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Alcohol minimum prices aren’t all bad you know

March 23, 2012 9 comments

There were no further changes to duty on alcohol during Osborne’s budget this week – a surprise to some. In fact, during some stolen moments during Wednesday lunchtime when I nipped into a nearby pub to watch Osborne reading out his plans there was audible joy at the move, despite cigarettes going up for smokers by 37p per pack.

To those who were happy I wanted to say – hold your horses, further plans will almost certainly be moved on prices during the alcohol strategy, out soon.

In accordance with the National Institute for Clinical Excellence’s recommendations (NICE),and against the preferred wishes of Andrew Lansley, the Prime Minister wants to see a 40p minimum price ceiling on a unit of alcohol.

I was told recently that this was a punishment on the poor for two reasons: firstly they would be hardest hit by the move as proportionate to their wages, low income earners spend more of their disposable incomings on alcohol than the wealthiest. Secondly that at a time where low income earners need a drink more, because they’ve fallen on hard times, this is a way for the government to kick them when they are down.

The problem with these reason are as follows: firstly the high price of many consumables, sadly, affect those on low incomes more. Fuel for example, proportionate to wages, tends to financially impact upon low income earners more, and inflation on that tends to disproportionately affect the elderly more.

To modify the price of alcohol so as to help low earners better afford it would mask, and distract attention from, the real problem here – that is people are paid too little to keep up with the prices of things. Particularly problematic if the only growth plan we can muster is for more people to spend money they often don’t have.

The other reason I was given for why this was a punishment on the poor I find deeply worrying. Sure it may be slightly tongue in cheek, but I’m sure it holds weight for some. Alcohol for the desperate can only bolster existing bouts of depression, not be used as a good source against them – as much as that may seem logical from time to time.

There is definitely social value to this move. The figures being used suggest there will be 50,000 fewer crimes each year and 900 fewer alcohol-related deaths per year by the end of the decade. It mustn’t however be the sum total of the move. Consultation with mental health facilities can help the government better understand the reasons people abuse alcohol if, say, they are experiencing anxiety-related problems. Equally the normalisation of alcohol misuse in the media might lead us to answering questions about how alcohol is viewed in everyday life.

A study by the Joseph Rowntree Foundation found, in 2011, that:

alcohol is the most prominent substance and beverage portrayed in TV programmes watched by young people. Alcohol is frequently depicted as a normal part of the characters’ lives and social interactions. However, the effects and consequences of drinking were only shown in about 10 per cent of the drinking acts featured in the programmes analysed, and focused on either positive or extreme negative effects (e.g. laughing, alcohol dependence, violence).

Another benefit of the price ceiling, often overlooked but is nonetheless concerned about, is the state of our communities and the “community pub”.

While local pubs have suffered financially over the past few years, and around 16 pubs close on average every week, the only drinking establishments available to many are the big chain pubs, devoid of atmosphere, and protected from being priced out of the market when selling drink promotions.

Rather than being a burden, Rick Muir from the ippr found that community pubs generate between £20,000 and £120,000 of ‘social value’ each year for their local communities. Their rapid closures have a detrimental effect on local economies.

One of the barriers to these pubs staying in the market, as well as their chain pub competitors, are supermarkets who can afford to sell at very low-cost prices. One of the recommendations in Muir’s report was to set a “minimum price per unit of alcohol should be introduced to prevent irresponsible promotions and close the gap between the on and the off trades.”

Supermarkets don’t sell alcohol for responsible prices now because if they did, the next supermarket down the road would go lower and the first one would lose out. Consequently, however, no supermarket makes what it potentially could on alcohol. It has to be said that supermarkets will benefit from this move because they can raise prices while their competitors are also obliged to. But this move has other, beneficial, consequences.

We cannot pick on one or two isolated issues where the poor disproportionately pay more – this needs a far wider approach, asking why the poor are “priced-out” in general. On the other hand the NHS will save money, crime will almost certainly be reduced, and we could potentially see a pub closure reversal, particularly for community pubs which generate social value. These new moves on price minimums are surely not all bad.

Categories: General Politics

Labour must challenge the personal allowance lie

March 21, 2012 1 comment

“Forget rising tax allowance. VAT hike, real terms cuts to tax credits, Child and Council Tax benefit mean poor getting poorertweets Owen Jones.

Owen is, I think, quite wrong.  The personal allowance is the last thing we should be forgetting.  This is the key to the Tories’ claim that this a fair budget, and it needs to be challenged for what it is.

