Facebook

I'm not an uncritical fan of Facebook but I do quite enjoy using the service, from time to time. There are weaknesses, problems and difficulties with all websites and there are quite a few things I don't like about Facebook's site but my main complaint is that I don't like being the product; I prefer to be the customer.

What do I mean by this? In common with many other 'free' web services (Twitter, Hotmail and Gmail, for example, all of which I use regularly), Facebook generates the revenue to cover their costs by displaying adverts to their users.

The nature of the adverts varies between the different services but the basic plan is the same; gather your users' personal information and show than adverts chosen, at least in part, by reviewing that data and making predictions about their habits. You are, in effect, sold to advertisers so that they may exhibit their wares to you.

The advantage for the advertiser is that this sort of customer profiling (which happens even if the only information the advertiser has is your approximate location) allows them to target their adverts at the people most likely to be interested in their services (it's a bit more complicated than this in real life but you get the idea). This reduces their costs (showing adverts costs money) and improves their hit rates (people are more likely to click through adverts showing things they actually want).

The advantage to the service user, apart from not laying out cash to use the service, is that they are more likely to see adverts which that might be of interest to them. Nobody wants to be spammed with adverts for products they're unlikely to buy but carefully targeted ads can sometimes be useful.

If targeted ads can be useful and if they allow a service to be provided without charge to the end user you might ask what I'm complaining about. Essentially, service quality and privacy, neither of which the providers of free services are incentivised to offer beyond the minimum required to attract or retain users. Facebook's business plan relies on gathering as much private data from users as possible so that their advertisers can more tightly target their ads. They're basically selling you and your data to the advertisers.

This is fine if you're happy to share your data, accept the loss of privacy and have your page cluttered with adverts. I'm not happy to do this any more. I want to pay for Facebook's service, which I enjoy using, so that I see pages without adverts and to incentivise Facebook to look after my interests and data.

I don't expect this to happen any time soon because the people most likely to pay to use the service are probably the most valuable users to advertisers and Facebook won't want to risk advertising revenue just to offer an improved service to a minority of customers. Maybe this is an opportunity for someone else to make a splash?

VAT on Alterations to Listed Buildings

The Chancellor’s decision to impose VAT on alterations to listed buildings (20%) appears to have upset people who own, manage, use or alter listed buildings. That’s not really a surprise - vested interests always complain when their privileges are withdrawn - but the Church of England appears to be particularly aggrieved. They’re so worried about having to pay tax like other businesses that their Director of Cathedral and Church Buildings, Janet Gough, has started a petition to stop the change.

A brief conversation on Twitter with Father Andrew of St. Peters in Walworth got me thinking about the application of VAT to alterations of listed buildings. The argument made by the Church - essentially that the new rules will inhibit their ability to alter their listed buildings - is probably correct (in that increasing costs by 20% is likely to reduce the work they can afford) but it is not, I would suggest, a strong reason for either halting the change or granting an exemption to religious buildings. Here is my reasoning.

The Church of England exists within the wider context of our society and functions, at the simplest level, as a charity in competition with similar faith-based organisations. It might not pursue profit, as such, but it is definitely interested in stakeholder value and service; in this respect it is no different from other businesses. The Church has large numbers of customers, any of whom could be poached by other religious organisations. The potential for the movement of customers between organisations, and the changes in revenue that those movements might create, drives competition between the churches.

Like all businesses, the future of the Church is in the hands of its customers and it must strive continuously to satisfy existing clients and attract new ones. In a de-regulated market with lots of new entrants (walk along Walworth Road, where St. Peters is located, and count the number of churches to get an idea of the nature of the marketplace), many of whom are unencumbered by the Church’s traditional cost base (buildings, management hierarchy etc.), this is increasingly difficult.

