It's about migration more or less

Jack Twyman is an intern at the ASI.

Take a look at any national newspaper and, as an alien from outer space, you’d be forgiven for thinking that the United Kingdom was under siege by an aggressive foe. 

Constant news headlines decry the government to “Send in the army to halt migrant invasion”, adding “Rescue boats? I’d use gunships to stop migrants”. The Express is desperate saying “We can’t stop migrant chaos”, and that “Migrants take all new jobs in Britain.”

It comes as no surprise to say that is not remotely the case. In 2022, the Office for National Statistics (ONS) recorded the highest ever net migration to the UK at 606,000 people. The ONS also recorded the 45,746 people who arrived illegally. Of those, 25,119 would be allowed to stay in the UK as refugees. Accounting for this, illegal arrivals accounted for just under 8 per cent of the total of net migration. In 2023, as of 13th June,  there have been 9,062 illegal arrivals so far.  

So what is leading the current UK government to assert that passing one of its five main targets is to pass new laws to stop small boats, and ensuring the swift detainment and removal of illegal entrants? 

Looking at opinion polls, the picture distorts further. An IPOS UK poll from March 2023 found that only 19 per cent of the public have passing new l was to stop small boats crossings as one of their top four priorities. Easing the cost of living, 67 per cent, reducing NHS waiting lists, 50 per cent, growing the economy, 36 per cent, halving inflation, 31 per cent, all out pace in importance for the public. 

Additionally, a Poll by the Law Society of England and Wales of 1,954 people in March 2022 found that almost two thirds of people said refugees who arrive in the UK illegally should have the same rights as those who come legally. 

However, it is still clear that a great deal of voters care deeply about the issue. Since government rhetoric has increased, and the Rwanda policy became more likely, trust in the Conservatives on asylum and immigration increased to 1 in 3 in March, up since February. POLITICO found that among 2019 Tory voters, 41 per cent see illegal migration routes are a priority. 

‘Why are my hard-earned taxes, in a time of rising inflation and economic uncertainty, being used to put migrants up in 4 star hotels?’ voters argue. Rishi Sunak is so convinced that he claimed “stopping the boats is not just my priority, it’s the people’s priority.”

The government of course has the resources and funds available to continue allocating efforts into sustaining the refugees, but the impasse of claim processing has exacerbated the issue further. Data from The Migration Observatory at the University of Oxford shows that decisions had already failed to keep pace with applications before the huge increase in claims in 2021 and 2022. This gap has only widened further, with outstanding cases awaiting final decision at the end of 2022 at 132,000 asylum applications.

So there is a real issue is in processing, where slow rates have created a backlog that has created a situation where asylum processing centres are overwhelmed and overfilled. The government now spends on average £4,300 per asylum seeker per month in private-provided housing for refugees, equivalent to a £6.2m daily cost of housing asylum seekers in hotels.

Last year, the UK spent £3.7 billion, or 29% of its aid budget, supporting refugees within the UK, drawing criticism from aid groups, international NGOs and domestic politicians alike. Surely there must be a better way? The obvious choice would be to train more civil servants to process the claims, but this is costly, currently inefficient, and would be a lengthy process.

I propose that we procure private firms as processors, paying them per asylum claim processed. This outsourcing and privatisation will create a healthier competition and increase diligence and duty of care as the claim assessor stands to lose more than if they were in a non-commercial, government position. It will also avoid the currently concerning plans to house refugees in former military bases and so-called “rudimentary accommodation” in the words of Immigration Minister Rober Jenrick. Private firms are proven to respond quicker to market demands, and there will surely be a host of providers created overnight if this scheme was put forward. 

But there is still more to be done. We must ask ourselves the question why we currently prohibit asylum seekers from working whilst their claim is being processed? In an era of high job vacancies, should these migrants not be seen as an opportunity, or gift for the country? A proactive approach would see these migrants start contributing from the offset, giving the government the opportunity to recuperate some of the funds used to support them, and allowing the migrants to bring benefit to the economy. 