The Labour leadership, and the Labour PR machine under its instruction, will almost certainly focus its fire on the lowering of the basic tax rate, and on the huge hit on pensioners’ tax allowances.  This is classic squeezed middle territory (remember that we’re talking second, not state, pensions here).

Meanwhile, the Tory party and its press will focus its narrative on the decision to raise the personal allowance to £9,205. 

As George Eaton identified this morning, the personal allowance hike may be bad policy but it’s great politics; the distributional effects may well be skewed to the upper earning centiles, but it’s easy to understand and  voters are already in favour of it.  In general, people are interested less in how the benefit might be distributed than in the idea that they might at least get some.

So while Labour is busy working out complicated ways to show how “average” hard working families and pensioners are hit (e.g. the claim that average families will end up £235 per year worse off), the Tories will be able to get on with their simple, effective message that it’s they who are the real party of the poor. It’s already happening, as this tweet indicates:

The Coalition Govt has now HALVED the income tax bill of a full-time employee on the minimum wage.

So what should Labour (and Owen) do differently?  

The answer is to tackle the personal allowance issue head on, with examples that people can readily understand. 

Here’s one I prepared earlier.

Take a single parent dad with two school age children, working full-time on just £12,000 per year (before deductions) as of April 2013, when the allowance announced today comes in. 

The new personal tax allowance from 2013-14 will be £,9,205.  This means that he’ll have (£12,000 – £9,205) £2,795 to pay tax on and a tax bill of (£2,795×20%) £559.

This compares with a tax bill for 2012-13, during which the personal allowance is £8,105 of  ((£12,000 – £8,105) x20%) £779.

So the tax saved is £779 – £559 – a not massive £220.

This isn’t the whole story, though.   To get a proper sense of how this family will fare, we need to take into account a) the three year freeze on child benefit effective from April 2011; b) the new freeze on working tax credit to which this family would be entitled.

Child benefit remains at £20.30 for the first child and £13.40 for the second (£33.70 total).  If you calculate what the benefit rate would have been if it had been inflation rated from 2011-14 (at, say, 5%, 5% and 3% per year as inflation drops), you find that child benefit that would have been totalled £1,995.5 in 2014 actually totals £1,752.40.  That’s a loss to the family of some £245 per year.

Then there’s the working tax credit freeze.  You can put the information into this handy government calculator, and you find that without inflation  rises in 2012 and 2013, the family ends up a further £29 out of pocket.

So for all Osborne’s fine words, a single parent family wioth two children surviving on £12,000 per year will be £274 per year worse off simply as a result of Osborne’s recent tax and benefit changes, and before any of the other factors like general cost of living increases, and VAT, are taken into account.

This is one angle in which we should be taking on the government when it talks about how it has lifted low earnersout of tax:  it’s smoke and mirrors.

But the other way – to make the personal allowance hike relative to the 50p tax reduction for high earners – may be more effective.

The maths are simple.  Someone who earns £1m per year will now pay £42, 500 less tax.  The personal allowance rise means someone on £12,000 will pay £220 less tax if you leave the previous freezes out of the equation. 

Someone earning a million earns 83 times as much as someone on £12,000, but will save 193 times as much in tax.  A simple measure of how regressive this is simple: 83/193 = the rich are being treated at least (193/83) 2.3 times better than the poor by today’s budget.

Of course, this is the dull maths, and someone in the Labour team will need to make the points a good deal more snappily than I can.  But the point remains that we shouldn’t just be letting the Tories get away with their lie that their personal allowance rise is doing anything at all for those on low incomes.

Daily Mail comments section reaches new low

March 21, 2012 4 comments

Will wonders never cease.

I’m sure a blog post could be achieved hourly on the state of the Daily Mail’s comments thread, but this one deserves highlighting.

A young woman met a young man, Peter Ramsey, on the internet before going on a date, which they arranged through messages.

They went on said date, he offered to walk her home, she accepted, he tried to kiss her, she refused, he punched her, raped her, and made her face “unrecognisable” – according to a police statement.

The following pictures are screengrabs of the comments

Categories: General Politics Tags: ,

First thoughts on resistance to road privatisation

March 20, 2012 Leave a comment

The privatisation of our roads is a little way off, and it’s still not clear what Cameron’s initial announcement actually means.

