Cable\’s logic

Seems rather illogical actually. The bankers weren\’t creating value but were getting high pay. So we should tax them more.

Instead, he suggests cutting taxes immediately for those on lower incomes, balancing this out by raising those for the wealthier. Although in the LibDems\’ proposals this is gained through clampdowns on capital gains tax and tax avoidance schemes, Cable is also theoretically in favour of higher tax rates for the bigger earners instead.

It is a traditional LibDem policy, but one which is becoming ever more popular in the wake of the financial crisis.

Says Cable: "I think we are living in a world which has moved further to the left than a year ago, and it\’s probably caused by the meltdown in the financial system; by the realisation that people who were being paid extraordinarily high bonuses in the City were not actually wealth creating at all, but were creating a vast pyramid selling scheme that has caused gross financial stability. This was not reward for wealth creation; it was reward for excessive risk-taking and ultimately for failure – and that has fundamentally changed peoples\’ attitudes."

Except, you see, those bankers ain\’t gonna be making those high incomes any more, because there ain\’t no profits to pay them from. So what he\’s actually suggesting is that we should raise taxes on those who are still creating value, those with high incomes not in the banking sector.

Which really doesn\’t sound all that sensible. Punish those who didn\’t contribute to the mess as a way of punishing those who did?

Yes, Harry Harperson should perhaps have done this.

He had an unerring eye for the approach which would rankle most with his recipients. Writing to Harriet Harman, then of "The National Council for so-called Civil Liberties", he began: "I saw you on television the other night… Why should an attractive lass like you want to confuse her pretty little head with complicated matters of politics, jurisprudence, sociology and the so-called rights of man? Leave such considerations to us men, that\’s my advice to you. A pretty girl like you should have settled down by now with a husband and a couple of kiddies." If she must work, he continued, she should consider a career such as "that of model, actress, ballroom dancing instructor or newsreader", before enclosing a pound for her to buy a pretty dress and urging the future MP to get in touch with "my friend Lord Delfont".

Cutting VAT (might not) won\’t work

Wish I\’d thought of this myself. But I didn\’t.

Between businesses of course the VAT rate doesn\’t matter, unless you want to argue minor points like cashflow.

In order to work, to provide a fiscal boost, VAT needs to change the prices paid by consumers in the shops.

But prices aren\’t determined by anything so logical as taking costs, adding a margin and then adding VAT. For almost all products, prices are set at "price points" which roughly approximate to what you would get if you did indeed do that calculation.

If by calculation you end up with a price of £1.03 then you\’ll probably have a retail price of 99p and take the lower margin. Ditto calculation to 96p and take the higher margin at 99p. Or £410 and £399 and £370 and £399.

So if items are priced at these price points, at £0.49, £0.99, £4.99, £49.99 and £499.99….how much difference is 2.5% off the 17.5% rate of VAT going to have?

Other than to widen retailer\’s margins, of course?

In other words, will the consumer see anything other than the most marginal benefit?

Further, let\’s say that it is indeed retail margins which will benefit from this. That will indeed turn up in their profit margins. Which we\’ll all be seeing the reports of in 14-18 months time.

Errm, that\’s quite a long time to be waiting for the visible effects of a fiscal boost, isn\’t it?

I guess the real measure of the effectiveness of this, umm, measure, depends on how much of consumer spending is subject to pricing at price points. Anyone know?

Civil servant stupidity

Then his South African friends asked him how he did it. He typed up some sample multiple-choice questions for them, all based on his swotting-up of Life in the United Kingdom, the Home Office text on which the official exam is based. They passed. So he put his questions and some coaching notes on his blog and lots of people started using them. They passed. So he published a book that now outsells a Clarkson. Damned successful foreigners. With their brains. And their ingenious ideas.

His books, he tells me, are not popular with the Home Office. If candidates turn up at an exam clutching a Red Squirrel publication, they are informed that they have been using the wrong material. Clearly, the civil servants are unhappy that someone is attempting to make sense of their test. Until Dillon came along, they had refused to publish any sample exam papers. When he published 400 of his own questions, which proved uncannily prescient, their shroud of mystery was lifted.

Essentially, this bloke has published a crammer to help you pass the citizenship test.

