Archive for the ‘Politics’ Category.

The Business Journalist and her tax muddle

My timeline was, on Thursday evening, chuckling about the fact that Margaret Hodge had run into a little difficulty when being asked by Krishnan Guru-Murthy of Channel 4 News about her own tax arrangements.

Whilst it was certainly quite amusing to watch her use the same answer about her affairs that she has publicly derided the likes of Google, Amazon and Starbucks for, my attention was caught by the clip which proceeded it.

I am not an accountant nor an economist – let alone a business reporter – but so far as I can see Siobhan Kennedy made two glaring errors in that piece.

The first is one same one which everybody seems to make these days: confusing sales with profits. Whether this is deliberate or due to ignorance I leave up to you, dear reader, and your personal prejudices.

It was the second one though which had me, to use the modern parlance, facepalming. Indeed I even went back and listened to it again just to make sure I was hearing correctly:

…making sales which could be subject to income tax under UK law.

Frankly, I’d expect better from a business journalist.

State good, individualism bad…

On Sunday Barack Obama gave the commencement address to the graduating class of The Ohio State University at Ohio Stadium in Columbus, Ohio…

Ronald Reagan who?

h/t Maggie McNeill for re-tweeting it into my timeline.

Margaret Thatcher

Born at the fag-end of Callaghan’s Premiership I, unlike some who have recently been emoting vehemently, lived through the Winter of Discontent and all of Baroness Thatcher’s time as Prime Minister. Not being a child prodigy, I cannot though claim to have memories of seeing and experiencing much of the events of the time first hand. As for those born after she left office who apparently know so much of what life was like under her, I can only say that I am in awe.

My knowledge of her time – and the events leading up to her 1979 election victory – is the result of what my parents have said and what I have read over the last 20 or so years. I do however know that there is a lot of difference between words on the page and first hand experience.

She was not perfect – no person, especially a politician, ever will be and anyone who seriously claims that they are should be referred to the nearest loony bin ASAP – but so far as my interpretation of her time goes, she left this country in a far better shape economically than it was when she started.

My memories of events in the world around me go back to the mid/late 1980s. I recall my mum watching the wedding of Prince Andrew, I saw Challenger explode on the news and I loved some of the privatisation adverts but I have little memory of almost all of the politics of the day.

Politically the first thing I remember is the Poll Tax and the brouhaha which surrounded it. Although a political disaster for the Conservatives and the policy which triggered Lady Thatcher’s downfall, it is perhaps ironic that my contempt for the hypocrisy of socialism can probably be dated to this time.

Whilst my dislike (and eventual hatred) of tax didn’t begin until I had to start paying it in its most obvious forms (Income, NI, Council) I became aware of its existence as a result of the Community Charge. A flat rate tax with every adult paying the same, my young mind couldn’t, initially, work out why socialists, with their commitment to everyone being treated equally, would object to being taxed equally. It was the eventual realisation that people don’t always mean what they say which allowed me to understand that perhaps socialists don’t like the idea equality in practice – let alone when it applies to them.

RIP Baroness Margaret Hilda Thatcher, 1925 – 2013.

Spot the difference

Here we have two pieces of prose, one (on the left) from Iain Martin, journalist and political commentator writing for the Telegraph and the second (on the right) from Patrick Warner, Conservative Councillor for Sovereign Ward, Eastbourne.

They look identical, no?

Both were published yesterday (April 5th) with Iain’s showing up at approximately 0700 (the earliest comment appears at 0713) and Patrick’s at 1503.

The obvious thought is that Cllr Warner has copied the entire thing without attribution and is passing it off as his own work.

Cllr Warner has been asked (via twitter) why his piece looks uncannily like Iain Martin’s but he has yet to respond.

UPDATE:

Cllr Warner has apologised to Iain Martin for not giving him credit.

Not sure why he has to copy entire articles and occasionally forget to attribute them in order to share pieces of interest with his readers though…

A quick thought: Goodbye to the 20% tax band?

Given that every rise in the personal allowance these days is met with an equivalent drop in the level at which the 40% rate kicks in (can’t have the rich benefiting, can we?), the logical extension of this policy is that the two will meet at around the £25,500 mark and the 20% band will completely disappear.

Gone but not forgotten

British Free Press b. 1695, d. 18th March 2013. RIP.

Family flowers only. Donations instead of flowers, if desired, to Hacked Off.

‘Money for Nothing…’

At this moment politicians in Nicosia are (assuming it hasn’t been postponed again) giving up their bank holiday to discuss the false choice presented to them by the Eurozone finance ministers: accept a deeply damaging bailout agreement or face bankruptcy.

In a statement released on Saturday, the Cypriot President was optimistic that the bailout “would put a definitive end to the uncertainty and restart our economy.”

I think it is safe to say that his optimism is not shared by the Cypriot people – nor many others not on the Greek half of the island.

Much, if not all, of the anger is focused on the decision that bank deposits in the country – previously thought to be safe because of deposit insurance – are to be subjected to a 6.75% levy whilst all amounts above the protection level of €100,00 are to be decimated*. The immediate (and not unsurprising) result of this was that the Cypriots tried to trigger a bank run – only to find that their government had introduced restrictions on the movement of capital. Can’t have people deliberately evading superstate-sponsored theft, can they?

However, as Frances points out, it isn’t quite that cut-and-dried…

The description of this as a “tax” or levy is a bit of a fudge. Under what type of taxation scheme are people provided with shares to compensate them for the taxes they have paid? But that is what is happening here. Depositors will be provided with bank shares to the value of their losses. They are being “bailed in” in the same way as junior bond holders: a percentage of their deposits are being converted to equity. The money taken from the depositors will go to the sovereign to compensate it for the cost of bailing out the banks. At the end of the process, the sovereign will be left with a manageable amount of debt, and the banks will be owned by their depositors and junior bondholders. In effect they will have become mutuals.

