

And there is a serious need for reversion to former patterns of land use, which will include significant replanting

Apparently we’re to go back to proper organic farming with cowshit as fertiliser. So, plough up every available piece of land so as to be able to feed everyone.

I am not an environmental expert and have never claimed to be.

Well, obviously.

Third, there is the issue of population. Most people don’t mention this, but I will. We are heading for 10 billion people on this planet. That will stress it to its limits. We do have to encourage birth control. There really is no other way to put it. We’re not going to stop population growth. But we do need to manage it.

We are managing it. By getting rich. As people get rich fertility rates fall below replacement levels. Has happened everywhere it has happened. And is happening everywhere it is happening. And contraception is some 10% or so of this. The other 90% is people getting rich. So, to curb population we must all get rich.

It’s impossible to suggest all the ways in which this change can happen,

Yes, quite, that’s why every economist on the subject insists that we must use markets in our solution. Because only markets provide the incentives to explore every possible piece and part of the solution.

So, if continual growth has been the singular prevailing narrative of government for 75 years – and I would suggest it has been – then that can no longer be the case.

Idiot. Actually, twat.

So RCP 2.6 is the one in which we conquer climate change. We o everything necessary and we save ourselves, the ice caps and Flipper.

RCP 2.6
This scenario might be described as the best case for limiting anthropogenic climate change. It requires a major turnaround in climate policies and a start to concerted action in the next few years in all countries, both developing and developed.
Global CO2 emissions peak by 2020 and decline to around zero by 2080. Concentrations in the atmosphere peak at around 440 ppm in mid century and then start slowly declining.
Global population peaks mid century at just over 9 billion and global economic growth is high.

Actually, he’s a cretin, isn’t he?

According to the standard and accepted science solving climate change involves high economic growth.

And if it has been assumed that wealth would trickle down – and that has been the assumption even though the evidence for the theory has been very thin on occasion and virtually non-existent of late – then this approach to the relief of poverty and the redistribution of well-being has to also end. If everyone is to have a chance now that can only happen as a result of positive action by government. Nothing less will do.

What’s actually the economic tale of the past 40 years? The manner in which growth has been pro-poor of course.

Whilst if government has for the last 40 years of the neoliberal era believed it’s been its job to stand back and let business take the lead in society because markets can apparently generate the answers to all problems then we also need to radically change that assumption as well. Markets have led us to where we are.

Oh, right.

Man’s remarkably ill informed isn’t he?

And we’re out of control. The invisible hand has proved to be remarkably malign. Government has to believe in itself like it never has in the time most people alive have known of it. That’s the most massive challenge.

Just a thought but the Millennium Development Goals included the idea that we halve absolute poverty globally. The only one of the targets that was overachieved and early. All due to those neoliberal markets of course, government action had nowt to do with it.

But that then means that government must spend to good effect. And it also means that tax policy must be designed to reinforce the policies of government.

Well, yes, as all the economists have been saying, have a carbon tax.

This is possible. To achieve this goal I suggest that the government must impose a new accounting demand on businesses. All but the smallest of businesses would be required to prepare a plan for them and their supply chains to be net zero carbon by 2030. Those businesses must cost this plan. And they must publish it. And the costs of the whole process of change must be included in their accounts by no later than 2022. If as a result they cannot either indicate how they might make this change, or if they think that they can but cannot see a way to fund that transition then they must be declared carbon insolvent. That would mean that they would not make it to the era when we have a sustainable economy. Let me not beat about the bush. This would mean that they would have to close. And the capital that they now use would have to be reallocated to those businesses that can operate sustainably.

The business of being the Sage of Ely requires transport – not carbon neutral in the Britain of today. Heating of a house at least, not carbon neutral in the Britain of today nor by 2022. Food ain’t carbon neutral here either.

So, looks like we get to close down the business of being the Sage of Ely.

Or we could just ponder that demand in itself of course.

Public transport must be transformed to cut the waste within private transport systems. This may well require nationalisation of large parts of this system to deliver the required degree of co-ordination between networks. The future is not the electric car. The future is either not travelling or doing so on public transport charged with renewable energy.

Even the Soviets allowed you on a list for a car.

I find this question rather boring. What it implies is that we have a choice about doing these things. We don’t. I do have a choice when it comes to the life of my dog – and yes I have one. Given his age there would definitely be a cost I would not pay for him if a vet asked me to do so. I am not apologising for this: that’s, literally, a dog’s life. But ask me the same for my children and there is no price I know of that I would not pay if I had to. And that’s what this is about. How much does this cost? ‘Whatever’, is my answer. And it will still be a price worth paying.

