The Pin Factory Blog

We've been endlessly told that the disappearance of the Arctic Sea ice will doom the polar bear. Odd really that currently they're being killed by an excess of Arctic Sea ice.

An interesting point: which should we fear most, socialism or statism? The two are decidedly not the same thing. 

Yet another example of how we are lied to given the mushroom treatment. How many (if any at all?) lives have been saved by compulsory seat belts?

Yes, even in this dumbed down age it is possible to give answers that mean you fail the exam. No, crime is not a good thing because it gives jobs for the lawyers and the police to do.

A contentious but very scary enumeration of the true value of the national debt.

Why ask government to do what you could manage to do for yourself? The answer, of course, is that you don't get to use other people's money to pay for it that way. 

And finally, an excellent new law designed to increase information to consumers is diminishing the information available to consumers. Well done that man. 

George Osborne's speech on tax yesterday, which he delivered at Policy Exchange, was structured around Adam Smith's four principles of taxation: efficiency, certainty, transparency and fairness.

On efficiency, Osborne said we needed to cut corporation tax in order to compete globally. On certainty, he said a Conservative government would think through tax policy properly, with an eye on the unintended consequences. So no more announcing a government policy (like the capital gains tax reforms, say, or the tax on non-domiciled residents) only to have to U-turn a few months later. On transparency, Osborne said he would not implement stealth taxes and would seek to simplify the tax system. On fairness, he repeated his pledge to abolish stamp duty on houses under £250,000 for first-time buyers and raise the inheritance tax threshold to £1 million.

All of which is welcome, sensible stuff. The overall message of the speech was: we want to cut taxes, and we will when we can – but politics means we can’t promise spending cuts, and the economic forecast means we can't be too radical about cutting taxes. From an electoral perspective, Osborne's probably got it right.

Of course, in the long term the best way of making the tax system efficient, certain, transparent and fair would be to implement a flat tax. How about aiming for the following by 2020: a personal allowance of £20,000, with a 20 percent flat tax on all personal income (whether from wages or capital gains, or whatever) above that. Abolish corporation tax and inheritance tax altogether – in fact, get rid of all the other taxes levied by central government. Then make local government self-financing with locally set (and thus competitive) property and sales taxes.

What could be more efficient, certain, transparent and fair than that?

36. "Welfare stigmatizes the poor. We should all be paid a citizen's income."

Welfare represents our decision as a society to help those on hard times. If people become unable to fend for themselves because of sickness or unemployment, society has decided to help them overcome their difficulties and put them back on their feet. For most who need it, it is seen as a temporary support to aid people through difficulties. There are some, permanently incapacitated, who will always need society's support, but these are a small minority.

Welfare is not conceived of as a permanent alternative to employment for those who simply prefer leisure. The healthy young male who prefers to sit at home and spend the day on his computer while he draws job-seeker's allowance is not a legitimate or deserving recipient of other people's support. Others have to pay higher taxes to support his leisurely lifestyle. The single young female who thinks it would be pleasant to have a child should not expect to do so and to live at home with that child, having all her living costs paid for by others.

In such cases the claimant is capable of taking paid employment and of engaging in more responsible behaviour. The presence of a welfare income gives an option for them to choose a dependent lifestyle, and an incentive to prefer it. The problem with welfare has always been how to target it to those who merit society's generosity, without making it available to those who would abuse it.

A citizen's income gives welfare a permanence and universality it was never intended to have. It makes it too easy for people to choose leisure at the taxpayer's expense, rather than becoming a productive part of society. It also involves taking money from most of us in taxation, and giving it back less the huge and wasteful administrative costs such programmes always entail.

It's sad to see a once proud institution enter a death spiral but we do have to consider quite seriously that the LSE might be doing so. The former home of luminaries such as Karl Popper and Freddie Hayek (and educator of some lesser talents) now has as one of its adornments a certain Professor Julian Le Grand who has come up with this idea:

A ban on the sale of cigarettes to anyone who does not pay for a
government smoking permit has been proposed by Health England, a
ministerial advisory board.

It is of course grossly illiberal: we do not need permission to do things. Whether to smoke or not is our right, not an allowance from the State. But rather worse the Professor seems to be incapable of actual thought. The licence might only be £10, but could be made complex to obtain:

"Breaking the new year's resolution not to smoke would be costly in
terms of both money and time ... [This] would probably have a greater
impact on poor smokers than on rich ones, hence contributing to a
reduction in health inequalities."

