Vir Cantium

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Category Archives: Regulation

Minimum Alcohol Pricing – Today’s Headline-Chasing Silver Bullet

This morning I thought of a superb policy idea. Something that will eliminate speeding and deaths on the road. It will save the NHS billions and mean that the police can stop ‘doing traffic’ and go out and chase ‘real criminals’ … and it’s stunningly simple:

Introduce a minimum price for petrol and diesel.

I mean, the stuff’s so cheap at the moment, I really don’t know why anyone hasn’t thought of it before. Perhaps, if that’s too radical, they could slap a load of tax on fuel – that would probably work as well….

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Conference Goes To The Dogs

By way of a belated and brief conference round-up I must suggest that the Award for Speaking Truth Unto Lobbyists must go to James Paice, Minister of State for Agriculture and Food, telling the RSPCA fringe that dog licences would not be the answer to abuses such as dog fighting – and he is right.

Introducing a licensing system to help police illegal activity relies on those conducting the illegal activities going out of their way to … errm … comply with the law. More often, therefore, it is the law-abiding who inadvertently fall foul of the rules who are caught first, not the real targets – something that James Paice pointed out.

Nevertheless, despite pinning his colours to the mast just after the preceding RSPCA speaker had elicited a cheer for stating the Society’s support for the licences, he made it out without too much trauma, which is more than might be said for anyone who wolfed* down the vegetable curry too quick – that was a recipe to sort out the men from the boys.

* See what I did there?

Some Swedes Are More Equal Than Others

One fundamental error that so many socialists / egalitarians / spirit-levellers seem to make is to try and address the symptoms of inequality rather than the genuine causes (as much as they could even solve the latter).

‘Egalitarian’ Stockholm rents feed black market

In the Swedish capital, an egalitarian-minded rental system put in place more than half a century ago to help erase social differences by permitting rich and poor to live side-by-side in the centre of the city has a very large flipside.

Hmm, let me guess – all those Swedes human beings aren’t playing by government rules?

The publicly regulated system has created a flourishing black market for aspiring tenants willing to dish out huge sums to skirt multi-year-long waiting lists for a rental contract.

What, you mean than artificially holding down the price has led to excess demand and/or inadequate supply? Surely not; don’t you know that all that market forces stuff is a conspiracy made up by swivel-eyed right-wingers.

Virtually the entire Stockholm rental market falls within various queue systems regulated by the municipality. More than 300,000 people are currently waiting in line for a rental contract in the capital, a city of around 2 million inhabitants.

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Miss! Miss! That Boy Won’t Let Me Play With His Toys!

Suppose you are a supermarket and you want to offer to your customers goods which only a competitor currently sells. You approach them for a deal to buy from them and re-sell in your stores. Why would a competitor allow that? The ‘why’ is irrelevant – it may be that they want to expand their own brand ‘reach’ or simply to increase turnover by selling to a section of the market that wouldn’t otherwise buy their brand or products.

So they strike a deal with your supermarket chain. Clearly, they are still going to look for a mark-up, but they’re entitled to make a profit, so that’s fair enough. If you don’t like the price they are charging then you can always go elsewhere, or accept that you won’t be offering that particular range of products.

Of course, what might happen is that the competitor will laugh at your request and tell you to take a hike. That is their right.

What happens, though, if you aren’t a supermarket but a television broadcaster? In the happy regulated world of broadcasting, there is now a teacher to going crying to when you don’t get your way – they’re called OFCOM. And if the big boy who won’t let you share his toy is not popular – maybe the teachers just don’t like his wealthy parents, say – they will find in your favour and order the other lad to share his toys. In other words, force Sky to share Sky Sports 1 and 2 with other broadcasters like Virgin and BT at wholesale prices to be set by the regulator.

I’m trying to think of a parallel where such discriminatory intervention by the state would actually be justifiable, but am struggling. Sky don’t have a monopoly on sports coverage (some leagues of some sports, maybe, but that’s hardly harmful in any way). They are not the sole supplier of some essential means of survival (ignoring jokes about football “not being a matter of life or death but something far more important than that”).

If Virgin, BT et al don’t like the prices they are being charged – and presumably they feel unable to pass those charges on to customers or advertisers – then either they should be bidding for sporting TV rights themselves, or they can tell Sky to get stuffed. This should have nothing to do with a state regulator.

So what happens next – assuming that Sky doesn’t succeed in their perfectly justifiable legal challenge? Sky reduces their margins, and quite possibly their profits and customer base. That lost profit will have to be made up somehow. Perhaps through lower prices for TV rights? A good thing, some will say; that’s as may be, but something is worth whatever someone is willing to pay for it. In Sky’s case, that someone is the combination of advertisers and subscribers: ultimately, either directly or via proxy, the sports-watching public – the same consumers whose interests OFCOM would no doubt be claiming “deliver benefits” to. I’ll bet there’ll be plenty of football fans complaining when season ticket prices increase to make up for the depressed market in broadcasting rights.