An interesting question. Does the Senior Lecturer also think that any price is worth paying when it’s societal resources? For example, would he demand that more than £30,000 per Qualy be spent upon the lives of his children?

That said, best estimates are that it will cost the UK as a whole at least £50 billion a year, or about 2.5 per cent of GDP.

Abolishing cars and building out public transport by 2030 will cost 2.5% of GDP per annum will it?

But given the climate crisis we face we need to stop the continual flow of funds into the purchase of second hand shares – which is all that stock markets have to sell – and second hand buildings, which is all that most commercial estate agents have on their books. These are utterly unproductive savings mechanisms. We have to instead direct savings to where they might be used – and right now that is likely to be government based savings schemes used to provide capital for the Green New Deal.

Everything that is already built or created therefore has no value as there is no market for it. This will also be true of everything that is built or created as there will be no second hand market for it. At which point how the hell does anyone get their capital back? To, you know, use again to build another thing?

He’s basically demanding that everyone invest with no possibility of exit.

Err, yes, man’s an idiot. And a remarkably illinformed one too.

Now redo the numbers

The tax subsidy the private sector pension now receives annually has already provided the private pension sector with more cash each year than it has paid out in payments to those in retirement. The result is that the situation has already arisen where every single penny of pension paid in this country is at cost to the state.

He’s measuring tax relief now against pensions being paid now.

But the correct calculation is tax relief now as against pensions to be paid from the funds that have received the tax relief. And at that point we’ve also got to work out what will be the tax paid on those pensions so that we can deduct that from the amount of tax relief being offered.

No, I’ve no idea either but that is at least the beginning of getting the sums right.

Amazing how up to date the Senior Lecturer is

But on this occasion she cannot avoid responsibility precisely because her role is constitutional and it is the. constitution that is in jeopardy. She does, therefore, have to act. It is her duty to reject Johnson’s call, which has the sole purpose of denying parliament its proper role.

If she does not do so then I think they days when she has a role are over.

And in that case there is no justification for the civil list.

Her Majesty should think long and hard: I’d suggest there is rather a lot at stake here for her and her legacy as well as the rest of us.

Well, yes:

In the United Kingdom, the Civil List was, until 2011, the annual grant that covered some expenses associated with the Sovereign performing their official duties, including those for staff salaries, State Visits, public engagements, ceremonial functions and the upkeep of the Royal Households. The cost of transport and security for the Royal Family, together with property maintenance and other sundry expenses, were covered by separate grants from individual Government Departments. The Civil List was abolished under the Sovereign Grant Act 2011.

That expansion of the universities to include Islington Technical College was a really great idea, wasn’t it.

Message for the Senior Lecturer

A pension tax trap has hit the Armed Forces, as leaders say it has affected thousands of service personnel. A former defence minister revealed that some senior soldiers had even spurned promotions rather than face a financial loss as a result of the pension rules.

Between 2017 and 2018 there were 3,840 members of the armed forces pension scheme who breached their annual tax-free pensions savings limits.

Earlier this month the Treasury said it would review the controversial tax rules on pensions introduced by the former chancellor, George Osborne, which sees higher earners restricted from putting more than £10,000 annually into pensions without facing taxes.

Marginal tax rates really do actually matter…….

For The Sage Of Ely

A famous theorem in economics states that a competitive enterprise economy will produce the largest possible income from a given stock of resources. No real economy meets the exact conditions of the theorem, and all real economies will fall short of the ideal economy—a difference called “market failure.” In my view, however, the degree of “market failure” for the American economy is much smaller than the “political failure” arising from the imperfections of economic policies found in real political systems. The merits of laissez-faire rest less upon its famous theoretical foundations than upon its advantages over the actual performance of rival forms of economic organization.

If only it were possible to beat this point into him.

Looking around the world, we don’t have any examples of countries with successful model of state-run economic organization that have consistently over the long-term provided a higher level of standard of living or faster growth than the many countries with market-based systems–that is, not just a different set of constraints and rules to a fundamentally market-oriented economy, but a genuinely different model where the economy is run primarily through the political system. That fact tends to confirm Stigler’s suggestion that real-world political failures in economic management can be severe.

Ooooh, we likes this we does

That is spot on. The absurdity that is faced by almost everyone around this country is that what is recycled, and how, varies considerably from place to place. This has to end. If it’s worth recycling then doing so must be enforced and nothing less than a national framework will do. That’s what a Green New Deal requires.

