The Beginning Of The End (Of The Journey)

Well, tomorrow sees the end of Child Benefit for those bloated plutocrats with a household income of £50,000 and a stay at home mother .

Thank heavens it's been preserved for those struggling families on £98,000 a year and a working mother, not to mention the 37,900 children living in Poland who receive it. The Tories are the party of the Polish family, after all.

I call on the commenters - is this the first removal of a universal benefit since the NHS introduced prescription charges, and a young minister, a left-wing firebrand called Harold Wilson, resigned in protest in 1951 ? Wilson, as Prime Minister, removed the charges in 1965, a rare example of political consistency, then reintroduced them in 1968. They've been there ever since.

The point of universal benefits, like a universal postal system, is social cohesion. They showed that the Welfare State was for everyone, that we were indeed all in it together. The more benefits are means-tested (an expensive and bureaucratic procedure), the more the welfare state is purely for "the poor" and not for "everyone", the less support it'll have from what Churchill called "the broad masses of the well-to-do" and the more uncertain its future.

 For some in or around the Tory party, for the millionaire venture capitalists advising on employment legislation while themselves paying only 10% tax, or the billionaire retailers advising the government on efficiency, while ensuring their company dividends go offshore, that may be considered a feature rather than a bug. 

 On Tuesday there's the vote on the 1% benefits freeze - for 3 years, at a time when the new BoE Governor, Mark Carney, has already suggested that his predecessor Mervyn "Money Printing" King is a tad hawkish on inflation targets, and that some loosening may be required in the fiscal straitjacket that has seen inflation continually above the 2% target.

I have no problem with someone putting forward the argument that benefits are too high, that they afford more than a minimum standard - but no one in the Tory party is doing that. Instead, it's proposed that they should be cut because of 'fairness'. Yet they're meant to afford people a minimum standard of living. When food and electricity prices rise by 10%, and benefits by 1%, what's going to happen to those people ? And that's just one year.            

I must say, the next few years are going to be interesting, in the Chinese sense.

The suicide rate fell dramatically at the start of both World Wars, as those otherwise tired of life decided that, like Vince and Muskie, they just wanted to stay around just to see what happens next.

I feel the same. The next few years are going to be awful but fascinating.
     

Benefits Rise By 1%, Food Prices Rise By 5% ?

Laban, last week at CiF:

"It was a bad wheat harvest in the West (although I'm told East Anglia did better then usual - they reckon they don't normally get enough rain there) but it'll be worse in 2013. None of the fields have been sown round my way - can't get tractors on the fields. Usually by now wheat would be sprouting.

Dairy and beef farmers have had to keep their beasts indoors since October and it's costing them a fortune in feed.

Food's going to be more expensive."

Telegraph, yesterday :

"The price of basic food items could rise by as much as five per cent this year because of miserable weather last autumn, the managing director of Waitrose has warned. Mark Price said food price inflation is already hovering at three to three and a half per cent, but this is just "the tip of the iceberg" and prices could increase even more dramatically over the coming months.

Produce such as bread and vegetables will become up to five per cent more expensive because of poor crop yields leading to a shortage of supply, he warned.

Many farmers are reporting that they still have not planted crops for 2013 because of the torrential rainfall which caused flooding across parts of Britain late last year. "

"Open borders make the eventual abolition of the welfare state imaginable"

Thanks to blogger BenSix in the comments for this, from libertarian economist Bryan Caplan.

(Graphs from Alesina, Glaeser, and Sacerdote's "Why Doesn't the United States Have a European-Style Welfare State?")

Caplan thinks that the end of the journey is not only possible, but desirable. Key paragraphs :

"Diversity undermines solidarity. People don't mind paying high taxes to support people "like them." But free money for "the other" leads to resentment and political pushback.

That's exactly what we're seeing in the UK, and why Osborne and Shapps may get away politically with a real-terms benefits cut. They noted the outrage among working people in 2011 when benefits rose by 5% at a time of static wages.

If you're a social democrat, this implies a tragic trade-off between social justice for natives and social justice for potential immigrants. But if you're a libertarian, the opposite is true. The welfare state doesn't make open borders impossible. It's open borders that makes the eventual abolition of the welfare state imaginable."

Caveat - the first graph is based on 1990-1998 figures, the second on 1998 figures. Ireland and the UK, for example, are considerably more diverse than they were then. And the US is a lot more Hispanic than it was in 1998.

UPDATE - another academic blogger takes issue with Prof. Caplan  - no comfort here, I fear:

" In particular, let me stress once again that even if open borders makes the majority population more anti-government, after a while their preferences will not matter, since they will inevitably become a minority of voters. "

 But at some stage the money runs out, no matter what the voters want.

Prof Caplan responds - no comfort again :

"The claim isn't that open borders will "destroy" solidarity or the welfare state, but merely that open borders will undermine both.  And while free-marketers may well agree that some degree of solidarity is good, it's also hard for free-marketers to deny that current levels of solidarity are excessive.  Solidarity stands in the way of free-market reforms in pensions, education, health care, taxation, agricultural policy, and much more."

 Can't say we've not been warned.

More On Universal Credit - Stable Door Edition

When I wrote about the Universal Credit rules for the self-employed, which will do such damage to the self-employed handyman or the single mum selling her crafts at local fairs, I forgot about another target - the Big Issue Benefits Loophole :

"A Big Issue seller is claiming victory in a landmark case to have her work classed as a proper job and thus be eligible for extra benefits.

Romanian Firuta Vasile was refused housing benefit because a local authority judged that her job selling the magazine "didn't count".

But she has successfully argued that because she bought the Big Issues and sold them at her own profit or loss she was self-employed.

Speaking through an interpreter, Vasile, 27, said she came to the UK in 2007 to look for a job, but could only find work selling the Big Issue."

Romanians and Bulgarians aren't allowed to work here unless they're self-employed. And you'll have noticed the terrible shortage of Big Issue sellers which is crippling British industry. But it sounds as if the Big Issue is their flexible friend :

"The Big Issue exists to offer homeless people and those at risk of homelessness the opportunity to work and earn an income. This is offered irrespective of a person’s background or origin. Earning their own money reduces dependency on hand-outs from the state, charities and the public.. "

Even when the entire raison-d'etre of "earning their own money" is to get "hand-outs from the state" ? It's not surprising that Roma Big Issue sellers are an increasingly common sight.

