Saturday, December 30, 2006

Britain finally pays off American Debt

Yesterday (Friday 29th Dec), Britain paid the final installment of the loan it took out in 1945 to finance the re-building of post-war Britain.

According to the Independent, the original loan of $4.34 bn is equivalent of £27bn today. The final installemnt payment was £43m to the USA and £12m to Canada.

Ed Balls, the Economic Secretary to the Treasury, said: "This week we finally honour in full our commitments to the US and Canada for the support they gave us 60 years ago.

"It was vital support which helped Britain defeat Nazi Germany and secure peace and prosperity in the postwar period. We honour our commitments to them now as they honoured their commitments to us all those years ago."

We still owe money for the First World War:

However, since a moratorium on all war debts was agreed at the height of the Great Depression in 1931, no debt repayments have been made to, or received from, other nations since 1934.

The Treasury points out that, at the time of the moratorium, Britain was owed more in war debt by other countries than it owed to America. In 1946, Britain's national debt stood at about 250 per cent of GDP. Today the comparable figure is 36.8 per cent.

250% of GDP!! It puts things in perspective doesn't it. All those doom-mongers who like to predict that Britain will "collapse" under her modest 36.8% of GDP debt (low by historical standards and low in comparison to other developed countries), should reflect on history and on where we are now and stop being so daft.

Thursday, December 28, 2006

Multi-culturalism comes to France - French GPs get Diversity Training....

..... on how to deal with their English patients.

From the Times:

Dr Léopold, 54, is among a growing number of French GPs undertaking a training programme on how to treat the several hundred thousand Britons who have moved to France. The difficulties they face are as much cultural as linguistic.

The programme, funded by the French Federal Association for Medical Training, aims to bridge the linguistic and social gulf that often separates Gallic doctors from their English patients. Participants are given a list of English medical terms and mistakes to avoid, such as confusing the French groin (pig’s snout) with a groin strain, or pile (battery) with piles.

They are also warned about what Marc Bonnel, who runs the programme, describes as “cultural diversity”. “Basically, we have a totally different approach to medicine,” he said.

Consultations, for instance, tend to be longer in France — an average of fifteen minutes compared with seven in Britain

........Dr Bonnel also advises GPs to avoid asking British patients to use suppositories — a common form of medicine in France — and to be aware of what he calls la pruderie anglaise. “I would never hesitate to tell a French woman to take off her clothes on her first appointment, even if she had just come with a cold,” he said. “But you have to be very careful about that sort of thing with English women.”

Begun in 2000, the scheme is proving so popular that the number of courses will be doubled in many regions next year. The need is underlined by British expatriate websites, which contain dozens of messages from families seeking English-speaking doctors.

The courses come at a time when the French authorities are trying to attract doctors to rural areas where the population is rising, partly as a result of the British influx. The Allier council in central France, for instance, last week put up “wanted” posters offering medical students annual grants of up to €18,000 (£12,000) if they agree to practise there for at least six years after qualifying.

Dr Léopold is typical of the rural GPs that officials are trying to cultivate. He has a practice in the village of Le Lonzac in the Limousin region of central France, where he now counts ten British families among his patients. He said: “They tend to be more docile than the French, who are very demanding about when they want an appointment and what treatment they should get.”

I expect their equivalent of the Daily Mail is gearing up for a series of articles moaning "Diversity Training costs French taxpayer Millions of Euros", "But Why can't they Learn French" and "What's wrong with suppositories? When in France do as the French...."

Oh I forgot. They don't have a tabloid culture in France. Isn't that lucky?

Wednesday, December 20, 2006

The Lib Dems

OK, one last thing before I vanish for Christmas.

I thought I'd link to Political Hack's excellent analysis of the Lib Dems. I must admit that since I've become politically active, I've slowly started to realise that they are not quite what they seem and that the public's image of them is incorrect (particularly the bit about it being safe for a centre-left voter to cast a protest vote for the Lib Dems).

Read the full article here.

Merry Christmas

Just wanted to say Merry Christmas to everyone who reads this blog. Hope you all have a great time, get the presents you want and don't put on too much weight over Christmas!

Normal service will be resumed after the festivities.

Monday, December 18, 2006

For Mozart Fans

For all Mozart fans, a new website has been launched. It's a free database of 24,000 pages of sheet music covering all his works plus 8000 pages of critical commentary.

