The main point of the Pickles inquest into the Tories’ election failures is that the manifesto should not be left to the prime minister and a close circle of her advisors.
Doesn’t that suggest that he blames Theresa May for producing a manifesto that was utterly out of touch with the demands of the British people?
The Conservative manifesto for the 2017 election was so bad that at least one of its policies was withdrawn before the document was even published.
Other u-turns followed and the Tories are currently raiding Labour’s manifesto for policies they can tolerate supporting, in a bid to steal support from the far more popular party.
It seems to This Writer that the only reason Mrs May wasn’t criticised for failing to turn up to any televised debates is: David Cameron didn’t like them either.
The inquest into the result of the 8 June election, drawn up by former cabinet minister Sir Eric Pickles, made 126 recommendations to make sure the party is better prepared for any future snap elections at a time of political volatility.
One key proposal was a new manifesto committee to make sure policies are properly thought through by senior cabinet ministers, after the document was kept to a tight circle of the prime minister’s advisers at the last election.
He suggested the process of drawing up a manifesto should start within 12 months of the last election, involving the prime minister, chancellor, home secretary, foreign secretary, party chairman, chief executive and chief whip.
The report also confirms … that the Conservatives will look to re-establish a “vibrant youth wing” and make sure there is under-30s representation on the party board and on candidate selection panels.
Photo opportunity: David Cameron and his posh new Wellies, talking a good fight but putting up less funds than he previously took away.
The storm of recriminations over the floods that battered the UK during the last few months appears to have been entirely disproportionate to their effect, if Vox Political‘s moles in the Environment Agency are to be believed.
Consider this: In 2007, the UK was hit by unprecedented flooding that damaged around 55,000 properties. Between December 2013 and February this year, the country was again hit by floods. Total number of properties flooded: around 5,000.
So we’ve had one-eleventh of the damage to homes, and (it seems) 11 times the fuss!
The media frenzy has given us photographs of David Cameron visiting flood-hit areas in his posh new Wellington boots, Ed Miliband being unjustifiably upbraided by a posh-voiced villager in his new Wellington boots, Eric Pickles blaming Owen Paterson, Owen Paterson blaming anyone he can, and everybody blaming the Environment Agency.
This is why Vox Political‘s EA moles are feeling ill-served; they say they have been doing the best they can under extremely difficult conditions – starved of funds, working 60-hour weeks including weekends with no extra pay (of course).
The extra cash provided by Mr “Money Is No Object” Cameron did not even equal the amount he had previously cut from the Environment Agency’s budget, meaning that the organisation was still unable to provide the service it had managed before the Conservative Party took the reigns of government in 2010.
Although funding cuts have been put on hold – for now, the Agency has no reason to believe its budget will not be hit again, as soon as the politicians find it expedient. If that is the case, what do you think will happen when the next flood hits?
This was a disaster that could have been avoided, with better planning and funding. But it wasn’t, and the government publicity machine went into overdrive while it was going on.
So our moles have been left with two questions:
Was this disaster manufactured?
If so, what was the government really doing while everyone was distracted by the constant media coverage of the storms?
The Conservative response: David Cameron swans around the Somerset Levels in his wellies while local MP Ian Liddell-Grainger (second from left) tries to get a word in edgeways.
It seems that David ‘Money Is No Object’ Cameron is unnecessarily forcing British taxpayers to fork out for flood relief while European officials scratch their heads and wonder why he isn’t taking advantage of a huge EU fund that is available to us.
We should all know why the comedy Prime Minister is avoiding Europe – he doesn’t want to lose face.
Eurosceptics in the Conservative Party across the UK criticise our membership because we pay so much in and take so little out (in their perception); this argument would be defeated if Cameron actually used the fund in the manner for which it was created and he would then lose support from members of his Parliamentary party.
Also, at a time when the UK’s future in Europe is being questioned, it would be “politically sensitive” (as Reuters describes it) for Cameron to go there and ask for a handout.
But governments are judged on the way they deal with crises (as the Political Rant blog put it) – and this one has put Cameron, figuratively as well as literally, between the rock and the river.
According to Reuters: “Asked whether Britain would ask for EU money, Cameron’s official spokesman told reporters on Wednesday the government was looking at every source of possible funding, playing down the idea that there was anything political behind it.
“Under EU rules, a country has 10 weeks from the first damage caused by a natural disaster to request aid.
