But if Welsh Water is worse than English water then what about privatisation?
We think this is a fascinating little piece of digging by the BBC:
Welsh Water has admitted illegally spilling untreated sewage at dozens of treatment plants for years.
The admission came after the BBC presented the water company with analysis of its own data.
One of their worst performing plants is in Cardigan in west Wales.
The company has been spilling untreated sewage there into an environmentally protected area near a rare dolphin habitat for at least a decade.
Welsh Water says it is working to tackle the problems and does not dispute the analysis,
Our word. Gosh. Because of course the English water companies have been subject to a barrage of complaints recently, no? As a result of Feargal Sharkey, Surfers Against Sewage and all water bills in England are to rise substantially to pay for the higher standards they desire. Well, OK, maybe that should happen - as we said. If we all want cleaner water then we’ve all got to pay for it.
But then the other part of the general analysis recently has been that it is private, for profit, water companies to blame for all of this. The dividends taken by the capitalists are the cause. Which does rather run into a slight problem, which is that investment in water rose upon privatisation. As we’ve also pointed out.
Cardigan was particularly bad, spilling for more than 200 days each year from 2019-2022.
The data provided to Prof Hammond showed that Cardigan almost never treated the amount of sewage it was supposed to.
According to its permit it has to treat 88 litres a second before spilling - but had illegally spilled untreated sewage for a cumulative total of 1,146 days from the start of 2018 to the end of May 2023.
"This is the worst sewage works I've come across in terms of illegal discharges," he said.
Oh. Well, that deals with the Richard Murphy critique, which is that the English water companies are environmentally insolvent and therefore must be nationalised. Not for profit and state run companies are worse so what do we do with them?
There is that third example, Scotland. But that’s difficult as Scottish Water is so efficient it seems not to monitor sewage overflows at all. A tad hyperbolic perhaps, but certainly very little.
Which does - or at least should, to the extent that anyone is willing to be rational here - bring us back to that basic discussion of state ownership and privatisation. Not, not at all, which is the best system in theory. Nor shriekings about capitalism, nor public goods to be publicly provided. But which is the most efficient system at delivering what we actually desire? Clean water from the taps, with the least sensible amount of environmental pollution, at the best price possible for those two?
We’ve also run a natural experiment here. England, Wales, Scotland, Northern Ireland got different ownership and management systems as a result of privatisation. The spectrum was from most capitalist to least. The best results have also been along that same spectrum - England, Wales, Scotland, NI.
We have, in fact, gone and tested those theoretical speculations. Done it with the water systems of entire nations. And guess what? Capitalism works best. Sure, well regulated capitalism and all that. But capitalism all the same.
Isn’t that interesting?
It's a very weird infrastructure report, isn't it?
Rishi Sunak has been urged to shut down Britain’s gas network and spend billions on rolling out heat pumps, in a major intervention by the country’s infrastructure tsar.
Sir John Armitt, chairman of the National Infrastructure Commission (NIC), warned that the supply of natural gas to all buildings must stop by 2050 if the UK is to hit its climate targets.
Eh? When did we decide to pass such powers over to the unelected? To the appointed, to those two and three levels removed from the electorate - or as we can call the electorate, us?
We might also wonder why everyone’s abandoned that basic lesson from the Stern Review - don’t, really don’t, try to plan all this with Wise Men in Whitehall. Set the general conditions by all means, then leave the market to sweat the details. The unelected banning us from cooking our eggs our way is detailed planning isn’t it? Rather a long way removed from any even pretence at democracy let alone economic efficiency.
At the same time we get told this:
The UK’s infrastructure needs a big cash injection, with public transport, home heating and water networks all in dire need of renewal, independent government advisers have said.
The investments, of about £30bn a year from the taxpayer and £40bn to £50bn a year from the private sector, would result in savings to the average household of at least £1,000 a year, higher economic productivity, and a better quality of life in the future, the National Infrastructure Commission said.
Eh? There are 28.2 million households in the UK. The tax bill for that investment - before we even think of the opportunity costs of the private money that could be turned to something pleasant and enjoyable like root canal work - is therefore £1,062 per household per year against the benefit of £1,000 per household per year. A number which says “Don’t!” in great big glaring letters.
The Man in Whitehall does not know best. As proven above.