…before going on to explain the flaws in the plan.

Olli Rehn, European Commissioner for Economic and Monetary Affairs and the Euro, has said that this will be a one-off but given the number of one-off’s the Eurozone has seen in the last few years, it is unlikely that he will be taken as seriously as he might like – especially given the situation in Greece, Portugal and Spain. I imagine that the Italians are suddenly looking over their shoulders as well. How much money is going to flow out of those countries in the next few days?

Further Reading:
Frances Coppola: Reaping the Whirlwind
Tim Worstall: Welcome to another Great Depression
Tom Paine: Governments, gangsters… Same thing, different name
Richard North: A massive own goal

* Yes I know that the figure being thrown around is in the region of 9.9% but I couldn’t resist the chance to use that word almost correctly.

That 10% tax band proposal

The members of what passes for the Labour Party’s Brains Trust (no laughing, please) have finally, possibly, maybe, made some marks on that blank piece of paper and come up with a policy. Not a new one though but a rehash of an old one: a 10%* tax rate.

The details provided are sketchy but the press is reporting that it would apply to the first £1,000 of taxable income, in contrast to the previous incarnation which applied to the first £2,500.

However, whilst I am very much in favour of governments stealing less money, this ‘policy’ is about as pointless as when Millipede Sr and Dave Prentis called for the Living Wage.

As a result of this policy, basic rate taxpayers** would retain an extra £100 of their salary each year. Oh, be still my grateful heart!

The current government, as useless as they are, have raised the personal allowance (PA) from £6,475 in 2010/11 to £9,205 in 2013/14 – an Income Tax (IT) reduction for basic rate taxpayers of £546 a year.

Raising the PA to £12,070.50 (37.5 hr week at the National Minimum Wage) would save everyone a further £573.10 in IT alone.

Sorry Eds but this policy can only be described in one way: #fail.

* Or 35% once National Insurance is factored in.

** No doubt the threshold for the 40% IT band would be reduced by £1,000 at the same time.

Globalisation: A life saver

One of the goals of the anti-capitalist morons who occasionally fill the streets of developed world is an end to globalisation. Heck, the loonies in Green Party think that an end to globalisation is the route to prosperity for all. No, I don’t understand their logic either.

The silliness of the localisation idea was, at least to my mind, proven when I saw a piece in the FT during the week about the bread manufacturer Hovis:

Hovis, one of the UK’s top-selling breads, is to abandon its pledge to use only British wheat in its loaves following rain-blighted harvests.

Hovis will start using EU grain from this weekend. The move is another blow for UK farmers, who are already reeling from the relentless rains that made 2012 the second-wettest year on record and cost £1.3bn in agricultural damage and its aftermath.

[...]

The UK’s wheat yield fell by 14 per cent last year, according to the National Farmers Union. As a result, the country’s wheat imports are forecast to more than double to 2m tonnes. Since 2011 the price of bread has risen by 4.3 per cent, ahead of the 3.7 per cent rate for general food inflation.

That’s right, because last summer was so awful that the wheat harvest was almost one seventh down on 2011 the company has had to look elsewhere or reduce its output.

Now imagine a similar shortage across everything produced by UK farmers and no option to import any food stuffs from abroad…

Long live globalisation.

Language difficulties

Last Friday the leader of the Labour Party (Millipede Jr for those who might have forgotten) stood up in Tooting to give a speech on immigration.

As part of this verbal diarrhea he said that:

…he promised the party would in future help immigrants learn English. It will also consider barring immigrants from some public sector jobs unless they can speak the language properly.

And later he clarified his point via the BBC:

“What I’m talking about today is also the issue of integration, which is when people are here, how do you ensure that they are part of British society?

“That’s about learning English, it’s about making sure that you don’t have slum housing where you have maybe ten, 20, 30 people all packed in a house working in a local factory or somewhere. That’s bad for them and bad for their neighbours – and also making sure that we don’t have workplaces that are segregated.”

Whilst I suspect that barring those with a poor of standard of English from jobs is probably against some piece legislation (EU perhaps and not applicable to non-EU passport holders? Someone will no doubt correct me!) I actually agree with the general point that he is trying to make about wanting immigrants to be able to speak the language.

Without checking with various colleagues who have taken up citizenship over the last few years, I seem to recall that part of the process was an English test. IIRC the Australian cricketer Stewart Law, when asked at the time of his taking up British citizenship how his English was, said something along the lines of ‘You are kidding, right?’ (I’m undoubtably paraphrasing that!)

No such requirement is necessary for those who don’t plan to take up this option but Millipede suggesting (quelle surprise!) throwing more stolen money at the problem by giving immigrants langauge classes.

And that is where he and I part company.

As a fan of open borders (boo hiss etc)* I have no problems with people moving wherever they may wish to. However learning the lingo should be the responsibility of the immigrant and paid for out of their own pocket. The State can assist in this process by not publishing government paperwork in anything other the English (also Welsh, Gaelic etc in the appropriate areas) meaning that if you want to interact with the bureaucracy – a sadly inevitable part of life – then you either have to be competent in the local language, ask a friend who is (at least) bi-lingual or hire an interpreter. Seeing as how the latter is likely to be a costly option long-term and friends are likely to start thinking ‘learn the bloody langauge, will you?’ after a while being able to communicate will become necessary.

A solution which saves trees, cuts down on government expenditure and ensures people have to be motivated? Sounds like a good one to me. :)

* I would however scrap national benefits in favour of a return to something like Friendly Societies,