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a good day to bury bad News, on the News Corporation de-merger
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There, I started my political blog. Post about party funding, and why it is really screwed up.


If I made a board game like this people would say it was rubbish.
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Jimmy Carr is not the problem. Why does this always have to come down to personalities? Perhaps Jersey is the problem. Jersey has a strange constitutional relationship with the UK - it is another territory of the Queen, not part of the UK and not subject to Parliament's laws 1, and is not in the European Union, even. It gets the benefit of relying upon the UK's defence and foreign affairs networks 2. And there's an implicit guarantee of rule of law that the UK provides. It's used this pseudo-sovereignty to reduce taxes to attract corporations, to provide employment and revenue.

You'd, therefore, think that the States of Jersey were rolling in it from all the foreign companies having nameplates there, right? It turns out that it's a bit more complicated than that. Supposedly, the UK exchequer subsidises Man, which has therefore been able to put its corporation tax to nil. Consequently Jersey and Guernsey have had to put their taxes down to match, and their public finances are running at a deficit! I had assumed Jersey was actually getting some benefit out of this arrangement. But no, they're being screwed as well. They even had to introduce a new VAT-like tax in 2007 - at the height of the bubble, to cover the gap, and then had to raise it from 3% to 5%, while looking at cutting spending by several millions still.

Ultimately, it doesn't matter whether this is the result of subsidy from the UK to Man - either way, it's a dangerous game for Jersey to be in. The only reason they're competing against Man in terms of tax rates is to be the best English-speaking northwest European tax haven. It's not like you'd decide to put your business in either Man or Jersey on some other criteria and then pick the lower taxed one as a second factor. So presumably they must see some benefit in playing that game in the first place? A non-tax haven Jersey might be more like the Isle of Wight than the Isle of Dogs. It could be better off like that in the long run, but that would be a fairly revolutionary change, and the current state is probably a local maxima. If they raise corporate taxes slightly, then everyone goes to Man, and revenue declines.

In short, this is a classic race-to-the-bottom situation. There's a simple solution, though. Give it (and Guernsey and the Isle of Man) a choice: incorporation into the United Kingdom (presumably as additional home nations with devolution akin to Scotland's, or greater), or full independence. If you want to be part of our polity to the extent that you are, you have to pay our taxes. If you don't, that's cool, you can go off and become a Commonwealth Realm or republic or whatever you like. No business of ours. If you chose annexation, we'd hope to raise so much extra revenue as a result that we can afford to offer subsidy to you, for improvements in people's lives there, that you can't afford because of being trapped in this tax-haven rut. We'll even guarantee that subsidy if the revenues don't materialise. I see both options as better than the status quo for everyone, and there's also the extra bonus of addressing the undemocratic nature of the crown dependencies status.


1. Parliament still claims the right to legislate for Jersey, but it would be pretty undemocratic considering there isn't an MP for Jersey
2. which it does, in fairness, pay a contribution toward
3. an earlier version of this said, rhetorically, "protected by our Navy". Of course, the last time this came into question, the Navy wasn't much use.
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Some political/economical thoughts. I've been having a lot of these lately:

The private sector gets touted as if it had some kind of universal efficiency-increasing pixie dust that makes everything more efficient. It's true that there are some notable successes. Aren't a lot of these mostly due to the political ability of the private sector to adapt new technology quicker (and lay off or deskill large portions its workforce) - because it doesn't have to answer to an electorate, rather than being actually a result of it being private sector per se. There are no productivity-enhancing devices that the nurses and teachers unions are stopping us from adopting. There's no mass overemployment of unproductive workers in the NHS or at schools! Best practice in healthcare and teaching can be observed by looking at staffing at the facilities the elite use. Teacher:student ratio at Eton is 8. EIGHT!
I see lots of talk about how they need to be able to sack bad teachers, and very little about how to attract good teachers who have left teaching. This will involve making the job more attractive, either through more money or other means, or both.
There are 8 million people in the UK between the ages of 5 and 16. If we take the teacher:student ratio at Eton as the target, we would need a million teachers. There are apparently 438,000. That's probably unachievable without starving some other socially necessary area of resources. I can buy healthcare becoming more automated - due to expert systems - a few decades down the line, but there are several factors blocking it (the insistence of the state in keeping a human in the loop for controlled substances is a big one). But teaching is going to remain a labour-intensive job for pretty much forever, isn't it? Unless we by some miracle get full AI.

Second thought:

What would a capitalist economy look like if you banned public advertising (billboards, and television)? I target these two things as they are already regulated by the state - you need planning permission to put up a billboard, and the content of broadcasting is controlled pretty closely.
Banning advertising in these realms, for things considered harmful (i.e. cigarettes) is already considered to be a legitimate use of state power. It wouldn't be that much of a stretch to expand this to stuff like unhealthy food.
In a protectionist economy you could then make the argument that advertising stuff that needs to be imported is bad for the balance of payments. Due to the single market you couldn't discriminate by producer, but you could certainly target specific industry sectors.
So.
What effects does this actually has? (ignoring the effects on people who own billboard space and television channels!)
Presumably people will buy less stuff? They'll buy stuff they need still. Greater emphasis on word of mouth for finding out about new products? Word of mouth is fantastic, especially today.
If we assume that consumption goes down, that leads to job losses in the private sector making stuff that people didn't need. Isn't making things that people only buy because of adverts unproductive labour anyway? So, there's an efficiency saving! Those are good, right?
And if consumption doesn't go down, well, we've just stopped consumer products subsidising commercial television. I don't think that's a bad idea in itself.

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Abigail Brady

May 2017

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