At which point we do need a suggestion over what to do. Ours is abolish all of these commissions and offices and committees. The OBR, CCC, National Infrastructure, the lot. Return to a system whereby elected politicians make the decisions.
On three grounds. Firstly, their limited bandwidth will mean fewer silly ideas. Secondly, just basic freedom and liberty. Only those we directly put into office should be allowed to make such decisions over us. Thirdly and most importantly, elections would actually mean something to that freedom and liberty. Because the entire point and saving grace of the system is that we get to throw the bums out if we’re so inclined.
This is, of course, why the commissions, offices and committees exist, so that we can’t. Therefore we must get rid of the commissions, offices and committees.
Liberty requires that we the people can say no. Therefore we must be able to.
Science says don't ban vapes, not even flavoured ones
The economic discussion about vapes and cigarettes is whether they are complements or substitutes. Do people who use vapes then smoke the same or a larger number of cigarettes? Therefore a complement. Or fewer? Therefore a substitute. Most outside the weirder end of the public health racket would suggest substitutes. Therefore while vapes may or may not be great if you wish to reduce the smoking of cigarettes they’re absolutely gggreat, as Tony the Tiger would say.
Then we’ve some actual science:
Over 375 US localities and 7 states have adopted permanent restrictions on sales of flavored electronic nicotine delivery systems (“ENDS”). These policies’ effects on combustible cigarette use (“smoking”), a more lethal habit, remain unclear. Matching new flavor policy data to retail sales data, we find a tradeoff of 15 additional cigarettes for every 1 less 0.7 mL ENDS pod sold due to ENDS flavor restrictions. Further, cigarette sales increase even among brands disproportionately used by underage youth. Thus, any public health benefits of reducing ENDS use via flavor restrictions may be offset by public health costs from increased cigarette sales.
Yes, even bubble gum flavoured vapes that might - might - be marketed to children are a good idea if we want to reduce cigarette smoking. Because they are substitutes, not complements.
Which does lead to an important series of questions. Why do we ban vapes for children? Why are we going to ban flavours? Or even, why have we allowed the weirder end of the public health racket to gain any influence, let alone power, over policy?
For it’s not just whatever our position might be on whether they’re mad, bad, terrible to know. It’s that they’re wrong. Strikingly, aggressively, 180 degrees, wrong.
Given this, why is anyone listening to these people? Perhaps equally relevantly, why are we paying them?
Harry Dimbleby meets the Lucas Critique
Henry Dimbleby is upset. Now that we’ve laws against sweeties at the supermarket checkout, even against end of aisle promotions, then people seem to be doing other things. That is, they’re conforming, absolutely, with the law of the land. But they’re still doing things Our ‘Arry doesn’t like, therefore they are bad people:
“Kinder find a way around bans on aisle end displays. Create an aisle end in-aisle. At children's eye level.”
This does remind us of Adrian Mole, those grand plans we all had of bending the world to our will at age 13 3/4. It also reminds us of the Lucas Critique:
The Lucas critique argues that it is naive to try to predict the effects of a change in economic policy entirely on the basis of relationships observed in historical data, especially highly aggregated historical data.
That people place the choccie bars at the checkout and people buy the bars placed at the checkout does not mean that when you ban choccie bars at the checkout then people will stop presenting or buying choccie bars. Behaviour changes to accommodate that law of the land.
This goes on and on, obviously. Cigarette taxes at nosebleed levels produce cigarette brands (“Manchester”) that no one’s ever even tried to sell in legal and taxed form. Plus, obviously, smuggling and so on. As will ever tighter restrictions on vapes.
And if that crusade against chocolate and sugar goes much further then so will reactions arrive, actions change. Which, to be honest, we’re rather looking forward to. Visions of being dragged up in front of that other great literary creation, Justice Cocklecarrot, dance in our heads. Charges of smuggling condensed milk and cocoa powder (maybe Ovaltine for the adventurous) into our underground chocco factory. And while we might dream of such take these restrictions much further and people really will start selling sweeties on street corners.
It’s simply not possible to rule a society at the level of detail these people think is appropriate. Just because we’re all endowed with free will, agency, and so we’ll do as we, not they, wish. So, please just stop.