The two key questions are whether any new programme will be for a large part of the existing network (rather than new roads and “pinch points” and whether the longer term plan is to do with tolling/roadpricing, or just another expression of what Chris calls “irrational debt phobia”, whereby what could be achieved by borrowing through the gilt market is instead put out to much more expensive PFI so as to keep it off the balance sheet.

We’re unlikely to know much more on this until the Autumn when the Treasury and the Department for Transport report back with their feasibility study.  Nevertheless, on the pretty reasonable assumption that what is announced later may be just as bad as we think it might, it’s wise to start thinking about how any privatisation might be resisted. 

The most obvious spanner for the works, it seems to me, is the “community right to bid” provisions set out in the Localism Act, which came into force in late 2011.  I’ve covered the basics of what those provision are (and aren’t) here.

Under these provisions, local community groups and parish councils etc. have the right to request that any “assets of community value” be placed on a register of same by their local authority.  If the local authority agrees to place these assets on the register, they then become subject to the “community right to bid” process. 

This means that when any owner wishes to dispose of any such asset, s/he must first observe a moratorium period during which community groups get the chance to express an interest in their purchase, and if they do express an interest a further time period must be given to allow for a business plan to be developed and bid submitted.

Now clearly, it can be argued that a road is an “asset of community value”.  Without access to it, people within that community can’t get from A to B.

If, therefore, lots of local authorities start putting their entire road network on the Register of Assets of Community Value – a register they are required by law to draw up  – their sale becomes an interesting question. 

With a typical trunk road passing through, let’s say, 10 local authority areas, of which five non-Tory ones choose to put their bit of road on the Register, the government would be legally obliged to go through five different moratorium/business plan processes, during which time community activists could come together with local authorities to develop a “buy back” offer, whereby central government has to pay them for maintenance rather than a private contractor (though as now maintenance would be done by contractors anyway). 

Even the thought of having to compete for stretches of road, and the fear that a 10 mile stretch out of a 100 mile highway might end up in the “wrong hands” might well be enough to put sovereign wealth funds off the whole idea in the first place.

Worth thinking through, anyway…..

In the meantime, it’ll be worth seeing the extent to which the DfT’s feasibility study takes into account another new piece of legislation: the Public Services (Social Value) Act 2012, which became law on 8th March 2012. 

Under this Act, if a “relevant authority proposes to procure or make arrangements for procuring the provision of services, or the provision of services together with the purchase or hire of goods or the carrying out of works”, then that authority must consider:

(a) how what is proposed to be procured might improve the economic, social and environmental well-being of the relevant area, and

(b) how, in conducting the process of procurement, it might act with a view to securing that improvement.

The selling off of our roads would, to say the least, be an interesting test of the application of this Act.  Failure to apply it before flogging off the highways would surely lead to Judicial Review action against the government by one or more of the larger campaign groups, perhaps in conjunction with some of the more pro-active local authorities.

Categories: Terrible Tories

Journalist Thickometer

March 20, 2012 1 comment

This is the first in an occasional series, in which we select five mainstream journalists, not entirely at random, and subject them to uttlery pointless ridicule which hardly anyone will read.

This week it’s the turn of Mehdi Hasan (New Statesman), Andrew Gilligan (Telegraph), Johann Hari (erm, nowhere), Toby Young (own arse), Merryn Somerset Webb (Financial Times).  Here goes….

Hasan, Hari, Gilligan, Young & Webb: sounds a bit like a High Street accountants, doesn’t it?

In the somewhat unlikely event that they ever do set up an accountancy firm together, however, TCF recommends that you use someone else.  Use this bunch and you could end up in debt, or prison, or both, or debtor’s prison (assuming that’s next on the list of the Coaltion’s programme for Dickensianism).

Anyway, this is their story - told using TCF’s non-patented Journalist Thickometer to measure their level of thickness.

Andrew Gilligan

Last week Liberal Conspiracy published a Sunny-edited piece from Andreas Paterson , setting out how stupid/what a smearer Andrew Gilligan is with his accusation that Ken Livingstone:

“has now channelled total earnings of £755,778 through the company, putting him comfortably in the top 1 per cent of all earners.”

Andreas/Sunny set out how Gilligan either doesn’t understand, or prefers not to understand, the Silveta Ltd abbreviated accounts he got from Companies House. 

Put simply, while Gilligan talks of “total earnings of £755,778 through the company”, he’s added up three years of Financial Year end asset balances to get to this figure. In fact, there is simply no way you can work out the earnings over three years (or indeed one year) from small company abbreviated accounts like the ones in question.  It tells you that on this BBC introduction to reading company accounts.