The website owners say they also intend to put 100 original manucripts, 270 letters written by Mozart, and about 2,000 pages of texts accompanying many vocal works, online next year.

To access the site, click here. Enjoy!

Thursday, December 14, 2006

Agreement with France on combatting VAT fraud

From the FT:

On Wednesday Gordon Brown said British and French officials had agreed that the UK could introduce a “reverse-charge” system of VAT on computer chips and mobile phones to fight “missing-trader fraud”, which cost the UK exchequer £2bn-£3bn in 2005-2006.

France had feared the UK plan could export the fraud from Britain to France but found that its own VAT system was leaking more revenue than thought.

.................The reverse-charge system levies VAT only as goods are finally sold to consumers and not throughout the supply chain, eliminating the possibility of missing-trader fraud.
Mr Brown said the UK changes would remove 90 per cent of goods used for missing-trader fraud from the UK VAT system and would be introduced eight weeks after the European Council of Ministers gave unanimous final approval to the changes.

Yesterday a French official said the discovery of a big shortfall in VAT receipts persuaded finance minister Thierry Breton to drop opposition to the British plan. France would study the plan with a view to implementing “something similar” to combat its own fraud problem. The aide said investigators estimated carousel fraud caused a shortfall in VAT receipts this year of €300m to €2bn (£200m-£1.3bn).

I hope this move is successful - most of Europe is leaking money to the fraudsters, and budgets would all look a lot healthier if this was stopped. Of course the fraudsters will then move onto something else - twas ever thus.

Thursday, December 07, 2006

Electricity prices in the EU

Eurostat have released an analysis of electricity prices in the EU plus surrounding european countries, as at 1/07/06.

Here's the table of prices for household customers:

Country Total euros Basic Other VAT
per 100KW Price Taxes

Bulgaria 6.34 5.27 - 1.07
Latvia 6.90 5.84 - 1.06
Greece 7.01 6.43 - 0.58
Lithuania 7.18 6.09 - 1.09
Estonia 7.50 6.35 - 1.15
Croatia 9.38 7.72 - 1.66
Romania 9.48 7.96 - 1.52
Hungary 9.71 8.09 - 1.62
Czech Rep 9.95 8.27 - 1.58
Malta 10.34 9.85 - 0.49
Slovenia 10.48 8.73 - 1.75
Finland 10.99 8.26 0.75 1.98
Poland 11.37 8.82 0.50 2.05
Spain 11.57 9.49 0.48 1.60
UK 11.59 11.03 - 0.56
France 11.91 9.05 1.24 1.62
Portugal 14.10 13.40 0.10 0.60
Slovakia 14.20 11.93 - 2.27
Cyprus 14.26 12.21 0.22 1.83
Austria 14.39 9.80 2.19 2.40
Belgium 14.68 11.36 0.77 2.55
Ireland 14.90 12.85 0.27 1.78
Sweden 15.61 9.75 2.74 3.12
Luxembourg 16.03 13.90 1.22 0.91
Norway 16.43 11.88 1.26 3.29
Germany 18.73 14.10 2.05 2.58
Italy 21.08 15.48 3.68 1.92
Netherlands 21.30 12.40 5.70 3.20
Denmark 24.56 10.72 8.93 4.91

The first thing to notice is that the UK pays very little in electricity tax
(VAT was cut to 5% by New Labour in 1997). Only Malta pays lower electricity tax than us. By contrast the Netherlands and Denmark levy swinging taxes (in Denmark's case the tax is greater than the base electricity price).

Latvia, Lithuania and Estonia enjoy low basic electricity prices because they get their gas from Russia at a deep discount (because they are former Soviet Republics) - how long this state of affairs will last is anyone's guess. Eastern European states in general all enjoy various discounts from Russia and hence pay less for their electricity.

In western Europe, France is notable for a low base electricity price - possibly because their electricity is generated by nuclear power and therefore hasn't been subject to the price hikes gas users have been subject to. Spain too has a low basic electricity price - their electricity generated by a mix of nuclear, gas and renewable (esp wind). Their low price is probably a testimony to how efficiently the Spanish electricity generators run their companies.

Intriguingly, Norway's basic electreicty price is higher than ours - a surprise as they are awash in oil and gas.

