Posts tagged ‘EU’

Kipped out

And so the quinquennial farce that are the European Parliamentary Elections draw towards an end as those who can be bothered to cast a ballot get the opportunity to do so at various times over the next 4 days with the results starting to be announced after the polls finally close on Sunday evening.

Farce, you cry? Well yes. What else do you call voting for a parliament with few powers? The real power lies with the European Commission and the members of that august body (no sniggering at the back) are appointed by national governments without any voter consultation.

Given that, is it any surprise that the European electorate aren’t expected to bother? Barely 43% bothered in 2009 – ranging from as high as 91% in Belgium and Luxembourg to just shy of 20% in Slovakia (the UK managed just over 1 in 3) – and I doubt it would surprise anyone if it is lower this time around.

As any UK resident will be aware, the main media story of the campaign in this country has been UKIP and the likelihood of them topping the poll – thus leading to them taking more seats on the European gravy train than either Labour or the Conservatives.

To call the campaign acrimonious would be an understatement. With it being impossible (since they have no effective power) to formulate an election strategy based on what the pan-European electoral grouping each national party is affiliated to might achieve should it become the biggest (pretty much nothing), the UK parties have fallen back on national issues. Therefore the election will (in the UK at least) be seen more as a protest against the ‘Establishment’ rather than as a serious attempt to produce a ‘Government’ (in the loosest sense of the word).

I suspect only those who have been concentrating will be able to recall anything memorable that iDave, Millipede Jr or Nick have said during this campaign but, thanks to the media attention focused on the party, can probably mention several things said by UKIP leader Nigel Farage and various candidates (whether for the European or the local elections) – especially the ones that cast the party in a bad light.

The charge of racism has been levelled at them since they made immigration (or the right to live and work anywhere within the EU) the focus of their EU election strategy and various comments have shown that there are certainly some candidates who have distasteful views regarding skin colour or, more generally, anyone perceived to be ‘foreign’.

I very much doubt that those sentiments are confined to just UKIP supporters or candidates but the repeated accusations and exposures of candidates opinions has, it would seem, demonstrably failed to make any negative impact on UKIP’s polling figures. We shall find out the truth of the matter on Sunday. What has been rather more amusing is watching the development of a bunker mentality amongst the more vocal of their supporters on social media and a run on tinfoil as their belief that this is all a conspiracy grows.

In the end though it matters not if UKIP top the European Parliament ballot in Great Britain. Until they manage to get some MPs they are going to remain an even more useless protest vote than the Lib Dems.

If you wish to vote UKIP (or, indeed, anyone else) then go ahead. Just don’t think it will change anything.

You will be tolerent… or else

A quick thought on Corporation Tax ‘avoidance’

There is a (largely constructed by people ignorant of the very basics of tax laws) furore building up around the fact that various (usually American) multinational companies have been ‘dodging’ UK Corporation Tax (CT). Firms such as eBay, Google, Amazon, Facebook and Starbucks have, amongst others, all been ‘outed’ as part of this wave of silliness.

Leaving aside the convenient fiction that companies pay tax, the reason why the UK government has seen (thankfully – they’d only waste it) little money in CT is because these companies do not have their EU headquarters in this country. Under the Single Market (one of the few things about the EU which is actually sensible) only one HQ is necessary to do business in the EU and so any CT on profits made in the EU is paid to the national government in country where it resides.

Why do firms have their EU HQ in other countries? Simple: because CT rates are lower.

How could we get those companies to place their HQ in the UK? Simple: cut CT. Whilst ideally I’d say scrap it, anything in the 10% – 15% range would make the UK more competitive.

The problem (of course) is that those currently foaming at the mouth about so-called CT ‘avoidance’ are those who hate the idea of lower CT rates.

As Spock would say, ‘Illogical, Captain’.

Patsy Pasty

Of all the tax changes in the budget which the politicians, press and public could have got themselves worked up about – cutting the top rate, freezing grannies allowance, the ongoing process of pulling people into high rates, the marginal rates levied on those earning between £50k and £60k with children, the ever increasing duties on petrol, alcohol and tobacco – it is changing of what is charged VAT with respect of hot, take-away food which seems to causing the government the most trouble.

The ludricous lengths that that our elected wastals and the copy-and-paste artists in the MSM have gone to over the whole matter is laughable in the extreme. Thanks to them we have had to put up with, amongst other things, iDave and various cabinet ministers attemting to remember if, where and when they last ate a pasty (and the MSN chasing these recollections up); Millipede Jr (with his likely Brutus in tow) going to Greggs for lunch as part of a staged photoshoot; and supposed ‘quality’ newspaper The Telegraph resorting to live blogging the entire fiasco.