For an experienced journalist, this is a signficant lapse/lie from Gilligan. As Andreas says in a follow-up comment:
 
“I think the far more important issue is that a blogger for a respected national newspaper [Gilligan]  has written a series of smear stories about Ken Livingstone and his income based on figures that are quite obviously wrong.”

But Gilligan’s not finished yet with his catalogue of rubbishness.  First, he attacks Andreas for not being able to misunderstand company accounts as well as he can.  Then, following an intervention for Sunny Hundal, he tries to muddy the waters by telling Sunny what Sunny already knew – that the three balance sheet figures add up to £755,778 - while carefully avoiding Sunny’s key point

“Read carefully what Gilligan said originally and what he’s saying now.

His original piece said: ‘In three years, however, he has now channelled total earnings of £755,778 through the company, putting him comfortably in the top 1 per cent of all earners.’

That says Ken earned over £775k over three years. In his reply, he now says he got the £775k figure by adding the amounts invoiced. But that does not mean Ken earned that money personally.”

Oooh, dodgy.

For all this, TCF gives Gilligan a 7/10 on the Journalist Thickometer.  It would have been higher, but we can’t be absolutely sure on the thickness/smeary knowing dishonesty balance. 

Toby Young

Yet in spite of this clear proof that Gilligan is totally wrong, Toby Young later simply repeated the allegation, and Gilligan’s figure, at The Spectator.  In this follow-up smear, Young says:
 
“All I can say is, thank God for Ken Livingstone. He’s the gift that keeps on giving. Following the revelation that he’s funnelled £755,778 through a tax avoidance vehicle over the last three years, the sensible thing would have been for him to write a large cheque to HMRC, particularly in light of his own tireless campaigning against tax avoidance.”

Blimey, I hope this bloke’s not on the Finance Committee at his free school.

But Toby Young’s not just in the Thickometer line up for his capacity to parrot wrong information mindlessly (we can all do that).  Here’s the real rub about Young, and where Mehdi Hasan and Johann Hari enter the fray. 

Mehdi Hasan and Johann Hari enter the fray

 Back in November, Young wrote a long post attacking Mehdi Hasan over Mehdi’s views on the debt crisis. Within this post, Young provides a aside:

“As a comic aside, one of the experts whose authority Hasan appeals to is Johann Hari. Yes, that’s right – Johann Hari. He [Hasan] quotes from a piece Hari wrote in March called ‘The Biggest Lie in British Politics‘:

…….

Hasan seems unaware that this piece was notorious at the time for beginning with the following paragraph:

Here’s the lie. We are in a debt crisis. Our national debt is dangerously and historically high. We are being threatened by the international bond markets. The way out is to pay off our debt rapidly. Only that will restore ‘confidence’, and therefore economic growth. Every step of this program is false, and endangers you.

It’s clear from the above [Young continues] that Hari is guilty of a beginners’ error [sic - we trust Young's not in charge of grammar at his free school] in any discussion of economic policy, namely, confusing the debt with the deficit. No one in the present government is proposing that we should “pay off our debt rapidly”. Surely, the fact that Hari isn’t aware of the this rather important distinction rules him out as an expert on the economy? “

Now, Johann Hari did indeed make a big mistake.  This had previously been summarised by Giles Wilkes at Freethinking Economist:
 
“But this [Hari's use of the term 'deficit' instead of debt] bespeaks a lack of understanding of the difference between debt (a stock) and the deficit (a flow): The invaluable Tax Justice Network has calculated that rich individuals “avoid” £13bn a year and rich corporations £12bn. (Indeed, a third of Britain’s top 700 companies haven’t paid any tax at all.) That’s enough to double the education budget – or to pay offBritain’s entire deficit in seven years without a single dent in public spending. £25bn is a huge amount of money.   But you don’t ‘pay off’ a deficit.  Both are annual amounts – flows.   The deficit would be reduced by ~1.8% for each year if we got £25bn somehow, but the savings from zero avoidance do not accumulate to the deficit, they accumulate to the debt – the stock.  Which is due to be £1300bn, not £175bn.” 

For this, TCF awards Johann Hari a journalistically posthumous big fat 8/10 on the Journalist  Thickometer.  He outscores Gilligan because, not only does he use the wrong term, but in his workings he clearly shows he doesn’t understand the difference. At least Gilligan was unthick enough to try and cover his tracks.  Harsh, as Hari’s heart is usually in the right place, but those are the rules and TCF must stick by them, except when we don’t want to (see below). 

