The Fair Tax on Flying  campaign is an alliance of more than 25 airlines, airports, tour operators, destinations and trade associations who are uniting to call on the Government to make the system of aviation tax in the UK fairer.  We already pay the highest levels of aviation tax of any nation in Europe.

By fairer, of course, they largely mean lower. Or, at least, no higher than it is under current APD 4-band rules: £12 per person for economy class flights to Europe, £60 for the USA, and £85 to Australia, for example. There is a Facebook group, which has attracted “Likes” from plenty of respectable travel industry names, alongside the odd anti-all-tax nut and corporates with an obvious interest. Major players at the top level of the industry (largely the CEOs and MDs of the big airports, airlines, and large outbound tour operators) have written to the Chancellor outlining their case (pdf).

If the idea is to “unite the travel industry” behind the campaign, I’m afraid I’m not joining.

1. The figures released by ABTA focus only on the (real) economic benefits of air travel (jobs, “contributions” to the economy, supply-side effects, and so on), without any proper consideration of the costs. In health and pollution clean-up, obviously. But also in congestion, and the clearing of it from the environs of our airports: how much has the widening of the M25 around Heathrow cost the general taxation pot? The externalities of air travel are a major part of the calculation, but ABTA seems to ignore them. Without a consideration of the long-term net economic impact of flying, any figures quoted are worthless. (And this is before we even get onto any Fallacy of Composition considerations.)

2. Arguments along the lines of “this is money saved by hard-working British families” etc., such as this on-message piece by a Labour MP, can safely be ignored. (And remember: APD isn’t a tax on travel or holidays; it’s a tax on flying.) Those are empty arguments against all tax, not this one. As can comparisons to European countries. Travel companies might like Germany’s take on APD, for example, but would be less happy with its corporation tax regime. “But country x does it this way” is not an argument, just a statement of fact.

3. The campaign makes much of data that shows inbound passengers falling in the face of a rise in APD: “rising APD levels had already begun to contribute to a fall in passenger numbers in late 2008″ (Key Facts [pdf], p. 3). What they may have found here is a correlation, of course, not a causal relationship. (Correlation and causation aren’t the same breed: the period since Liverpool were last champions of England has seen unprecedented growth in home PC ownership. That’s another correlation.) A significant growth in domestic tourism (11.8% between 2008 and 2009, according to VisitEngland [pdf]), aligned with a world economy in meltdown, could be considered a more potent factor in air passenger numbers simultaneously falling. This is exactly when the neologism “staycation” was coined, after all. In any case, the idea that significant numbers of long-haul inbound travellers would cancel a multi-thousand dollar trip here over a few pounds in APD doesn’t seem credible. What they would trouser from APD’s abolition wouldn’t even pay for one night in a London hotel.

4. Later in the same document (Key Facts, p. 4), ABTA claims that the “Aviation tax is not environmentally effective.” However, in their press release, ABTA Chief Executive Mark Tanzer says: “Air passenger numbers have decreased by 22% since 2007 when the tax was last increased“. If this is a causal relationship, it has been the most effective environmental tax in history. ABTA can’t have the argument both ways.

4. “In a separate survey of 2,046 British adults conducted… for ABTA by ComRes, almost two thirds of consumers (63%) believe the current level of tax is too high”. Yes, but look at the survey question. I’m surprised they could find 5% to say that it was currently too low.

The naked, actual, real truth is that air travel currently receives a massive effective subsidy from other forms of travel. Aviation fuel is not taxed. Air travel is exempt from VAT under VAT Notice 744B. The main substitutes to air travel are subject to one or both of these taxes. You don’t need to have got much beyond “Microeconomics 101″ to see this is hugely damaging to domestic and local tourism, and to the viability of green alternatives to mid-range transit such as high-speed rail. I’m not the only hack to spot this:

If we just taxed aviation fuel at the same rate as the petrol that UK motorists get out of the pump, everything would be wonderfully fair. That’s just a measly 58.95 pence for every litre of fuel used. Can’t say fairer than that, can you Fair Tax on Flying Alliance? Everybody’s happy, justice is done, and… oh yes, the cost to your business would be absolutely crippling

Yesterday, coincidentally, I was pricing up rail travel from London to Florence. It’s looking likely to cost me  £400+. A budget airline return to Pisa, an hour by train from Florence, could be mine for under £100, including all those “unfair” taxes. As I tweeted, the economics of responsible travel are screwed. There also skewed… in the airlines’ and large corporate outbound operators’ favour. Don’t let ABTA persuade you otherwise.

Feel free to agree, or to tell me I’m wrong: I’m always happy to hear comments and opinions.

The Agreement requires all commercial activities undertaken by the BBC to comply with four criteria. …

4. comply with BBC fair trading guidelines and in particular avoid distorting the market.