Fankly, if the whole business means anything, it is as

  1. yet another reminder how pathetically out of touch the inhabitants of the Westminster village really are,
  2. showing how woefully ignorant and stupid the so-called reporters who are paid to fill up the output of the media really, and
  3. a demonstration of how utterly stupid VAT is.

As I’m certain my readers are aware, VAT is an EU tax and thus subject to the whims of Brussels and the rent-seekers to be found in that city. It is therefore no surprise to learn that the reason for impsition of the ‘pasty tax’ is somewhat more than the bland statement Osborne made to parliament during his speech:

We will also address some of the loopholes and anomalies in our VAT system.

[…]

Hot takeaway food on high streets has been charged VAT for more than twenty years; but some new hot takeaway products in supermarkets are not.

A fuller account of the reasons why the children supposedly running the country are in the mess that they are in comes from Richard North of EU Referendum:

Enter Manfred Bog who, back in 1994 was running three mobile snack bars. After a series of disputes with the German tax authorities, Bog in 2006 fixed upon one particular issue, that 70 percent of his sales were being assessed for standard rate of VAT, while the remainder only attracted the lower rate of five percent.

The German authorities here were arguing that the larger proportion of the food sold was consumed “on the premises” (i.e., under a shelter provided by Bog) and, therefore, the trade was a “service” rather than the supply of goods – thus attracting the higher rate of VAT.

We should not detain ourselves with the finding of the German financial court, the Bundesfinanzhof. Down that path lies madness. Suffice to say that the case was joined by others, including a firm called CinemaxX, arguing the toss about popcorn sales. Again, the service/supply of goods argument was in the cooking pot. And then there was Mr Lohmeyer, with his snack stalls and a swinging grill, plus – of course – Fleischerei Nier. Don’t even go there.

Cutting to the chase on this bundle of cases, the judgement on 10 March last year ruled that the supply of food or meals freshly prepared for immediate consumption from snack stalls or mobile snack bars or in cinema foyers is a supply of goods rather than service – as long as the supply of services preceding and accompanying the supply of the food were not predominant.

Ostensibly, this did not apply to the UK – or so HMRC said at the time. Yet the Fish Fryers Federation and others disagreed, because the essence of the ECJ judgement was that they were supplying goods (as in foodstuffs), not services. And as the UK zero rates food, they were thus salivating at the prospect of a mega-refund.

“Ahah!”, said HMRC batting away such insolence. The fish fryers are caught either way. Their tax category – devised uniquely by the UK – includes “hot take-away food” and well as catering services. It matters not whether it is food or service, VAT still applies, regardless of Bog.

And there gripped the cold, mindless jaws of the VAT Sixth Directive, of which the ECJ had so cruelly reminded us. To their horror, HMRC have confronted their worst nightmare. If the fish fryers are selling hot food rather than services, and have to charge VAT on it, so does everybody else who sells hot food.

That’s right, Osborne had no choice in the matter.

Can we leave yet?

Rowan Williams fantasies again

Given that an orgy of stupidity has been in progress in and around St. Paul’s Cathedral for just over two weeks now it is somewhat surprising that it has taken the Church of England’s CEO, a man given to saying foolish things, this long to open his mouth and insert his foot.

However presented once more with the pulpit of the MSM (in this case in the shape of the Financial Times) from which to preach, the Archbishop of Canterbury has gratefully seized the opportunity to do just that and did, yesterday morn, issue a sermon.

If his article was full of waffle about what has been going on at the Cathedral then we could – and would – quite happily have ignored him. However as he couldn’t help but slip in his opinions on matters temporal, viz banking and economics, he once again needs to be taken to task.

There is help to be had from a bold statement on our financial situation emerging last week from the Vatican. This document, from the Pontifical Council for Justice and Peace, is entitled ‘Towards Reforming the International Financial and Monetary Systems in the Context of Global Public Authority‘. It contains, along with some sharp critical analysis a rather utopian vision of global governance and regulation. But, more importantly, it offers three quite specific recommendations that seek not to change everything at once but simply to minimize the damage of certain current practices and assumptions in the immediate future.

Ah, so it turns out that Williams hasn’t had an original idea (perish the thought) and is instead taking his lead from the Vatican. That is, surely, more then enough reason to have Brenda, as Chairman of the Board, send him to the Tower so that he might consider the error of his ways…

His future, or lack there of, aside what are the papist ideas which he wishes us to consider?

One is something we have now heard clearly from many sources – a plea now endorsed by the Vickers Commission that routine banking business should be clearly separated operationally from speculative transactions. The rolling-up of individual and small-scale savings into high-risk and high-return adventures in the virtual economy is one of the more obvious danger areas in the light of recent years. Early Government action in this area is needed.