Overall then, impressive thickness from Hari, and he only misses a 10 because at least he was intelligent enough to realise the game was up (though for other thicknesses) and go and get himself some training. 

Think all this through for a second, though,   The concept of “stock” and “flow” can be applied to company accounts in exactly the same way: the “stock” is the asset balance actually shown on Silveta Ltd’s abbreviated accounts, which provides the end of year snapshot, while the “flow” would be the income across the year (as noted, this is not required in small, closed company abbreviated accounts and is not therefore known for Silveta).  

Gilligan has therefore made precisely the same conceptual error made by Hari, but in his case with a piece of business information that a year 10 secondary school student would be expected to understand.  

Young, however, still manages to outdo Gilligan, by not only repeating Gilligan’s entirely false information. but in doing so doing exactly what he had previously accused Mehdi Hasan of doing.

(Bizarrely, Hasan himself doesn’t come off scot-free, because he also appears to have used the same figures unquestioningly in his own attack on Ken Livingstone.   For this Hasan is awarded 3/10 on the Journalist Thickometer, because we regard this as an error of judgment worth noting, but out of character with his general rigour and attention to detail. He’s also a leftie and TCF is completely biased). 

Back to Toby Young

Young’s error, though, is worse than anything he can accuse Hasan of, because he copies the conceptually flawed information directly and without questioning, while his attack on Hasan is for Hasan’s quoting approvingly from another part of the Hari post to the one where Hari makes his conceptual error.

For this series of total thicknesses, Young scores the ultimate 10/10 on the TCF  Journalist Jhickometer.

Merryn Somerset Webb

Now you may be wondering what happened to FT investment whizz, Merryn Somerset Webb?  Quite right, too. We had forgotten about her.

She has absolutely nothing to do with the displays of great thickness above, and she’s probably not thick at all.  But she is a bit daft, choosing this weekend for her active promotion of tax avoidance via company formation (though she also inadvertently promotes Ken Livingstone’s case for the defence, by arguing that while it may not have been worth the hassle to date to set up a company, it may become so as and when Osborne reduces Corporation Tax).

TCF hasn’t yet developed a Daftometer, however, so Somerset Webb is awarded a 2/10 on the thickometer as a way of registering our disapproval.  we can almost hear her weeping with shame already, but I’m afraid that’s what you get when you go around telling rich people how to avoid paying their taxes.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Categories: General Politics

In defence of the day of rest

March 19, 2012 2 comments

Two things happened for the first time in 1986: a) the government of Margaret Thatcher was defeated in the Commons (in fact it was the only time Thatcher’s government was defeated) and b) a major piece of legislation had been defeated in the Commons at Second Reading. The issue: Sunday trading.

Matthew 6:24 observes: “No man can serve two masters: for either he will hate the one, and love the other; or else he will hold to the one, and despise the other. Ye cannot serve God and mammon.”

When Thatcher decided to try and love both on a Sunday, she first realized that the iron fist with which she ruled, was in fact inclined to bend on occasions after all.

In her letter of public statement about Sunday trading she wanted to “reassure you that the government is not trying to alter the traditional nature of Sunday in this country” but “Eight million people already work on Sundays, about half of them regularly”.

In many ways this makes sense, but I wonder if this was intentional of Thatcher. What is true of the above quote, but probably not true of her sentiment, is that Sunday’s are already blind to the observation of Sunday as a day of rest. In her mind that begged the question of why we are denying shopkeepers of their potential surpluses?

In short, she wanted the same dire Sundays – but more so.

Is this not the rupture of neo-liberalism and traditional Toryism made flesh? Is what divides these two factions most in the Conservative party not what to worship more, God or mammon?

A retired British Army officer in a French work of fiction from the 1950s once said: “If England has not been invaded since 1066, it is because foreigners dread having to spend a Sunday there.” This should give us pause. As a nation have we come to loathe rest?

I’m not sure what kind of debates they have in Spain around longer trading hours and curbs on siestas, but I’m sure the anti-rest lobby are just as willing to ruin shut-eye as clearly some are over here.

It took 26 attempts before Sunday trading laws were relaxed in 1994 as a compromise with Thatcher’s idea to get rid of all restrictions. Now George Osborne wants the UK Parliament to suspend restrictions during the 2012 Olympics.

As one blogger put it:

Local people won’t have any more money to spend; there will be no extra Olympic visitors contributing to the legal economy … Yet the burden of extended opening hours will be felt by those on small wages and low status.