The good news is that, come October, all this will stop and our self-employed sellers will be assumed to have an income of around £250 pw - whether they have or not.

The bad news is that, come December, the entire populations of Romania and Bulgaria will be free to move to the UK, self-employed or not.  

I do wonder if the aim of our rulers is actually to push immigration to the levels where the Brits will, of their own volition, call for the end of the Welfare State. Maybe that Grant Shapps isn't as stupid as he sounds, only as unpleasant as he sounds.

"I do think that it’s right for the taxpayer at large, who after going out, working hard, paying their taxes, should feel that they’re not having to pay for people who are in receipt of benefits to get a higher effective pay rise than the people actually working. So I think this is an argument about fairness."

As I've said before, benefits are meant to afford a minimum standard of living. Raising them by 1% a year for three years, when inflation on necessities is probably over 5%, will drop them a long way below that standard. Now maybe that standard was set too high. But that's not what he's arguing. He's arguing that it's "fair" that a minimum standard set by Parliament should be reduced because other, better-off people are tightening their belts.

I said he's not stupid. People working and still struggling to pay the electric bill aren't going to be overly sympathetic, to put it mildly. Good politics if lousy humanity.     
 

Shepherds Arise

A carol from Sussex, collected from the Copper family and sung here by Oak.

Sorry about the pagan  video, but the guy's got taste in music.

A Happy Christmas to one and all from the Laban household ! And don't forget to pray for the Christians of Syria, Nigeria and Egypt.

 

"What's Wrong With The Left?" Part 296

Andy Newman at Socialist Unity is worried :

"I think there is another underlying problem, in writing about what the left is doing,  because the left really isn’t doing much at the moment which engages with the political mainstream. I will write a longer and more considered article on this, but I am interested in what our readers think. Has the left lost its way?"

Well there's a surprise. What could the matter be, I wonder ? In a week when the statutory consultation period for large-scale redundancy has been reduced from 90 days to 45, and the Agricultural Wages Board ('which permits the fixing of minimum wage rates and terms and conditions for agricultural workers') has been abolished, all with hardly a ripple of opposition, what could a left-winger in the UK possibly find to worry about except US gun control and gay marriage ?

But if Andy doesn't understand what's going on, his commenters can fill him in :

Alan Gibbons : 

"The Tories have been relatively successful at slicing away at public services. There has been no ‘big bang’ provoking a generalised fightback... anti-welfare rhetoric has struck a nerve with some sections of the population. The second national anti-cuts march, while substantial, was smaller than the first...what worries me more, from the perspective of somebody involved as an independent activist in the fight against the cuts and particularly the campaign to save the public library service, is that the Left looks much older, greyer, divided and less confident ..."

You're telling me ... I think this post needs a link.

"The time of salami-slicing in public services seems to be coming to a close and whole areas of public spending may be axed, as shown by Newcastle’s withdrawal from the Arts. The assault on redundancy, the privatisation of the NHS, the proposed onslaught on the teaching unions and accelerating attacks on benefits show a weak government with a fragile mandate going ahead regardless with an offensive strategy."

A slight diversion here - I think some areas of public spending OUGHT to be axed. The dynamic of the last sixty years in local government is

a) central government puts statutory obligation on local government
b) gives them some money to fund it.

Until a local authority gets far more of its money from central government than from local taxation, and this is cancerous to local democracy, because you don't really get what you vote for. As a school governor, for example, I saw our Conservative local authority zealously implementing Labour's hideous "Every Child Matters" agenda, and wondered what the point of a Tory vote was. If central government want something done, they should do it themselves.

So anyway, I wouldn't mind if some of the legislative nagombi (how many diversity consultants) was dropped. Alas, this isn't going to happen any time soon. What's more likely is that the local authority (LA) staff will end up being outsourced to whichever company promises the LA that they can do the same stuff as the council did, with the staff having the same terms and conditions (except pensions - a not inconsiderable point, as LA pensions are index-linked final salary i.e. what you don't see in the private sector any more) - and all at 10-15% less cost ! I invite the reader to imagine at whose expense these savings will come.

I digress.

Nadia Chem - fine old English name, but she talks sense (though should that be "overestimated"?) :

"What has been missed is the reality that the working class might not have the confidence to resist such an offensive. The atrophy of working class organization at workplace and community level cannot be underestimated... the locus of the offensive has been as much in a general attack on living standards as in cuts. This has generated an enormous well of bitterness but little active resistance... the fact that this attack on living standards started under the Labour government from 2006 weakens Labour’s ability to grasp the bitterness."

Mr Newman himself :

"My experience of knocking doors for Labour, is that people are open to a traditional Labour message, but not with any real conviction that labour would be even different, let alone better."       

Trust the people, Andy.

"I fear that much of the left – including the so-called revolutionaries – have actually given up on social change"

I wouldn't say that. We've seen unprecedented social change, and will see more.

BrokenWindow :

"the Left is as atomised as the workers collectively are atrophied. Underpinning this is an absence or failure to theoretically engage in wider debates about globalisation and nation states... most of all it must re-engage with the people it hates the most,the young working class white men and women who have gone to the right."

So there are plenty of people who can see that there's a problem. But in 175-odd comments, no one seems to really know why they're up the Swanee.

"the best thing we could do for the cause is to recruit more people to unions/help install a sense of discipline/participate in community campaigns and start working where people are rather than where we want them to be." 

Of course ! Like good old  Boxer in Animal Farm, "I must work harder" ! If only we were better socialists...

Laban dropped into the comments a quote from the anthropologist Peter Frost (of 'Fair Women, Dark Men') :

"In late capitalism, the elites are no longer restrained by ties of national identity and are thus freer to enrich themselves at the expense of their host society. This clash of interests lies at the heart of the globalist project: on the one hand, jobs are outsourced to low-wage countries; on the other, low-wage labor is insourced for jobs that cannot be relocated, such as in the construction and service industries.

