Raising the personal allowance?

2719

raising-the-personal-allowance

The House of Commons Treasury Committee chairman, John McFall MP, says that raising the tax threshold for low-income workers is 'in the prime minister's mind'. It would mean that instead of paying tax on earnings over £6,035, nobody would face tax until they earned £10,000 or more.

Let's hope that John McFall is right and that what's in the prime minister's mind actually becomes reality for once. £10,000 is roughly what someone working full time on the minimum wage of £5.73 could earn in a year. It's scandalous that people earning less than that should be paying tax at all. Worse, there are millions of people who face an unemployment and benefits trap because of the high tax rates they have to pay. Not only do they pay income tax on low incomes, they also start losing benefits as well. In some cases the effective rate of tax they face is 70% or more. And who's going to work an extra hour at minimum wage rates if 70% of their extra earnings is taken straight off them.

There are so many millions of people on the minimum wage that this tax change would have a really big economic effect. Far more so than Gordon Brown's overcomplicated Tax Credit system. It would entice hundreds of thousands back to work, and hundreds of thousands more to move from part-time work to full-time work. It would help the government to meet its targets on reducing child poverty. And poorer people spend more of what they earn - they don't have the slack to put it aside as savings. So nearly all that money would go straight into the economy, boosting demand for our hard-pressed retailers and producers.

We've been calling for a doubling of the income-tax threshold for years , as part of a plan to reduce and to simplify the taxes on work. Perhaps it has taken economic disaster to make the government see the merit of it. If they have, then the whole country will be the gainers.

Blog Review 832

2717

blog-review-832

Even Paul Krugman (when writing as an economist that is) seems to think that fiscal stimulus simply buys time rather than it is a solution.

Whether you call it political corruption seems to be a point of view more than anything else.

No, tariffs are not the solution and one reason is that you've got to assume that everyone else does nothing about them.

Automating tasks is how we progress: but there might be those who will game an automated system.

A textbook example of creative destruction in action.

History is supposed to repeat itself, first as tragedy, then as farce. Not, as in this case, a tragedy repeating a farce.

And finally, fun for all. The internet anagram server.

Twelve angry men

2709

twelve-angry-men

Should we elect our leaders by lot? There's an ad in the current edition of Standpoint magazine saying just that, and calling for a 'people's parliament' and 'citizens' juries' which apparently, we are told, make much better policy decisions than so-called experts.

I've often said that I'd prefer to be governed by the first twelve people in the phone book than by 650 career politicians and hundreds more party placemen posing as peers. But only so long as none of them actually want to do the job. The problem in any system of government is not how to choose our leaders, but how to restrain them. An elected government with unlimited powers is no better, in my book, than a government chosen by lot with unlimited powers. And I don't think that members of the general public, taken jury-service style off the street for a short stint in government (it couldn't be a long one, because they've all got jobs and businesses to look after) would make better decisions than career politicians. At least the careerists know there are limits - they may be in office now, but eventually they'll have to live in opposition. But people who are parachuted into government for a few weeks or months will be focused entirely on the present. The future won't be their concern.

However our leaders are chosen, we need rules to keep them in their place. In Britain, we developed these rules over many centuries, largely through struggles between kings and commoners (or kings and aristocrats). Trial by jury, habeas corpus, double jeopardy - all the rules that ensure our leaders can't just grab us, torture us, stick us in jail and forget us without some form of due process of law that involves ordinary people as well as officials. The trouble is, in the last ten years all that has been torn up. However we choose our leaders, those basic rules of personal liberty need to be reasserted.

Don't think twice

2710

dont-think-twice

In the ongoing battle between Conservative supporters who want Cameron to take a small government low tax approach, and those who would prefer he sticks close to Labour policies, the former are finally starting to win out. Cameron has announced that if elected he would scrap taxes on basic rate taxpayers' savings and would increase the level of non-taxable income for pensioners by £2,000 a year. The tax cuts will be fully funded by lower public spending.

Cameron is now committed to cut public spending by ₤5 billion. It will no longer be anathema within Conservative circles to hear opinions on the shrinking of the state. Ideally we would see promises of more than a ₤5 billion, though it is a start. In response to Cameron Labour has warned that transport, research and universities would be at risk from Conservative cuts. As these are areas best out of government hands, we can only hope that Labour's warnings come to fruition.

Scrapping taxes on basic rate taxpayers' savings is not so much a move that incentivises saving, but one that goes some way towards not disincentivising it. This will offer a practical and potentially popular alternative to Labour profligacy and waste; failure underwritten by debt ridden public finances. The reality has fallen desperately short of the rhetoric; the mindless mantras Brown has been repeating for the last few months make Tony Blair’s spin look like profound intellectualism.