“A person close to Cameron said there were technical grounds to do with spending thresholds that determined when to apply for a grant. Britain had no desire to get into a war of words with Brussels on the matter, he said.”
The news agency added that the government had deployed the armed forces to evacuate residents and shore up river defences, while under fire from critics for what ministers have acknowledged was a slow initial response.
Political Rant is less diplomatic (as you might expect): “Ken Clarke said it was just a normal winter and people complaining about flood defences were just a ‘lynch mob’. Eric Pickles criticised the Environment Agency while the Environment Agency criticised government cuts and Owen Paterson criticised Eric Pickles.
“David Cameron has undertaken several jaunts in his nice clean wellies, first to Kent just after Christmas where he was harangued by people left waist-deep in water without power for a week, then Somerset which he only visited after Prince Charles had been the day before, making it look rather silly the Prime Minister hadn’t bothered, and … to Cornwall where, a friend tells me, Railtrack diverted engineers who were supposed to be fixing the washed-out rail line at Dawlish to shake hands with the PM at a rail depot.
“The same PM has talked sadly about how a power cut interrupted his viewing of The Sound of Music on New Year’s Day while staying silent about two SSE engineers who said they were diverted from reinstating the power for 11,000 people to locate his trip switch.
“When the floods recede, we are more than likely to find a few people who died.”
Yes, and they’ll be in rural areas because the increased funds Cameron has announced amount only to a slightly smaller cut than he had originally intended, and the funding formula for flood defences demands £8 of economic benefit for every £1 spent – meaning a concentration on densely-populated urban areas.
Add to that the fact that Cameron only bothered to act when Conservative-voting areas were affected – the Somerset Levels, Windsor, Reading, Oxdfordshire, Surrey, Kent – and couldn’t care less when the waters were hitting places like Scunthorpe (as revealed on the BBC’s Question Time yesterday) and Cameron has put himself in a serious political mire.
He has made it clear that his is a government that only looks after its own supporters.
You may have noticed that yesterday was Christmas – the day when Christians throughout the world celebrate the birth of Jesus, whose teachings in later life form the basis of their faith.
Jesus was born into a world of politics and political machinations – the Roman world was much the same as our own in this respect – and had an effect on it, right from his birth.
According to one of the Gospels, when King Herod learned that a child had been born who had been named ‘King of the Jews’, he sent spies to find out who this possible usurper was; failing in this attempt, he gave orders for the death of all boys aged two or less in Bethlehem and nearby.
Joseph (husband of Mary, Jesus’ mother) was warned in a dream that Herod intended to kill Jesus, so the family fled to Egypt until after the King’s death – then moved to Nazareth in Galilee to avoid living under Herod’s son Archelaus (the Romans had divided the kingdom into three, and Nazareth was ruled by another of Herod’s sons, Herod Antipas).
Regarding the Massacre of the Innocents, doubt has been cast on whether the event ever took place. No other account of the period makes reference to it. Some have said that this may be because the number of male children of the right age might have been less than 20.
Since the point of this article is to compare what happened then with current events, here in Britain, it seems best to bookmark the disputed event; we’ll come back to it if we must.
The part we are told under no uncertain terms is that Joseph took Mary and Jesus to Egypt until Herod’s rule was over. In modern terms, they were made homeless because of political persecution that was so extreme, they had to flee the country.
The situation in the UK today, as stated by Shelter, is no less than 80,000 times as bad.
The charity told us (in November): “Government figures show that 80,000 children in Britain will be homeless this Christmas.”
Vox Political said then that government policies had caused the dramatic rise: “The bedroom tax; the ‘Pickles Poll Tax’, otherwise known as the Council Tax reduction scheme; the benefit cap that so many people in this country seem to support without understanding any of its implications.” This blog had warned that this would happen, as long ago as January.
In contrast with the Bible story, in which the family fled to safety, most homeless families interviewed by Shelter said they felt more unsafe, witnessing violence, sexual offences, drug use and dealing.
This is more than 2,000 years after the Biblical incident; civilisation is supposed to have improved over that time. Why are we allowing our government to do this to our children on such a massively more widespread scale?