This two-way movement redistributes wealth from owners of labor to owners of capital. Business people benefit from access to lower-paid workers and weaker labor and environmental standards. Working people are meanwhile thrown into competition with these other workers. As a result, the top 10% of society is pulling farther and farther ahead of everyone else, and this trend is taking place throughout the developed world. The rich are getting richer … not by making a better product but by making the same product with cheaper and less troublesome inputs of labor."  

I think Mr Frost describes it pretty well. The UK business elite in 1940, as noted in Harold Nicolson's diaries, were prepared to go down in flames rather than see Hitler triumph. But now ... even "conservatives" like Boris Johnson and Michael Heseltine* "are no longer restrained by ties of national identity", let alone businessmen who've seen their incomes soar, both absolutely and relatively. This is why the end of the journey will soon be in sight.
    
Anyway, Andy (or his gofer, I know not) deleted the post in about minutes one. They don't want to know, and that's why they'll continue to get shafted - along with the rest of us.

Andy is at this moment involved in  an industrial dispute between Carillion, an outsourcer, and their many Asian employees - mostly Goan Catholics and I'm sure good people (the details of the dispute make depressing reading - looks like third-world petty corruption is already here).

But you do have to wonder why people from half way round the world are needed to clean Swindon's hospital - especially as Swindon is a place where there are 30 applications for every vacancy in Next.

The answer to Andy's questions are literally staring him in the face - but there's none so blind as those who will not see.

    


* Heseltine gave a famous Spectator interview where, asked if he was worried about Britain being merged into a Greater Europe, replied "who now remembers the Heptarchy (the seven kingdoms of Saxon England)?" 

"Croydon abandoned by middle-class"

Forget for a moment about today's inevitable news that native Brits are officially a minority in what was their own capital city - it's what was reported last week that struck me :

"One of Croydon’s biggest private employers has said that it could be forced to move out because middle-class workers do not want to live in the borough.

Mike Webb, chairman of insurance company Allianz Global Assistance, warned that his firm was struggling to maintain its pool of 600 staff because of Croydon’s negative image. He told a business summit aimed at promoting the economic renewal of Croydon that the middle-class talent pool from which his company recruited was leaving the borough at such a rate that the firm could be forced to leave within two to three years.

His warning that they may quit comes on top of Nestle's announcement earlier this year that it was moving its Headquarters to Gatwick. And in October another major employer, department store Allders, was closed down after administrators were called in.

“Croydon has been a fantastic place for us and we would like to be here for a long time,” Mr Webb said at Develop Croydon last Thursday. “The key issue is how we are going to continue to find these people because we see a large drift out of Croydon of the middle-class who have traditionally been our employees. If they are not here in two or three years, we won’t be here.”

Mr Webb said that the firm had long-standing links with the borough and that, traditionally, most staff lived locally. However, he said that the public’s perception had worsened after last year’s riots and added: “We need to be making the case for Croydon and its strengths more positively.” Mr Webb told the Standard that his company was committed to staying in Croydon for the next three years, but might reassess the situation if the trend continues. “When I said middle-class people, what I meant is white-collar workers,” he said. “Not necessarily graduates, but hard-working and enthusiastic people.”

Croydon was, well within living memory, one of those London boroughs like Ealing, Bexley Heath, Dulwich - shorthand for safe, dull, conformist suburbia. Gone.

The laurels are speckled in Marchmont Avenue
Just as they were before,
But the steps are dusty that still lead up to
Your Uncle Dick's front door.

Pear and apple in Croydon gardens
Bud and blossom and fall,
But your Uncle Dick has left his Croydon
Once for all.

Told You So

This blog, two years ago :

"... the Gove option will mean that a lot of bright working or lower-middle class kids will look at a potential £60,000 debt and they won't bother - unless they're at Oxbridge or doing a course with a pretty much guaranteed career at the end of it. Outside this small subset of courses, university will be restricted to those whose parents can subsidise them - i.e. the very rich.

That's not all bad - I can see cultural studies departments being disbanded across England and Wales. Economic forces will cut away swathes of courses and institutions, correcting the insane growth of the last 25 years.

But at that kind of cost the idea of education as a good in itself will wither away. Who's going to do archaeology without a private income ?"

And lo, it comes to pass (pay link):

"Nearly one in five degree courses has been scrapped since the trebling of maximum tuition fees to £9,000 as universities concentrate on popular subjects and drop courses that have too few applicants or cost too much to run. Officials figures show a cull of more than 2,600 in the number of courses available to applicants planning to start their degrees in 2013. More than 5,200 courses had already been removed for students beginning this year, the first to face the higher fees.

Some of the courses have been dumped by universities even after prospectuses went online earlier this year, and in some cases after applications had begun. The scrapped courses range from archeology at Birmingham to languages at Salford and London Metropolitan. The number of courses listed by UCAS has fallen from 43,360 to 35,501 in two years"

In all respects (you can read this one) ...

"Students beginning university next year will be only the second cohort to pay at the higher rate of tuition fees, which were increased to a maximum of £9,000 per annum last year – almost treble the previous limit. The fees increase led to a sharp drop in applications last year, but hopes that this was a temporary dip will have been hit by today's figures, which show an even greater proportional fall at this stage compared with last year among British school leavers.

In total 145,000 applications were received for all courses at UK universities by November 19 this year. This compares with more than 180,000 at the same stage in 2010, the year before the introduction of the new fees regime."

I think the new fees have also concentrated some people's minds when it comes to the value of a degree, which was sold to prospective students as "Graduates earn £15K more then non-grads ! You know it makes sense !". Alas, those figures, while true, failed to point out that those figures were based on the relative scarcity back of graduates back in the day, compared to a world where maybe 40% of their age cohort would be grads. It also failed to point out that in a few-graduates world, those grads were likely to be at the top of the intelligence range - and maybe that's why they were high earners. In a many-grads world, average grad intelligence will be lower.

But even for bright people the jobs market is tough. I know people with 2-1s from Russell Group uni's who are working in call centres at £6 an hour.


UPDATE - obviously, the solution to all these woes is to bring in more graduates from overseas. 

Vote Conservative !

For more expensive wine !