Sigh. Time is more valuable to you the richer you are, for you have more opportunities. Thus the opportunity cost to the wealthy of queuing to get the permit is greater, meaning such bureaucratic obstacle making will reduce the smoking rate amongst the wealthy more than amongst the poor, leading to an increase, not a decrease, in the beloved "health inequalities".

The money raised would go to the NHS.

Eh? What money raised? Does anyone at all think that a licence, especially one that is deliberately bureaucratically complex, can be issued for £10?

But the ultimate fatuity is that of course such a scheme will only cover the UK. We will still all be free to purchase anywhere else in the EU without such a licence. And still free, as at present, to bring such back into the UK, for the free movement of legally purchased goods is a cornerstone of the entire enterprise.

Meaning, of course, that the numbers who do this will rise, leading to less revenue from the taxation of tobacco sales to pay for the NHS.

None of these effects are, from either my or the Professor's point of view, desirable. Something seems to have changed at the LSE: back in my day we were urged to think before making proposals. 

A reminder that, as in the US, so in the UK. Houses have not in fact become more expensive in recent years. Permission to build a house however has.

As so often happens, the fight to extend recording copyrights having failed in the UK it's now been moved up to the European level: where the idiocy might succeed. 

Extraordinarily dubious statistics from the anti-smoking front. If rates of myocardial infarcts are declining anyway, why should a decline that coincides with a ban on smoking in public places be ascribed solely to the ban? Or at all?

Isn't it wondrous when we have to turn to the nation's cook to get sense spoken on matters political? 

Yet more on the importance of mobile phones to development and how to get more of them and it. 

If the price of drugs is dropping, then supply is growing, yes? The alternative, that demand is dropping, seems unlikely. 

And finally, British builder spotted in Washington DC. 

I imagine that many reacted as I did to the news that a minimum of five hours of high culture is to be included in schools. These ministers come and go, making these announcements as they pass, but little happens on the ground. I wonder if these 5 hours will come before or after the compulsory 3 hours of sport previously promised (but not happened)? Or maybe they'll come after the compulsory cookery hours to be introduced? Perhaps they could be fitted around the promised lessons in "What it means to be British."

Ministers and bureaucrats sit at the centre signing pieces of paper to commit schools to each popular fancy, while hapless teachers shudder and groan at each straw added to an already over-burdened and top-heavy curriculum. Then the fuss dies down, the gloss wears off, and there are no more column inches to be gained, so the initiative is quietly forgotten.

Isn't there a case for giving teachers more discretion in this? Shouldn't head-teachers draw up proposals and put them to parents to see what they think of them? Couldn't education be decentralized so that local schools could offer an education they thought suitable. That way lies parental choice, with the money following the child. That way lies the transformation of education from a monolithic state system into one which tailors itself to the needs of parents and children and the talents of teachers.

In the meantime, would anyone care to guess what the next ministerial initiative will add to the school timetable?

35. "No-one should be given an unfair start in life. That is why there should be no inherited wealth."

Parents seem to want their children to have a better life than they did, and are prepared to devote energy, resources and time in order to achieve it. It seems to be a normal attitude which goes with parenthood. If society tries to thwart it, parents finds ways of achieving the same end. If inherited wealth is banned, then it will be jobs, or patronage, or some other advantage which will be secured. In socialist countries, for example, parents used their influence to secure good government jobs for their children.

Death taxes are very unfair from the point of view of parents. They earn money and pay tax on it, then when they die the state comes along to tax it again, and takes away much of the provision they'd worked so hard to give their children. It removes much of their motive to generate wealth and aid society with new opportunities in the process. From the recipient's point of view, the bequest from parents comes as a lump sum when most have already bought a house, and is available to give them a chance to invest, or even start up a business.

Inherited wealth allows capital pools to accumulate and boost enterprise and economic growth. Without heritable wealth, most family businesses, including such things as shops and farms can be broken up by death, with a consequent economic loss to society. Everyone loses from this, not just the rich, as employees and customers are hit.

In Britain inflation and rising house prices have meant the death tax now hits middle income people, rather than the very rich it was intended for; the really rich plan ahead to escape its net. The tax does more damage to the country's economy and future well-being than is justified by the revenue it brings in.

London, the success story of the financial-services era, is blighted by youth unemployment: 42.9pc of Londoners, aged 16-17, are out of work. Meanwhile young Poles come here and find jobs in a day.

– Jeff Randall in the Daily Telegraph

For the cynics among you:

"It’s such a rip-off. With flowers, dinner and cabs, you’re looking at a hundred quid minimum. Wouldn’t she just prefer the cash instead?"

For 19 more reasons why it's okay to hate Valentine's Day, see The Times.