You\’d think that this was actually a good thing, something to be welcomed by those administering the tests, no?

Apparently not. I can\’t for the life of me work out why though.

The purpose of the test is to make sure that those who gain citizenship know about the country they are gaining citizenship of, no? So teaching them about the country they are gaining citizenship of sounds like a very good idea really.

The opposite argument is absurd, akin to demanding that those taking A levels should be those who have never been to school.

So what are the bureaucrats up to?

Well Done Willie!

That idea only lasted a week then.

Last week we were told that we should join the euro forthwith. This week:

Don\’t underestimate the capacity of very low interest rates and a devalued pound to help to put a floor under the economy.

Amazing really, that this week he praises the flexible exchange rate which last week he decided we should abandon.

Government figures

You\’d like to think that they\’d get important numbers correct, wouldn\’t you?

Last night the figures used to estimate the scale of child abuse in Britain were themselves under scrutiny. The annual report of education and children\’s service inspectors Ofsted, published last Wednesday, stated that 282 child deaths had been reported by local authorities across England over the 17-month period ending in August 2008.

According to government sources, Ofsted has now privately admitted this figure is \’misleading\’ and should have been explained or broken down. The figure of 282 is made up of all children who died while receiving any kind of local authority help – including terminally ill children receiving social care and accidental deaths of nursery age children.

In fact, it is likely that the deaths of fewer than 100 children could be attributed to neglect or abuse.

Sheesh.

Recycling to save resources

So, how\’s that going then?

"We are continuing to recycle rather than store 2,000 tonnes of waste a week – and that is costing us £70 a tonne."

Recycling loses money. Hmm, that\’s normally a sign that more resources are being put into the system than are coming out of it. That is, that recycling uses more resources than not recycling.

So, umm, why are we doing it?

Green Party pre-budget report.

The government should use its partial nationalisation of the banking system to exert greater control over the amount and direction of lending. We have to restrict the amount that any bank can lend. We have to restrict the purposes for which they can lend it, emphasising loans that will finance a new low carbon economy.

Mmmmm, can\’t you just smell the freedom and liberty there!

Your and my savings (which is what the banks lend after all) must be put to uses which the Green Party approves of. Never mind what we want our own money to be spent on or lent to, they\’ll take that decision off our hands.

Umm, no: 

Government funds can be used to cut taxes or to create jobs. If used for tax cuts then consumers are likely to spend, especially in the period before Christmas. Because a lot of what is stocked in shops is imported from abroad, the benefit of this consumption will go abroad. That’s in part why we have a permanent trade deficit. As a result of the way our economy is geared, tax cuts tend to create new employment in other countries, and not in the UK. That means we export most of the benefit of tax cuts to other countries, while still having to finance the cuts.

Some 80% of the UK economy is entirely domestic. So whilethere is an arguable point here, it\’s 80% untrue that any stimulus will simply flow abroad.

Although imagine if it is true, that all the stimulus does flow abroad? Is there something wrong with taxing the rich to provide employment and benefit for the poor? We are after all the global rich and the people we buy things from largely the global poor…

 For a green economic policy, there are obvious attractions in a more controlled international financial system that offers a good deal of domestic policy autonomy. This would require the introduction of capital and exchange controls.

The usual failure to understand whose money it is. It\’s not the Government\’s, it\’s not the nation\’s, it isn\’t society\’s. The money belongs to individuals, thus placing restrictions upon where they may move or invest it is a direct restriction upon individual liberty. So bugger off is the correct response here.

It\’s that last, the corporatism, which makes the epithet of "eco-facism" valid.

Excellent piece!

These new laws on prostitution are in fact worse than I had thought.

For starters, the new offence of \’paying for sex with person controlled for gain\’ is so broad that it will be unworkable. Under existing laws \’controlling\’ can include advising what to charge, and \’for gain\’ currently means \’any financial advantage\’. \’Trafficking\’ already includes providing food or transport on a journey – even giving someone a lift to a train station. Theoretically, the proposals criminalise a prostitute\’s landlord as well as her client.

As for trafficking, the only official report from the police operation Pentameter 1 shows a tiny proportion, just 0.11 per cent, of people in the sex industry have in fact been trafficked. A subsequent operation, Pentameter 2, found 167 trafficked people, which is still only 0.21 per cent.