We’d also add a little warning. No one tell them that lactose in the babbies’ feeding bags is sugar. They’ll be mandating mastectomies soon enough. Others are already, as in Ireland, insisting that Daisy needs to be shot for producing the stuff. So shhh, no giving them ideas, eh?
Unless, perhaps, this is all performance art? Not seen many scripts from Graham Linehan around recently, is he writing Harry’s stuff?
The revolution in NHS cancer treatment
Don’t get us wrong here, we think this is a good thing that is happening:
Park – who is married and lives in Edinburgh – was recently asked to join a revolutionary UK research programme known as Determine. It has has been set up to target individuals with rare tumours in the hope that drugs licensed for more common cancers could be appropriated as a new treatment.
“By definition, rare cancers are uncommon,” said one of the project’s leaders, oncologist Matthew Krebs of Manchester University. “However, there are so many of them that in total they represent around 20% of all cancers that are diagnosed globally each year – more than any single type of cancer including lung, breast and colorectal cancer.
Rare cancers’ total impact on the health service is therefore significant but there are few treatments currently available to help patients. Determine has been set up to find if drugs that are already prescribed by doctors for more common types of cancer could benefit patients with rare cancers for which they have not been licensed.
We would just point out one important thing. That word “licensed”.
The crucial point is that, with recent advances in DNA analysis, scientists have discovered some very rare tumours possess abnormalities that could make them susceptible to treatments developed for common cancers. “We will be able to fast-track the approval of any promising drugs, opening the door to treatments for patients who have historically been left with limited options,” said Iain Foulkes, the executive director of research and innovation at Cancer Research UK.
This is about the approval process, the license. This is about getting through the bureaucracy that currently prevents these known to be effective against one cancer drugs to be used upon other cancers.
You know that vile, market based and capitalist American health care service? Any drug licensed for any use can be used by any doctor to treat anything she cares to try it out upon. “Off label” it’s called.
Markets in health care are such terrible things, aren’t they?
Just how unequal is Britain?
The Sunday Times has a fascinating little article.
What it’s like to live in England’s richest and poorest neighbourhoods
On the ground in Clapham and Grimsby, where household incomes differ by nearly £90,000
Well, OK. Except this offers us the opportunity to think about how really unequal Britain is.
That average household income in Clapham is £108k. In the worst - sorry, poorest - ward of Grimsby it’s £22k. So, that difference is 5x. That’s a pretty big difference between poorest area and richest.
But they also give us post housing cost net incomes (which we assume is after income tax and NI). £54k and £17.7k. That’s a 3x difference.
So, what’s the income difference we should be using? Is Britain geographically unequal by 5x or 3x?
We can go further too for other prices vary by geography, not just housing. A pint (hey, journalism and booze, why not?) is apparently about £5 in London, £2.30 in Grimsby. Yes, we know, beer prices vary by geography rather more than most other prices except those of land and housing. But still, use that as our measure and geographical inequality falls from 3x to 1.5x.
This modern world takes economic inequality to be the besetting sin of modern society. We disagree but so what? We would though insist that the only economic inequality that can possibly matter is consumption inequality. And that’s very much lower than the standard numbers portray.
Don’t forget that everyone is taxed upon the national numbers. All benefits (other than housing) are paid according to the national numbers. The leverage of the tax and benefits system when applied across those variations in regional or more local income is huge. As above, we can argue that inequality declines from 5x to 1.5x. A pretty extreme argument, we agree, but it’s certainly to less than the 3x that just post tax and post housing numbers give us. For prices of many to all things do vary by geographic location.
So, what’s the correct level of inequality that we should be striving for? And what’s the number which, when reached, we say “That’ll do”?
As we’ve suggested before we think that the inequality numbers should be measured using local PPP calculations. That is, just as we compare incomes between countries by the local costs of a specific lifestyle in those different countries so we should do so over the geography of Britain.
The reason we don’t is obvious of course. Once we do that then much of the claimed geographic inequality we must strive to get rid of has already been got rid of. And those who would tax the bourgeoisie out of existence would never want to give up their grand excuse now, would they?
Of course NHS hospitals pay business rates - a very sensible idea it is too
That old outrage, that NHS hospitals pay business rates but private hospitals can be charities and so gain an 80% reduction is doing the rounds again. A good explainer - and the one usually referred to - is here.
