A little prediction about what's to happen next here

This amuses:

A string of offshore wind projects meant to power Britain are in jeopardy after the global race to net zero sent costs soaring, casting doubt over the industry’s future as a cheap source of energy.

A surge in supply chain costs has pushed up the price of wind turbines, while increases in global interest rates have raised refinancing costs substantially.

Ah, so that terribly cheap wind power isn’t, in fact, cheap. The reason why is obvious and no, it’s not supply chains. It’s the price of money.

The vast majority of wind farm costs are upfront. Capital costs that is, which are then paid back over the operating lifetime. To be crude about it, the cashflow from the last 18 months (or whatever) of the 15 year installation is the profit, everything that comes before it is just paying back the capital plus interest. When interest rates rise that 18 months becomes 12 and 6 and negative 12 and so on.

The basic financial economics is exactly the same for solar - the costs are near entirely upfront meaning that interest rate changes hugely change the viability of an installation.

This just is so. Therefore we’re going to see shrieking that something must be done. We’ve actually already seen it being floated, the idea that there should be some special - lower - interest rate for green projects. No, there shouldn't be, for we’re already including all those externality costs of fossil fuels in the other things - carbon permits, etc - that we’re doing. To then insist upon lower interest rates is double counting - or double subsidy.

But there will be those calls, we guarantee it. It is after this that we make our prediction. For that basic fiscal set up is also shared by nuclear. High upfront costs, low running costs, the real determinant of the cost of the entire project being the interest rate applied. So, logically, if we are to have a special low interest rate for wind and solar then we should for nuclear. And we will not.

Which is the prediction - we will be told we must have low interest rates for 15 year wind projects, for 20 year solar and not for 50 year nuclear. And that is how we will know they are lying.

Vaping and the peak of the Snowdon Curve

We have pointed out before that there is that corollary to the Laffer Curve, the Snowdon Curve. It is possible for regulation to be so strict that it makes the problem worse, not better. It’s therefore necessary to make sure that the regulation of even things that we all agree need to be regulated is at that sweet spot, the Goldilocks point.

Our original example of the Snowdon Curve was about vaping:

Millions of illegal and potentially harmful vapes have been seized by trading standards in the last three years, data shows, with experts warning this is the “tip of the iceberg” and a “tsunami” of products is flooding into the UK.

Freedom of information requests to 125 local authorities revealed that more than two and a half million illicit e-cigarettes were collected since the beginning of 2020.

If people think it’s worth smuggling vapes in then clearly we are regulating enough that people think it worth smuggling. So, what are we regulating?

The e-cigarettes are not-compliant with UK legal regulations and could have higher nicotine concentration levels, contain banned ingredients or have oversized tanks for nicotine liquid. Previous analysis found illicit vapes to contain high levels of lead, nickel and chromium.

Umm, why don’t we not regulate tank size, nicotine concentration? So that the only incentive to smuggle is to be able to claim a higher lead, nickel or chromium level? Which, and call us picky here if you like, we tend to think isn’t one of those things that would be a great selling point.

That is, if we’re getting smuggling in volume then we’re over that peak of the Snowdon Curve. Reducing regulation would thus make us safer - and since being safer is rather the point of the regulation then why don’t we do that?

In which we do celebrity with Meghan and Harry

Tho’ we do insist that we’re just using celebrity with Meghan and Harry to illustrate a point about Gell Mann Amnesia. That last being that when we read a newspaper artcile on a subject we really know about we oft find that it’s really not right at all. But said experts will then turn the page and go on to believe the entirety of the next article upon which they think they are being informed by the journalist rather than knowing they’re being misinformed.

At which point:

The Duke and Duchess of Sussex’s attempt to patent Archetypes was rejected by US officials in the latest setback to hit their podcast business.

Well, no, even that pair aren’t stupid enough to try to patent the name of a podcast series. Given that they are capable of walking and breathing at the same time they really can’t be that daft.

But the British press seems to think they are. There’s that above from the Telegraph, from LBC, The Mail, Daily Express, The Royal Observer (?!) and so on. It’s necessary to turn to the Hindustan Times to get the truth of the matter:

Trademark application for exclusive right for their podcast name “Archetypes” was denied by the U.S. patent and trademark office.

A podcast name would be a trademark, not a patent, even though both are delivered - or not as the case may be - by the US Patent and Trademark Office, USPTO.

Given that it’s most of the UK press that has got this wrong we’d very strongly suggest that the mistake is actually in a Press Association piece from which everyone’s drawing their story.

We could just say this is an example of what Granny always said - you don’t want to go believing what’s written in the paper. But we’d want to be a bit more emphatic than that we think. If they’re like this on something so simple then how much are they getting wrong on complicated things like inflation, climate change, resources, political plans and all the rest?

Quite, if they’re not getting it right on things we know about then why are we trusting them to inform us on things we don’t, as Mr. Gell Mann pointed out.

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.