All of which is bad enough but:

The proposals are based on myriad flawed and inadequate reports written by lobby groups who have a vested interest in the criminalisation of clients and the victim status of women.

Couldn\’t be talking about Ms. Bindel there, could we?

What?

Steve Wiggins, a rural development expert at the Overseas Development Institute, said: "There are very few economies of scale in most agriculture above the level of family farm because managing [the] labour is extremely difficult."

Stevie laddie, I\’m sorry but you are severely deluded here. The "family farms" that we\’re talking about are peasants scratching away at an acre or two of soil. There are massive economies of scale from this up to the size of the American or British farm.

Try reading some Paul Collier: what Africa needs is a great deal more industrial and commercial agriculture, not less.

Quite

I\’ve known women who would rather spend their afternoons servicing a punter than scrabbling from low-paid job to low-paid job. Who is Miss Smith to decree that pouring Limelite down my lavatory for a low wage is less oppressive than selling sex?

This Ricardian Equivalence thing

OK, so not even Ricardo thought it actually worked but there is this idea that tax cuts which will be followed by tax rises don\’t provide a stimulus to the economy. For rational people save the tax cuts in order to pay the future taxes. I don\’t think I actually believe this, at least not whollly. However:

The Chancellor will say on Monday that tax increases and a reduction in future spending plans are necessary to pay off the borrowing that will fund short-term emergency tax cuts.

Loudly announcing that taxes will have to rise in the future is a pretty good way of ensuring that more people do indeed save the tax cuts and thus diminish the effects of the boost.

Well done Alistair. So nice having a lawyer trying to run the economy isn\’t it?

Collecting food scraps

The problem with this isn\’t that it\’s just a massive expenditure of time, it\’s that it\’s entirely unnecessary.

Every household in the country could soon be required to keep a separate bin for food scraps as a new scheme to reduce landfill is rolled out across the country.

The purported reason for doing this is as follows:

Phillip Ward, of WRAP, added: "Collecting food waste separately is a very effective way of reducing the amount that gets sent to landfill and the environmental damage this causes."

The "environmental damage" done is the release of methane as the food rots. But we collect the methane (most of it) from such rotting and use it to generate power. Thus we have CO2 as the end product.

Now, if it is separately collected and recycled then it is still used to generate methane (most of) which is collected and used to generate energy. The end product is CO2. Plus, of course, all the extra CO2 generated by having a separate collection system for it. Plus the costs and embedded CO2 of the new digesters.

So we have a system which is more expensive and generates more CO2….and this is supposed to help the environment?

Penalising the punters

I think I can answer this question.

The home secretary has caused a storm with plans to change prostitution laws. She tells Julie Bindel why she is following the global trend to target men who buy sex.

She\’s telling Julie Bindel because Julie Bindel is one of the near hysteric lesbian activists* who have been pushing the line that all prostitution is rape, that all women are forced into it and that it should be abolished (as if we could!).

She explains that demand is one of the main reasons so many women are involved in the sex industry,

I suppose there\’s hope for us all then. At least one Cabinet Minister seems to have realised that "demand" is the reason that most things happen in the economy.

"We need to send out a message to men and to society in general, that most women do not choose to be in prostitution, whereas the buyers have free choice."

Again perfectly correct. Most women do not choose to be in prostitution. There\’s an estimated 80,000 "sex workers" in the country and some 35 million or so women of various ages.  I\’m willing to believe that 34,920,000 out of 35,000,000 is "most".

But that\’s not the question we want to know the answer to. We actually want to know what portion of the 80,000 have chosen prostitution as the least bad of their available options and there the water is murkier. I very seriously doubt whether there\’s more than a few hundred that have been forced into it in the sense of sexual slavery (such slavery obviously being a bad thing and something which is already illegal). I\’m perfectly happy to agree that many more will have been "forced" into it by economic pressures (seeing it as the above "least bad option") but then I\’ve been "forced" into writing for a living rather than riding the paddock ponies at F1 races by economic pressures too: my complete lack of skill at anything at all to do with cars being an unfortunate fact of my life. Similarly, at times I\’ve made my living by washing pots, sorting used ink jet cartridges, risking my life with the Russian metals Mafia, delivering newspapers and waiting table. All of which (at least most of them) earning me less than turning tricks would have done.