Hospitals in England receive most of their funding from NHS England and ultimately central government (mostly from general taxation). These hospitals then pay business rates to councils, which keep some of the money to spend on services and give the rest back to the government. The government then redistributes that money to other councils using the Barnett formula, which is designed to distribute based on need.
At worst it’s a bit of a money go ‘round, the NHS budget includes the business rates bill which then returns back to government. If NHS hospitals didn’t pay business rates then the NHS budget would go down by that same amount. Or, perhaps more likely given the terror any politician has of cutting the NHS budget, wouldn’t rise so quickly for some years until the effect was the same.
But if it is just that money go ‘round then why on Earth do we do it? For the same reason that we charge the contracting company lane rental on a roadway while it’s undergoing works. We have to pay the rent money to the contractor and then they pay it back. A go ‘round - except it produces an incentive for the contractor to economise on how long the lanes are closed for. Because they get to keep the daily rent for any time underruns but have to pay it for any overs. Beats a Cones Hotline as an incentive.
Spectrum is a scarce resource - we also know that the military needs some of it. So, we allocate spectrum to the military rather than selling all of it to the mobile telecoms companies and TV stations. But we charge MoD for it - and increase the MoD budget to account for that. A go ‘round again. On the basis that seeing that cash flow across the budgets is going to concentrate military minds on whether they need quite that much spectrum. Spectrum which, if they didn’t really, really, need it we could sell to the telecoms companies and TV stations. A weaker incentive than the roadworks people, obviously, but then it’s been a long, long, time since a Colonel was personally responsible for the finances of a regiment.
Which is also why we charge business rates to NHS hospitals. Land and buildings are a scarce economic resource. We’re obviously going to allocate some of those to the NHS - well, until that blessed day that we abolish it and decide to have a decent health care system instead. But we want those who have them allocated to to also think about whether they need quite as much as they’ve got. Thus the business rates go ‘round. All the money to pay it comes from government. All the money paid out goes to some level of government. But that it flows across the budgets of the varied levels of NHS management means that minds are concentrated upon whether quite that much of the scarce economic resource is actually required.
It is, in fact, sensible that NHS hospitals pay business rates.
Baumol's Disease isn't inevitable, it's just difficult
Baumol’s Disease is an entirely true observation that gets politically misused. It’s used as the justification for the NHS having its own inflation rate, requiring a 4% real rise in budget each year for example. So too some insist that government should always get ever larger. What government provides is largely services, these will become relatively more expensive over time, therefore we should inevitably have more government over time. Along with the tax bill to pay for it.
This is to slightly abuse the insight. Which is that wages are set by the average productivity of the economy - a truth. It is easier to increase productivity in manufacturing than it is in services. Therefore the labour embeded in services becomes more expensive, over time, relative to that in manufactures. Services become more expensive relative to manufactures. Or, another way of saying the same thing, services have their own, higher, inflation rate than manufactures.
The misuse is in insisting that services cannot be improved in their productivity. That’s not true. It’s just more difficult. And the way to do it - or one way - is to turn the services into a manufacture. As has just happened:
Novo Nordisk today announced the decision to stop the kidney outcomes trial FLOW (Effect of semaglutide versus placebo on the progression of renal impairment in people with type 2 diabetes and chronic kidney disease).
The decision to stop the trial is based on a recommendation from the independent Data Monitoring Committee (DMC) concluding that the results from an interim analysis met certain pre-specified criteria for stopping the trial early for efficacy.
Semaglutide is that same drug that is shrinking waistlines and also, in a different formulation, treating diabetes. The impact here is that this trial shows that it slows to ceases the progression of chronic kidney disease. Meaning that many fewer will need to have dialysis to treat kidney failure.
At which point we can marvel at the information efficiency of markets for the share prices of the major dialysis providers dropped 20% within hours of this press release. That’s the efficient market hypothesis - which, recall, only says that markets are efficient at processing information - tested and rather supported then.
But rather deeper we can see that this is a solution to Baumol’s Disease. We’ve just converted that service of dialysis into a manufacture of an injection. This is a large increase in productivity - we’ve beaten Baumol by converting that service into that manufacture.
