Wednesday, 17 December 2014

CIA torture, ironic really

The US Senate Intelligence Oversight Committee has published its massive catalog of the CIA's torture of Islamic "detainees". It's over 500 pages long and gives gruesome details of simulated drownings (up to 20 per day), rectal feedings and food and sleep deprivation by interrogators - followed by medical officers asking the prisoner if it hurts and handing out an aspirin! (Bureaucracy beats torture.)

The irony comes from the fact that for decades the CIA has been suspected of working on advanced and illegal mind control techniques such as MK:ULTRA with sophisticated use of drugs and electrical fields. MK is a Germanic reference to Mind Control.

And yet when the need is there, it turns out all they know how to do is rough people up and pour water on them.

We're getting richer (or maybe poorer)

Yes, we really are getting richer. Yesterday the ONS published their CPI number and it was 1.0%. Today we have the earnings growth for the year and it's 1.4% - so we are on average 0.4% richer on the year.

Only a curmudgeon would point out that the RPI number was 2.0% so against that metric we're actually 0.6% poorer on the year.

In  practice everyone's  personal inflation number is going to be different so whether you are richer or poorer is down to you. But it's unusual for either of the big inflation numbers to be below earnings growth so some cause for note, if not actual celebration.

The underlying cause for inflation being down is the Saudis still trying to bankrupt the American shale oil producers. Oil is down to $60 per barrel today. This is causing pain in the oil exporting nations, especially Russia, Venezuela and Brazil but for importers it's free money (kind of) and for the last ten years the UK has been a net importing nation - not generally considered a good thing but it's working for us at the moment.

The Chinese economy is also cooling down and this is stopping them buying up stuff we want, like food. So our food inflation rate is also reduced. It's win-win at the moment.

If you're determined to find a fly in the ointment then it's worth noting that UK house price inflation is 10% on the year - and that's an average of much higher numbers in London and South East and flat or falling numbers elsewhere in the UK. London/SE prices are being driven up by expat Chinese and Russians buying up our housing stock - and quite often keeping the houses empty so not helping our housing shortage at all. This needs to be sorted out, we cannot have foreigners buying up the country.

Wednesday, 3 December 2014

Autumn Statement - 2014

The Chancellor, George Osborne, has this afternoon graced us with his autumnal statement in which he glossed over the not-so-good state of the economy and then showered us with goodies so we vote Tory in May next year.

First he announced that UK GDP this year would grow at 3% - at rate higher than any other G7 or Western country, but then he admitted that this was a one-off aberration as the rate would fall in future years.

He told the House that the deficit was falling and would only be £91.3bn this year - somehow not finding time in his packed fifty minutes to mention that back in his March budget he predicted borrowing of about £7bn less than that. Unfortunately tax receipts are down and the sums do not add up anymore.

Despite breaking not only his 2010 borrowing promise, and this year's promise, he none-the-less intends to legislate a "Charter on Budget Responsibility" so that future governments cannot push the country even further into the red. Pot, kettle, black much?

For the record the Chancellor intends to borrow  heavy in 15/16 and 16/17 but then run a surplus of £4bn in 2018/19 and a whacking surplus of £23bn in 2018/19! So a balanced budget is in the cards; it's just that it is always five years in the future.

Then, despite the dodgy fiscal situation, Georgie launched into his raft of give-aways: more money for GPs; pay off World War I loans; fuel duty frozen; air passenger duty cancelled for children; pension death tax (currently 55%) abolished; ISA death tax abolished; tax allowances at the basic and higher rates increased (a tiny bit) from next year, and ...drum roll... the big one coming up... stamp duty on houses (SDLT) massively reformed.

From tomorrow, yes cuts in at midnight - he's keen on this one, SDLT will only be charged on the tranche the rate applies to. Previously the rate applied to the entire purchase price of the house. This will be a big saving to anyone buying a house  for £900K or less (ish) and should put an end to stupid prices. (The slight downside is that there is probably a bulge of houses priced at £249,999 because to go over the quarter mil would tip the house into the next band. Likely these houses will be re-priced higher to "share" the gains between buyer and seller.)