I would also propose allowing asylum seeker applications to be made in embassies abroad. Sure, there are foreseeable issues with this proposal in countries where there are a high number of prospective applications, but allowing application in France or other similar countries will prevent the need to dagerous journeys to be made overseas, and the subsequent strain on the emergency services responding the the dire humanitarian results. I am not alone in this proposal as in fact 68 per cent respondents for an Ipsos  poll of the UK public support this proposal. 

Ultimately, I am sureI align with the vast majority of my fellow countryfolk in not sharing Jenrick’s belief  that Asylum seekers who arrive in the UK by crossing the Channel in small boats “cannibalise” communities.  Certainly he is correct that the continued uncontrolled situation threatens “the compassion that marks out the British people.” Yet claiming that the protestors outside migrant hotels are a “warning to be heeded, not a phenomenon to be managed” is at best a reach. The Daily Express Editor Gary Jones recently claimed that after concerted effort by Stop Funding Hate was a signficiant factor in rethinking editorial direction around sensitive topics like the Channel migrants.

This serves as a reminder how the public can exercise non-political rights to enact change and achieve a voice irrespective on whether elected representatives are in agreement. Sure, the UK is in danger of neglecting necessary action on the issue, however this is not equivalent with a mutli-million pound deal to ship arrivals to Rwanda and elsewhere, nor pay huge sums to house migrants in hotels, or former military bases. With a pragmatic approach that reaches out of government and into enterprise the situation can be more effectively dealt with, and far faster that without. Election ploy or not, securing the stability of UK society must be a priority.

What joy! We have to crush the NFU for Gaia

The Guardian tells us of a new World Bank report. Which states that there are vast subsidies going to fossil fuels and farming which really must stop, right now. Not doing so will lead to Gaia boiling and of course none of us want that. Which does indeed mean that we all get to go crush the National Farmers’ Union. Which is, we can all agree, such wonderful fun.

Vast fossil fuel and farming subsidies causing ‘environmental havoc’

Sounds very bad indeed.

The “toxic” subsidies total at least $7.25tn a year, according to a major new report from the bank. The explicit subsidies – money spent by governments – account for about $1.25tn a year, or more than $2m a minute. Most of these are harmful, the bank says.

Now there’s a little twist here. Explicit means actual money paid out. Concerning fossil fuels in the rich world this near never happens. This is the subsidy of oil and or gas in places like Russia, Iran (the two largest) and certain other middle and lower income countries. We don’t do that so we don’t have to stop.

The indirect fossil fuel subsidies are a bit more difficult. Because the calculation is that everything should be paying VAT and also fossil fuels should be paying a full carbon tax. Any level of tax less than this is an indirect subsidy. We don’t do much of that - the UK is one of the very few places that does, by this calculation, already tax petrol and diesel enough to cover those. True, there’s red diesel for farmers and trains, so those would have to go. The special lower VAT rate for domestic fuels, that’s got to go to meet this World Bank standard. But that’s what they are talking about here and in this sense the UK is really doing very well indeed. Fix red diesel and VAT and we’d be fully conformant in fact. And, you know, since we want to save Gaia, why don’t we do those last two things?

Farming though, farming is a different thing. We do have that National Farmers’ Union demanding, as with the National Union of Miners of decades ago, that farming (mining) is special and there should be vast, gargantuan, subsidies to those who drive Range Rovers across their own fields on our behalf. The World Bank is telling us that this is not so.

In fact, the World Bank is telling us that we’ve got to stop subsidising farming at all. We should go the full New Zealand and just let them work as with any other business. Those who add value stay in business, those who don’t, don’t.

There can also be no arguing with this for of course we are all to do absolutely everything in order to save the planet. This is the science you know, the only way to save humanity from a fiery, boiling, death.

So there it is. In order to save Gaia we’ve got to crush the NFU. We baggsie the right to be first to tell them too.

Lordy be this is an appalling piece of poltroonery

The Guardian tells us that austerity has meant that we’re seeing the stunting of British children again:

Children raised under UK austerity shorter than European peers, study finds

Average height of boys and girls aged five has slipped due to poor diet and NHS cuts, experts say

The average height of British children has risen slightly.

British children who grew up during the years of austerity are shorter than their peers in Bulgaria, Montenegro and Lithuania, a study has found.