Relaxed restrictions: cui bono? Those anti-relaxation types in the shopkeeper world. Who suffers? Everyone else.

As the architect Le Corbusier rightly pointed out: “commuting time is a surplus labor which correspondingly reduces the amount of “free” time.” George Osborne is trying to make of a Sunday more surplus labour time, to no benefit of the majority. Let’s stick up for rest.

Why is the Financial Times promoting tax avoidance?

March 18, 2012 1 comment
Avoiding tax by “funnelling” earnings through a company is in the news a lot recently, what with the Livingstone smear/scandal and the inability of a high-profile journalist to read a simple set of accounts.
 
It seems an odd time, then, for the Financial Times investment specialist, Merryn Somerset-Webb, to be giving this advice to her readers in this weekend’s edition:
 
Finally, if you are thinking of setting up a company and funnelling your freelance earnings through it to cut your tax bill, keep going: the corporate tax rate is already 25 per cent and there are suggestions Osborne is targeting 20 per cent. That’s a rate that might well make the excess burden created by the bureaucracy of a small company worth taking on.
 
Well, she certainly doesn’t mince her words. 
 
For what it’s worth, I think one largely overlooked issue in the Livingstone saga is that the usual reason for forming a company is that it limits personal liability if it all goes pear-shaped.  No-one seems to have given Livingstone the benefit of the doubt on this – namely that tax may have been the last thing on his mind when he decided to form a company.
 
But Somerset-Webb’s advice is unreservedly about forming a company for no other purpose than paying less tax.  The use of the word “funnelling” – the very same word as used by Gilligan to smear/attack Livingstone – does kind of give the game away.
 
The other thing to note, in passing, is Somerset-Webb’s assessment that, while the 25% rate might not make company formation worth the hassle, the prospect of a 20% rate does. 
 
This does in turn lend some independent (though inadvertent) “expert” support to Andreas’ calculationsscorned of course by the financially illiterate Gilligan –  that the difference between tax paid via the company route and that paid through income tax is probably currently smaller than the smearers are making out – small enough indeed to make a decision on whether to form a company a marginal cost-benefit matter.
 
In any event, I’m not sure publishing this advice today was the FT’s finest editorial decision.
 
Categories: Law

Fuelling Poverty

March 17, 2012 1 comment

Some figures that I have been looking at recently sit very uncomfortably with the recent government-sponsored report which shows how the UK is on the way to seeing some 8.5 million people hit by fuel poverty.

Between January 2008 and January 2011 fuel prices rose by around 50 per cent according to the typical domestic energy consumption figures produced by Ofgem. 

Alongside that, Ofgem noted that direct debit for annual bills averages at £608 for gas and £424 for electricity. 

In a report called Paying Over the Odds written by Jane Perry, while noting that very low income households has risen by a massive 1.5 million to 13.5 million from 2004-5 to 2009-10, details a case study:

Paula said she paid £100 each for gas and electricity each month. She said she was aware that her gas alone could cost her £360 a year less if she was on a contract, but she was unable to find the £250 deposit the company required.

The Resolution Foundation in an analysis of low to middle income earners pointed out that over half (52 per cent) are struggling to meet credit repayments and, importantly, bills.

In a recent study of tenants living on estates and housing schemes in the West Midlands by HumanCity, seven out of 10 were economically inactive, of whom 44 per cent were unemployed, more than half had a net annual income of £5,200 and 54 per cent paid more than 10 per cent of their incomes on fuel bills – the official measure of fuel poverty.

Professor John Hills who has written the report for Ed Davey, the Secretary of State for Energy and Climate Change, wrote that 7.8 million people could not afford to pay their energy bills in 2009 – a figure he thinks will increase to 8.5 million by 2016.

Hills said that 3,000 die each year as a consequence of fuel poverty, which is set to increase. 

From the 10-year period between 1996-2006 fuel poverty had been lowered, but ever since has been on the rise and set to hit 1996 levels – and beyond! – very soon.

Campaigners such as Age UK have called on the government to institute a programme of home insulation. It should go further and ensure people are not priced out of going on contracts.

It is unsurprising to learn that paying for bills is often the main reason people on low incomes take out high cost loans. It ought to be remembered that, according to a 2007 paper for the Legal Services Research Centre, that the average cost of a debt problem to the public purse is estimated at £1000.