A rigorous examination of what’s “worth recycling”? Bring it on.

Assuming that it will in fact be a rigorous examination of course.

Two little tales about sovereignty

Richard Murphy says:
August 21 2019 at 10:54 am
Fine

You can give a reason

But you can’t explain how to do it and honour our commitments

Nor can you explain how we are still a nation or why you think we passed our sovereignty to the EU when very clearly we never have, in the slightest

So as an argument that’s so full of holes and so not based on truth or reality it takes us nowehere

So. Let us consider the Vodafone tax case. Where Murph was vehement that massive amounts of tax were being dodged. As Richard Brooks was alleging. And English law was stating that those profits in a Luxembourg company in Luxembourg were taxable in the UK. Controlled Foreign Companies, dontchaknow. And the EU demurred. They said that under EU law such profits were not taxable in the UK.

We have a conflict between UK and EU law. Sovereignty is rather defined by whose law wins in such circumstances.

The EU.

And the second. Murph decided that the UK should adopt passport based taxation. It was gently – if sneeringly – pointed out that he couldn’t do that, not regarding other EU countries that is. Would go against free movement of peeps. He accepted that – eventually. UK cannot pass a law to do x because it has given up its sovereignty on that issue.

As, of course, with trade etc.

Now, of course, it’s possible to argue that it’s all worth it. But the statement ” you think we passed our sovereignty to the EU when very clearly we never have, in the slightest” is clearly and obviously colei.

Incentives, incentives

Capital gains tax Entrepreneurs Relief does, in essence, reduce the rate of gains tax by those who sell privately owned businesses. In most situations they pay 10% on their gains rather than 20%. The tax rate is halved.

In the last year for which data is available the relief cost as much as the tax paid on these disposals, or £2.36 billion. Of this £1.73 billion went to just 4,000 people, at a tax savings of more than £430,000 each, on average.

That is wholly unjust. It is a simple boost to those already wealthy. Remember, these people had by definition just picked up gains of in excess of £4 million each. And as I have argued before, the relief makes no sense. It does not encourage entrepreneurial activity at all. It encourages short-termism and selling out rather than developing entrepreneurial activity, both of which are the opposite of what the UK needs.

Nothing about this relief makes any sense at all. It has to go.

Rule number one in economics. Incentives matter.

A corollary of which is that we get less of those things which we tax. Because that reduces the incentive to do those things which are taxed.

We like people being entrepreneurs. They end up – as Bill Nordhaus pointed out – keeping about 3% of the total value created by their endeavours. The other 97% largely flows to consumers in the form of the consumer surplus. We like people working hard to make us richer. Therefore we let them keep more of the already trivial portion of the value created they get to keep in order to create that greater incentive to crack on with it.

This does not make sense in what manner?

Blimey

The biggest claim made by Brexiteers right now is that Remainers do not understand them. If only we tried a bit harder it would be obvious what this is all about, they say.

It’s about national pride; democracy; taking back control; having our own laws; deciding who lives here.

I think those are their claims. Tell me if there are more. Just don’t mention economics: it does not come into it.

D’ye think the Spudmeister has even heard of Patrick Minford?

Oh, right

It did continue. For a bit:

Reply
Richard Murphy says:
August 20 2019 at 10:20 am
The UK has reasonable residence rules now: I have to say that as I helped shape them

We simply do not need domicile to be fair to those arriving or temporary residents : tho0se issues are covered without alternation being required

There is no base cost to entry for people now and there would not be from the change

Reply
Laurence Parry says:
August 20 2019 at 10:34 am
I also helped draft the residence rules (apart from the split year treatment, which is rubbish)

Richard Murphy says:
August 20 2019 at 11:02 am
I do not recall your involvement

James says:
August 20 2019 at 11:30 am
Really Richard?

You helped shape the non-dom rules?

I can’t find any mention of you in the formulation of non-dom rules at all. All I can find is you saying repeatedly that they should be changed.

So if you helped write the rules, why did you do such a bad job of it?

Richard Murphy says:
August 20 2019 at 1:29 pm
I helped write the current U.K. residency rules

A slight difference there

James says:
August 20 2019 at 2:31 pm
I can’t find any record of you writing the residency rules, or indeed being involved in that process at all either.

Other than writing a few blogs about it anyway. I can check the House of Commons library if needed.

Could you point us to where you say you had so much input? Because I can’t find any record of you at all in this process.

