22 December 2009

Ha Ha Ha Ha Ha!

From the BBC:
A man has received an apology from the Home Office after his ID card was refused as he tried to board a ferry to Rotterdam.

Norman Eastwood, from Salford, and his wife Jeanette were planning to travel from Hull on P&O Ferries on Saturday.

The new ID card, launched in Manchester, can be used instead of a passport across Europe - but the travel firm said it did not know this.

A Home Office spokesman said it "seems to be an isolated experience".

P&O ferries added that from now on ID cards will be accepted.

Mr Eastwood, however, said he "felt like a second-class citizen" and it was "humiliating" when he was told that he could not board the ferry.

"My wife was devastated too, she was really looking forward to doing some Christmas shopping over in Rotterdam, it was meant to be a festive treat."

Instead, the pair were left with no option but to turn around, abandon their plans and drive the 105 miles back to Greater Manchester.
I try to avoid deriving pleasure from the misfortune of others, but when somebody suffers because they choose, completely unnecessarily, to collaborate in one of the government’s most authoritarian projects, I’m willing to make an exception.

18 December 2009

The See-Through BPI

The latest from the nauseating BPI:
Levels of illegal filesharing are not declining, despite significant media coverage on the issue.
What an incredible co-incidence that, following Peter Mandelson's announcement that if there wasn't a significant reduction in illegal filesharing there would be a raft of draconian measures introduced, the record labels' main lobbying organisation has been able to produce a report showing that there hasn't been a significant reduction in illegal filesharing. Except, of course, that it doesn't; it just presents a fairly limited opinion poll as hard evidence.
Use of non-P2P methods to acquire music illegally have grown significantly in last six months, and are expected to keep growing. ... Geoff Taylor, BPI Chief Executive, said, "The growth in other, non-P2P methods of downloading music illegally is a concern, and highlights the importance of including a mechanism in the Digital Economy Bill to deal with threats other than P2P."
How very convenient that, after Mandelson proposed the introduction of an enabling act which would allow him, or his successors, to completely rewrite copyright law on a whim, with the justification being that it is needed to respond to sudden shifts in the methods of copyright infringement, the BPI is able to offer a report that supposedly supports the case for the enabling act.
The survey showed a net increase in the use of web-based or "non-P2P" methods during the last six months, with the biggest increases in use coming from overseas unlicensed MP3 pay sites (47%) and newsgroups (42%). Other significant rises included MP3 search engines (28%) and forum, blog and board links to cyberlockers (18%).
Take another look at those figures. Even if you take them at face value, the biggest increase is in unlicenced pay sites. These are people who are paying to obtain music. They might not be paying the people that copyright law says they should be, but they clearly don't have the "everything for free" mentality that lobbyist like the BPI try to portray them as. There is a market there, it's prepared to pay money for music, but rather than try to engage with those potential customers, the BPI expects the government to threaten them on its behalf. The music industry is paying the price for pursuing legislation when it should have been innovating and it is continuing to pursue the same strategy. Is it any wonder they face such ill will?

Lobbyists like the BPI try to portray those who infringe copyright as freeloading spongers, when in reality, it is the record labels which the BPI represents that could be most accurately be described that way; they continually go to governments asking to be handed more money. Of course, they don't tend to go to governments and say "collect more tax and give it to us as a handout." There approach is to say "give us laws that will allow us to go and extract more money ourselves." The method is different, but the end result is much the same.

It is the reord labels which expect the endless free lunch and countless private individuals have been saying by their actions that they aren't prepared to stand idly by while they keep being given it.

An interesting addition to the story from the BBC:
Despite the levels of piracy, the BPI was able to announce in October that we are living in "the era of the digital single", after figures revealed 2009 was biggest ever year for UK singles, with more than 117m sold. Of those, 98.6% were purchased in digital formats.
So, all this illegal filesharing doesn't appear to be resulting in the death of the music industry after all.

09 December 2009

Nonsense in the Pre-Budget Report - Part 2

From the Pre-Budget Report:
Budget 2009 announced that the Government would work with business to examine the balance of taxation on innovative activity, including intellectual property (IP). As part of this work, the Government has looked at the case for a reduced rate of corporation tax applied to income from patents (a so-called “Patent Box”). The Government announces that it will introduce a Patent Box applying to income from April 2013 to strengthen the incentives to invest in innovative industries and ensure the UK remains an attractive location for innovation.
It's a stupid approach which I can't see being anything other than unworkable. How does the government propose that a business should work out how much of it's income comes from patents? If a car manufacturer patents a new kind of light fitting, would the whole of the revenue from the sale of the car count as revenue from patents. If so, then pretty much every manufactured product is going to end up containing some patented part and corporation tax revenue will collapse. If not, then I can see no reasonable way of apportioning revenue to individual parts of the car.