In 1985, British boys and girls ranked 69 out of 200 countries for average height aged five. At the time they were on average 111.4cm and 111cm tall respectively.

Now, British boys are 102nd and girls 96th, with the average five-year-old boy measuring 112.5cm and the average girl, 111.7cm. In Bulgaria, the average height for a five-year-old boy is 121cm and a girl, 118cm.

See? That’s a rise in height. Not a fall, a rise, in the height of British children.

And now the poltroonery.

Experts have said a poor national diet and cuts to the NHS are to blame.

What, cuts to the NHS make kids grow taller? Really?

said Henry Dimbleby, the former government food adviser

Well, at least we have been given the usual sign that the rest of this is nonsense.

The actual paper is here. And so to the truly interesting part:

But they have also pointed out that height is a strong indicator of general living conditions, including illness and infection, stress, poverty and sleep quality.

“They have fallen by 30 places, which is pretty startling,” said Prof Tim Cole, an expert in child growth rates at the Great Ormond Street Institute of Child Health, University College London. “The question is, why?”

OK, so British children aren’t shorter, they’re taller. But if we rank kiddies by country then British children have fallen 30 places in such a ranking. A ranking of 200 countries by the way.

So, what has happened? The most glorious thing, the greatest reduction in absolute poverty in the history of our entire species. This past 40 and 50 years has indeed been exactly that, as idiot socialism died off and free market capitalism roamed the globe. Meaning that children in formerly poor countries are now in places not so poor. Those children are also now, as ours have for a century, getting three squares and some milk a day and are now growing up big and tall. As the actual paper in Nature points out. And laments isn’t happening in those areas like sub-Saharan Africa where this joy is not, as yet, happening.

Globalisation means kids formerly so poor they were stunned from hunger grow up tall now. And this gets turned into a whine about the NHS? Poltroons, there’s no other explanation for it.

Except Dimbleby, of course. No one’s going to accuse him of understanding this enough to twist it.

Yay! for geothermal energy

How wonderful:

At United Downs, a stone’s throw from many of the old mines, a pioneering project run by Geothermal Engineering is drawing heat from granite rocks that lie more than three miles below the surface.

It does this by pumping out water warmed to 200 degrees celsius to power a heat exchanger, before being pumped back down again to a shallower well.

It’s a known technology, it works, it is at least possible for it to be economic, so why not?

Well, of course, this being Britain we do have a problem:

However, the UK currently lacks a specific regulatory regime for geothermal, according to a House of Commons Library report,

That’s one of those things that is terribly easy to provide. Just print the fracking regs with “geothermal” copy pasted in where necessary. The similarity - drilling holes which might cause earthquakes, more importantly the reinjection of wastewater which causes earthquakes - is obvious enough that they can and should be both governed by the same rules.

So, what’s to stop us? Except the clear point that if geothermal were to be restricted by the same rules as fracking then geothermal would not be possible. Therefore geothermal will gain different rules - and the hypocrisy of the fracking rules will be revealed. Not that they’ve exactly been hidden, but made even more clear perhaps.

Nothing like the clear rule of law, is there, and this is nothing like it.

Time to praise Will Hutton again

After all, it’s only 14 years since we last did so.

Without Will Hutton where would we be? How would we know what not to do if he were not there to guide us?

Thus praise is due to Will Hutton. As with the recent comment about Polly Toynbee from Fraser Nelson: every compass needs its butt end.

Amazingly, the subject matter is the same as well. Last time around he was insisting that there should be a “Gordon Mac” as with Freddie Mac and Fannie Mae in order to protect Britons from mortgage problems - a suggestion made two weeks before those two American institutions went resoundingly bust.

Now he’s suggesting that we should have long period fixed rate mortgages - something that would require that Gordon Mac - because:

Britain is experiencing the sharpest, fastest rise in interest rates since the 1980s, with more expected – and that after 13 years of rates at 0.5% or below.

True, other economies are facing interest rate increases. But what is unique about Britain is the degree to which borrowers are left to face so much interest rate risk alone. We need more than a review. We need a top-to-bottom investigation into the structure of British finance and how it could be made to work more fairly. And the institutions of economic policymaking need a makeover too.