Of course, that begs a whole series of questions, but this much is plain: BBC Worldwide activities that distort a domestic market in which the corporation is a player are forbidden. This, essentially, was the basis for the decision to disallow BBC investment in ultra-local video last year. It’s the reason that the BBC’s acquisition (through BBC Worldwide) of Lonely Planet should be reversed at the first opportunity.

The opportunities for LP–BBC print cross-promotion are blatant enough. Shiny new Lonely Planet Magazine‘s launch issue featured a story by Stephen Fry, that tied in with his fine …in America book and series. The second issue has David Attenborough in “The land that time forgot“, the Galapagos. I wonder how easy a non-BBC subsidiary would find it to commission a travel feature from either of those two. Unlike, say, Top Gear Magazine, this is a market segment in which the BBC had zero presence until November 2007.

As I predicted in my previous piece, both issues have been light on advertising. In rotten market conditions, Lonely Planet Magazine has an ace up its sleeve: BBC magazines are able to buy market share by taking a hit on profitability, in the short term at least. Strategies like that aren’t so readily available to small commercial players like Wanderlust.

But these advantages are trivial compared to the online expertise that Lonely Planet has bought into. The BBC runs the best news website in the world, at our expense. Three BBC Online experts were sent to LP’s Melbourne HQ immediately after that 2007 acquisition. The latest marketing wheeze, launched yesterday, is a travel module integrated inside BBC.com that provides access directly and exclusively into Lonely Planet hosted content (via). When it comes to social media, these digital marketeers know where the online travel information market is going:

Users will also be able to click through to the Lonely Planet site to discover a range of content and tools to plan, book and share travel experiences.

The feature is geo-coded, of course, and so only visible to overseas viewers. Oh, and any UK nationals who check BBC.com for the footie results when they’re on holiday. In any case, the idea that growing the worldwide brand power of Lonely Planet could fail to distort the domestic travel information market is naive. The 26m readers of BBC.com are being corralled into Lonely Planet for their travel information, at the expense of other UK-owned and -sited travel portals, among them struggling startups.

The travel guidebook market is worth something like £100m in UK retail book sales alone. Quite where the online market for travel information is going, nobody quite knows. But it’s safe to assume it can only grow. And with the massive, unfair advantage of BBC Online know-how behind it, taxpayers’ help in effect, it’s likely that Lonely Planet will shout so loud that other UK players barely get heard. Innovators with shallower pockets will be trampled or deterred from entering in the first place. Is this really what the BBC is for?

First published here.

The reason’s simple: whoever changes the signs doesn’t have the incentive to bother. Nobody’s checking every little detail of his job – nobody could. And these little extras – what we used to call public service – aren’t Big Picture stuff. (You could have said the same about clean hospital toilets until a couple of years back.) By turning my postman from a public servant into a rational economic actor, we’ve destroyed the small parts of his job that used to connect him with our lives in all their complexity. Marketization can only put incentives (targets, bonuses, competition) in place for a proportion of what he does, or did. The rest is deemed worthless, history. Or it’s left up to his own integrity, which we still expect him to display in his new daily life being pushed around by capitalists.

Now I’m not saying that I oppose the market running public goods; nor do I know whether this ‘public servant’ ever really existed, or even if s/he did, whether we could re-energize the corpse. But deciding where markets can be successful needs to be an empirical judgement: they appear to be better at running airlines than train networks; better at holiday camps than prisons.

And marketization isn’t a process we should be celebrating. When markets need to take over, it’s a sign of human failure, a necessary second-best option, not something anyone should be proud of, Left or Right. Smith, like Worstall on a good day, teaches us that self-interest can be useful, not admirable.

First posted at Liberal Conspiracy.

Like Dave, I doubt the Greens can build a systematic left-wing alternative to Labour, now properly classified as a ‘centre-right’ not a ‘left’ party. But I do believe the popularity of mainstream greenish politics offers something. A ‘moment’, perhaps, for slipping something with a progressive flavour in with the recycling. A reasonable place to look for inspiration is Sweden.

Sweden’s Green Party have just finished 8 years as junior coalition partners in a red-green government. Top of their list of achievements was the inauguration, in January 2005, of a so-called Alternation Leave policy. Under this scheme, 12,000 Swedes have the annual opportunity to take a government subsidized sabbatical from work (similar to parental leave, but without a baby). Three main conditions apply: employer consent is required; the vacancy may only be covered by recruiting from the pool of current unemployed; you may not work while on leave, except to start a new business.

While headline UK unemployment is low, we have above-EU-average rates of economic inactivity for males aged 25-64 (pdf, p.9). More than supposed sick-man France. Schemes that give the jobless employer-based training may pay us back in the long term. Alternation policies similarly support entrepreneurship: give your big idea a go, with a twelve-month safety net should things go Pete Tong.

