We don't believe Which? here for a moment

Which? magazine wants us all to know that there are vast areas of the country which are “food deserts”. We do not believe this for a moment. It’s nonsense.

The big supermarkets need to step up support for low-income customers marooned in England’s “food deserts” to enable them to readily access healthy groceries during the cost of living crisis, according to the consumer group Which?.

The scarcity of affordable, healthy food is so acute in some of the poorest parts of Birmingham, Liverpool, Bradford, Durham and the Welsh valleys that the vast majority of neighbourhoods in these areas should get targeted help, Which? says.

The study found nearly half of neighbourhoods in the north-east of England – and about a third in Yorkshire, the West Midlands and the north-west of England – lacked easy access to supermarkets, and had poor availability for online deliveries and low levels of car ownership, making it much harder for low-income households to put food on the table.

The reason it’s nonsense is in there, they’ve got the facts but don’t realise they do.

Just as an aside there’s some chatter about how there are more food banks in these “deserts”. Well, possibly the causation runs the other way? Who is going to set up a business selling food in an area where people get food for free?

But the nonsense. 20 years back the idea of food delivery to the home - of groceries, not a takeaway - was something limited to Hovis ads and they harked back near a century themselves. Today anyone in the country can book that online delivery from any of a number of different grocery suppliers.

We did in fact check this. A midweek delivery pass - which we believe means free deliveries on midweek days for one month - seems to cost £4. Perhaps we’ve not quite got that detail quite right but it does seem to be of that order. According to ONS the average household grocery bill is some £60 a week. Add a bit to that for the recent burst of inflation and call it £280 a month. The delivery cost is 1.5% or so of that bill.

This is not nothing, we agree, but it is pretty trivial. It’s most certainly less than the price difference between a full service supermarket and a corner store.

Which? is claiming that there are food deserts in Britain. When in fact each and everyone of us has a handful of supermarkets in our own front room - or wherever else we keep the computer, tablet or mobile phone. It’s simply nonsense. Abjectly so. Geographic access to good, cheap and nutritious food is better now than it ever has been in all of human history. This really isn’t the right time to be complaining about the lack of such access.

But then we suppose that these campaigning organisations do have to find something to complain about. Where would this form of indoor relief for the sprogs of the upper middle class be without something to whinge about, however absurd it might be?

There is no such thing as tax avoidance

We fear that MPs are suffering from a logical failure here:

However, a recent report by an All-party Parliamentary Group is attempting to dispel this as a myth. Some politicians have also attempted to confuse the position by categorising tax planning between acceptable tax planning and unacceptable tax avoidance, despite there being no legal distinction between the two.

This simply doesn’t make sense. There is indeed a thing called tax evasion, by definition it is illegal. There is also tax planning, paying the amount the law demands. Then there are attempts at tax avoidance. But while people may attempt a dodge or three upon examination these become either illegal - tax evasion - or legal - tax planning.

There is therefore no such thing as tax avoidance, there is only the attempt to avoid taxes. This is indeed a very different thing. It also means that there need be no change in any prosecution policy because if people evade tax then that is, by our very definition, already illegal and something that can be prosecuted.

There’s an interesting example of this right here:

The APPG report has been prepared in conjunction with Tax Watch

Julian Richer funds Tax Watch. Julian Richer sold his business, Richer Sounds, for vast piles of money and paid not a bean in capital gains tax. Entirely, wholly and absolutely legally. The company was sold to an employee trust, public policy has been to encourage such actions by making the receipts from having done so free of those taxes. Those who follow the law to the jot and tittle should not be put in fear of the law now, should they?

We really must praise Willy Hutton for this

Willy’s managed to reference a specific report and entirely ignore the findings of the report. Which is pretty good going even for Mr. Hutton. The complaint is about the interaction of economic and health inequality. Hutton is insistent that it’s the former that leads to the latter. It’s that life is so unfair in Britain which leads to the illness. In this Willy is entirely in line with current bien pensant thinking of course.

This is also entirely the opposite of what the report he references actually says on the point.

It is their birth weight (heavier babies fare best), what they then got to eat, the strength of family ties and parenting, their access to great early years education, as a telling report from the Institute for Fiscal Studies on health inequalities released on Friday confirmed.

