Tim Worstall

Ooops!

Children’s social care costs £3 billion a year more than thought, a government-appointed review has revealed, as experts warn the sector “cannot afford to morally or financially” continue.

They don’t actually know what they’re doing. We’d better have them doing less then, eh?

How stupid do you have to be?

The subject has fallen out of favour for a couple of reasons. One is that those apocalyptic predictions have, so far, proved wrong. The famines did not happen, the world is not running out of resources and the population curve did not move ever more steeply upwards. Improvements in technology meant that humanity got better at producing more with less, and population growth rates crashed in countries that prospered. South Korea’s fertility rate has fallen from nearly five to less than one in 50 years.

While Asia’s growth rate has dropped sharply, Africa’s remains high. That’s part of the reason why this subject has become toxic. As antiracism and anticolonialism have risen up the progressive agenda, so ideas that could be seen as even faintly tainted by the West’s shameful past became unacceptable. Talking about population pressures in Africa is uncomfortably close to saying that there are too many black babies in the world.

Asia grew, fertility fell. Africa’s fertility hasn’t fallen – well, it has, but not so much – so we must send condoms.

Umm, why not do what worked last time? Help Africa grow by buying stuff from them?

Especially since the standard analysis says that family planning affects 10% of actual fertility, it being desired fertility that explains the other 90%. And 90% solutions are better than 10% ones…..

Imagine we accept that this is true

Britain’s most senior civil servant has backed Whitehall critics and admitted that the government does not have the “skills and experience” needed to tackle the biggest challenges facing the country.

In a letter to The Times Simon Case, the cabinet secretary, said many officials lacked the “technical and specialist knowledge” necessary to fulfil the government’s post-pandemic reform plans. He said he agreed with Dame Kate Bingham, the former head of the successful vaccine task force, who this week warned that civil service “groupthink and risk aversion” was leaving the country exposed to a range of future threats from climate change to cyberwarfare.

OK,so what do we do about it? Clearly, once we accept they’re not competent to deal with such questions then we stop asking them to deal with such questions – they’re incompetent, d’ye see?

The British civil service – the only argument we need in favour of minarchy.

Isn’t this a lovely thing

Recep Tayyip Erdogan may have been placing his own future on the line as he pledged to lead Turkey in fighting an “economic war of independence” against markets.

The MMT and monetary theories of Mad³ are in full display here. They’re printing money to spend so as to meet need. They’re not raising interest rates in order to beat inflation because that’s regressive. They’re fighting to maintain the FX value of that currency.

And they’re finding that you can’t control all three at the same time. Which is what will happen to the Bawbee as well.

No doubt the P³ has some reason why this won’t in fact apply but it’s difficult to see what.

As the president forces his central bank into market-rattling interest rate cuts that defy the laws of economics, prices are soaring and the country’s currency is in freefall – along with his people’s confidence.

Yep:

The Turkish president has pursued policies widely rejected by mainstream economists, shredded the central bank’s independence and vowed to fight high interest rates,

Here’s the thing

A useful little eye into mining:

Cornish Lithium has secured an £18m investment to speed up the development of its mining projects as the UK attempts to wean itself off a reliance on Chinese minerals.

OK.

Cornish Lithium argues the reserves underneath Cornwall are “globally significant”, thanks to a huge layer of granite running from the Isles of Scilly in the west to Dartmoor in the east.

Some of the rock is immersed in saline water, meaning it can be pumped to the surface.

There’s, erm, sorta, two types of mining. 1) “Is there anything there”? and 2) “It’s there, now, can we get it out economically?”

This is definitely 2). That Li is there, no doubt about it. As there should be associated with granite and tin. There’s that hot water flowing through the rock. Li is soluble in water, it’s in the water. Cool!

The Q here is whether it can be extracted economically? My bet would be yes. Modern work on desalination plants means membranes and all that are much better understood than they were even two or three decades back. Getting geothermal energy from it as well will aid too.

Now, of course, I don’t actually know, but that’s the way I would bet. Make of that what you will.

For then we come to the next bit. Which is that this sort of geothermal resource isn’t in fact all that rare. I know of at least two more regions where this will be true and I’ve not even gone looking. Knowing that extraction is economic is a public good – can’t stop someone knowing it nor using that knowledge once it exists. So, whether the mine actually makes a profit in the long term is another thing as success here will almost certainly mean those other sources also coming online.

Erm?

Religious believers in Australia will be protected from being sued if they make anti-gay comments, under a proposed law that Scott Morrison, the prime minister, said would guard against “cancel culture”.