Neither the complacent governor nor the chancellor of the exchequer – blithely saying that a recession is worth contemplating to get inflation down – seem aware of the structure of the British mortgage market. About 95% of British mortgages are either variable, linked to every quirk in interest rates, or a mere two-year fixed rate. So the rise in rates has proportionally more of a disastrous impact on household finances than anywhere else.

The bit that Hutton misses is that therefore interest rates will rise less in the UK than elsewhere. Because monetary policy is more effective here than elsewhere.

Think on it. We’ve - just to create a simple model - two sectors to the economy. Business and domestic. The domestic reaction to interest rates is determined by those mortgage rates - for, as Hutton is pointing out, variable interest mortgages do pretty immediately impact upon domestic finances. Business obviously has to also suffer whatever interest rate is imposed upon the economy.

So, now we need to raise interest rates in order to squeeze out that inflation. If we had long term fixed rate mortgages then the effect of higher interest rates on most households would be zero. The only ones affected would be those attempting to buy right now - everybody who has already bought is protected. All businesses of course face the new and higher rates immediately.

Protecting domestic finances in this manner will mean having to have high interest rates for longer in order to squeeze out the inflation. Or have interest rates have to go higher to squeeze out the inflation. So, fixed rate mortgages shaft business and industry more than floating rate ones whenever we need to raise them.

It is exactly that vulnerability of British households to interest rate changes which makes monetary policy so much more effective in the British economy than it is in many others. Meaning that as we’ve a more effective policy we only have to use less of it than others.

But, you know, as we said 14 years back, every compass does need that butt end, Mr. Hutton.

The Wickes boycott is the joy of capitalist free marketry

There is a little contretemps over the management of Wickes (a matter to do with tradesmen we believe) shouting that of course everyone should be celebrating 2SLGBTQ+ or something. Others insisting that well, if they’re going to start ramming that idea down our throats then we’ll not shop there - leading to that fall in the share price.

Good.

Not the idea of 2SLGBTQ+ or not, the celebration of or not, but the idea and practice of boycotts - and their opposite the deliberately thought through extra purchase. As happened with Chik-Fil-A over a related issue some years back, when those supporting their stance deliberately and offensively went to eat mor’ chikkin in the parking lots in celebration.

How we spend our money is how we bend producers to our will.

Capitalists desire our money. In fact, any producer of anything does. In order to get our money the producer has to pleasure us sufficiently to get us to hand over that cash. Free markets mean that anyone can set up - that is what the free means, freedom of entry - to make any attempt to pleasure us enough to hand over our money.

Excellent, our job as consumers is to dispose of our money in the manner that most pleasures us - maximises our utility in the technical jargon. If this includes strong celebrations of 2SLGBTQ+ then we should - note should - spend our money with those who display such support. If it doesn’t then we should - again note, should - not spend our money in such places.

The actual issue here we’re not commenting upon, that’s not for us to have an official view upon in the slightest. A step back and of course consenting adults get to do as consenting adults wish, that’s the core of the liberal argument. But that includes, obviously enough, deploying one’s own cash in whatever manner one wishes - again the core of the liberal argument.

Which is that joy of the capitalist and free market system. We’ve got the incentive for producers to do as we wish them to, we’ve got the feedback mechanism to force that behaviour. Their greed for our cash plus our ability to direct our cash gives us the one and only system where we all get to vote our views each and every day. What an excellent system, eh?

We can even go further. Those aiming at the mass market have to be careful of those utils of the mass market. Anheuser Busch trying the idea with Bud Light - the working man’s beer heavily associated with F-150s and the like - might not have been the wisest move. Trying it with Michelob wouldn’t have worried anyone because who would worry about that beer? Similarly, Wickes might not have made the wisest choice given their customer base.

But that free entry does allow capitalist greed to aim at niches too. Someone is making a fortune out of all those flags. There are people profiting from heavier foundation creams and clothes with tucks. The system allows both the mass market offerings that have to average out those utils and also the niches where very specific desires can be profited from.

It is only free market capitalism that gives us both kinds of music, country and western.

Our role in the system is to force the producers to pleasure us by judicious spending of our own money. Therefore we should do just that, spend on those who pleasure us.