Well, no, the report actually says:

Reverse causation argues that the poor health of a group with some characteristic – low social

status – is because poor health causes that characteristic, at least in part. That healthier people

make better marriages, for example, is institutionalised in many societies. More relevant today

are the effects of health on education and on earnings. Poor health in childhood and in young

adulthood limits educational opportunities, though once educational qualifications have been

earned they are largely impervious to illness. That is not so with earnings or income, which are

often severely affected by sickness or approaching death. It is unclear to us why this channel

should be controversial, often denounced by those who work on the health gradient. Of course, it

does not preclude income causing health, though it is surely not a good idea to rely solely on one

mechanism and ignore others.

As we’ve been saying for a long time now, health inequality will cause economic inequality. And at least some health inequality is just inevitable, that moving finger of fate having written and all that. It simply is not true that health inequality is purely an outcome of economic inequality. It could be, partly, we can see mechanisms by which it might be, but it is also absolutely true that some of the causation will work in that reverse manner.

It is also not true - or at least not obviously so - that austerity contributed to the slowdown in improving lifespans:

However, it is far from clear that austerity bears primary responsibility for the slowdown in

mortality progress. After the financial crisis in 2008, different European countries had different

experiences of austerity – some with a great deal, some with none – and there is no systematic

negative relationship between the degree of austerity experienced and subsequent health

outcomes among wealthy countries.

Finally, there’s one more point the report makes, one that we’ve been shouting about. Which is that for much of this we simply do not know.

Until we are able to merge death records into the census

What is meant here is that we simply do not know what the connection is between childhood conditions - economic, social and so on - and lifespan. Because we measure lifespan by age and place of death. We do not - and we’ve checked this ourselves, both with a Registrar and with ONS - have any statistical linkage between place of birth, place or conditions of upbringing, and place of death. That’s on the long form death certificate which is not an input into any of the currently used statistics. It is possible to get some sort of proxy by linking in, as there, the census, but this has not been done.

International migration is such that some 14% of the UK is currently foreign born. Whatever those childhood influences for them are, they’ll be the ones of their source country, not this one. Internal migration rates are obviously vastly higher than this. And when we get to the most detailed level of statistics - the sort that say this council ward in Glasgow has life expectancy 11 years lower than this other ward in Kensington and Chelsea - then migration rates are such that we’ve really no useful information at all about that link between childhood and age of death. Simply because the portion of the population that dies in the same 3,000 or so household unit it was born into is tiny.

The IFS is doing good work here really looking into the subject. Will Hutton takes it as supporting his preconceived ideas. It really would help if he actually read - understanding it is perhaps too much to ask - the report.

This is also true of all those others wailing over the same points and subject. Current bien pensant thinking on the subject is wrong. Partly because we’ve simply not the statistical base to make the conclusions some do and further, the logic used over causality is incorrect as well.

Germany is the poster child for killing the planet

Dominic Lawson is far too mild here, far too polite:

Now look at Germany, whose Energiewende policy trailblazed the switch from fossil fuels to wind power. On one day in 2019 wind power supplied almost 60 per cent of the country’s demand; on another day it could muster only 2.6 per cent. Cheap Russian gas seemed to be the ideal backup, but then ... well, you know the rest. Result: the German government has just authorised the removal of a wind farm that sits over untapped coal reserves, which the country now desperately needs to keep its industry going (and voters warm). RWE, which owns both the wind farm and the coalmine, explained: “We realise this comes across as paradoxical. But that is how matters stand.”

That is far too polite for this is the pathway, the technological one, that leads to that high end climate change outcome. The one where the ice caps melt, Flipper is broiled in the fumes of the last ice floe and AIEEE! we all die. Or, as the academic literature calls it, RCP 8.5.

As we’ve pointed out before, and as this paper discusses at length, what is required for this disaster to happen is the following. Please note that we’re not joking here. Nor are we making anything up. This is the underlying assumption which creates that entire runaway warming prediction. The world runs out of conventional oil and gas. The world refuses to use unconventional oil and gas - shales and fracking - and thereby turns to coal to power industrial society. Coal usage not only grows, it grows to more of total energy provision than it ever has done historically. That’s what produces the disaster.

What is Germany doing? Ah, you see the problem there then?

This is also why we’re so vehemently against planning - that detailed insistence by politics on what people may and must do - as a method of solving climate change rather than the Nobel-winning insistence from Bill Nordhaus that the way forward is to incorporate the externality into market prices and leave well alone.