Why not just have the one overarching law? Folks can say what they want in the absence of, say, libel and immediate incitement to violence? We could call it free speech or summat?

Just a thing about wealth taxes

Taxing wealth. OK, well, but. The aim here, hopefully at least, would be to tax those who just happen to be wealthy. But not to tax those entrepreneurs who are making the rest of us better off as they build their fortunes.

To tax, ahaha, good fortune but not to tax wealth creation.

Much inherited wealth – the big chunks of it, the great fat gobs, is in trust funds. It’s this generation’s newly created and still growing wealth that is in the easily taxable stuff like equities directly held.

A wealth tax won’t apply to trust funds. But it will to those directly held equities.

So, an actual and real wealth tax will end up taxing those we don’t want to and not those we might want to.

We’ll not tax the Duke of Westminster and we will tax Mike Lynch. Just not the right way around, is it?

Well, yes, obviously

A wealth tax could unfairly hit people who are “equity rich, but cash poor” and lead to a “flight” of high net worth individuals out of the UK, Sadiq Khan has said.

Imagine, just as the set up, that you’re one of those wealthy folks.

A capitalist, almost certainly – among the wealthy there might be a sprinkling of top top musos etc. The trust fund kiddies don’t count here because, well, trust funds are differently taxed.

To be on this rich bastard that must be taxed radar you’re going to be, well rich. Say, £10 million as a starter. At which valuation you can live pretty much anywhere.

OK. So, wealth tax. This is, when we come down to it, a fee for living somewhere. You’ve the choice of living many places, the ability to exercise that choice. Why would you live somewhere where they’re charging you a high fee?

Especially as the rules allow one to pick and choose in part. Organise yourself and you can still have 90 days a year in London – the plays, whatever – and pay no tax here.

Amazing who he falls out with

First, I have now resigned from all association with the Fair Tax Mark, partly because of my concern about this international standard.

Second, the Fair Tax Foundation that runs the Fair Tax Mark has reminded me of my legal obligations not to discuss the details of this issue, and as a result I will not do so.

Third, I do however note that none of those now managing the Fair Tax Mark on a day-to-day basis has any qualifications in or practitioner experience of accounting or taxation, let alone at an international level.

I wish to make clear as a consequence that I am not offering any sort of endorsement for the standard that has been issued, for which I have no responsibility.

My word, yes, this could actually be true

I have already analysed the last available accounts of Bulb. They are not pretty. But, to suggest that they required a capital injection of £1.7bn seems far-fetched, based on what is available on public record.

To put this in context, that level of support amounts to £1062.50 per customer on the basis of the above data, or about half a year’s energy bills for each of them given current prices.

If the government imposed price cap is having that much of an impact then that needs to be stated and the implications for the rest of the market must be spelt out as well.

The impact and implications of that price cap must be spelled out, yes indeedy.

And if support of this scale is required because of the impact of the price cap at a time when wholesale prices remain high, but below their peak, then the obvious implication is that there will be no domestic energy supply companies left in the UK soon because of the losses they must all be sustaining and in that case we face the scenario of a totally failed market rather sooner than I anticipated.

Well, yes, could even be that government setting prices is a damn fool idea. Something to chew upon at least.

French law is just so weird

Judge Sophie Clément said Mr Richard had “committed grave acts by favouring the interests of Mr Tapie at the expense of those of the state”.

Mr Tapie was handed compensation and damages after accusing the state of defrauding him when he sold a stake in Adidas, the sportswear group, to a bank backed by the French government in 2008.

Christine Lagarde, the French finance minister at the time who is now president of the European Central Bank, had pushed through the settlement.

It was later overturned after prosecutors said the process was tipped in Mr Tapie’s favour as a reward for backing Nicola Sarkozy in the 2007 presidential election.

Mr Richard’s case relates to his time as Ms Lagarde’s chief of staff when she was finance minister. She was convicted of negligence in 2016 in relation to the scandal, but faced no fine or sentence due to her “international reputation”.

Political bird gets off because she’s political bird. Aren’t you glad we left political union with that gang of thieves?

American law is just so weird

Three white men have been convicted of murdering Ahmaud Arbery, an unarmed black jogger who was shot dead while running through a residential neigbourhood in Georgia.

Travis McMichael, 35, his father Greg McMichael, 65, and their neighbour William “Roddie” Bryan, 52, were found guilty after a jury deliberated for 11 hours.

Someone threatens you during a riot and you shoot him and that’s not guilty. Some bloke runs through the neighbourhood and you shoot him and that’s murder.