Wednesday, December 06, 2006

Poles flock to join UK Trade Unions

Duncan Campbell in the Guardian:

More than 200,000 Poles have registered to work in Britain since the EU expanded, and the actual number now working here is thought to be much higher. Many have found that employers try to pay them lower wages than British workers and take advantage of their ignorance of employment laws. Now unions, particularly those that recruit from the catering, security and building trades, are reporting a sudden growth in membership and involvement.

"This is very significant for the trade-union movement," says Brendan Barber, the TUC's general secretary. "It's not enough any more to think only about traditional workplace organising. We have to see what unions can do to reach out to vulnerable workers and find out how well they get their rights enforced."

............"People have a feeling of being lost when they arrive," said Paulina Tomasik, the 24-year-old secretary of the new Polish-speaking GMB branch in Southampton. Ms Tomasik, who moved to Britain from Radom, sees the union as playing a crucial role in helping Poles adjust to life in Britain: "It's not easy when you don't have a place to live and you don't speak the language very well. Some agency workers are paid £120 a week and then told they have to pay £80 in rent. When one person objected to this he was sacked by text message."

Many Polish workers in the catering trade are also realising that they can easily be taken advantage of. One Polish waiter in Southampton recounted how his management took a percentage from all the tips paid by credit card and were refusing to pay them extra for working Christmas Day or bank holidays.

Ross Murdoch, a GMB project coordinator, said that when a public meeting for Polish workers was held a few weeks ago in Southampton, "we were expecting around 20 to come and were amazed when 130 arrived". The Polish branch was swiftly formed and similar projects are planned for Swindon, Slough and Brighton, where there are large pockets of Polish workers.

The experience has been mirrored around Britain. Groups in Bristol, London and East Anglia have contacted unions for advice and help. In Glasgow the Transport and General Workers' Union set up a Polish branch after holding a meeting attended by 150 Polish workers. "We have recruited several thousand into the union nationally," said Andrew Brady of the T&G in Glasgow. He described the influx of Poles into the union movement as "a shot in the arm".

Links have also been established with Polish unions, and the North West TUC brought over a national organiser from Solidarnosc to give advice on employment rights. The TUC now attends job fairs in Warsaw, and many unions have Polish-language websites and application forms. Discussions are also under way about whether to allow Poles to join unions before they arrive in Britain and pay dues when they have started work.

This is a very welcome development - it should end exploitation. Solidarity between indigenous workers and Poles will make the work playing field level. I hope these Poles will vote Labour too in local and EU elections (they arn't eligible to vote in general elections) - after all they owe the Labour government a debt of gratitude for letting them in, in the teeth of prejudice from the opposition.

Tuesday, December 05, 2006

Doubts grow about Eastern Europe's Flat Tax model

From Businessweek:

Doubts over the flat tax are being voiced not just by voters but also by economists, drawn to the subject because of its current vogue, who have found that it does not have all the benefits that its proponents claim.

An International Monetary Fund (IMF) working paper published in September argued that previous debate over the tax "had been marked more by rhetoric and assertion than by analysis and evidence."

Supporters of the flat tax often deliberately confuse the impact of moving to a flat system with the impact of cutting tax rates or simplifying the system. Often the switch to a flat system involves cutting and simplifying, but these are separate issues from the tax rate.

Looking at the impact of moves to a flat system in the region, the IMF economists found that this did not increase revenues unless the tax was set at a high level, such as in Lithuania and Latvia.

Behavioral effects such as improved incentives were usually not enough to compensate for a cut in overall tax rates, contradicting the hypothesis by the economist Arthur Laffer that revenues would increase as rates were cut. "Behavioral responses may have mitigated the revenue loss, but in no case does there appear to have been a Laffer effect," the researchers found.

The IMF examined the only significant exception, Russia, but found that improved tax collection there was more a consequence of fast economic growth and improved enforcement than of the move to a flat system in 2001.

The impact of the flat tax on incentives is in any case ambiguous. Cutting marginal tax rates will increase incentives, especially for those at the lower and upper ends of the income scale. However, some taxpayers may be less motivated to work harder if average tax rates fall because they will more easily achieve the standard of living they aspire to. Many others, of course, are salary earners and cannot work harder in any case, regardless of whatever tax incentives are offered. Extra revenue from incentives offered to entrepreneurs is likely therefore to fail to match the reduced revenue from the majority of taxpayers if overall rates are cut.