It should soon be a criminal offence to pay for sex with someone who is controlled for another person\’s gain – and it will be no defence for buyers to claim that they were unaware that a person was trafficked, pimped, or debt-bonded to their drug dealer or landlord.

We\’re actually at serious danger of debasing the language here. What does "trafficked" mean for example? There\’s what I think everyone would agree was such, kidnapped, smuggled in, held prisoner….a slave in fact. Here\’s what it seems to mean to campaigners like Bindel though….an illegal immigrant who works in the sex trade. And that\’s a much more expansive meaning. For example, somone might have paid to be smuggled, voluntarily, in order to enter the trade. Someone might have simply moved in order to do so: Gary Becker looked at this decades ago and pointed out that becoming a prostitute lowers your social capital. Thus people tend to do it away from home which is where your social capital is essentially located. While women used to move from hometown to next town (and anyone who has travelled on late night InterCity in the 80s and 90s would know that women would travel from S Wales to Swindon for example, the smoking carriages were full of loud conversations about the night\’s takings) with travel ever cheaper, why not country to country?

And "pimped"? Are these twits unaware that many working girls actually prefer to use a pimp? Not read Steven Levitt\’s research, showing that even after the slice taken by the pimp the nett earnings were higher for those who did? This is exploitation in the same way that an actor hiring an agent is.

According to government statistics, 4,000 women and children have been trafficked into prostitution in the UK at any one time, but the police suggest the real figure is far higher – studies have found that at least 70% of women working in UK brothels are trafficked from places such as Africa, Asia and eastern Europe.

This is where our definition of "trafficking" is so important. The use here is "imported" which is not the same at all (see Becker above) as the meaning of "sex slave".

Lithuania and Finland both have laws similar to Britain\’s new approach, making it illegal to pay for sex with a trafficked woman.

If "trafficked" means "sex slave" then this is already illegal in Britan as well. Sex without consent is known as rape, no? If it means imported then you\’d better not think of shagging that Spanish bird you met on holiday and invited over then.

but well over half agreed that paying for sex with a trafficked woman should be criminalised.

Indeed, our varied meanings of "trafficked" again.

In 1984, for instance, Victoria was the first Australian state to legalise prostitution, and the main arguments put forward for the move (including by pimps and brothel owners) were that this would sever prostitution from organised crime and make the trade much safer for the women involved.

The reality does not match that early promise, as underlined by the occupational health and safety advice that is handed out to women by states that have legalised the trade. Women are advised to pretend they have a stomach upset if a buyer "insists on anal sex without a condom"; they are told to be careful when injecting local anaesthetic into their vagina, as it can mask more "serious injuries". (The idea that anyone would inject anaesthetic into their vagina is a stark reminder of the trade\’s brutality.) Then there is the advice that women should "learn basic self-defence", "be aware some clients can be rough" and that, when visiting a buyer\’s home, they should check for signs of a planned gang-rape, including loud music and too many cars in the drive.

Are we to assume that none of these things happen in places where prostitution is illegal? In fact, if you go and scour the net (as I once did for a sadly unpublished book project) you\’ll find the blog of a black escort in London where she says she\’s very glad that it is legal for her to sell here: it means that if she is threatened with violence by a customer she has the same rights to call the police for help as anyone else facing assault does.

This reflects the situation in Nevada, the only US state to legalise brothels, where the illegal prostitution industry is currently nine times larger than the legal one.

That\’s simply shameless. Prostitution is legal in a small number of counties in Nevada. They happen to be the counties with very few people in them. Of course the prostitution trade in Las Vegas (illegal but many people) is larger than that in somewhere with 3 residents and a few horses.

"I am willing to accept that there are women out there who say they have chosen to sell sex, but they are in the minority, and laws are there to protect the majority."

No love, that\’s the part of your case that you haven\’t made yet.

*The phrase here is "lesbian activist", not "lesbian" activist. Bindel\’s not just arguing (correctly of course) that lesbians have as of right the same civil liberties we all do. She\’s arguing other things which come directly from a certain view of human sexuality.