All of which is interesting by itself. But it also gives up the political plan. Baumol doesn’t say that increasing services productivity is impossible, only that it’s difficult. That means that we have to apply more effort to that productivity improvement then - difficult things do require more effort. And what system do we know of that increases productivity? Pushes forward innovation? Quite, that’s markets - a result derived from another part of Baumol’s work in fact.
That is, Baumol tells us that the very problem identified, the rising cost of services, is exactly why we must have markets in the NHS. Because that’s the necessary system to overcome that difficulty over productivity.
Isn’t economics fun?
Apologies, but this has us laughing like a drain
Varied newspaper groups have been spitting blood over social media for some years now. That sharing of links and stories has been described as tantamount to theft of copyright. As a result of which varied countries are now insisting that social media companies must pay the newspapers for those links and headlines.
The social media companies are therefore dropping news as a product. Even, in countries like Canada - with very strict rules about payments that must be due - refusing to allow any news stories to be posted. We’d also suggest that Twitter’s recent change, so that headlines are not shown in such a link, is based upon the idea that if you don’t show any of the copyrighted words then you’ll not be charged for the copyright.
We’ve done our fair share of journalism - OK, writing for newspapers - over the years and this insistence from the newspapers has long puzzled us. Because every editor positively lusts after links from social media sites. But, you know, if money can be gained from shanghaing politicians.
When veteran journalist Campbell Brown stepped down from Facebook-owner Meta last week, it signalled the end of the social media giant’s brief flirtation with news.
Ms Brown, a former NBC and CNN anchor, was hired to much fanfare in 2017, vowing to rebuild relations with the media and oversee a revolution in the sector following a rush of fake news that plagued Donald Trump’s election.
Six years on, her quiet departure underscores how, for boss Mark Zuckerberg, news is no longer top of the agenda.
For ad-funded publishers, particularly those at the tabloid end of the market, the shift in priorities at Meta has been a painful blow. After building their businesses on a wave of social media clicks, digital mass market titles now face a sharp downturn in traffic.
The impact was clear to see in the numbers published by Reach on Tuesday. The publisher of the Mirror and Express newspapers blamed Facebook’s algorithm changes as its revenues continue to fall.
Yes, this does make us laugh. Right drain-like. For the newspapers are now complaining that social media has stopped stealing.
Nothing quite like people getting what they’ve been demanding, is there?
A proof that government's a bad way to run things
That certain things just do have to be done by government is true. For there are things that have to be done and also only government can do. We are not, after all, anarcho-capitalists around here. But a generally agreed idea around here is that government should be limited to only those things which must be done and also can only be done by government. One practical reason for this being that government’s not very good at doing things.
Breakdowns caused by potholes have risen by almost a third in two years, according to the AA, as Britain’s worsening roads snag tyres and wreck cars’ suspension.
Jakob Pfaudler, the chief executive, said callouts linked to Britain’s broken roads had risen by 30pc in the past two years.
He welcomed Rishi Sunak’s plan to spend £8bn mending holes in roads, saying it would be appreciated by his customers.
Mr Pfaudler said: “We were pleased that there’s investment in road infrastructure, particularly potholes, that’s something our members are very concerned about.”
The Prime Minister recently set out plans to spend some of the billions that were earmarked for HS2 on fixing Britain’s broken roads, after axing the Northern leg of the rail project.
The above being just an example of why this is so. Government is terrible at maintenance. That just general and boring grind of making sure that the little bits are tidied up around the edges, that things we’ve already got get fixed and stay fixed at that micro level.
For look at what is happening. Government currently spends around 45% of GDP. That’s 45% of everything. They tax motorists multiples of what it costs to enable people to be motorists - fuel duty, the VAT on it and so on is vastly, hugely, greater than the roads budget. But look at what then happens.
Firstly, as we know, the tax revenue from this activity is used to finance other lovely things for other lovely people. That’s a part of politics, using other peoples’ money to buy the votes of a third party.
Secondly, and more importantly, that good, service or infrastructure just never is properly maintained. For maintenance just isn’t one of the things that allows public posturing - that essential in vote buying. As no politician can cut a red ribbon over a pothole repair then pothole repairs don’t get done.
Until, obviously and as here, it’s possible to dress up that myriad of £50 repairs as a national £8 billion plan.
Politics, the political system, just never does deal with the fifty quid things. That’s why it’s such a bad way of actually running something.