Perhaps we can take some small comfort from Herod’s fate. Modern medicine suggests he had chronic kidney failure, complicated by Fourier’s gangrene – but let us see how it was described at the time. The historian Josephus – in Antiquities, Book 17, Chapter 6, Verse 5 – describes the disease that killed him shortly after he set out to murder Jesus: “a fire glowed in him slowly, which did not so much appear to the touch outwardly, as it augmented his pains inwardly; for it brought upon him a vehement appetite to eating, which he could not avoid to supply with one sort of food or other. His entrails were also ex-ulcerated, and the chief violence of his pain lay on his colon; an aqueous and transparent liquor also had settled itself about his feet, and a like matter afflicted him at the bottom of his belly. Nay, further, his privy-member was putrefied, and produced worms; and when he sat upright, he had a difficulty of breathing, which was very loathsome, on account of the stench of his breath, and the quickness of its returns; he had also convulsions in all parts of his body, which increased his strength to an insufferable degree. It was said by those who pretended to divine, and who were endued with wisdom to foretell such things, that God inflicted this punishment on the king on account of his great impiety.”
Eric Pickles, Iain Duncan Smith, and above all David Cameron, beware.
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Demonstrating for justice: Campaigners against the Bedroom Tax gathered outside Parliament while MPs debated it inside.
“I’m amazed Labour have chosen to spend their allotted day in Parliament arguing for more unfunded spending on housing benefit.” That’s what Matt Hancock, Conservative MP for West Sussex, had to say about the Opposition Day debate on the Bedroom Tax in the House of Commons on November 12.
Hancock is, it seems, author of a book entitled Masters of Nothing, which sums up his understanding of the situation rather well. He clearly has not mastered the fact that the State Under-Occupation Charge will not save money. He has not mastered the fact that emptying dwellings of their current owners will not make them available to new familes as these people are afraid they will themselves be tipped onto the street when their circumstances change – instead the premises will be left empty, at huge cost to social landlords; and he has not mastered the fact that anyone evicted because of the tax will become a burden on local authorities, who have a duty to rehouse them in bed and breakfast accommodation, even though the money provided to them for this purpose by the government is ludicrously inadequate to the task.
Hancock is not alone in having misconceptions about the Bedroom Tax. Most, if not all, of the Conservatives who spoke during the debate uttered howlers – and the purpose of this article is to name them and explain why they should be ashamed of their words.
Please take the opportunity, Dear Reader, to look for your own MP in the catalogue of calamity that follows, then use it to attack them in their own consituency. Let’s make them realise that actions have consequences.
If you don’t have a Tory MP, feel free to use what follows in order to make sure you never have to put up with one.
We begin with Tobias Ellwood (Bournemouth East) who asked of Rachel Reeves: “What does she say to the almost 400,000 families who are living in overcrowded situations when they look over their shoulders at the almost one million spare bedrooms in Britain?”
The Shadow Work and Pensions Secretary responded without hesitation: “I say that instead of presiding over the lowest rate of house building since the 1920s, this Government should get on and build some houses.”
The Minister of State, Steve Webb, came back to this point later, saying: “Who was doing the house building for 13 years?” Well, we all know who hasn’t been doing it for the last three.
Mr Ellwood said the Tax was brought in because the cost of housing benefit was rising alarmingly: “After 13 years of Labour the cost of housing benefit doubled to £21 billion. That is unacceptable. The cost to taxpayers was £900 per household. The system was getting out of control.” His failure is that he refused to accept the explanation offered by Labour’s Katy Clark – that this was due to the rising cost of rent in the private sector (private rents have indeed been rising massively and the government refuses to take action because this would interfere with the market. Bizarrely, the Conservative-led Coalition seems to believe it is acceptable to pay huge gobs of housing benefit to private landlords – who make unreasonable demands – and then blame social renting tenants for it). He also, by inference, rejected the evidence that the Bedroom Tax will not save any money.
Mr Ellwood also referred to the deficit run by the Labour government of 1997-2010. He said: “Labour lived beyond its means. In 2002-03, it spent £26 billion beyond its means. Four years later that rose to £33 billion. In its final year of office, the deficit rose to £156 billion. That always accumulates.”
This is disingenuous. As he must know, not only did Labour run a lower deficit than the Conservative governments of both Thatcher and Major (average 41 per cent of gross domestic product) from 1997 to 2007, it also made a surplus in the 2000-2001 financial year – something that the previous Conservative governments never did. This means Labour actually paid off some of the debts that had been accumulating. With that pedigree, even the 43 per cent deficit of 2008 looks respectable. The higher deficits of 2009 and 2010 were entirely caused by the bankster-instigated financial crisis, when the actions taken by Labour were entirely supported by the Conservative Party.