Things may turn out better – Sky may make more money with the wholesale agreements, but if that was the case, wouldn’t they be doing it already? Again, though, the question stands: what the blinking flip has it to do with a government regulator?

And unlike in the real world, Sky won’t be allowed to stop feeding the moaning minnies at Virgin et al. So, having invested in a popular service, Sky are now finding that because those without have shouted loudly enough, the state has come along and forcibly redistributed the fruits of that investment – sorry, that should be “delivered consumer benefits”. How very … socialist.

Now suppose that Sky was charging people for their channels even if they never looked at them, and then threaten then with criminal prosecution if they refused. You’d think they would be throwing the book at them for such extortionate behaviour, no? So how do the BBC get away with it?

Shopping Around

Suppose you suspected that the place where you usually had your hair cut was overcharging. What would you do?

You might go down the road to the next hairdressers/barbers. Perhaps their prices were similar – unsurprising if they and the near neighbour were in competition and keeping an eye on each others’ rates.

A short distance away, you might find someone who’ll cut your hair for considerably less, so you go there instead (assuming you’re happy with the quality, customer service and all the non-financial factors that might go into the typical purchasing decision).

This, surely, is how most people would do things. Not, it seems if you are Dr Ros Altmann “former government adviser”. Her approach, it seems, would be to call on the government to launch an enquiry into the rates charged by hairdressers … or, to take another example, credit card companies:

A former government advisor has called for an investigation into the profit margins of credit card companies.

Ros Altmann says credit card rates of around 18% are excessive and argues there could be a case for a regulator to oversee the rates they charge.

Credit card customers are now paying the highest interest rates for 12 years, according to financial information service Moneyfacts.

This is despite the fact that base rates are at an all-time low of 0.5%.

The card companies say rates are high because of the large number of people failing to pay their bills during the recession.

Well, a quick glance at moneysupermarket reveals that there is a good selection of cards charging single figure rates, so it’s hardly a cartel operating here.

If a credit card rate is that critical to someone’s finances, then they need debt advice or help with their financial planning – not, potentially, more government regulation to save them from themselves.

Next thing you know, they’ll be suggesting that the credit crunch had nothing to do with people borrowing irresponsibly and that it was entirely the banks’ fault. Oh, wait….

Stephen Gately, Jan Moir and That Slippery Slope

Many will remember the article by Jan Moir that was published about the death of Stephen Gately. A not insignificant 25,000 people complained to the Press Complaints Commission about it. Now, the verdict has been passed:

The press watchdog has decided not to uphold a complaint about a newspaper comment piece on the death last year of Boyzone singer Stephen Gately.
Ms Moir’s article was published the day before the gay singer’s funeral. It discussed his lifestyle and suggested the cause of his death had not been natural.
Ms Moir said Gately’s death struck a blow to the “happy-ever-after myth of civil partnerships”.

This was the right decision, however inappropriate or distasteful the comments*. The old maxim applies: “I disagree with what you say, but defend your right to say it”.

Ben Summerskill from Stonewall, interviewed on the Today programme this morning, seems to think differently. He disagreed with the IPCC ruling and suggested that more needed to be done to deal with such situations. He has, unfortunately, fallen into the familiar trap whereby someone sees that a self-regulatory mechanism doesn’t produce a result he agrees with, therefore “self-regulation isn’t working”. He expanded on the point thus (not verbatim – working from memory):

We don’t let investment banks say “don’t worry about the audit, we’ll self regulate” or to mining companies “don’t worry about health and safety” we’ll self regulate”

If investment banks aren’t audited, then a lot of money is at stake (including, somewhere down the line, yours and mine). Health and safety can literally be a matter of life, death or limb. Jan Moir’s ill-advised comments were simply upsetting.

The problem here, and I think it was cited this morning, is that offensive comments about black or Jewish people are now covered by criminal law. Well, in my view, hate speech legislation has already gone too far. It provides for someone to be jailed because they expressed a viewpoint the government and legislature disagree with. Of course, the line must be drawn somewhere, but we had perfectly sensible, tried and tested rules covering incitement to violence, slander and libel for many years before hate speech laws came about. Too many have died for the right of free speech for it to be compromised just because someone’s feelings were hurt.

The fact is that to put regulation of the press on a legislative footing will not be putting us onto a slippery slope … we are already on that slope. Even so, that doesn’t mean that we should dig the ski poles in and give ourselves an extra push.

* Update: I think I should clarify – it wouldn’t necessarily have been wrong, given the independent nature of the PCC, to have decided the other way, but on balance I think the decision was right. Jan Moir was suitably castigated following publication, and apologised afterwards. End of.

The EU: Not A Place To Do Business

At least, certainly not if it involves employing people. Here is a legal ruling on a case brought, in part, by some HM Revenue & Customs employees:

Employees are entitled to accrue holiday pay while on sick leave and can carry that leave over into another year if they are too ill to take it, the European Court of Justice (ECJ) has ruled.