"The ban on cheap multi-buy deals will not apply to pubs, clubs and restaurants and is aimed at curbing binge drinking, especially by teenagers "pre-loading" on very cheap alcohol before they go for an evening out."

 I suppose enforcing existing laws on public drunkenness is a ridiculous idea. Far easier to penalise everyone. It's all about rewarding personal responsibility, you know.

I am going to take a weekend off, spend a night or two in France and fill the people-carrier to the gunwales with the more bearable products of Carrefour and Leclerc. About 300 bottles should suffice, and that nice M. Hollande needs the taxes.

(see also "a substance abuse counsellor has been charged with murder and drink-driving after she allegedly stuck a pedestrian and drove for more than two miles with the dying man embedded in the windscreen.")



For concreting over England !

More than 1,500 square miles of open countryside - over twice the area covered by greater London - needs to be built on to meet housing demand, the Government’s planning minister Nick Boles has said.

I suppose stopping letting half a million people a year into the UK is a ridiculous idea. Far easier to ruin the countryside and build on some of the best agricultural land in the world. Who needs food ?




For electricity bills, utility bills and train fares all increasing faster than inflation.

Who needs to keep warm in the winter ? Us Brits can take it ! 





For an India - EU trade deal which would allow 30,000 (above existing numbers) Indian IT staff into the EU  - because there are still one or two UK IT people earning over £30,000! The BBC were plugging it this morning on Radio Four. The Institute of Directors are very keen.

 "CEDEFOP (2010) estimates show a labour shortage of 12 million in the EU in 2020 cutting across all levels of workers."

You may have noticed how few unemployed there are in the EU.

"In 2007, about three million jobs were unfilled in sectors such as information technology (IT) and engineering (EurActive, 2007)."

Must be why IT salaries have gone up so much in the last six years.

(In India for IT staff it's like the 80s in the UK - wage rises three times a year, go to a jobs fair and pick a job from half a dozen offers. A former colleague told me that two years back he'd trained up three or four people so that they could move his job offshore. He trained them in .NET technologies, they went back to India to start supporting "his" applications - and immediately left, armed with their new skills, to work for a competitor! He's still supporting the apps - the company he works for seem a tad 'burned' by the experience.)

More Dreadful Tax Antics By Foreigners - The Government Acts

We've seen the dodgy deeds of various swarthy chaps documented in HMRCs Most Wanted.

But one should remember that if you want a decent job done, call a professional. All bar the top two or three of HMRC's bad-boys were six-figure tax dodgers or less.

If you want to keep nine, ten, eleven or even twelve figure sums out of the Revenue's sticky grasp and also get a Guardian column to argue how the other guy's tax money should be spent, or be appointed to a Government business task force, it's best to forgo concepts like "carousel fraud" and the "long firm", and think about ordering a Dutch Sandwich with a Double Irish to go.

You'll note the absence from HMRC's list of Starbucks, Google (whose execs have the brass neck to pontificate in the Guardian about how more kids should be taught programming in UK schools), Amazon (whose Luxembourgeois variant involves some interesting VAT shenanigans with the publishers),  Apple and a whole host of famous names. They avoid paying the corporation tax that unimportant sectors like manufacturing stump up - because their UK businesses make hardly any profit. Yet strangely, they don't want to close these loss-making enterprises - far from it. They're very profitable - but the profits are elsewhere.

Now most of these techniques involve vesting the company's "intellectual property" (IP) in some tax haven then levying a hefty transaction fee for use thereof, one which renders the business activity taking pace in a taxable jurisdiction (as it might be the UK) only marginally profitable or even loss-making. You'd see how it might be possible with software, where IP is all (how much does it cost to copy a disk?), but apparently a there's more intellectual property than coffee in Starbucks, for example :

"accounts filed for its UK, German and French units, which make up 90pc of European sales, showed an apparent loss of $60m, but Starbucks told investors its European business was profit-making...

Starbucks said that although it had paid no corporation tax in three of its “largest and most important markets” last year, it had paid value-added tax, social security costs and business rates...The coffee giant uses a range of measures to mitigate the impact of tax. For example, the European unit is required to pay a royalty rate of 6pc of sales to Starbucks for using its intellectual property. Starbucks, which has a complex financial structure..."

A paragraph back I mooted that IP was valuable stuff compared with the price of producing a CD. Well, yes and no - not if you're the biggest software company in the world.

 Steve Sailer on Microsoft :

"Microsoft has over 40,000 employees in the state of Washington in the United States. But they don't actually physically burn on to disks the software they develop. Instead, Microsoft, has a manufacturing plant in Puerto Rico employing 185 people that gets credited in Microsoft's books with a lion's share of Microsoft's Western hemisphere revenue and profits. It's making disks that's the really important thing that Microsoft does.

Despite all you've heard about Microsoft being a software company, they are actually a manufacturing company, at least for tax accounting purposes. To the IRS, Microsoft is basically a Puerto Rican, Irish and Singaporean industrial goliath with a money-losing R&D outpost in Redmond, WA."

Now call me naive, but I'm not sure how you can reasonably one day discover that all your intellectual property lives in an offshore haven. I thought Bill Gates set up shop in Washington State, and Steve Jobs worked out of a California garage. It's not as if they set up their firms in the Dutch Antilles or Caymans. I may be wrong, but I could have sworn that Facebook guy started at Harvard, not in Northern Cyprus.

Her Majesty's Revenue and Customs take a dim view of this sort of thing when done in the UK. I'm no tax lawyer (alas), but I understand the general rule is that if they consider a business arrangement to have been set up wholly or mainly as a tax avoidance measure, then they can knock it on the head, and Lord help you if you didn't put aside some of that money in case of an HMRC challenge.

Yet these rules don't seem to apply to multinationals. They seem able to extract the urine with impunity.

But wait ! What's this in the Telegraph ?

"New push on foreign firms’ tax"

"Political pressure to change the way foreign firms are taxed in Britain increased this weekend"

Lord Myners, the former City minister, and Margaret Hodge, the chairman of the PAC – which is carrying out its own inquiry into the issue – said the Government should look into a sales tax as a way of raising extra tax revenue from global companies.
Tomorrow the issue will again be in the public spotlight when Starbucks, Google and Amazon all give evidence on the issue to the PAC. The comments come in the wake of a string of disclosures surrounding the small amount of tax paid by large international companies.