Of course, Cameron has mantras of his own. To talk of attacking “excessive materialism" makes him sound more like the Archbishop of Canterbury than is really comfortable. However, given the choice, Cameron’s paternalism should perhaps be tolerated. We may have to give him our soul, but at least he will steal less of our money than the chap currently in charge.

Blog Review 831

2707

blog-review-831

Oh dear. Another big name author not quite grasping the difference between income and wealth....stocks and flows, stocks and flows!

It isn't just the corporate fat cats that are causing problems for the Detroit Three.

Sadly, this doesn't come as a surprise. Government consultations are consultations of those who already agree with what the government wants to do, not actual consultations.

Another old story: just what are the costs and benefits of EU membership?

Try treating economics as an art instead of a science.

MV equals PQ: although Netsmith isn't quite convinced that V falling below one is quite the disaster being portrayed.

And finally, how things get better. Gays were jailed 50 years ago (or at least could be), same sex marriage is very new and now such of a (conservative!) politician is fodder for the gossip columns just as with a hetero one, rather than the front page of a scandal mag as it would have been only a short time ago*.

*We're, just in case you hadn't noticed, liberals around here. Classical ones, yes, but both economic and social....

Solving climate change for $2 billion

2708

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Now this is a piece of research into climate change that I can really get behind. It's one of those win/win policies that environmentalists like to tell us are out there. It might even be "no cost" for the value of the fisheries created might be more than the cost of doing the work, the climate change effect coming for free.

OK, OK, reality time, this is very much early stage work and no, we don't know how effective it is going to be.

As a result of the findings, a ground-breaking experiment will be held this month off the British island of South Georgia, 800 miles south east of the Falklands. It will see if the phenomenon could be harnessed to contain rising  carbon emissions. Researchers will use several tons of iron sulphate to create an artificial bloom of algae. The patch will be so large it  will be visible from space. Scientists already knew that releasing iron into the sea stimulates the growth of algae. But environmentalists had warned that to do so artificially might damage the planet’s fragile ecosystem.

We know very well that the basic idea works. Large areas (up to 70% of the global ocean) of the sea are nutrient poor, specifically iron poor. We can see what results when there's a storm in the Sahara for example, and iron rich dust gets blown over the Atlantic: algal blooms. Some such algae, when they die, fall to the ocean floor and lock up the carbon they contain. Others become the beginning of a food chain that results in lots more yummy tuna for us to eat. So, if we deliberately throw iron into the ocean can we create such blooms, such richer fisheries and such carbon sequestration? 

As I say, we know that this basic idea does in fact work, we just don't know how well. We do know that there won't be any appalling side effects, for we actually did this once before: all that soot and slag from all those coal fired ships for a century or so did not lead to catastrophe after all (and yes, they did create areas of higher nutrients and thus more algal growth). But what we want to find out is how much of that carbon captured from the atmosphere goes to the bottom of the ocean and how much goes right back, either from the algae themselves or the fish (and us! Yum!) that feed upon them? A commercial company called Planktos that wanted to conduct this very experiemnt a could of years back thought that 20% was sequestrated for the long term.

20%? On a blog a long time ago and far away I ran through these numbers. Given the cost of iron powder (or as here, iron sulphate) the cost of sequestrating one tonne of carbon would be around 3.3 US cents. Yes, that really is 0.033 of a dollar. To sequestrate all of the 5 billion tonnes of current anthropogenic emissions would thus cost under $2 billion dolllars. Erm, in raw material costs.

Yes, of course, these numbers are wrong. Entirely wrong, very much back of a fag packet wrong. Let's say they're an order of magnitude out. Still costs less than $20 billion annually. Two orders out: still less than $200 billion. Even that, as an annual cost, pales into insignificance against the cost of, say, the Stern Review's prescriptions.

OK, let's imagine that this is indeed wrong. That there's some error (in my calculations, in the basic idea itself perhaps). That still leaves us with a very large question. Why is only one experiment being done upon this? We're being asked to spend trillions upon trillions of dollars over the next few years to "beat climate change" so why isn't everyone and their granny investigating such possibly low cost methods of doing so?

Thre's a cynical little voice in me that says that it's because there's an awful lot of people who aren't as interested in solving climate change as they are in using it as an excuse to impose their vision of the good life upon us.

Accountability remains at large

2668

accountability-remains-at-large

This government is a lot like a rottweiler chewing on a postman's leg: one thing is certain, it's never going to let go. Yet another example of this is the dropping of the plan for directly elected members of police authorities. The ever-increasingly irrelevant Home Secretary, Jacqui Smith, caved into pressure from senior officers and Labour council chiefs, both groups only interested in protecting their much vaunted positions of power from the threat of being made accountable to the meagre serfs of this country.