He went on to condemn Labour for voting against £83 billion of welfare savings; if the reasoning for them was as shaky as that for the Bedroom Tax (and it was; see previous VP articles) then Labour was quite right to do so!
It should be noted that the Secretary of State for Work and Pensions, Iain Duncan Smith, was not present at the debate. RTU (as we like to call him) was woofing it up in Paris, rather than accounting for his misbehaviour to the taxpayer.
Mrs Anne Main (St Albans) echoed a comment by Mr Webb, but did it in such an inept way that we’ll look at her words rather than his. Following Labour’s Stephen Twigg, she referred to the too-low allocation of Discretionary Housing Payment to families having to cope with the Bedroom Tax: “Perhaps he would like to speak to his Labour-run Liverpool council and ask why, when it received £892,000 in discretionary housing payments last year, it actually sent back £337,000.”
Mr Twigg put her straight: “Does she accept that the figures that she has given are from before the bedroom tax was introduced? This year, Liverpool city council will certainly spend the entire discretionary housing pot.”
His words echoed fellow Labour MP Lucy Powell, who had previously berated Mr Webb: “The Minister incorrectly gave figures for last year—the bedroom tax was introduced only in April. I was talking about money that will come back this year. I can guarantee that the Minister will not be getting any money back from Manchester this year — the year of the bedroom tax.”
Referring to the 400,000 disabled people affected by the Bedroom Tax, Mrs Reeves said 100,000 disabled people live in properties specially adapted for their disability, but the average grant issued by local authorities for adaptations to homes [when they are forced to move out by the Bedroom Tax] stands at £6,000. The total cost of doing the adaptations all over again could run into tens of millions of pounds.
At this moment, Heather Wheeler (South Derbyshire), said while seated: “They’re exempt.”
The response: “The hon. Lady said from a sedentary position that disabled people are exempt, but she would not say it when she was on her feet because she knows it is not true.” In Vox Political‘s home constituency, at least one disabled person has already been evicted because of the Bedroom Tax.
Philip Davies (also known as ‘Stupid of Shipley’) weighed in with a shocking error, in an attempt to attack his local housing association and its director, a Labour MP: “Does the Minister agree that the spare room subsidy is one reason why we do not have the right mix of housing? Social housing providers could build houses as big as they wanted, knowing that the Government would cover the full bill irrespectively. In that respect, does he deplore the social housing provider in my area, of which a Labour MP is a director? It complains on the one hand that it has too many three-bedroom houses—”
That’s as far as he got, and just as well. Let’s go through this one more time: The ‘spare room subsidy’ is a fiction. It never existed and therefore could never have been abolished by the Conservative-led Coalition government. Being entirely make-believe, it could never have affected the decisions of social housing providers. This is just one of the many reasons why Mr Davies is rightly considered to be one of the biggest twits in the Tory Party (among hefty competition). Another might be his claim that disabled people should work for less than the minimum wage.
David TC Davies (Monmouth) complained: “Opposition Members… do not want to talk about the fact that they introduced a measure like this for the private sector.”
He was among many Tories who complained about this apparent double-standard. Labour members reminded them that the Bedroom Tax is retrospective (affecting people currently in social housing) while the private-sector measure was for new tenants only. One may also ask why, if these Conservatives were so disturbed by the apparent discrepancy, they were not calling for this earlier measure to be scrapped as well.
George Hollingbery (Meon Valley) said: “We need to pose ourselves a question: what is dealing with the spare room subsidy about? Is it about reducing the housing benefit bill? Yes, of course it is. The Government propose a £500 million saving, which is important.”
It is important, because Conservatives seemed confused throughout the debate about whether they were trying to sort out overcrowding by putting people into appropriate accommodation, or trying to save money. The two are mutually exclusive. The only way to make money on the policy is for people to remain locked in housing that, thanks to the Bedroom Tax, is now too expensive for them – but this cannot last because they will soon be evicted for non-payment of rent. Moving people around, so that nobody is under-occupying, will result in a higher housing benefit bill because more people will be claiming – the original tenants in their new properties (which, if they are run by private landlords, will be more expensive) and the new tenants who will be occupying to the limit of a property’s capability and therefore may claim the full amount of housing benefit. Either way, Mr Hollingberry’s claim of a £500 million saving is pie-in-the-sky.