For that more market oriented US is fracking and thereby not moving back to coal, that planned Germany is moving back to coal in the absence of conventional oil and gas. The planners are, in fact, creating the very scenario that the entire game is hoping to avoid. You know, spending €1 trillion and more on the Energiewende so as to increase the chances of Flipper being broiled?

The resaon we don’t want the planners anywhere near anything is because they make things worse. In this case, actually cause what it is that we are all trying to avoid.

Privatisation *increased* investment in the water system

Parts of this Times piece on the water system are very good. But the economic analysis is entirely arse over tit. As in incorrect, entirely and wholly wrong, disastrously misleading and so on:

A prosperous country should be able to find the money for a sewerage system that can keep up with demand. So why is it not happening in Britain? Privatisation is often fingered as the principal culprit. Pretty much everywhere else in the world, the water industry is a public enterprise — for good reason. Aside from it being a natural monopoly, there is a basic mismatch between the behaviour financial markets encourage in publicly quoted companies (short-term profit maximisation) and that which the public interest demands of the water industry (long-term investment in infrastructure).

We agree that this is the current zeitgeist, the currently held fashionable view. But then it’s still wrong.

For investment in the water system *increased* following privatisation. In fact, desiring that increase in investment was one of the reasons for privatisation. Logically we’d not, therefore, expect an increase in investment if privatisation were reversed.

The reason for this being that private sector companies have a longer investment horizon than government does. Or, perhaps in a more detailedly correct manner, than politics does. Politicians, therefore politics, look(s) to the next election. Things beyond that horizon tend not to get dealt with at all and if they are then not well.

Back when there was a wall of necessary investment arriving in that water system. Partly simply because politics hadn’t invested enough in it over the preceding decades - it was more important to pay off state workforces than dig drains. Partly because new water standards - which is righteous, a richer country should indeed have higher environmental standards, Mr. Kuznetz and all that - were arriving prompted by the EU.

Politics simply wasn’t going to provide those sums. Capitalism would - because capitalists were entirely delighted to invest now in order to receive a steady flow of utility related interest, dividends and so on over the next decade or four in return.

One of those very points of privatisation was to get the water system into the longer time horizons of the private, not political, sector and thereby increase investment in it.

In fact the British water industry is the very poster child, the real world exemplar, of why this belief is wrong:

Pretty much everywhere else in the world, the water industry is a public enterprise — for good reason. Aside from it being a natural monopoly, there is a basic mismatch between the behaviour financial markets encourage in publicly quoted companies (short-term profit maximisation) and that which the public interest demands of the water industry (long-term investment in infrastructure).

When that theory is tested against the real world it fails. And, as always, when facts meet hypothesis it’s the universe that wins, not the babykissers.

Them’s the facts and no, if you don’t like them there isn’t another set to offer. Privatisation increased investment in the water system.

It's strange to see Liberals forget how to be liberal

Perhaps it’s that qualifier, Democrat, that causes the problem:

The Liberal Democrats would force GPs to see every patient within a week, as they say NHS waiting times are a major factor putting voters off the Tories in their target seats.

….

Sir Ed said that his seven day policy would be enshrined into law and added to the NHS constitution to make sure it happens.

The basic authoritarian mindset is that if all the really clever people in government tell everyone else what to do then we’ll gain the best of all possible worlds. The Fat Controllers pass laws, make punishments, shout, pull the policy levers and the wishes of Sir Topham Hatt become reality.

The liberal looks at this same world and these same policy goals and realises that people do not work that way. The way to get people to work like Stakhanov is not to shoot those who don’t but to give a medal - and the bigger assigned flat, reduce the waiting period for a car to only 5 instead of 10 years, etc - to those who do. Even the Soviets worked that out, eventually.

That is, the most basic lesson in all of economics, incentives matter, is true. So, create and mould the incentives to get people to undertake the desired action.

The seven day law, the constitution, this must be backed up by punishment when the appointment doesn’t happen. Who is going to get punished and how? Anyone really see jailing doctors as a cure for anything?

The liberal instead looks at this same situation and notes that doctors currently get paid by the number of patients that they don’t see. GPs are, largely enough, paid the capitation fee, an amount per person who is registered with them for the appointments which do not, in fact, happen. The incentive therefore is to have a large list and few appointments. Lots of patients who produce revenue by not having appointments is the income maximisation strategy here.