What is truly eye opening, and eye wateringly painful, are the reasons that were proffered. The weakest argument comes from Ms Smith: that the police force would become 'politicised'. Ahem. I think if she looks at how her department acts with regard to the police force, she may find this has already happened. Then there is the downright crass from Keith Vaz, who fears that a far right organization could capture police authorities. Another politician who needs to open the window and have a look round: the police have already been captured by a bunch of fascists (i.e. the government). And to add further insult to the voters, he piles on the idiocy by claiming that electing authority members would reduce accountability. To this swamp of ineptitude we'll add the vested interests of the Labour Group of the LGA (Local Government Association) who feel that it would fragment the relationship between police and councils. Which can't be a bad thing, considering that the police aren't supposed to be at the beck and call of councillors, unless of course the councillor is a victim of crime.

Wresting control of the levers of power from any politician these days is nigh on impossible; if they are wearing a red rosette it's even harder. In the meantime we shall continue to dream of the day the police are allowed to protect us and do their jobs how they want to. For now they will remain nothing more than a private army for the government to direct against the population.

On the twelfth day of Christmas...

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My true love sent to me: twelve drummers drumming. It probably means the twelve points of doctrine in the Apostle's Creed.

Research conducted jointly by Gloucestershire and Chichester Universities shows that playing the drums for a rock band requires the stamina of a premiership footballer. Tests on Clem Burke, the veteran Blondie drummer, showed that 90 minutes of drumming could raise his heart rate to 190 beats a minute. An hour in concert could burn between 400 and 600 calories.

A dedicated drumming laboratory is now being built at the Gloucester campus to continue the study. Which makes you wonder why our tax-funded universities haven’t got anything better to research.

Blog Review 830

2706

blog-review-830

A very interesting indeed speculation about how advancing science might make certain moral certitudes untenable. It's already true that the ideas of Simon Baron Cohen on systemising and empathic aptitude (on average!) differences between men and women are rejected, not because they are wrong (which of course they might be) but because the implications are uncomfortable to certain such certitudes.

Yes, of course the current crises have people arguing for what they want anyway....whether or not it solves any of the current crises.

This gas crisis. The gas gas crisis, not the American petrol one. Something that would simply go away if we had a proper competitive market.

And no, we do not need to have masses more storage for said gas. It's stored very well right where it is, underground.

Perhaps (and no, this isn't satire) the return of town gas would be a good idea?

All hail the "Lilley Option". It often is the correct thing to do: nothing.

And finally, yes, the rules for the rulers are different from those for the ruled.

The Daily Outrage

2705

the-daily-outrage

The Daily Mail has a large story about how much the NHS is paying to hire agency staff to cover holes in the payroll.

Millions of pounds of health service funds are being wasted employing agency nurses on up to £128 an hour. This is almost ten times the amount paid to an experienced staff nurse  -  and equates to a salary of £250,000. Overall, the health service spent almost £800million on agency doctors, nurses and consultants in 2006-07, according to the figures uncovered in a Freedom of Information request. That could fund around ten hospitals or employ 30,000 full- time experienced nurses.

But the important line is I think this:

He said many nurses were emigrating, partly because the NHS could not help with high housing costs in many areas.

Or if you want to put that more properly, the NHS cannot vary wages across areas with different living costs, for it is bound into a rigid straitjacket of national pay scales. We looked at this near the beginning of last year.

Wages and living costs vary widely across the country but NHS pay (bar a too small London weighting) does not. Thus a nurse of a specific grade trying to live in the SE is in poverty compared to one on the same wage elsewhere. Not surprisingly those parts of the NHS in the more expensive areas of the country find it difficult to recruit and retain staff. They thus have to hire agency staff at great expense....and note that being agency staff is the only way that staff in such expensive areas can earn more than the nationally set NHS wages. This leads to less than desirable outcomes: 

A 10 percent increase in the outside wage is associated with a 4 percent to 8 percent increase in AMI death rates.

That is, in richer areas of the country, where wages are higher, death rates from heart attacks are higher than in areas with lower general wages, because the NHS national wage rate makes hiring and retaining staff more difficult. It isn't just the cost of those agency staff which is the daily outrage, it's that people are dying because we have a national pay scale.

The obvious answer is to abolish the national pay scale and tell hospitals to pay whatever they need to to attract the necessary staff. Sadly it won't happen, for there are those who would insist that death for some is better than any violation of their sense of what is just or righteous. Like, for example, wages set upon supply and demand rather than central planning.