We hear a lot about ‘lifelong learning’ – this policy puts its money where its mouth is. Here’s a year – go fill your head. It’s also liberal (voluntary), costable (set numbers in advance) and even supports ‘family values’. Plenty of Swedish alternation-leavers have spent their time raising children or extended family. It’s a practical way to show government commitment to ‘work-life balance’, that goes beyond platitudes.

None of this will smash the capitalist system and reclaim surplus value for the working (wo)man, of course. It’s not a workplace panacea. It does, though, combine sellability with the seeds of a new model for employee/employer relations. A start towards ‘Scandinavianizing’ British working life. Maybe even a real-world path to a Citizen’s Income. Even more interesting than the details of the policy (which I’d call ‘intriguing’ rather than ‘convincing’) is the realisation that in a galaxy not so far, far away from us, There Is Never No Alternative.

Of course, for our Greens to get anywhere near Westminster, we’re going to need a serious dose of electoral reform first. And that, as they say, is another story.

First published at Liberal Conspiracy.

It is axiomatic, since the death of socialism, that governments must everywhere retreat… Liberalisation, privatisation and global policies of “small government” (except in the areas of defence and law and order) have led to a withdrawal by governments from areas of concern, which, until recently, had been seen as their primary functions.

He’s 180 degrees wrong. In fact, the state is hungrier than it’s ever been. Figure 2.1(a) of this pdf shows that total managed expenditure has almost tripled in real terms since 1963-4. Even as a proportion of GDP, current spending matches the mid-1960s. Of course, unlike 40 years ago, we’re now instructed how to dispose of our toasters, whether we must strap children into car seats, and what we can wear to work or shop.

What happened in the 1980s wasn’t deregulation and privatization, but re-regulation and government capture. The New Public Management: governance networked on the al-Qaeda model. Nothing was privatized in the sense that control passed into the hands of private citizens, or even (*shriek*) workers. Every pseudo-transfer retained the magical Postwatch proliferation property.

And it’s all hidden, partly beneath this language of “privatization”, retreating government and non-existent competition. For instance, unless you happen to read through pages 43-44 of the Postwatch Annual Report 2005/6 (pdf), you’ll have no idea that the self-appointed (but certainly not self-financing) consumer champion spent £200,000 obtaining a judicial review of a Postcomm (that’s the regulator, by the way) decision; or that during this financial year they anticipate a potential £700,000 bill from legal action involving Royal Mail. Corporate lawyers get distastefully rich while different parts of the sclerotic state sue the arse off each other. Nor would you know that since Postwatch is funded on a fee per complaint basis, a shortfall of £870,000 caused by a drop in customer complaints is expected to be made up by the DTI. When service improves, it costs us more, on top of the more it’s already costing us to improve the service. Still, on the plus side, at least that annual report is available in Welsh.

Socialism may have lost, but boy did big government win. I can’t see how anyone, let alone an eloquent commentator such as Jeremy Seabrook, could think otherwise.

First published at The Sharpener.

But the best blog post I’ve read all year has given me a nudge. Specifically, this:

… to voice my entrenched views questioning the morality of making a profit from the provision of healthcare…

I guess this feeling is common. It probably forms the backbone of public opposition to “privatizing” the NHS. But why? Why do so many of us instinctively feel that profiting from healthcare is plain wrong?

We don’t have the same hostility to profiting from chocolate (rots teeth) or brewing (cirrhosis) or skateboard-making (broken wrists). But the people who put the ultimate impact of these right, we expect to work for love. It’s not an argument about funding limits: public healthcare expenditure per capita in France is higher than the UK, within a national insurance system part-provided by private contractors. It’s not, either, about healthcare being “free at the point of delivery” or involving co-payment. Both are compatible with wholly private, wholly public or neither-Arthur-nor-Martha provision.

And the finite-pot argument (that profit subtracts from the total available for patient care) is a fallacy, if multiple providers increase competition and therefore efficiency. When only one airline flew to Paris, nobody could afford to go. Now most of us can. Nobody seriously argues for a National Supermarket Service. And so on. This economic line of reasoning, the finite-pot argument, whether accurate or not, seems too instrumental anyway: the objection appears to be one people just feel.

But yet, in my experience, people working and being treated inside the NHS don’t just feel part of a giant civic institution, as they do in state education. There are no civic side-benefits, not any more. I just wanted the surgeon to make my daughter well. I didn’t care who paid her. The institutions that impacted daily on staff were teams, groups of colleagues, wards, units.

And we don’t just feel that doctors and nurses ought to work for board and lodging and no more. They are quite rightly allowed to make a profit from their labour. Yet companies involved in the business of making people better aren’t?

First published at The Sharpener.