I can see this proposal having three effects: increased patent filing, increased patent trolling and increased use of convoluted business structures, none of which are particularly desirable.

Maybe the unworkability is why the introduction has been put so far into the future.

Nonsense in the Pre-Budget Report - Part 1

From the Pre-Budget Report:
To give support during the transition to recovery, the Government is maintaining for a further year the temporary increase in the threshold at which an empty property becomes liable for business rates. For financial year 2010-11, empty properties with a rateable value of less than £18,000 will be exempt from business rates, exempting an estimated 70 per cent of empty properties. This higher threshold reflects the effects of business rates revaluation. The Government continues to believe that, in the long term, beyond an initial rate-free period, it is right to charge rates when properties stand empty, since this increases incentives to re-let and reuse empty property, and avoids subsidising owners of empty properties.
So, the report acknowledges the benefit of charging business rates on empty properties, but exempts the majority of empty properties at a time when there is most benefit to be gained from creating incentives to bring empty properties back into use and there is a need for revenue to narrow the gap between government spending and government borrowing.

Absolutely barking.

07 December 2009

The Growth of Bank Notes

I've been involved in a few debates where I've expressed the opinion that the growth in the overall money supply is driven largely by growth in the fiat currency (notes, coins and Bank of England reserves). I've managed to pull together figures from the BoE in the past to show some movements, but I've never been able to get enough consistent data to show long term trends. Which is why I was glad to get hold of this graph from a speech given by Andrew Bailey, the Chief Cashier of the BoE:

I think that, by any standard, that's significant growth.

Copyright Back-Fire

From Michael Geist:

Chet Baker was a leading jazz musician in the 1950s, playing trumpet and providing vocals. Baker died in 1988, yet he is about to add a new claim to fame as the lead plaintiff in possibly the largest copyright infringement case in Canadian history. His estate, which still owns the copyright in more than 50 of his works, is part of a massive class-action lawsuit that has been underway for the past year.

As my weekly technology law column (Toronto Star version, homepage version) notes, the infringer has effectively already admitted owing at least $50 million and the full claim could exceed $60 billion. If the dollars don’t shock, the target of the lawsuit undoubtedly will: The defendants in the case are Warner Music Canada, Sony BMG Music Canada, EMI Music Canada, and Universal Music Canada, the four primary members of the Canadian Recording Industry Association...

I find the draconian copyright laws around the world which have been created and continue to expand as a result of special interest lobbying to be thoroughly distasteful. However, on this occasion, I hope that the subject of the claim gets hit very, very hard.

01 December 2009

The benefits of LVT seem to be sinking in

Adam Posen, a member of the Bank of England Monetary Policy Committee gave a speech today which, while not directly suggesting Land Value Tax itself, used many of the economic arguments commonly put forward in support of it to promote the idea of using cyclical residential property taxes to combat house price bubbles. From the press release:

In a speech at the MPR Monetary Policy and Markets Conference in London today, Adam Posen – an external member of the Bank’s Monetary Policy Committee – discusses how asset price booms might be addressed in the future. He rejects the notion that monetary policy should be used to tackle asset prices, and believes other tools are needed and better suited for the task. In addition to macroprudential policies – such as those outlined in a recent Bank of England discussion paper – Adam Posen suggests there is merit in considering tools that tackle asset prices directly. In particular, he discusses the idea of an automatic stabiliser for housing prices...

...His focus on housing reflects his view that bubbles in real estate are often more destructive than in other assets. He says: "Real estate bubbles tend to have much higher real economic costs than equity bubbles, perhaps because they involve illiquid collateral and local spillover effects."

So what could be done to limit or pre-empt real estate price booms? He suggests as a complementary policy, changes to real estate taxes and regulation, to provide a counter-cyclical element – automatic stabilisers – to structures already in place in many countries’ housing markets.

Adam Posen stresses that the proposal is "…something modest, without any large implications for tax revenue over the cycle…". He says: "…it would mean having already existing title fees, capital gains taxes, stamp and transfer taxes, varying over time in line with price developments in the housing market more broadly. ...a simple blunt instrument targeted to lean against the wind in real estate prices in an automatic fashion."

So, he isn't suggesting LVT directly, but he's using the underlying reasoning. I think it can be shown fairly easily that property sales taxes, such as stamp duty, won't have the desired effect, as they'll stiffle sales, but they won't restrain rental values, so the underlying bubbles will continue. Take those taxes out of the equation and you're left with taxes on residential property owners varying in line with property prices, at which point you've made a large step towards fully fledged LVT.

The full speech, which can be downloaded from the same webpage as the press release, gives the impression that the argument is there to be won.