Remind me, how much did the ‘casino’ arm of Northern Rock lose? How much did the retail arm of Lehman Brothers lose?

A second plea is for the recapitalization of banks with public money to be accompanied by obligations on the banks to help re-invigorate the real economy.

No and no. No bank should have been propped up by the poor bloody tax payer, being instead allowed to fail. Savers would have been fine up to the tune of £35,000 and investors, as is the case with any failed business, would have lost out. However what’s done is done there (sadly) but why should these newly acquired state assets be forced to lend money? You can’t re-capitalise them, thus allowing them to rebuild their balance sheets, yet expect them to lend money to all and sundry once again.

But the third suggestion is probably the most far-reaching. The Vatican statement strongly backs the proposal of a Financial Transaction Tax – a ‘Tobin Tax’ or, popularly, a ‘Robin Hood Tax’ in the form in which it has been talked about most recently. This means a comparatively small rate of tax (0.05%) being levied on share, bond, and currency transactions and their derivatives, with the resulting funds being designated for investment and development in the ‘real’ economy, domestically and internationally. The modest rate of taxation conceals the high levels of return that could be expected (some $410bn globally on one estimate).

I don’t know where the Archbishop is getting those figures from but even if we give him the benefit of the doubt and say that it isn’t a retired tax accountant from Wandsworth, that $410 billion is a rather high number. Using the 2010 GDP figures we can see calculate that the $410bn figure is 0.65% of the total, which is somewhat above the theoretical 0.05% tax rate given.

Thankfully, via Clifford Chance, who have looked at the EU’s own analysis, we have some more realistic figures available to us:

The Commission paper estimates the tax itself would raise €16bn to €43bn, but the figure is very dependent upon the degree of dislocation, and previous reports suggest the Commission’s original estimate was €10bn. Revenues would be shared between Member States and the EU (partly reducing national contributions).

The Commission does not however estimate the reductions in receipts from other taxes. Stamp duty revenues are currently quite significant – £4bn in the UK alone. Add to this reduced corporation and personal tax receipts – the Commission’s impact assessment anticipates a reduction in economic output of almost 1.8% – and it seems likely the revenue effect of the FTT will be negative.

The FTT is therefore perhaps the first tax in history which is being proposed in the knowledge it will reduce tax revenues.

A tax that loses use money? That’ll scupper any chance of more money for government ‘investment’ then, won’t it?

Other commentators such as Charles Orton-Jones and Tim Worstall also agree, pointing out the cost of this will be passed on to you and I as customers, employees and shareholders as well as the potential loss of jobs (and thus tax revenues) if banks, hedge funds and other such financial companies decide to relocate to less hostile climates.

In conclusion I therefore repeat to the silly old fool the advice I gave him back in April

May I kindly suggest to the Archbishop that he sticks to his job and doesn’t stick his head above the parapet again unless he has actually thought about what it is that he is saying?

in the hope that this time he will take it? However as I doubt he will I look forward to filleting his twaddle the next time he decides to place his foot in his mouth.

Street Theatre

There has been some reportage, and blog coverage, recently of remarks made by Public Health Minister Anne Milton.

As said Minister was last seen on this blog looking longingly at your organs I thought I’d investigate and see how she’d managed to put her foot into it this time.

The answer, somewhat surprisingly, is that she didn’t. At least not to any great extent. Her remarks came in a Westminster Hall debate on May 3rd on the subject of Childhood Obesity at which she, as Minister responsible, was present to respond. Towards the end of her response she talked about her recent junket to the World Health Organisation sponsored ‘First Global Ministerial Conference on Healthy Lifestyles and Noncommunicable Diseases’ held in Moscow on the 28th and 29th April.

Passing over such questions as how noncommunicable diseases and healthy lifestyles are in any way related and why politicians feel the need to have an international conference on the subject (further documentation is available online for those who are interested) the comments in question are these:

…the Minister of Health for Columbia talked about a scheme they have there. On Sundays they close certain streets so that everybody can play in them. That is an outstanding idea. Before constituents e-mail to complain about their streets closing, I should say that I accept it would not work everywhere. It could, however, work in some places.

And that was it. A silly, unenforceable and completely impractical idea to be sure but hardly a proposal or anything binding. Certainly nothing worth getting overly excited about.

No, the real revelation, although it seemed to pass unnoticed by hacks who either don’t care or can’t be bothered to report anything beyond trivia, came earlier on in her remarks when she said, on the subject of food labelling:

The regulations surrounding front-of-pack labelling are an EU competence.