What it is that people are using as their measure is the deeply unimportant thing - liberals, recall, your life, your decisions about it. That everyone gets to act upon their desires is the very joy of this capitalist free marketry.

Seriously, how stupid do these people think the rest of us are?

People mithering about the cost of sunscreen - terribly important to beat skin cancer in an age of global warming, d’ye see? - and we get told this:

ONS data shows that sunscreen has risen in cost by 5%, from an average of £6.26 a bottle to £6.58, when comparing figures from April 2018 with the same month in 2023.

We have actually had some inflation since 2018 - you might have noted people talking about it. £6.26, to have a flat real price, should now be £7.61. If we’ve got our denominator the right way around that’s a 16% fall in price over 5 years, not a 5% rise.

This is not the only foolishness here of course:

Asda’s Protect Refreshing Clear Sun Spray at £4 for 200ml and Protect Moisturising Sun Lotion SPF30 at £3 for 200ml both did well.

The reaction to free market capitalism actually solving the problem is that we must stop using free market capitalism:

Leading dermatologists fear deprived families could shun sunscreen due to its cost, as some experts call for a voucher scheme giving children and those in need free access.

Yes, it is to follow such free market success by nationalising the provision of something so cheap.

The suncare market in the UK is worth an estimated £169m,

Yep, they’re seriously suggesting that a £3 a head (there are some 65 million in the country) problem, one that is therefore already solved, be made worse through nationalisation. Scourges and whips are needed to force these mitherers back into a welcome silence.

This is before we even note the real problem. Which is not that sitting in an English country garden leads to skin cancer. It’s that 10 days on the beach in Alicante that causes the burns - the sudden change is the problem, not the general exposure. To actually solve the problem being described would require Britain lowering the cost of sunscreen in Spain, not Britain.

And no, it is not a sensible answer to say that at least it gives these people something to do, to worry about. This is one of those problems already solved therefore we desire silence upon the subject, not suggestions.

The joys of government investment

An entirely standard economic analysis is that government should be doing some part of the investing in a country. A lot is resting on that qualifier “some” there. Even we would agree that investment in the rule of law - as an example - is something government should be doing. But others take this much further.

The argument does become that as government can borrow more cheaply then and therefore government should be doing the building of all large projects. This doesn’t convince for a number of reasons but the most obvious is this:

Thurrock’s plight echoes recent insolvencies at Croydon, Slough, and Woking councils, each of which fell into difficulty after borrowing hundreds of millions of pounds to pump into ill-starred commercial investment and regeneration schemes.

Those local councils were able to borrow at lower than market rates via a special scheme at the Treasury. They should, therefore, have been making super-profits. If your financing costs are lower than anyone else can possibly achieve then you really should be making higher profits than anyone else - the very definition of super-profits.

As we can see it hasn’t worked out that way. And no, we can’t then turn around and say central government would do it better - not with HS2 staring us in the face we can’t.

The problem here is that people not used to thinking in commercial terms just aren’t any good at investing even on better than commercial terms. So, in order to hoard and save societal resources we shouldn't allow the non-commercial world to be deciding upon investments. Not for any moral or ideological reasons but just because they’re so damned bad at it.

That local councils go bust left, right and centre even with the use of lower than market price money just shows that we shouldn’t be using local councils to do any investing. QED.

We can now define that word “some” to a useful level of accuracy in this application of it. Government may be the investor where only government can be the investor. Government may not be the investor where government may or could be the investor.

That this entirely puts the kibosh on Mariana Mazzucato’s ideas of modern corporatism is just one of those pieces of collateral damage that we’ll all have to put up with.

Why do Tories like the NIT while Labour calls for a UBI?

In my previous blog, which you can find here, I investigated the economic rationale behind a Negative Income Tax (NIT) and a Universal Basic Income (UBI), arguing that the former exhibits greater effectiveness in combating poverty but might discourage individuals to work, while the latter incentives greater participation of low-income individuals in the labour market at the cost of a lower effectiveness in tackling poverty. 

However, this economic assessment is not the only lens through which these two policies can be analysed and usually fails to explain why right-wing parties tend to support a NIT while left-wing ones prefer an UBI. This political divide is mainly to be connected to the ethical – rather than the economic- differences of the two policies, with a NIT relying on a libertarian view of freedom and equality while the UBI arising from an egalitarian one.