One of the Church’s key advantages is that it has a virtual monopoly on spectacular custom buildings, for example cathedrals. By comparison, new churches often start in abandoned or dilapidated conversions (again, see Walworth Road) which are anything but attractive to new customers. One consequence of the VAT change, and possibly the main motivator behind the Church’s complaints, is that it reduces the number of infrastructure improvements the Church can afford to make and thus weakens its ability to compete with new market entrants.

In our modern economy we try to avoid extending privileges to a particular business or sector at the expense of its competitors because this practice generally has a negative impact on customers. The Church may struggle to alter its buildings as a result of this change but that doesn’t mean the change is wrong. All companies should receive equal treatment and operate under the same rules. The tax should stand.

Politician and Tax Avoidance

The campaign for the office of Mayor of London is warming up. The vote will be on 3rd May and the polls indicate, even before the recent arguments about tax avoidance, that Boris Johnson is likely to win a second term.

The question of tax avoidance is interesting. Although there are no suggestions that either candidate has done anything illegal, Ken Livingstone's use of a limited company as a vehicle for his media work have allowed him to avoid a significant amount of income tax. By asserting that Boris Johnson had a similar arrangement (an assertion that turned out to be incorrect) Ken opened the way for Jenny Jones, the Green party candidate, to challenge her rivals to release the details of their tax returns. Boris (and Brian Paddick) agreed and promptly published, Ken released partial figures some time later.

Here are the details:

• For the year 2010-11, Ken earned £94,500 and paid just under £35,000 in tax.
• Boris did rather better, earning £473,280 (of which around £130k is his salary as the Mayor of London) and paying tax of £210,410.
• Brian Paddick's income was £76,804 (mostly his police pension) and he paid £14,534 in tax.
• Jenny Jones' finished fourth (coincidentally her expected position in the coming election) with a still very respectable £63,009 (around £15,133 in income tax) generated mostly from her work as a London assembly member.

Unsurprisingly, the Eton and Oxford educated Johnson leads the earnings table, gathering rather more than the other three candidates put together. Despite Ken's comments about tax avoidance, Boris  doesn't take advantage of the more tax-efficient arrangements favoured by Mr Livingstone and he also manages to pay more than three times as much tax as his rivals. In fact, not only does Boris pay the most tax in absolute terms, he also pays the most tax as a proportion of his earnings; as an example of "we're all in this together", Boris, despite his colossal earnings, is putting on a pretty good show.

The tax avoidance row probably won't affect Brian Paddick and Jenny Jones, who have almost no chance of winning the election, but it has probably damaged Ken's chances by exposing him to a charge of hypocrisy. Writing in The Sun on this very subject, Ken said:

"These rich bastards just don't get it…No one should be allowed to vote in a British election, let alone sit in our Parliament, unless they are paying their full share of tax."

It would be difficult for Ken to argue that he isn't fairly well off and, if we consider the evidence released so far, it would also be difficult to say that Ken is paying his full share of tax. Should we exclude Ken from the contest for Mayor of London simply because he appears to have channeled his fees through a (completely legal) tax efficient company? No, of course not, but we can certainly ask searching questions during the campaign.

Evidence Based Policy-making

Newspapers, TV journalists and other commentators love political u-turns. A big change of policy by a prominent politician, ideally after a long and costly defence of said policy by said politician, makes a great headline (or, if you're lucky, several great headlines, followed by a resignation). The media as a body seem to love criticising politicians for the policies they promote and then, if they actually persuade someone to change their mind, they attack again over the apparent u-turn.

Let's be completely clear. This practice is utterly stupid and it acts against our interests as a society and as individuals. It deters politicians from changing their minds even when it becomes clear that their ideas were wrong; the result is a political system where politicians can't admit mistakes for fear of public humiliation and retribution. Politicians are forced, if they wish to retain their position, to advance either very safe policies with no possible risk of failure or, if they advance grander schemes, to pursue them even when it becomes clear they will not deliver the anticipated benefits. 