A government minster for once admitting that an issue is out of their hands? We can applaud, for once, some honesty by a politician in admitting that, as a result of the actions of all governments and Prime Ministers since 1972, they have surrendered their ability to set policy in at least one area to their masters in Brussels. Now all they have to do is admit everything else that they and their predecessors have given up.

Even if they do, what are the chances of the MSM reporting it rather than some piece of trivia?

I wouldn’t hold my breath if I were you.

Rejoice!

It may have escape the notice of some (or even all) of you but today, May 9th, is Europe Day (EU version), not be be confused with Europe Day (Council of Europe version) which was last Thursday (May 5th).

WTF, I hear you say, is Europe Day?

The EU themselves are all to happy to provide the answer:

On the 9th of May 1950, Robert Schuman presented his proposal on the creation of an organised Europe, indispensable to the maintenance of peaceful relations.

This proposal, known as the “Schuman declaration”, is considered to be the beginning of the creation of what is now the European Union.

Today, the 9th of May has become a European symbol (Europe Day) which, along with the flag, the anthem, the motto and the single currency (the euro), identifies the political entity of the European Union. Europe Day is the occasion for activities and festivities that bring Europe closer to its citizens and peoples of the Union closer to one another.

That’s right, it is the anniversary of the day that the political project, of which the UK is now just an a regional subdivision, began.

So be a proper EU citizen and wave the blue flag with the yellow stars on it whilst reciting Friedrich Schiller’s ‘Ode to Joy’ (set to the final movement of Beethoven’s 9th) and remembering that you are ‘United in Diversity’.

You’ve done all that? Well done! Now, how does it feel to be a good little Soviet?

Who Rules?

On Thursday the House of Commons partook of a discussion and division on the issue of voting by convicted prisoners. The result of this vote is not binding on the government being as it was simply a backbench motion allowing members to express an opinion on a matter that has yet to be formally presented to the house by the government. In the free vote that followed the debate the motion was passed by 234 to 22. A roll of honour/list of shame* is available. Those on the government payroll and the Labour front bench abstained.

That the matter was under discussion is the ‘work’ of John Hirst, a thug convicted of the manslaughter** of his landlady with an axe, who sued the UK under the Human Rights Act because he was not allowed to vote whilst he was detained at Her Majesty’s (dis-)pleasure. The European Court of Human Rights (ECHR) ruled in his favour and asked the UK government to look again at the issue.

Predictably there has been a lot of outrage at the thought of the likes of Hirst being allowed to play a part in democratic elections whilst in gaol with one opinion poll putting support for the idea at only 9%. David Cameron has been widely quoted as saying that the idea makes him ‘physically sick’.

The whole issue however is somewhat of a red herring, a trifling concern. According to the most recent breakdown of figures that I could find (2010-08) there are 31,630 convicted people in prison serving 4 years or less (excluding under 18’s and fine defaulters but including the unsentenced). By the same criteria there are only 11,433 serving less than 12 months. Those numbers aren’t enough to form a constituency of their own. Split evenly across the 600 constituencies (come the 2015 election) that equates to 53 or 19 each (assuming an even split). Those sort of numbers aren’t going to affect the outcome of a general election.

Rather the issue here is one of sovereignty: is Parliament – elected by the population of the UK – supreme or does an external institution take precedence? MPs like to maintain that they are still in charge – and today’s vote has no doubt resulted in lots of back slapping amongst the Eurosceptic wings of the big parties – but they aren’t and haven’t been so for some time.

Unless Cast Iron Dave uses the result to find himself a spine and finally gives the public the in or out referendum*** that all of the big three political parties have offered at one time or another then it is meaningless. Justice Secretary Ken Clarke has already said that the UK would ‘do the minimum necessary in order to comply’ with the ruling and something tells me that said stance will not have been altered by what went on today.

It would be nice to hope that this is the straw that finally broke the back of the proverbial camel but I doubt it. Our elected representatives are, generally, too wedded to the idea of further political and economic integration no matter what the cost. Indeed I doubt that many of them realise that the PR exercise which is the Referendum Lock promised by the collation government will have no affect on the ongoing transfer of sovereignty to European bodies.

* Delete according to your belief.

** During the debate various MPs referred to him in other terms but unlike them this blog is not protected by parliamentary privilege and therefore cannot be so blunt.

*** Yes, I am well aware that the ECHR is a Council of Europe body, not a European Union one but given the amount of overlap that exists between the two and being aware that provisions exist on both sides for integration, withdrawal from the European Convention on Human Rights would (hopefully) mean expulsion from both entities as membership of each requires the the Convention to be ratified.