Personal debt is projected to reach £2.1 trillion by 2015, according to the OBR, which is bolstered by taking out loans which is often triggered by fuel costs. Inaction on this front is a financial burden for which the government can, and should, seek to rectify.

Categories: General Politics

Why would the Head of Ofsted lie about our children’s literacy?

March 16, 2012 5 comments

Sir Michael Wilshaw, Chief Inspector of Schools and Head of Ofsted, was the object of some ridicule this morning for his failure to grasp a pretty basic mathematical concept (just like his boss Gove had done).  Polly Curtis at the Guardian’s Fact Check covered that well, drawing out how this slip of the tongue reflects how averages have gradually become targets.

There is, though, a much more serious charge to be levelled at Wilshaw.

On BBC radio 5 this morning (from about 2mins 11secs) Wilshaw stated:

It is a national concern and especially when you look at the international league tables which show that we’re down from 7th in the world 10 years ago to 23rd in the world and that countries are doing better than us…

This is out of keeping with the very Moving English Forward report he was on air to talk about. This report says (para 96):

 The government has placed increasing emphasis on international comparisons which appear to show that England has fallen down the league table when it comes to performance in literacy. The White Paper [The Importance of Teaching, 2010] argues: “What really matters is how we’re doing compared with our international competitors. That is what will define our economic growth and our country‟s future. The truth is, at the moment we are standing still while others race past. In the most recent OECD PISA survey in 2006 we fell from… 7th to 17th in literacy.

What that 2010 White Paper actually says (para 4.36) is:

England fell in the PIRLS rankings from 3rd out of 35 in 2001 to 15th out of 40 in 2006. In the most recent PISA survey in 2006, England fell from 4th to 14th in science, 7th to 17th in literacy, and 8th to 24th in mathematics.

So neither the PISA  (for 15 year old reading) or the PIRLS (for 11 year olds) data quoted show that England is in Wilshaw’s purported 23rd place.  

The PIRLS data quoted in the White Paper is in fact correctly quoted there (see table 1.2 of this report), but this is not referred to in his own organisation’s report, even though it is for the age group (11 year olds) about whom he expresses most concern.

So not only has Wilshaw apparently referred to his own report incorrectly both in terms of international comparison, he’s also managed to sign off a report which quotes the wrong age group figures in the first place.

From where, then, does Wilshaw pluck this mysterious 23rd place, different from the one given in his own report?  The answer may lie in an October 2011 Department for Education press release, which I examined at the time.  This press release  states:

England has tumbled down the international tables in the last nine years – from 7th to 25th in reading; 8th to 28th in maths; and 4th to 16th in science.

This 25th is only 2 places away from Wilshaw’s claim, and the two can be reconciled by the fact that in the original DfE coverage failed to notice that England was only behind Denmark and Chinese Taipei in the table because, though all three are on the same score, England starts with a later letter in the alphabet.

But as I noted in my earlier post, that DfE press release contains a catalogue of other, more serious errors; it fails to note that some 12 other countries nominally above England have statistically insignificant higher scores; it fails to note that two countries in the new table are there for the first time and so skew the trend; and it fails to take account of the OECD’s utterly explicit warning (para 2) against comparing earlier PISA results with the 2006 data, because the response rate for the earlier years was so low as to raise big concerns  about sample validity.

So what do we have, in summary? 

We have a Chief Inspector -  head of a supposedly independent organisation - operating in apparent collusion with a government department to give a deliberately false and negative impression of literacy standards and English teaching in England.  Why else would he discard the information provided in his own report, which he’s been asked onto radio to talk about, in favour of other, more negative figures apparently dredged from a dodgy press release?

This is not only potentially scandalous in terms of Wilshaw’s own lack of integrity.  It is also very bad news for teachers and children, because it reveals just how politicised literacy has become. 

In fact the PIRLS data referred to in the 2010 White Paper (but left out of today’s Ofsted report) could be useful, not least because it shows up how much more unequal the distribution in achievement is between the upper and lowe percentiles compared with other countries (see Exhibit 1.1 in this PIRLS report).  This could, if properly used, have provided a clue that the measures needed are around narrowing inequalities at the lower achieving. 

Instead, Wilshaw prefers to ignore this kind of refined analysis and to bluster on in the press about the need to raise targets for everyone, even though there is no evidence that the actual target is the problem, and even though this is a 2010 White Paper announcement rather than something in the new report:

So one of the first questions we need to ask is whether the national end-of-primary-school target of level 4 is sufficiently high to provide an adequate foundation for success at secondary school.