In conclusion, the IMF paper argues that flat taxes may not be suitable where the fairness of the tax authorities is less in doubt, where there is no need to signal a shift to a market economy, where tax compliance is better established and tax administration more effective, where income tax is more important in revenue terms, and where the presumption of the progressivity of marginal rates is more entrenched.

This would imply that rather than Western Europe coming to embrace the flat tax mantra, it is Central and Eastern European states that will adopt a progressive system as their economies develop.

This is even more likely given the pressure that the new EU member states will come under to close their budget deficits. Flat taxes can only work politically if they are set at a low level. However, government spending in this region is still very high. To finance this and at the same time meet the budget-deficit convergence criteria to adopt the euro, Central Europe would have to set flat taxes at a rate that would harm the middle class and constitute electoral suicide.

Sunday, December 03, 2006

The Importance of the Team

A new ICM poll in the News of the World reports that on the question "Who would make the best Prime Minister" voter preferences were 29% Gordon Brown, 25% David Cameron, 8% John Reid, 5% Ming Campbell, 14% None, 19% Don't Know.

It's encouraging for Labour not least because 37% opted for Labour politicians. Both Gordon Brown and John Reid will be in the next Labour government cabinet, and voters will no doubt be reassured that there are two Prime Minister-quality politicians at the top.

A crucial part of Labour's ability to get back into power in 1997 after 18 years was the fact that the team surrounding Blair had so much depth - Brown, Dewar, Cook and others - it reassured the public that Labour had the abilities in place to govern. In particular there was a "buy one get one free" aspect to the Blair-Brown partnership, most explicitly in the 2005 election. The public seem to like this. They are reassured that everything is not dependant on just one person and that government can function even if the prime minister is out of action.

I think that in the next election Labour should continue to pursue this "team" theme with Gordon Brown and John Reid. Reid handled the summer airport plot very reassuringly in Blair's absence, and having a strong team should contrast well with one-man-band that is the Tories.

Friday, December 01, 2006

Another reason not to smoke: Polonium poisoning

From an Op-Ed in the New York Times:

WHEN the former K.G.B. agent Alexander V. Litvinenko was found to have been poisoned by radioactive polonium 210 last week, there was one group that must have been particularly horrified: the tobacco industry.

........The industry has been aware at least since the 1960s that cigarettes contain significant levels of polonium. Exactly how it gets into tobacco is not entirely understood, but uranium “daughter products” naturally present in soils seem to be selectively absorbed by the tobacco plant, where they decay into radioactive polonium. High-phosphate fertilizers may worsen the problem, since uranium tends to associate with phosphates.

In 1968, the American Tobacco Company began a secret research effort to find out. Using precision analytic techniques, the researchers found that smokers inhale an average of about .04 picocuries of polonium 210 per cigarette.

........A fraction of a trillionth of a curie (a unit of radiation named for polonium’s discoverers, Marie and Pierre Curie) may not sound like much, but remember that we’re talking about a powerful radionuclide disgorging alpha particles — the most dangerous kind when it comes to lung cancer — at a much higher rate even than the plutonium used in the bomb dropped on Nagasaki. Polonium 210 has a half life of about 138 days, making it thousands of times more radioactive than the nuclear fuels used in early atomic bombs.

We should also recall that people smoke a lot of cigarettes — about 5.7 trillion worldwide every year, enough to make a continuous chain from the earth to the sun and back, with enough left over for a few side-trips to Mars. If .04 picocuries of polonium are inhaled with every cigarette, about a quarter of a curie of one of the world’s most radioactive poisons is inhaled along with the tar, nicotine and cyanide of all the world’s cigarettes smoked each year. Pack-and-a-half smokers are dosed to the tune of about 300 chest X-rays.

Is it therefore really correct to say, as Britain’s Health Protection Agency did this week, that the risk of having been exposed to this substance remains low? That statement might be true for whatever particular supplies were used to poison Mr. Litvinenko, but consider also this: London’s smokers (and those Londoners exposed to secondhand smoke), taken as a group, probably inhale more polonium 210 on any given day than the former spy ingested with his sushi.

So now you all know - stay away from the ciggies if you want to avoid Litvienko's fate!