Margot James (Stourbridge) made a proper fool of herself. She said: “The Opposition… want to position the end of the subsidy and the creation of a level playing field between all recipients of social housing support as a modern day poll tax.” This is the least of her mistakes as some Labour members may have suggested such a thing; in fact it is Eric Pickles’ Council Tax Reduction Scheme that is the modern-day Poll Tax, because every household must now towards it.
Margot James went on to deny that the Bedroom Tax is a tax, saying: “A tax is a government levy on somebody’s income, whereas we are clearly talking about reducing a subsidy.” This is wrong on two counts. Firstly, there has been no subsidy to reduce – unless she was referring to housing benefit in its entirety. The spare room subsidy is, as already mentioned, as mythical as the “unicorns and fairies” to which Anne Main referred when she tried to dismiss the existence of the under-occupation charge as a tax on bedrooms. Both ladies are wrong, because a tax may also be defined as a government levy on property owned or used by a citizen (such as, say, a bedroom). So – not quite as mythical as unicorns and fairies. One has to wonder why Mrs Main mentioned these, as she has clearly been away with the fairies herself.
Kwasi Kwarteng (Spelthorne) breezed in from another committee to provide the benefit of his own ignorance. He asked: “Is it fair that someone on a low income who is in privately rented accommodation should pay taxes in order to subsidise someone else’s spare room? Is it fair to raise taxation from low-paid workers to subsidise other people’s accommodation?”
The answer, of course, is yes. It is fair. In fact, it is a principle of our system of taxation. Everybody pays into the national treasury, in order to allow the state to provide services – such as housing – for those in need. This may be a detail that current Tories have missed, considering the government’s vigorous attempts to write the highest earners out of taxation altogether. If he wanted to help low-waged people in private rented housing, the answer to that is also simple: cap their rents.
And doesn’t he know that the very low-paid have been lifted out of taxation by his own government, as the Coalition has been raising the threshold for payment of income tax every year, aiming to reach a target of £10,000 income per annum by 2015.
At the end of the day, the motion to scrap the Bedroom Tax was lost by 26 votes. Some have already said that Labour could have won it if all members had been present, but that was never really on the cards; the government has the numbers, even if some Liberal Democrats (like VP‘s own MP, Roger Williams) abstained.
So what are we to make of it all? Simply this: The Conservatives do not have a credible narrative to describe what the Bedroom Tax is about. It doesn’t save money; it won’t put people into appropriate accommodation; and it certainly won’t cut homelessness!
Work out what it’s really about, and you will understand why they are so desperate to keep it.
Grant Shapps and Iain Duncan Smith (Vox‘s Monster of 2012, let’s not forget) delivered woeful performances on radio and TV respectively, during the weekend – discussing the Bedroom Tax.
That’s right – the Bedroom Tax. Not the “spare-rooms subsidy”, not the “under-occupation subsidy” – the Bedroom Tax. The tax on bedrooms that is being levied on some of the poorest people in the land, who cannot move to smaller premises because a previous Conservative administration stopped them from being built.
Tweedle-Shapps and Tweedle-Smith clearly need a lesson in what taxation actually is. The sad part is that they probably think they delivered good performances.
Appearing on BBC Radio 4’s The World This Weekend, Shapps said: “Labour have very cleverly deemed this to be a tax; of course it’s exactly the opposite to a tax. It’s a spare-rooms subsidy, that’s being paid through the benefits system, on a million empty bedrooms in this country, which makes no sense.
“We’re not using the housing we have in this country in a proper way… What we can’t continue to do, and we can’t afford to do, is pay for a million empty rooms whilst we’ve got a waiting list that doubled under the previous administration and with so many people in desperate need of a house at all.”
Mr Smith, on The Andrew Marr Show said: “We have in social sector housing a very large number of people in houses where they have many more bedrooms than they actually need… Meanwhile we have over a quarter of a million people in overcrowding and a million people on the waiting list, trying to get into housing.
“The last government let house building fall to the lowest level since the 1920s… What we want is those that are under-occupying their properties, we need to help them to be able to move to property that they would occupy-”
Eddie Mair, standing in for Andrew Marr, interjected: “You mean force them?”
Smith plunged on: “What we’re saying is, ‘Look – you can stay where you are, but if you do, you have to pay more.'” (In other words, yes, he means “force them out”).
Mr Mair again: “But cough up. We know you’re very poor, but pay more.”