The UK business of Starbucks, the coffee chain, reported sales of £398m and paid nothing in tax because it made a £32.9m loss. The online retailer Amazon paid no tax in the UK in 2010 despite generating sales of more than £3.3bn.

Lord Myners told The Sunday Telegraph that the current system for collecting corporation tax from multi-national companies (MNCs) is flawed. “Corporation tax for an MNC operating in the UK is close to being a voluntary payment,” he said. “The problem is that the tax environment many MNCs are interested in is a zero tax environment.”

Two points. First, is that this Margaret Hodge ?

"The Labour MP has been one of the fiercest critics of tax avoidance by companies such as Starbucks, Google and Amazon. However, she is likely to face questions over the limited tax paid by Stemcor, the steel trading company in which she owns shares and which was founded by her father and is run by her brother. Analysis of Stemcor’s latest accounts show that the business paid tax of just £163,000 on revenues of more than £2.1bn in 2011. However. it is not known whether the company – which made profits of £65m – used similar controversial tax avoidance measures criticised in the past by Mrs Hodge. Stemcor’s tax bill to the exchequer equates to just 0.01pc of the revenues it booked through its UK-based business. In accounts filed with Companies House, Stemcor revealed that despite generating about one third of its revenues in Britain, its UK tax contribution made up only 2.7pc of the tax the company paid globally. "

Now before Tim Worstall gets all cross, I know that taxes are levied on profits, not turnover, and that, for example, some capital investment or previous losses can be used to offset tax. But it doesn't look good. Be interesting to know how they do it.

The second point - if it's a sales/revenue tax they're proposing, how do they think they'll be able to impose it on Company A (notionally loss-making but remits vast sums to tax haven IP owner) but not on Company B (profitable although squeezed by Company A, pays its taxes) ?  Remember that Company A can probably hire brighter lawyers than HMRC.


I'd have thought the only long term solution was to stop the IP nonsense in its tracks i.e. for the law to adjust to todays business practices, treating IP more like a physical asset. If Microsoft made car parts at Redmond, then smuggled them out to a low-tax jurisdiction (as it might be Puerto Rico) to sell, senior guys would soon be doing eight-to-twenty-four stretches and everyone else doing the same would clean up their act.

The alternative is public and governmental pressure - a lot of it. Treat Amazon, Starbucks as if they were the late Jimmy Savile or the Medellin Cartel - or alternatively, the way the Obama administration treated BP and is about to treat HSBC and Barclays. Point out the Kobo as the ethical alternative to the Kindle, or that Amazon vouchers should be what South African sherry was in 1968. No cosy relationship with ministers, no invites to even a local Tory wine and cheese, let alone Chequers. Constant public reminders of what they're doing. No need to do a China (vis a vis Japan) and invite people to smash up their branches, just reiterate that they are not good corporate citizens - that, in short, they are Bad People. Most people want to be liked.

I'm not sure either party is capable of doing this, but you never know. Government has a lot of clout - if it wants to use it.

Last - I know it was originally published in 2010, but this was the strip on a colleagues Dilbert calendar on Wednesday.



        

Universal Tribulation

One of my hobby-horses (see here, here, here, and here) is the apparent belief among our rulers that allowing mass immigration, from countries where corruption is endemic and a State job is an opportunity for self-enrichment, will have no effect on the culture of the UK.

That was always unlikely - and even more unlikely with a relatively generous welfare state and a default assumption of honesty in claimants. True in 1948 but not true now. The benefits system is open to looting on a grand scale, especially by those with access to forged ID - which means not many Brits but an awful lot of Londoners.

Another hobby-horse is that the law-abiding are penalised for the sins of the lawless. Some hapless electrician with a Stanley knife in his pocket is pulled in because of youths being stabbed on London streets, children can no longer (as I did in youth on a classmate's farm) use an air-rifle unsupervised, I can't buy sodium chlorate weedkiller any more because someone might use it to blow things up.

Which brings me, by a roundabout route, to Ian Duncan Smith's Universal Credit, slated for implementation next year, and replacing Child Tax Credit, Working Families Tax Credit (which people with an income of over 50K could get - thank you Gordon Brown for this last-ditch attempt to encourage welfare dependency) and a number of other benefits.

"When implemented, Universal Credit will drastically affect the low-paid self-employed as well as anyone who makes a tax loss. It is proposed that Universal Credits, like the current Working Tax Credits, will be "limited to those who exceed the 'floor of assumed income'" based on the National Minimum Wage."

What this means is that a host of small businesses - often the "single mum selling her handmade stationery" type, which might make no profit or small profits, will be assumed for benefit purposes to be doing a 40 hour week for £6 an hour - whether they are or not. If you recall, the number of self-employed has mushroomed during this recession .

“A rise in self-employment may, in itself, be a good thing, however previous analysis from the CIPD found that the recent rise was less a sign of a resurgent enterprise culture, and more evidence of a growing army of part-time ‘odd jobbers’ desperate to avoid unemployment.”

Alas, come next summer this is going to go into reverse as large numbers of self-employed close their business down and sign on again. So why is this entrepreneur-friendly (well, wealthy entrepreneurs, anyway) administration stamping on what could be the next Laura Ashley or Party Planners ?

"I think it will cut out a lot of fraud, i am a housing benefit processor and the amount of self employed taxi drivers working 40 hours a week and declare £50 a week earnings is beyond a joke, however i do feel for the genuine people who are struggling, who will be hit by this i think it is unfair. if your not earning this money then your claim should not be based on this amount."

My HMRC spies (aka the DWP website) are quite open about it. Reducing fraud, along with "making work pay" (but not low paid self employed work) is what it's all about. The good guys (and gals) are suffering for the sins of the bad guys.

"Universal Credit will make it much easier to catch fraudsters as it will calculate benefit levels using real-time information linked to the PAYE system. By picking up financial irregularities, such as earnings whilst claiming unemployment benefits, it will remove the main opportunities for fraud and error in the system."