To gain the Hatt goal, of GPs actually seeing patients, the solution is to change those incentives. Pay GPs for having appointments, not a list of those they don’t allow to have appointments. Then watch behaviour follow the money as GPs and their systems swivel to maximise incomes under the new set of incentives.

The authoritarian and the liberal both have those visions of the good society, as here the desired outcome might even be shared. The difference is in the method used to gain it - the authoritarian would force, the liberal tempt. The advantage of that second method is that it works - as every priest since at least Aaron has bitterly complained, temptation works really well with human beings.

If we start from abject nonsense then.....

….we’ll end up with abjectly nonsensical policy, won’t we?

Take this from The Guardian:

Agriculture is the world’s largest industry. Pasture and cropland occupy around 50% of the planet’s habitable land and uses about 70% of fresh water supplies.

Agriculture doesn’t use 70% of fresh water supplies. Nothing like, it’s an ingloriously silly thing to say. Having said it of course leads to very silly indeed proposals for doing something about it.

The Guardian’s own link to the FAO to back up the assertion contains this:

On average, agriculture accounts for 70 percent of global freshwater withdrawals.

Which is something wildly different from the first assertion. Of the fresh water that humanity diverts in the system 70% is used by agriculture. Something - as we really do insist - very different from the claim that agriculture uses 70% of fresh water supplies.

We can approach these numbers from the other side. Total rainfall is some 500,000 cubic km a year. 70% of that is over the oceans of course so we might or might not say that’s part of the available supply. River discharge of the 107,000 km3 that falls on land seems to be 37,000 km3. 35% of rain runs into the sea, therefore nothing at all can be abstracting 70% of all (land based) rain from the system.

We can go further too. That oft quoted insistence that it takes two or three tonnes of water to grow a kilo of wheat. Well, OK. Much of that falls from the sky onto the field. That which doesn’t run off into the rivers (see above) returns to the atmosphere through some combination of evaporation, transpiration and, for all we know, perspiration. Whether we’re growing wheat or thistles in that field there’s not much difference in that water cycle. Equally with that 15 tonnes of water to grow a kg of beef. Cows do not turn up at the slaughterhouse as 1 tonne of bovine and 15,000 tonnes of water in a big trailing bag (as a loaf of bread does not have a 3 tonne reservoir attached). That 15,000 tonnes is respirated, transpired, perspired or even pissed out again, back into the cycle. Which would be much the same if we grew bunnies we didn’t eat in that field instead of cows.

Agriculture does use 70% of the water than humans use, that’s the actual truth. It’s also entirely true that some of that is used horrendously inefficiently - irrigation of alfalfa in Southern California being an obvious example. The alfalfa produced is worth less than the alternative uses of the same supplied water. Sure we should do something about that - having an actual and real market in water would solve that particular problem by teatime.

But 70% of water used by humans is an entirely different number from 70% of all water, or all freshwater, or all freshwater supplies, or all freshwater annual availability or any other such construction we’d like to think up. Further, not having agriculture would change the abstraction from the overall system only by a tiny amount at the margin - for whatever plant and animal life replaced agriculture would also use water to something close to the same extent. As also evaporation would still happen.

If we start believing abjectly stupid claims then we’re going to end up with stupidly abject policies. Farming doesn’t use 70% of the world’s freshwater, nothing like. So, stop believing that it does.

How to Get Growth

If you were suffering from a disease you did not understand, would you consult a doctor with six years training or a quack with no training at all? Translate that metaphor to the economic growth politicians claim to be so necessary for paying inflation-proofed wages and funding the increasing tax take. Should you consult those with long experience of creating business or ministers who have had no training of any kind for their positions? The departmental civil servants are not much help: they just restrain ministers from their dafter ideas as distinct from implementing what might work. That is why nothing happens. Nuclear power stations are identified as essential but work does not start for 20 years. In 2018, the Home Secretary declared that migrants crossing the channel in small boats was “a major incident” and she would put a stop to it at once. The numbers have grown dramatically since, aided and abetted by the judiciary who declare attempts to export them to be illegal. The idea that the illegality could be addressed by changing the law is too subtle for the Home Office.