Okaaaay. Here’s the best bit though:

Individuals may also be able to claim for annual leave payments dating back more than 10 years, to when the Working Time Directive was first introduced, if their sickness absence had meant they were unable to take holiday, and hadn’t already claimed benefits from their employer.

Great! Well, great if your employer is, say, a large organisation that doesn’t have to worry much about having enough cash at the end of the month to pay the bills. Anywhere else, and either your employer will be pushed that bit closer to the edge, or you’ll find yourself strangely frustrated in your career path.

I will be fair here (maybe because I deal with them regularly): normally it’s not HMRC staff making life difficult for businesses, but the system they work in and their Whitehall and political masters. Therefore, this case might count as unusual in being a case of HMRC staff making like difficult for businesses entirely from their own initiative.

Trouble is, it does not seem that the principle cuts both ways, though. If one is sick during work time, can the employer dock the employees’ pay, or compel them to work unpaid overtime to make it up? Funnily enough, no. Now that would be equitable.

H/T: The Register

It’s Registration Time

And so we have chapter one in the textbook of how to create your own overbearing authoritarian state:

A review of home education in England is expected to recommend a national registration scheme for home educators.

It is also expected to say local authorities should have the right to visit any child taught at home.

The government commissioned a review to find out whether local councils were monitoring home educated children, or offering parents enough support.

But the government has also been concerned that home education could be a cover for abuse.

After all, we’ve got all the classic boxes ticked:

You have your bogeyman: in this case, paedophiles (“the government has also been concerned that home education could be a cover for abuse”). Well, I suppose “terrorism” or “climate change” wouldn’t really scan.

You also have the modern approach to the tired old principle of innocent until proven guilty, in that parents are apparently guilty of child abuse unless a state inspector has proved otherwise (or more likely, in practice, ticked a box to say so.)

Then there’s the special brand of newspeak: “The government … wants local authorities to provide better support to home educating parents.” Yep, because home-schooling parents were so enamoured of local authority support that they, errr, opted out of the local education authority’s service.

Concerning Alcohol

Plans For Minimum Alcohol Price

The government’s top medical adviser has drawn up plans for a minimum price for alcohol which would double the cost of some drinks in England.

Under the proposal from Sir Liam Donaldson, it has been reported that no drinks could be sold for less than 50 pence per unit of alcohol they contain.

I seem to remember hearing that before somewhere.

So, a senior government doctor calls for government intervention to tackle a social ill. Government funded fake charity supports his call. State-funded broadcaster carries the item at the top of the news (it was item two on Sky).

I think we can see where this is going … and despite that fact that such intervention (in the form of taxation) has been used over many years – presumably to little effect, or they wouldn’t be calling for this measure (no pun). And let us not forget that the licensing trade, particularly pubs, have already been dealt two hammer blows in recent years with the smoking ban and the recession. Pubs are as important part of many communities as the post office (remember them?)

This is all apart from the sheer inequity of making the responsible majority pay more to punish the weak-willed few.

Never mind, the good doctor has called for it, and so it will happen – although only after due consultation, of course!

It’s just the sort of thing that Devil’s Kitchen goes on about, and rightly so.

Fraser Nelson's Banking Experience

Fraser Nelson over at the Speccie has had an interesting experience with RBS:

Some tip-offs are so awful that you almost hope they are untrue. When I was told by Geoff Robbins, a computer consultant, that he had been asked about his political connections before opening an account with the state-controlled Royal Bank of Scotland it sounded fantastical.

Sadly, it seems, it was not fantastical. Fraser’s investigations revealed that indeed RBS are/were asking about political affiliations. The staff were blaming the Money Laundering Regulations. To be fair, the Money Laundering regs do require organisations, from banks to accountants and beyond, to ask some damn silly and pointless questions, but such is the nature of state regulation that the real targets of such measures often carry on as before, while the majority of the law-abiding are inconvenienced.

However, for a bank – a state owned bank in particular – to be asking about political sympathies is way out of order.

RBS’s response ran thus:

“As part of our implementation of FSA guidelines around Anti-Money Laundering activities, we introduced questions on Politically Exposed Persons as part of our account opening procedures. This has meant that staff in some instances have been asked to enquire about whether someone is a Politically Exposed Person. Unfortunately, they have asked the question of political affiliation instead. We have taken all necessary steps to ensure that our customers teams are aware of the difference and will change practices with immediate effect. This issue will also be highlighted in our ongoing staff training programmes on this important topic.”

Now in accountancy we also have to abide by the regulations. Many firms are regulated by their respective professional bodies, others by HM Revenue & Customs directly. For some enlightenment as to what a “politically exposed person” actually is, we can turn to HMRC’s guidance (pdf, 677kb, page 22), which would be near-identical to the FSA rules cited above:

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