Well, it might, if there weren't 83 million National Insurance numbers in the UK for a working population of 30-million odd. Fraudsters are very resourceful people.

So while I have small sympathy for this self-employed, low income person :

"I am a seriously talented artist but no-one wants to buy art at the moment"

You can't but feel for this couple :

"I am employed 25 hours i have asked my boss to increase my hours but there are no available hours?? we have 2 children under 16,
when my husband lost his job 4yrs ago down to the company going into liquidation etc,etc, he was forced into claiming benefits because after months of looking for work nothing was available, he signed on for jsa but didnt receive any money because of what i earn…. a job was going at a local bus firm term time only, which he applied and got and is still currently there… NOW this is the confusing bit…….. my husband is classed as Self-employed ?? He works for the local company and gets a weekly wage… BUT because the company dont deduct tax and insurance from this wage he is classed as Sub-Contracred-Self employed ... because his work is Term-time this means he only works for approximatly 38 weeks of the year, thus leaving our household with only my income for the other 14 weeks, we do rely on tax credit as a safety net during these 14 weeks, we have both and still are looking for more full-time work but its easier said than done and with 2 small dependant it is difficult….. so how is universal credits going to help my situation if we dont meet there criteria???"

I think the answer is - "it isn't going to help" - and that's a great pity.

It's Just Like The Crucible, Isn't It ?

The BBC (and Newsnight**) are in the doo-doo because of Jimmy Saville*.

It's getting out of control, everyone saying that everyone else should be investigated, so they turn round and point the finger elsewhere.

"If I'm bad, look at him!"













* FWIW, back in the 70s, a nurse at St James's in Leeds told me "all the nurses know not to let him get you alone in a stock cupboard". But there are a fair few blokes like that in the world.


** Were the BBC right to pull the Saville prog after all ? The magnificent Anna Raccoon rips the story open - better than anything you'll read in the press or see on TV. Turns out she was a resident at one of the children's homes where JS allegedly did dirty deeds. Seven posts - "Past Lives and Present Misgivings" - exhausting/riveting to read, what must they have been like to write? And I note that a 14 year old Anna was quite a character then, too.

"America Has Reaffirmed Its Faith In Barack Obama"

Thus the Radio Four news headline at 7 a.m. on Wednesday. I don't remember that quite being the headline in November 2004, but maybe memory fails me.

I've got to the stage where, as in the UK, I don't honestly think who wins makes a vast amount of difference. Obama's foreign policy has out-Bushed Bush, with drones clocking up a body-count several times higher than the Texan cowboy's, plenty of civilian "collateral damage", and an innnovation that would have sent the media apoplectic if a Republican was the incumbent - the assassination of US citizens.

On the other hand, Romney seemed gung-ho for an immediate attack on Iran. Long time readers may note my distinct lack of enthusiasm for yet another Middle East "adventure". Iraq was a reasonable concept with appalling execution, Aghanistan has morphed somehow from "butcher and bolt" to liberal nation-building, Libya has no redeeming features whatsoever. As Mr Keynes put it, "when the facts change, I change my mind - what do you do?".


On the domestic front, Obama will want to let millions more Mexicans into the US, which will mainly impact on the employment prospects of blacks (who voted around 95% Obama - no good deed goes unpunished) and poor whites (as well as bankrupting California, but that's by the by). Romney wanted to give a green card to anyone in the world with a science degree, which would mainly impact the incomes and employment prospects of educated whites.

There's a silver lining for the winner, in the unlikely shape of shale gas. Just look at these price differentials. Some predict a US manufacturing renaissance driven by cheap energy. Japan, who are closing their nukes, are dependent on imported LNG and oil, Germany, doing the same, are dependent on Vladimir Putin's goodwill, as he controls the gas supply. This could be a golden opportunity for the US to rebuild lost manufacturing capacity.

One other silver lining, albeit tarnished. Had Obama lost, there'd have been riots and deaths in all the old familiar places. America's been spared that.

More Thoughts On The End Of The Journey

From todays news :

"UK Border Agency working on plans for priority passport lanes for rich travellers at Heathrow and other British airports"

"Heh heh heh ... I told you those Zil lanes would be useful"

"Ms Miller, who is also the Culture Secretary, argues that extending marriage to same-sex couples will ensure that the institution retains its importance and relevance in modern Britain, and that its introduction is a milestone in Britain’s heritage “of freedom and fairness”."

"The new definition of domestic violence and abuse now states:
Any incident or pattern of incidents of controlling, coercive or threatening behaviour, violence or abuse between those aged 16 or over who are or have been intimate partners or family members regardless of gender or sexuality. This can encompass but is not limited to the following types of abuse:
* psychological
* physical
* sexual
* financial
* emotional **"

"George Osborne wants two-year freeze in state benefits"

"Heh heh heh ... you get gay marriage, and we get a "flexible labour market" .. heh heh heh .." 

So the journey continues - there's been for quite a while now an acceleration of the "left" social agenda in tandem with the "right" (read "rich") economic one - and did I mention that the pressing problem of racism in football's still not solved?

John Whittingdale MP, chair of the inquiry, said: "Recent incidents of racist abuse in the UK highlight that there remain significant problems." MPs also said homophobia may now be the most prevalent form of discrimination.

Steve Rotheram MP, a member of the Culture, Media and Sport committee, said a lack of ethnic diversity in management and boardroom positions at many English clubs was holding back the fight against racism.

A couple of points. While the plan may indeed be working, there's no need to invoke a conscious conspiracy. I had a couple of long debates (and a monologue) on this subject a few years back, before the economic poo hit the fan. Capitalists will just take advantage, if the culture lets them. It's what they do. Mass immigration may be a necessary condition for the impoverishment of the UK working class, but not a sufficient one.

While it's not a cheerful thought (especially in finding yourself alongside, for example, George Galloway), I have to surmise that the collapse of Soviet Communism may also have played its part in what we see now. While there was an alternative model, no matter how evil and corrupt (as it was in many respects) it may have been, Western capitalists couldn't take the **** too much. Now anything is possible.