This is the precise opposite of what should actually happen. We want evidence-based policies that, whoever has suggested them, can be tested and proven before being rolled out, sometimes at enormous expense, across the nation. I see it working like this:

1. Politicians suggest their policies based on their individual expertise and ideology, just as they do at the moment. They use their reputation and position to describe the advantages, costs and risks of their Big Idea to a grateful nation.
2. Civil servants, having (ideally) rectified the most obvious flaws and failings before the initial policy announcement, then design scientifically valid trials to determine whether or not the policy will actually deliver the intended effect. In discussion with the politicians, civil servants also define the criteria by which success of the policy will be measured.
3. Parliament then enacts legislation to begin a limited trial, as designed by the civil servants, to test the policy and prove its effectiveness.
4. The National Audit Office, or some other independent body, gathers and evaluates the evidence from the trial and, using the pre-agreed criteria for success, announces the success (or otherwise) of the policy. 
5. Finally, if the trials suggest the policy will work, the politicians return to Parliament to begin a nationwide roll-out, claim the glory for their initial insight and generally get on with whatever self-congratulatory activities they deem appropriate. Alternatively, if the trials suggest the policy will not deliver the anticipated benefits, it can be quietly shelved, without undue embarrassment, and everyone can get on with their lives.

This system would give us better outcomes (because only proven policies would be implemented) while encouraging cross-party support for successful legislation (because nobody wants to argue against independently verified evidence) without ever preventing politicians from attacking each their opponent's ideas, just as they do at the moment. It would be a first step to a better, more rational, legislative process.

A few things that annoy me

This could really be a much longer list but six is a good round number. Some people might even read the whole article...

Dodgy Road Signs: it doesn’t take much to get the text right on road signs - they’re not exactly verbose - but when they say things like “Use Both Lanes” rather than the somewhat more accurate “Use Either Lane” I feel a terrible urge to obey; imagine the fuss if you actually did exactly what the sign instructed you to do.

Badly Designed Websites: unlike road signs, designing an good website is not easy to do. That’s not an excuse for doing it badly, though, which is the option taken by too many companies. Rather than release a half-finished, untested mess of poorly thought out user interactions, give your website the treatment it deserves; either finish it properly or execute it humanely and spare us all the pain of having to use it.

Real-life Television: I’m looking at you, Airline, with your scenes of people missing flights because of drunkeness, heavy traffic, poor process design or bad temper. Yes, occasionally, some people do make it through the airport to their destination, but programmes that concentrate so heavily on pain and anguish really ought to come with a health warning: “Beware - may seriously damage your sense of humour”.

And while we’re on the subject of television, let’s spare a moment to consider Strictly Come Prancing. Sorry, Dancing, which my wife insists on watching (sometimes twice a week if she feels the need to catch up on the results). It’s not that I particularly object to these shows (although I think it’s time to put Bruce Forsyth back in his coffin) but there should be limits - no more than an hour a week and no more than 12 weeks a year. Seems only fair.

Hotel Rooms from the 19th Century: if you regularly spend time in hotels you may notice that many suffer from a flaw, namely a shortage of readily accessible power points by which electrical devices (phones, tablets, laptops etc.) can be charged. Typically, power outlets are hidden under beds or behind cabinets where they are out of sight, presumably for aesthetic reasons, making it difficult or inconvenient to gain access. In 21st century hotels, available (i.e. unused) power sockets should be located beside the bed (both sides) and the desk.

Sunday Trading Laws: in the UK we are blessed with a collection of antiquated traditions based on a largely abandoned Middle Eastern religion. These traditions, codified as the restrictive ""insert name of Act here"", are used to justify an artificial shortening of trading hours on an arbitrarily chosen day of the week to placate the sensibilities of a non-existent supernatural being. Madness, and enormously annoying to anyone who has limited free time and who might like to shop on a Sunday, i.e. pretty much all of us.

It turns out there are a lot of things that annoy me. This may become a regular series.