Richard Murphy says:
August 20 2019 at 3:08 pm
You clearly do not know how advisory teams work

And that is also your last comment here because you are a troll

Find and replace

Most concerning of all, however, to the Corporate Accountability Network is the fact that this change of heart by the leaders of American business, whilst welcome, includes no suggestion as to how these new priorities will be evidenced or how they will be reported upon. The Corporate Accountability Network believes that unless corporate accounting is reformed so that businesses must report to all their stakeholders then words such as these will be largely meaningless. Our aims is to ensure that the accounts of limited companies are available to all who want to view them, and in a format that might supply them with the information that they need to understand the activities that it undertakes from the user’s perspective as a stakeholder of the company.

Replace “CAN” and “Corporate Accountability Network” with “I, Spud!” – so also “our” and you’ve about got it.

I do hope this discussion continues

Richard Murphy says:
August 20 2019 at 10:20 am
The UK has reasonable residence rules now: I have to say that as I helped shape them

We simply do not need domicile to be fair to those arriving or temporary residents : tho0se issues are covered without alternation being required

There is no base cost to entry for people now and there would not be from the change

Reply
Laurence Parry says:
August 20 2019 at 10:34 am
I also helped draft the residence rules (apart from the split year treatment, which is rubbish)

Richard Murphy says:
August 20 2019 at 11:02 am
I do not recall your involvement

The absurdity of the Visiting Professor

It is almost absurd that when we face a global heating crisis what is of concern in the UK energy market is the fate of small companies trying to make a buck out of a failed system of energy privatisation that has very largely led to consumer rip off, limited real energy supply transformation, and a system so lacking in co-ordination that it can be claimed that when these companies fail people are left without energy suppliers when glaringly obviously the supply to their properties still exists.

If we are to get serious about tackling global heating the nineteen-eighties obsession with energy market reforms needs to be replaced with energy policy intended to deliver zero net carbon as the only issue of real priority.

And in the process we should also have single, fair, tariffs for all so that the age of rip-off ends forever.

This is what the Green New Deal requires. And we need it now.

One single price for all electricity taken from the network. So, no cheaper electricity when there’s lots of it about. Meaning no load balancing when the sun shines and the wind blows. We can throw out all those smart meters then, the entire plan to deal with intermittentcy.

Or if that’s not what he means, tariffs allowing for different prices at different times, it’s still remarkable, isn’t it? A supposed economist arguing that competition doesn’t increase efficiency over time….

The Senior Lecturer will disagree

George Osborne’s tax policies have cost Britain billions, because the super-rich are fleeing the country and taking their wealth with them, statistics have revealed.

The number of non-doms – those not legally domiciled in the UK but who obtain tax advantages here – fell to a record low of 78,300 last year, from 98,500 in the previous year, figures from HM Revenue and Customs show.

The amount of tax directly contributed by non-doms fell from £9.5 billion to £7.5 billion over the same period. Experts said that a string of tax policies introduced under the former chancellor were principally to blame.

Because of course people don’t move for tax reasons and even if they do it’s a very small number of people and they’re the sort who only increase inequality so it’s good they go. So there.

How does this work then?

Let me offer an alternative explanation that I think much more likely than this deeply politically driven hype from the firms servicing this declining market.

It costs to be a non-dom. The charge can be as much as £60,000 a year. It increases the longer a person claims to be non-domiciled.

My suggestion is a simple one. The non-doms might not be leaving. Instead I suspect they may just be choosing to pay their taxes in the UK.

Because £60,000 a year is a lot of money people will volunteer to pay more?

The Senior Lecturer should know the difference between a stock and a flow

OK, about which the Senior Lecturer tells us that:

I would suggest that the answer is simple: it is growing inequality that is creating this situation, plus a structural change in the way that wealth is held.

Now let me be clear, households is all households so in principle this should not be the case, since the ranking should be indifferent to wealth. But if the wealthy hold more of their assets through companies and pension funds invest ever more widely outside the UK, whilst the links between asset owners and their assets becomes ever harder to trace because of nominee holdings, then the likelihood that there will have been a shift of apparent asset holding out of the so-called household sector and into other categories is high. The result is that the net insolvency of a great many UK households becomes much more apparent.

The sectoral balances are the flows between the different parts of the economy. It’s the net change in any one period.

Insolvency is of course the stock position, not the flow. With household wealth (yes, net of liabilities) at whatever it is, £9 trillion or summat, we don’t have evidence that the British household sector is net insolvent.

Stocks and flows matey….