Goodbye, Green Belt!

Last night BBC London News aired a short film I took part in about the Green Belt. As part of a series of ‘authored’ pieces about various solutions to London’s housing crisis, I suggested that we should allow construction on the Green Belt around London to increase the supply of developable land.

Cheshire-htg-fig-1Land, as Paul Cheshire likes to point out, is the key. The graph above shows how closely house price rises have tracked land price rises. Land-use restrictions on the Green Belt are quite strict: under the National Planning Policy Framework, local councils face a very high burden of proof to approve new developments on Green Belt land. If they were made less strict, then the supply of land and housing would increase and the price of both would fall.

I usually think of people who want to preserve the Green Belt as being motivated by financial considerations. If you own your house, you don’t want its value to fall, so you have a strong incentive to oppose any measure that will increase supply. Perhaps a large proportion of people involved in campaigns to ‘protect the Green Belt’ own their own homes. (And if not, that would certainly falsify this view.)

But filming with the BBC made me realize that this explanation is too neat and too unfair. The preservationist I interviewed, Dr Ann Goddard, was not preoccupied with preserving the value of her home – she believed, as many do, that relatively unspoiled natural areas are valuable and important to protect from development. The meadow she took us to was very pretty and I would regret losing places like it as well. Throughout our conversation Ann made it clear that her idea of England was entwined with its image as a ‘green and pleasant land’, not just somewhere for endless suburban sprawl.

Much of that greenery is worth keeping, but I suggest that the question is not ‘what’ but ‘where’. Since Green Belt land rings cities, it is much more difficult for city slickers to access than, say, gardens or parks. And lots of London already is covered in gardens or parks – more than half, according to one estimate. Allowing London to expand outwards would eat away at the Green Belt, but also allow more people to have gardens and for more (and bigger) parks to be built.

I also realized how important symbols can be: to Ann the meadow we went to WAS the Green Belt. If we’d taken her to a piece of intensive farmland (34% of the Green Belt around London) maybe she would have cared less about the prospect of that being turned into a village. And I wonder if focusing on intensive farmland is the key to changing people’s minds. In the end, if the battle over the Green Belt is about ideas and symbols rather than pocketbooks, a change of language might help us.

A masterly piece of political game theory

This is a subject of some controversy so please, put aside your thoughts, passions and logic on the subject itself, abortion, and instead just think about the political tactic being employed here.

In general in the US it is the left that is strongly in favour of the right to abort. In general again, it’s generally the conservative right that is against. Also, again in general, it is the left that is in favour of detailed and sometimes expensive regulation of activity and it’s the right which is against. So, what would be a useful political tactic if you were against the general availability of abortion? Quite, regulate it:

The last restriction under the law goes into effect Sept. 1. All abortion clinics at that point must have upgraded their facilities to ambulatory surgery centers. Busby says many can’t afford it and more will close.

“This would basically force all the clinics to become mini-hospitals,” Busby said. “They have to have hallway widths a certain length, and a janitor’s closet, male and female locker rooms, which is completely unnecessary – and a bunch of other regulations that are really not appropriate or do anything to increase the safety of one of the safest procedures in the country.”

Pro-life groups supported the law, saying it would protect women by making abortion safer. At the time of the passage of the law, The Texas Tribune quoted Republican state Sen. Donna Campbell saying: “There’s nothing in this legislation that will close a clinic. … That’s up to the clinic. If they want to put profit over a person, that’s up to them.”

The right has been saying for years that regulations can be expensive and those who would regulate have been shouting that that’s nonsense for the same amount of time. Rather a case of the biter bit.

Sadly, of course, no one is going to learn anything from this. Certainly not those who generally propose regulation: for do note that while they argue that clinics should not be subject to this level of regulation they’re not, not at all, arguing that mini-hospitals can be trusted to work out whether they need a janitor’s closet for themselves. Still regulation for thee even if not for me.

Time for a human rights review?

The Times law report (15th July) concerned a Muslim school-age immigrant, granted asylum in France, who had come to the UK instead on the grounds that she was not permitted to wear the burka in French schools. She claimed that to be a human right and therefore the Home Secretary was wrong in seeking her return to France.

The rights and wrongs of human rights and clothing indicating religion are not my concern.  The issue here is the extent to which foreigners are entitled to legal representation to fight their cases at UK taxpayers’ expense.  Some lawyers claim that justice has no price but can that really be so?

In this case, Mr Justice Hickinbottom refused a judicial review of the Home Secretary’s decision.  On 24th June, the Court of Appeal, being the Master of the Rolls and two other Lord Justices, resoundingly supported the earlier judgment.  The appellant needed to show that there was a “flagrant violation” of the European Convention on Human Rights.  In this case, there was no violation at all, never mind flagrant.