The Chancellor did wield a little fiscal stick, but not in the direction of anyone likely to vote. As a little "mansion tax" of his own, Osborne is introducing a couple of higher SDLT bands: 10% up to £1.5m and 12% on everything above that. Non-doms will have to pay more for their status, previously it was £30K a year, now £60K or even £90K depending on how long they have been in the UK.

Also multinational corporations which move their profits to tax havens will be taxed 25% on those profits as they leave the country. (This sounds like a scheme extra-ordinarily difficult to legislate. Define tax haven? When is money profit rather than a necessary business expense?) This will be known as the "Diverted Profits Tax" - should be popular with the people even if difficult to enforce.

Osborne also made a few random references to policies he obviously likes but are nothing to do with the Treasury as such: English votes for English laws got a mention. It seems he is taking a position on the whole devolution debate.

Shadow Chancellor Ed Balls rose to respond. He started off floundering, not really knowing what to say, and mainly asking Osborne for clarifications on what he had announced, but then someone handed him a copy of the Office for Budget Responsibility's report; he had a quick ferret through it and realised how much Georgie Boy had left out and gave him a few broadsides.

It has to be said George Osborne is not looking a well man. He has developed mad staring eyes and a rabbit-in-the-headlights look about him. He has also adopted Gordon Brown's habit of gabbling at breakneck speed through speeches in the hope no-one will notice what is he not saying. If he had good news he would slow down and give it time to sink in. These are not good signs for UK Plc. Perhaps tellingly, France's biggest bank has advised its clients to pull out of the UK while they can.

Tuesday, 2 December 2014

What could the Chancellor do to boost tax revenue?

Over on his blog, John Redwood MP asks how the Chancellor could increase the tax take. It seems HM Treasury is feeling the pinch on many fronts: income tax down, North Sea oil revenues down, corporation tax down.

The Chancellor is going to need a lot of money soon - tomorrow in fact. It's the "Autumn" statement (some people reckon it's already Winter - depends on your definition.) In his Spring budget the Chancellor increases taxes and takes your money, and in the Autumn statement he gives it all back by doing lots of spending.

So JR wants some ideas on how to increase the tax take so the Tories can bribe us all to vote for them in the Spring of next year.

This blog was pleased to help with the following suggestions...

The two obvious geese ripe for plucking are: (i) multinational corporates who are channeling profit through tax havens by transfer charging - they would not decamp if forced to pay more tax, the UK is just too lucrative for them, and (ii) rich foreigners who own property in the UK. France and Spain are already looking at doing this. Some of these foreigners would decamp, but since I don't like the way the country is being bought up piecemeal by people who looted their own countries I don't mind if they do leave. We should not be hidey-hole-of-choice for ill-gotten gains.

Note that neither suggestion involves you or me paying more tax.

Monday, 1 December 2014

Oil is falling

A few short weeks ago a barrel of oil would set you back over $100, but now it's down below $70. The Americans are bringing their shale oil to market at exactly the same time as the economies of the EU and China have stopped growing; increased supply, falling demand - the result is predictable.

When you consider that oil is a component in just about everything we consume that has got to be a good thing. Oil use in the UK divides about equally into thirds: transport, heating and industry. Homes, schools, offices are heated; food is transported, industry provides jobs - the benevolent effect of falling oil should permeate just about everywhere.
Apart from at the petrol pumps; that's mainly tax. If the oil price fell to £0 you would still be paying 80p a litre at the pump.

Normally Saudi Arabia would curtail the supply and push the price back up. But this time it's different - they are worried about this "shale oil" idea and want to bankrupt the investors by letting the price fall below the economic cost of shale oil production, thus ensuring the investors get no return on their expensive outlay.

This will piss off the Americans, and also the other oil producers: Russia, Nigeria, Venezuela, etc - they are all going to be on short rations for a while. We might see the odd bankruptcy and maybe even a coup d'etat.

Muhammad has reached the top

In previous years if you aggregated all the various spellings of the Prophet's name (Mohammed, Mohamed, Mohamet, etc) they came out as collectively the most popular boy's name. But in 2014, for the first time, the name Muhammad is most popular name for all boys born in the UK all by itself - up from 28th last year.