My point, obviously enough, is that if you want a new shower installed, you should ask a plumber, not a carpenter. Another Think Tank, which should remain nameless, is organising a major event to consider how the UK achieves growth. It has identified the key aspects for discussion as regulation, trade, investment, enterprise, tax and financial services. Getting these aspects wrong undoubtedly impedes growth but does growth automatically follow from getting them right? Or are these just things politicians like to talk about?

One definition of enterprise is taking on financial risks in the hope of making a profit. But that puts the emphasis on risk. I do not know a single successful entrepreneur who started by looking for risks to take on. Yes, of course, new ventures are risky but that’s just an undesirable side effect. The entrepreneur and her banker would rather it wasn’t.

Financial services similarly are side effects. It certainty helps to have access to finance although access to too much finance is dangerous. That is one reason why government sponsored new ventures usually fail. Bernard Matthews told me, and just about everyone else he knew, that in May 1950 he started what became a fabulously successful turkey business by buying 20 eggs and selling the 12 chicks that hatched to a neighbour for half a crown.

Tax is not a thing the successful entrepreneur thinks about at the beginning. You have to be making good profits before it becomes an issue but I do know one exception. The CEO of Gilbeys Ireland was pally with their Finance Minister who, over a boozy dinner, told him that if he launched a successful export brand, the profits would be tax-free for 10 years. Bailey’s Irish Cream was the result. The real point of that story is not that the launch was driven by tax but by human interaction. Innovative new business comes from the people you interact with.

There is not enough time in this blog to debunk all the conventional “wisdom” that rattles round Westminster about how growth should be achieved. Innovation and productivity are the keys and neither word appears in the list above. Ministers should study how growth was, hitherto, achieved in the real world. What brought it about? It is certainly good to remove the obstacles, regulation in particular, but understanding how it is really generated is far more important.

Compared to what?

We are very much in favour of Thomas Sowell’s interesting question - “Compared to what?”

More than one in four children with care worker parents are growing up in poverty, according to a report by Trades Union Congress, with the union warning of “rampant” hardship in households with key workers.

The TUC said that 220,000 children – 28.4% – with at least one social care worker as a parent were in poverty, and said the number was on course to rise to nearly 300,000 by the end of this parliament unless action was taken to improve pay and conditions in the sector.

This is, of course, relative poverty. Living in a household with less than 60% of median household income, adjusted for household size. Given that neither the TUC nor Landman Economics have deigned to actually publish their study we can’t tell whether this is before or after housing costs.

So, to ask Sowell’s question, compared to what?

Child poverty continues to rise. The latest data tells us that almost one in three children in the UK are living in poverty (31%). Nearly half of children in lone parent families live in poverty, compared with one in four of those in couple families.

Oh. So poverty rates among care workers are lower than they are in the general population. Or, care worker incomes are higher than they are in the general population - the same statement.

So, that’s something that seems to be solved then, isn’t it?

There are two ways to look at this

It’s not just in this particular part of the Establishment that this happens:

Government ministers are eight times more likely to have been privately educated than the general population. More than half of the new cabinet (58%), including Sunak himself, attended private schools, compared with only 7% of the British population.

That figure is similar to that for the new prime minister’s two immediate predecessors: 60% of Liz Truss’s cabinet were privately educated, as was the case for about two-thirds of Boris Johnson’s first cabinet and those following his 2021 and 2020 reshuffles.

We’ll admit to not having checked this but we’d strongly suspect the Shadow Cabinet has, even if to a lesser degree, rather more than that 7% of the general population. It’s also something of a standing joke that those who write The Guardian are not exactly nor usually the products of that bog standard comp.

Which leads us to those two ways. It’s possible, as many do, to complain about the privilege which comes from those private educations. Then propose that something must be done - abolish the private educations perhaps.

We think that the much more interesting question - much more important too - is what is wrong with the state educations on offer for them to lead to this result? Once we’ve worked that out perhaps we could go to work on fixing whatever those problems are. Which, we would insist, would mean changing how the state schools operate, not abolishing that competition which shows them up.

Observations about the country are all very well. What matters though is what questions you ask about why it is this way. A complaint that private schools seem to produce our rulers is fair enough. But why do they, what’s wrong with the state schooling that leads to this result? As we say, that’s the much more interesting and important thing to be asking.