The first key aspect that distinguishes the ethical foundations of NIT and UBI relates to their perspectives on freedom. Examining freedom from a negative standpoint involves considering an individual free when they can carry out their actions without interference from others or groups (i.e., they are free from). Emphasising the concept of negative freedom is intrinsic to libertarian thinking, as it necessitates the establishment of minimal legal frameworks and a governing authority to safeguard individuals' self-determination. 

In contrast, from an egalitarian standpoint, an individual is deemed unfree if they lack the means necessary to pursue a goal and be autonomous, even if no other individual or institution obstructs their path. Positive freedoms can therefore be described as opportunities (i.e., they are free to), and their maximisation necessitates redistributive measures, which are ensured by a stronger and more active state.

A second factor is individuals’ approach to uncertainty. On one hand, the libertarian stance acknowledges that different individuals possess varying degrees of risk aversion when engaging in economic activities. This implies that individuals make choices regarding their employment status, investments, and consumption based on their unique risk preferences. In this view, the market system ensures equality of treatment among individuals. 

On the other hand, the egalitarian viewpoint perceives and justifies redistribution as a response to the widespread risk aversion exhibited by all individuals. This argument is rooted in the notion that, given individuals' lack of knowledge beyond moral considerations (referred to as the veil of ignorance), they would collectively support the existence of institutions dedicated to redistributing the products and benefits stemming from the arbitrary distribution of abilities and talents.

Based on a libertarian view, a negative perception of freedom and a probabilistic approach to uncertainty would reject any form of equality beyond equal rights, thus opposing any form of compulsory fiscal imposition. However, assuming the necessity for the existence of such a policy, state intervention should be limited to preserving the essential tenets of libertarianism. 

Therefore, any public redistributive scheme should exclude any form of needs, the link with the market should be as weak as possible and the role of the state should be as less invasive as possible. In this context, a NIT scheme is often argued to be a redistributive policy that adheres to these constraints by implementing exemptions and deductions from taxable income and only taxing the portion that exceeds a certain threshold. On the other hand, a positive perception of freedom, which asserts that true freedom encompasses both the means and the rights to pursue one's desires, along with a risk-averse approach to uncertainty, leads to a policy that addresses people's needs with an unconditional requirement. This is exemplified by a UBI, which aims to meet individuals' purchasing power without imposing specific conditions.

Ah, so wind power's not so cheap then, eh?

Back the drawing board then, eh?

Energy bills will rise £200 a year within a decade to pay for wasted wind power as new turbines in Scotland are paid to switch off, according to new forecasts.

Poor electricity grid infrastructure means energy created by turbines in Scotland cannot reach homes in England on very windy days.

Last year Britain wasted enough wind power for a million homes, but new turbines built over the next decade would see that figure grow fivefold by 2030, according to think tank Carbon Tracker.

The cost to pay wind farms to switch off at these times and buy gas to fill in the shortfall would rise to £3.5 billion a year, according to Carbon Tracker’s analysis. That would add an average of £200 to annual household energy bills.

Once we add in dispatchibility and transmission costs then wind isn’t so cheap. But then we all know that already, even if the others haven’t grasped it as yet.

The much more interesting part of this is something more meta.

The problem has been blamed on bottlenecks in the planning process which can take up to seven years for major new electricity cable projects.

Think on this. The same people who are insisting that we’ve got to entirely redesign the whole economy - or, the milder ones, the entire power sector - are likely the same who insist we’ve got to have lots and lots of planning. The planning being the thing which obstructs the ability to do that redesign of course. For the one thing the planning permissions sector does is make it damn near impossible to do anything different. But the whole point of the redesign is that everything must be done different.

That is, the last 30 years of planning law is what is making it so difficult to carry through the plans of the past 30 years.

There is one theory of history which states that every society starts out vibrant and active and this lasts until it drowns in its own bureaucracy. At which point the fall and the rise of a new civilisation. Given that we do actually know this is possible we suggest, ever so gently, that perhaps we could - should - short circuit this process and instead drown our own bureaucracy?