Blimey, who could understand such a mess? Almost as if three’s some weird principle behind all this, wonder what it could be?

Just to clarify on asylum seeking

Any time you say something like “asylum seekers should seek in their first safe country” you get referred to this Full Fact piece. Which is a masterpiece of not quite being clear. It’s necessary to read between the lines more than a little to pick out the real story here.

Do refugees have to stay in the first safe country they reach?

The answer to that is, of course, no. Anyone can, of course, go to any country that will have them.

The trick being performed here is in this phrase:

Incorrect. The UN Refugee Convention does not make this requirement of refugees, and UK case law supports this interpretation. Refugees can legitimately make a claim for asylum in the UK after passing through other “safe” countries.

Sure, anyone can make a claim anywhere.

But there’s a huge difference between who *must* grant a claim and who *may* grant a claim if they should so wish.

The asylum seeker, refugee thing, is a right in international law. Rights are things which must be granted. They are not privileges which may or may not be, they are rights which are due simply as being a human being in this specific situation.

If you are at risk in your own country then you have a right to seek safe haven.

Cool.

However, that *right* extends only to that first safe haven you reach. It’s not the one next door, it’s the first your reach. That first safe haven *must* grant you that asylum, that safe haven. That’s what the right is.

Now, other places might well be willing to grant you safe haven. But they don’t have to. Those after your first safe lace might well do so – and just to be clear I’ve no problem with the UK doing so for all sorts of people in large quantity too – but that is a privilege at their discretion, not a right to be had a of, umm, right under international law.

Which is why people do get denied asylum in the UK as they are deemed to have that right elsewhere – in, perhaps the previous place they were before the UK.

Which is why I say that asylum seekers *should* – please note, not have to – claim in that first safe haven. Because that’s where that asylum is a right to which they have an absolute claim under international law. Claiming anywhere else is a privilege which they may or may not get granted.

As the Guardian says:

There is no obligation under the refugee convention or any other instrument of international law that requires refugees to seek asylum in any particular country. There has, however, been a longstanding “first country of asylum” principle in international law by which countries are expected to take refugees fleeing from persecution in a neighbouring state. This principle has developed so that, in practice, an asylum seeker who had the opportunity to claim asylum in another country is liable to be returned there in order for his or her claim to be determined.

The BBC:

But what happens if they have passed through a safe country on their way to the UK?

There is a general principle observed by many countries that asylum seekers who have passed through a safe third country where they could have claimed asylum can be sent back there in order to make their claim.

All of those waiting in Calais to cross the Channel fit into this category. They are in a safe country but few will have reached France without having crossed another EU border beforehand.

UNHCR:

However, asylum-seekers may be returned to a country that is deemed safe based on reliable, objective and up-to-date information, and where they could have sought asylum provided that a fair process is available to them, there are proper standards of reception and their rights under the Convention will be respected in practice.

Me, I’d say this is all a fair enough basis for saying asylum seekers *should* apply in first safe haven because that’s where they’ve got that legal right to it. Anywhere else it’s a privilege which they may or may not be granted.

And I’ve got the Guardian, the BBC and UNHCR on my side in this too. And, as it happens, international law on asylum seeking.

Plus the law:

7.3 However, as currently drafted, they allow claims to be treated as inadmissible only if
the asylum applicant is accepted for readmission by the third country through which
they have travelled or have a connection. A stronger approach to disincentivise
individuals is needed to deter claimants leaving safe third countries such as EU
Member States, from making unnecessary and dangerous journeys to the UK.

7.4 The changes separate the readmission requirement from the inadmissibility decision,
allowing us to treat applicants as inadmissible based solely on whether they have
passed through one or more safe countries in order to come to the UK as a matter of
choice. They will allow us to pursue avenues for their removal not only to the
particular third countries through which the applicant has travelled, but to any safe
third country that may agree to receive them.

Note the point being made there. The first safe haven point always existed. The change in the law (Dec 2020) doesn’t change that first safe country thing either. It changes the ability to deport to, but not that general ability to refuse an application if this is not first safe country.

Or, The Guardian:

Ministers have quietly changed immigration rules to prevent people fleeing war or persecution from claiming asylum in the UK if they have passed through a “safe” third country, prompting accusations of a breach of international law.

From 1 January, claims of asylum from a person who has travelled through or has a connection to a safe third country, including people coming from EU member states, will be treated as inadmissible.

As you can see that’s slightly garbled from what the law says but that same distinction about safe countries is still made.