Although the report does not say so, it is hard to believe that this school-age asylum seeker had the funds to cover the original hearing, still less the appeal. Perhaps we will be paying for a further appeal to the European Court of Human Rights itself even though the ECHR has already ruled several times that France is entitled to ban the burka in schools so long as it does not do so in general.  Other forms of education are available, e.g. distance learning.

Some will feel that an asylum seeker is lucky to be accepted at all and such acceptance should not entitle them, free of charge, to the full panoply of rights built up and paid for by the citizens.  Obviously as time goes by and they integrate, so their rights should build up but not immediately and certainly not before they have gained admission.

One solution would be to require asylum seekers as part of their acceptance to sign, with legal advice, a binding agreement that they are not entitled to legal aid until assimilated into the country as defined by learning the language to conversational level, paying UK taxes for, say, five years and not being found guilty of a crime normally punishable by a prison sentence.

Some will say that the last is both unfair and inefficient.  In effect they would be deemed guilty before being judged and self-defence by someone without the language would clog up the courts.  But the present system lands the UK taxpayer with the not inconsiderable cost of prison followed by a failure to expel them, as we legally can, because deportation is appealed and the Home Office is overwhelmed by cases.  The UK taxpayer funds not only the legal costs of asylum seekers’ “rights” but all the associated civil service, police and imprisonment costs.

Time for a review?

Mariana Mazzucato’s extremely strange economics

Mariana Mazzucato’s got another installment of her rather strange economics in the paper. This is the follow on from the insistence that government funds all innovation. Here’s she’s decrying the rise of “finance” and how it doesn’t actually develop the economy and thus, well, and thus politicians should do it all for us I think.

One interesting little thought is that she doesn’t seem to have understood Piketty:

Indeed, the origins of the financial crisis and the massive and disproportionate growth of the financial sector originated in the 1970s, as finance became increasingly de-linked from the real economy.

It’s also true that Piketty doesn’t really understand his own data either. Yes, there has been a rise in the wealth to GDP ratio and yes, it did start in the 70s. For the US and UK this was a rise of about 150% of GDP. And yes, this has almost all been in financial assets. So we can indeed say that finance has risen in importance as a part of the economy.

But what has also happened is that pensions savings have risen by 150% of GDP over this same time period. That is, that the rise of finance seems very closely correlated with the baby boomers saving for their retirements.

It’s difficult to see this as a problem really.

Then there’s this entirely bizarre point she makes:

In the attempt to “rebalance” economies away from speculative finance towards the real economy, there have been proposals to reform finance so that it helps to fuel more innovation. Various measures have been tried to help those few small and medium enterprises willing to go after difficult high-risk investments, the backbone of innovation. Yet these reforms have been inadequate, slow and incomplete, with the proportion of profits from quick trades in the financial sector, rather than long-run investments, rising not falling. And one of the key tools for long-termism, the financial transaction tax, has still not been applied.

She seems not to have read the EU’s own report on the FTT (which I wrote about here). The EU itself states that the introduction of an FTT will reduce investment in business, so much so that the economy will actually shrink compared to where it would be without the FTT. So Mazzucato is apparently recommending a course of action, in order to increase investment, which we know will actually reduce investment.

It’s an odd policy world she inhabits, isn’t it?

The rest of it is just that we should have a Public Investment Bank and everything will be sweet. Which, given the things that politicians like to invest in (Olympics, HS2, Concorde, write your own list) is a very sweet but most misguided hope.

 

Rising demand hits static supply: what shall we do?

So here’s a little puzzler. Imagine that we had some good or service that was in limited supply. And that then demand for that good or service rose. What could or should we do to deal with  this problem? For obviously some of those who desire that good or service are going to be disappointed given that we cannot increase supply.

The obvious logical answer is that we should increase the price of that good or service. This will, in the way that rising prices tend to do, reduce demand for that good or service. Further, we also know that that limited supply will go to those who value it the most: we working this out by concluding that those willing to pay a higher price are those who do value something more highly.

Then we get the Mail:

What a rip off! Hotel room prices in Glasgow soar 158 PER CENT to up to £448 a night as city prepares to host Commonwealth Games

A night in a hotel will now cost an average of £344 for the Games period
A year ago prices were on average of £78 per room
The most expensive night – Sunday 27 July – will cost an average of £448

That’s the house magazine of the angrier part of Middle England complaining about the solution to that difficult problem that, well, when a sporting event is going on more people want to stay in a city which has, in the short term at least, a static supply of hotel rooms.

No wonder we all have problems getting economically rational political policies put in place, eh?