In short, it’s hard to avoid the sense that Sir Michael Wilshaw is anything more than a Gove lapdog, happy to bash teachers and children for narrow political purpose, and to use manifestly incorrect data to do so. 

In the current political environment, therefore, he’ll go far.

On drugs and the law via Tom Chivers and Peter Hitchens

March 15, 2012 4 comments

On the tube this morning I picked up a few items on drugs and wanted to comment.

The Telegraph, namely Daniel Knowles, the assistant comment editor and somebody notable by their commitment to considered opinion and not party-line – infrequently though I agree with him – opined that all over the world people are dying to stop the likes of Russell Brand from taking heroin.

It’s a very bombastic way to frame the debate, but perhaps this is necessary. I remember watching a television programme with Alex James, the former bassist from Blur and now cheese farmer, visiting Columbia and former President Uribe (who he gave cheese to, in a sickening moment on the show) to look at the effects of what his own tribe – the drug-taking celebrity – was inflicting upon the world.

Indeed Knowles has predicated his argument on this same line: namely, “To try to stop people like Russell Brand (a participant in the debate) from killing themselves with heroin or cocaine, we turn third-world countries into warzones.”

Knowles notes his colleague Tom Chivers who has also entered this debate on the pages of the Telegraph: “laws in the West are failing to restrict the supply of drugs. They merely turn the entire market into an unregulated, uncontrolled disgrace, entirely in the hands of criminals.”

There is more to be concerned about reading the pages of the Guardian today, too. The newspaper along with Mixmag, have found that there is a new generation of very young, high-risk – and indeed risky – drug users. Out of 15,500 surveyed young people, a fifth of those admitting to drug use admitted to taking “mystery white powders” without any idea what they contain.

Furthermore, one of the headline findings shows signs “of an emerging “grey market” in legally prescribed painkillers and antidepressants, often acquired from friends, dealers or through the internet.”

David Nutt, “the former government drugs adviser sacked for suggesting LSD and ecstasy were less dangerous than alcohol” contributed, saying he expected these results.

So the regulation debate is back on the table. Few people want a society with more drug use, but the argument on how best to control it, and how dignified it would be for the government to decriminalize and therefore regulate the market will be, despite the intended result being that less drugs are used, is up for the taking.

In brief, the argument goes thus: if you regulate, you control the supply, you stop the criminal underworld, and this has good consequences for the ever-failing war on drugs. If you uphold a ban, you do so because you believe government is there to stop bad things, not strategically use the rule of law to bring about unintended consequences – it is a moral arbiter alone, should be seen to be upstanding and ethical and if people cannot do good themselves they should be punished under the direction of the law.

We can attribute the former opinion to somebody like Tom Chivers. The latter, to somebody like Peter Hitchens. It has great consequences for what the role of the state and law is. The notion that a regulated drug market can control supply and hopefully reduce demand from it is compelling, but is the role of the state not primarily to decide what is right and wrong? If you think drug use is wrong, then should this not be reflected in law? If you think drug use is wrong, but see evidence that decriminalizing drugs would consequently reduce use, do you not see the rule of law as a simple mind game and the state a game player not appealing to reason and evidence but motivated only by the popularity of the vices of the day?

Here’s something: does Peter Hitchens think the continued war on drugs is good? Does what Knowles said about the third world and Russell Brand – a man who Hitchens recently called “a selfish kid” – bother him?

I’ll end by stating my case: the role of the state as far as I see it is to uphold the law, but also ensure maximum happiness. The accusation of utilitarianism is probably on the tip of your tongue, but tell me someone who doesn’t want to be mostly happy when the only other option is to be mostly unhappy. On this basis the state should weigh up what on balance makes me people the most happy – that is to say, as well, most happy and in control of their faculties. If the war on drugs is a lost cause, and the benefits of a regulated market that it could, in the end, see a reduction, then why not allow the law to reflect this.

Does this ignore individual autonomy? No, at the end of the day people should decide what is best for themselves, but the role of government is needed to close off, as best as possible, conflict in people acting upon the right to decide what is best for themselves.

Update:

Entirely by accident I found this – “I really believe we should treat marijuana the way we treat beverage alcohol,” Mr. [Pat] Robertson said in an interview on Wednesday. “I’ve never used marijuana and I don’t intend to, but it’s just one of those things that I think: this war on drugs just hasn’t succeeded.” Didn’t see that coming.

Categories: General Politics
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