It's true that in a rational economic world, a high-earning working class might be considered a good thing for a nation - and that therefore it's not in our rulers' interest to take us back a hundred years - but that would also have applied for the several hundred years prior to, say, 1860-1960. The post-1945 settlement is not the natural order of things. Before that it was the plebs and the rest* - and the will to power, even constrained by Christianity, was strong. Unconstrained, what limits are there?    





* read a couple of Jane Austens over the last week. Ordinary people just do not feature. Reminds me of "Friends" or "Four Weddings And A Funeral", where making a living is the least of any of the characters concerns and everyone, while always appreciating more, has enough money. Still, Lizzie Bennet's dad is a hoot, although while Lizzie's wonderfully witty and self-assured, I prefer an Ethelberta - or still more, her sister.


** financial abuse can apparently consist of not giving someone enough of the family income - by which measure EVERYONE in my family, myself included, is a self-declared victim. If that's the case, do you think sexual abuse might consist of not giving someone enough sex? I look forward to some brave lawyer arguing that in court...

The End Of The Journey Will Soon Be In Sight...

Mass immigration doesn't "just" depress wages and reduce the power of working people vis a vis employers.

I haven't blogged much over the last year due to long hours, but still sniped over at CiF - and this comment sums my emerging view :

The greatest prize for the very rich would be the total dismantling of the welfare state and the removal of its consequent tax burden (although venture capitalists, on 10% tax - "entrepreneurs relief", do pretty well already).

It's a lot easier to justify a welfare state when the recipients are "people like us" and therefore easier to identify with and to think "there but for the grace of God". Social solidarity among working people, whether it be support for a welfare state or a trades union, will always be stronger in the absence of cultural, religious or racial divisions. Social scientists like Robert Putnam have noted how diversity weakens a sense of community.

So were I an evil capitalist billionaire looking to reduce the power of trades unions and destroy the welfare state, I'd start by funding Left groups supporting mass immigration.

I'd encourage such groups, and left-wing lawyers too, to support the most outrageous abuses of the welfare system, knowing that it would discredit welfare in the eyes of ordinary working people - and I'd chuckle to see Telegraph and Mail readers - and BBC commenters, too - getting angry when benefits rise, as they should do, with inflation.

"The plan is working ... heh heh heh ..."

I'd suggest, with all its faults, that the Welfare State is the most outstanding instance of UK social solidarity - started in Edwardian times by Lloyd George and nailed down in the aftermath of WW2 by a strong people, annealed in the fire of two world wars and quenched in the depression years of the 1930s.

I'd also suggest that the plan is continuing to work :

Despite the tough economic climate, the study by independent social research agency NatCen reveals attitudes towards welfare and welfare claimants have toughened. Only 28% of those asked wanted to see more spending on welfare - down from 35% at the beginning of the recession in 2008, and from 58% in 1991.

Report author and NatCen chief executive, Penny Young, said the study showed the public's view on welfare was "in tune... with the coalition's policies".She said: "The recession doesn't seem to be changing things; attitudes continue to harden. One thing that we've seen is that even where groups are seen as perhaps more deserving - so retired people, disabled people - again for the first time since 2008 we've seen that the number of people who are prepared to see more money go on disability benefits has actually fallen."

 "Heh heh heh ...." - the BBC Today programme this morning couldn't get over it - in the early 90s recession 58% thought we should increase welfare spending, now it's down to 28%. What could possibly have changed since the early 90s? They just couldn't understand such a dramatic shift in attitude.

"You beat your pate, and fancy wit will come,
Knock as you please, there's nobody at home"

In various posts over the last year, I've aired the fancy that in ten, fifteen years, the Guardian will be simultaneously

a) bemoaning the end of the welfare state and the new poverty of the working class
b) celebrating our ever-greater diversity

and I've pointed out that

Western welfare states carry a high tax burden, which makes life uncomfortable for the mega-rich. It would be a lot easier for them if social solidarity was destroyed to the extent that the welfare state no longer existed and their taxes could come down. A good way to do that is to create atomised societies of competing ethnicities.

Mass immigration will IMHO mean the end of the Welfare State, probably in the next thirty years. A pity. It was a good concept - for 1948 Brits and their descendants. And as an ageing boomer, I don't want the NHS to turn into any more of a death factory for the old than it currently is.

But at least we'll all be equal in our barrios, looking up at the gated communities on the hills.







UPDATE - "The government is considering ending the automatic annual increase in benefits in line with inflation, sources have told BBC Newsnight.

The whole point of benefits is that they're meant to be a liveable minimum amount.So if inflation rises, so should that amount. But there'll be little sympathy for that view from those whose expenses are rising but whose wages are static - and that means most of us. 

"Heh heh heh ..."

UPDATE2 - "To promote prudence and responsibility, rather than the dependency and waste of the welfare system, we should return to mutual aid societies

"Heh heh heh ..."

OK, what happened at Hillsborough ?

I asked this question at CiF last night only to be deleted immediately. Some facts are obviously not as sacred as others.

There seems to be an awful lot of heat but not much light around - enough that I still can't establish from the media coverage what actually happened that day.

The version I had in my head (doubtless influenced by various police leaks) was - large numbers of p****d-up Scallies, some without tickets, turned up shortly before kick-off, things looked nasty outside the ground, and the officer in charge opened the gates, condemning many people inside to an awful death. I didn't have any ideas that the people inside were anything but victims of a most unfortunate (to put it mildly) decision.

And that's pretty much what the interim Taylor report said - with the exception that the police opened the gates not because they feared for public order but because they feared crush deaths outside the ground :


64. Meanwhile, the crowd grew at the Leppings Lane entrance. As more arrived at the back the crush at the front grew worse. Entry to the turnstiles became more difficult. Their efficiency was impaired and their rate reduced. Arrivals at the back exceeded deliveries through the turnstiles, so the build-up increased. The foot officers outside were unable to function and in danger themselves so they went through the turnstiles and out again through gate C where they did what they could to relieve pressure by the tubular barrier. The mounted officers were surrounded by the dense mass of people and became ineffective. Superintendent Marshall was in the midst of the turmoil. He extricated himself and stood on a parapet of the bridge to get a clear view. A drunken fan tried to push him off: a beer can was thrown at a mounted officer. But these were isolated acts by individuals; the menace came from the massive numbers single-mindedly determined to be in for the kick-off with time running out. At the back of the crowd fans were frustrated by the lack of progress as 3 o'clock approached. Some, mostly young men who had been drinking, tried to push and force their way forward. At
the front, people were jammed together and against the turnstile walls. Some panicked as the pressure intensified. Some youngsters and women were fainting and in distress. They were helped out through the tubular barrier by turnstile G or were passed over the turnstiles elsewhere. Fans climbed up and over the turnstile building or on to the dividing fence. This was to escape the crush rather than to gain free entry since most of them had tickets.