As here:

In the first two quarters of 2021, 7 cases were deemed to be inadmissible, meaning there was sufficient evidence that the asylum applicant had travelled via, or has connections to, another safe third country, and that country will take responsibility for the asylum application. The UK is preparing the return of these applicants.

First safe haven might be something the UK government can ignore if it wishes. It might be of minor relevance to the vast majority of cases. It could be that it’s a distinction that *shouldn’t* be made on moral or other grounds. But there’s absolutely no doubt that it’s a concept that does exist in the relevant law.

As to the other country being willing to accept them. This is rather “Hmm, so, does the concept of first safe haven exists” “Err, yes” “So, what do we do about it?”” “Ahh, that’s difficult”. OK, it is difficult, but we have established that the concept exists, haven’t we?

That would be a remarkable coincidence, wouldn’t it?

The message is very clear: the Bank of England clearly thinks that the central bank reserve accounts that are created as a consequence of quantitative easing, and which are held by the clearing banks with the Bank of England, are critical to the financial stability of the UK economy.

As to the question that Bailey poses as to how many hundreds of billions of liquidity are required, I suggest that there is an answer. That answer is not less than £895 billion, which just happens to be the current target sum for quantitative easing, and may be considerably more when the need for green quantitative easing is taken into account.

That the world has changed is true. Bank liquidity used to be – largely – dealt with via interbank lending. That market is pretty dead now, being replaced, pretty much, with reserves at the central bank.

OK, cool. So, how much more of those reserves do we need to ensure the liquidity under the new system. Be a hell of a coincidence if it were just exactly the amount that government has borrowed and pissed away, wouldn’t it?

It would also be true that if we wanted to tighten monetary conditions – something we would if inflation returned – then we’d want to reduce the amount of those central bank reserves, which means reducing or reversing QE…..

Why, hello there higher interest rates

Worse though, I do not like the pretence implicit in this relationship between the Treasury and the Bank of England. Monetary policy in the UK should be under democratic control. The suggestion that it was not was always deeply subversive, and profoundly neoliberal. It is time that this supposed power that is granted to an accountable group was brought firmly back under Parliamentary supervision.

Markets – that’s the people with the money – don’t trust politicians over interest rates and inflation. Shrug, just don’t. So, that independence of the Bank lowers the interest rate that must be paid on government debt. Shrug, just does.

So, why do we want to increase the cost of govt borrowing?

Sorting out Bulb Energy’s accounts

So apparently the energy companies should all be nationalised because:

Second, whatever risk appraisal was undertaken with regard to future cash flows of this company it now looks unlikely that they were sufficient. The assumption implicit in the directors’ comments that there would always be an adequate time lag between moves in wholesale price and the ability to increase tariffs was clearly not true.

It did turn out to be an incorrect assumption, yes. But then there is always that political risk, isn’t there? That government is going to do something as damn stupid as imposing a price cap? Only on the retail market, now wholesale?

I am not suggesting that anyone should have foreseen the increase in wholesale fuel prices that have taken place since March 2020. I would, however, suggest that if the directors were aware of the significant risk to the company then they had a very obvious duty to model the possible consequences of substantial change in that price to determine whether this would have put the company at risk. What now appears certain is that their belief that the use of a variable price tariff would cover any risk without the apparent use of hedging appears to have been misplaced.

Ah, yes, hedging. That’s the thing that to Ritchie is the speculative froth in the markets that we should tax out of existence, isn’t it?

How could you, really, just……

Parliament building and police station burned down during protests in Solomon Islands

Showing us up like that. Yes, yes, I know frustrations with modern politics and all that. It’s also true that we tried and didn’t manage it. But do you have to show up Catholics as political failures quite so graphically?

Err, no

The global fascination with the Royal Family makes them one of Britain’s biggest tourist attractions, bringing in hundreds of millions of pounds to the economy each year.

The same appeal means buyers, particularly foreign investors, are willing to pay a regal premium for properties close to royal residences. In some locations a royal postcode can increase the value of a home by more than half.

The average price of postcodes closest to Clarence House, the London residence of the Prince of Wales and Duchess of Cornwall, sits at just under £2.4m.

This proximity to the royal neighbours adds a premium of 63pc when compared to the average asking price of almost £1.5m in the borough of Westminster, where Clarence House is located.

Palaces tend to be n nice areas. Even, the presence of a palace has led to development, over the years, as a nice lace. Even possibly, folks choose nice areas to build palaces in.

Houses in nice places are worth more. Surprise!