65. At 2.44 pm Mr Marshall radioed for reinforcements, for the Tannoy to request the crowd to stop pushing and for a vehicle with loudspeaker equipment to come and request the same... The Tannoy was used but with little effect. Reinforcements, including mounted officers from Penistone Road, were sent. The third request, for a Landrover, was received direct by its driver PC Buxton who arrived at 2.46 pm and urged the crowd by loudspeaker not to push. This was no more effective than the Tannoy. The mounted officers besieged near the turnstiles came outside the perimeter gates. An attempt was made to shut them against the crowd outside, to enable the throng inside to be dispersed or at least thinned through the turnstiles. The pressure from without, however, opened the gates again. Mounted officers, now reinforced to greater numbers, formed a cordon across the elbow of Leppings Lane from the sweet shop to the bridge, again with the object of reducing pressure inside the gates. They were successful in this for some minutes despite desperate individuals forcing their way under or between the horses. However, this exercise was overtaken by a more dramatic relief of the pressure.

"Open the Gates"
66. Between 2.40 pm and 2.45 pm the crowd inside and outside the turnstile approach had swelled to over 5,000. At the head of the phalanx conditions had become intolerable. Those who got through were short of breath and sweating profusely. Many complained to police officers on the concourse inside the turnstiles and asked them in forceful terms to do something. Exit gates A and B were being shaken. It was clear the crowd could not pass through the turnstiles by 3 pm. Police Constable Buxton radioed from the Landrover to control asking that kick-off be postponed. The suggestion was acknowledged but rejected.

67. Superintendent Marshall realised the crowd had become unmanageable. Although loth to do so, since it was contrary to basic police strategy, he decided to request the exit gates be opened to relieve the pressure. Otherwise, he feared fatalities would occur. Other senior officers outside the ground agreed. At 2.47 pm he radioed control to permit the gates to be opened. At 2.48 pm, whilst Mr Duckenfield was considering the request, gate C opened to eject a youth who had climbed in with no ticket. Immediately, fans outside took advantage and about 150 managed to get in before a mounted officer enabled the gate to be closed again. Mr Marshall repeated his request. Still no response from control. He repeated it a third time, adding that if the gates were not opened someone was going to be killed. In the control room, Mr Duckenfield had not made a decision. Mr Murray asked him "Are you going to open the gates?". Mr Duckenfield gave the order and Sgt Goddard radioed to Mr Marshall "Open the gates". Neither the Club control room nor any police officers inside the turnstiles were told of this order before or after it was given or of any action it would require.

68. At 2.52 pm, gate C was opened wide.

Now the new improved report is out, and I've glanced through it, but I've been out most of the evening and it's 354 pages. OK, can anyone tell me what evidence has emerged to revise the above picture?

I couldn't find any but it's quite possible I've missed it.

(Every national newspaper, the House of Commons and the BBC tell me that this report totally changes our view on what happened. So they must be right.)

He's Back Inside

Remember this guy?

I have an awful feeling this story's not going to end well.

Well, he's back in again.

"His arrest in July came just three days after he had been freed from prison in Perth, 30 miles to the north, after spending six years in solitary for previous offences involving nakedness.

Sheriff James Williamson told Gough, who has also refused legal representation, that he was concerned that he had not met or co-operated with social workers drawing up the background report ordered. The sheriff said: "Will you meet with them and assist them?"
When Gough responded, "No, not really", Sheriff Williamson said he had been left with no choice but to jail him for five months. "

I don't blame him for rejecting the social workers and psychiatrists. But he's engaged in a political struggle (one with which I disagree), hoping that the legal system will be the first to blink. In England, maybe - I wouldn't put it past some judges to agree that the right to expose yourself = basic human right. In Scotland, no way - especially not for a 'Sooth-moother'*.

The sad thing is, he's been inside for five years. And the longer he's inside the more he's invested in the struggle and the more inclined he is to throw good years after bad.












* Shetland expression used about anyone from south of Orkney.       

Friday Night Music - Far Away Love

Reggae from a more innocent age - from the Melodians classic "Swing and Dine". A bit of a Western feel to this, clip-clopping along.

The title track's not bad either.

Carina Saunders

Here.

She was murdered in the States, but it's another Mary-Anne Leneghan-style killing - they killed her in front of another girl as a demonstration of the penalties for disobedience.

Reality vs Blank Slate Theory - Lego Edition

"The debut of Lego Friends, featuring a more prominent use of pink than your typical Lego fan would be used to, drew criticism that it would reinforce gender stereotypes. As well as the usual trucks, policemen and rugged houses, the line now includes Stephanie's cool convertible in distinctive pink and purple, and Mia's Puppy House, accessorised with flowers and full pet grooming kit."

And .... ??


The world-famous plastic brick maker said net profit rose 35% to 2bn kroner (£213m) in the first six months of 2012, from 1.48bn kroner for the same period last year. Sales rose 24% to Kr9.1bn, spurred by the success of the Lego Friends line, which was launched in January in an attempt to expand the company's appeal beyond boys. It has been a runaway hit, selling twice as many sets as expected.

"It has been amazing to experience the enthusiastic welcome that consumers have given the new range," said the Lego chief executive, Jørgen Vig Knudstorp. "Sales have been quite astonishing."

What's amusing is that Blank Slaters tend to be militant atheistic types, priding themselves on following reason and science - unless the science tells them things they don't want to hear. In a sense, a Christian should be in awe of such a faith as theirs, utterly unbuttressed by reality. It's a real triumph of the will.