Smith was determined: “People… who rent in the private sector under housing benefit – they’re not allowed to have extra bedrooms. They’ve never been. So they are only paid, in the private sector, for the number of bedrooms they occupy.”
Mr Mair, an astonished inflection in his voice, spluttered: “But the point of social housing is to help-”
Now Smith fell back on the real reason for the change: Money. “Look, the taxpayer is paying about £900 per household to help people stay in social housing.”
Put these things together and we get a clear picture of what’s going on. First, a bit of history:
Back in the sunlit days before Margaret Thatcher first won an election, local councils were permitted to build and maintain social housing stock. I know this seems an alien concept now, but they were actually allowed to build houses in which poor people could live, for a rent that they could meet.
Then the Thatcher government came into office and she decided to sell off council houses at discounts of up to 70 per cent. Of course, take-up was huge. People believed they would be able to sell the properties on at a later date – for a profit – and go further up the housing ladder, and this appears to be what happened. The houses that were sold on again tended to go to professional private landlords, who then rented them at a higher price than the councils who originally owned them.
The policy raised more than £20 billion for the Conservative government, but it never allowed that money to be ploughed back into council house-building. That money has disappeared; we don’t know what was done with it (in fact, if anybody does know where it is, please write in and let us know)!
My understanding is that councils had expected to be able to use the receipts for a new house-building programme but then, by one of those “coincidences” – and I put that word in quotation marks for a very good reason; I don’t think they are coincidences at all – for which the Tory Party should be infamous, another policy was introduced – the Rate Cap.
Local taxation at the time was done by a method known as the Rates. We’ve had Poll Tax and Council Tax since then (and will soon have the Poll Tax back, thanks to Eric Pickles and his evil, misnamed little ‘Council Tax Reduction Scheme’) so many readers may not remember them.
The idea was to stop councils from spending more than the Tory government thought they should, by limiting the amount of money they could spend every year, and creating a blacklist of councils that transgressed, with associated penalties.
Result: any new council house-building was stopped dead.
It’s a situation that has continued to this day. During the New Labour years, there was a push for new social housing with a condition on planning permission for new estates, that a certain proportion of the new build had to be “affordable” housing.
Result: We now have a huge amount of land with planning permission for estates that have never been built, as developers are reluctant to create housing for which they won’t be able to screw maximum profit from the buyers.
So, successive governments have created a situation where the queue for social housing is very large. Even though the plan during New Labour’s time had the best intentions, my opinion is that it was scuppered by the greed of developers.
Now we have the Nasty Party in office again, and of course they want to screw as much money out of the poor as possible.
They don’t want to build any new social housing; they want people to rent from the private sector, who will try to screw the highest amount out of them.
In order to push them out, they have invented this new term, “spare-rooms subsidy”, or “under-occupation subsidy” – that never existed before. They have declared that people – who are only occupying the houses that were available to them when they went into social occupancy – are now receiving that subsidy for any spare bedrooms they may have (no matter whether there was a reason for having those rooms in the past, or may be one in the future). And in April they will remove an arbitrary amount – nobody knows how they arrived at the figure – from tenants’ housing benefit.
Result: As Eddie Mair said, these people will be forced out – into the arms of private landlords, who will charge more while they will receive less help from the government.
The money saved will, we’re told, be used to help balance the national finances, which is a policy of this government.
So, getting back to the point – the removal of this recently-dreamed-up “subsidy” istaxation, because the money removed from UK citizens will be used to finance government expenditure. That is the definition of tax.
A tax avoidance loophole specially created by George Osborne, the UK Chancellor, last year means that water companies have played the system to reduce their tax bills to a trickle.
Some people just don’t know when it’s time to do the right thing.
Look at the three water companies that are paying practically no tax on their huge profits, while yanking up prices every year according to the retail price index and enjoying a monopoly in their areas – according to today’s report in The Observer.
Thames Water avoids tax by offsetting the interest payments on its debts against its tax liability and delaying it by claiming allowances on capital project spending. The company is seeking government support for a £4.1bn project to build a new “super sewer” under the Thames.
Anglian lent £1,609.1m to a subsidiary company in the Cayman Islands tax haven in 2002. This year it was able to pay £478.1m in equity dividends to investors, including its subsidiary in the tax haven.
Yorkshire Water also increased the debt on its books recently, which offsets tax payments.
In other words, all three were able to exploit a new tax loophole, created by George Osborne last year – that’s right, the Chancellor who is supposedly trying to stop tax avoidance has actually been creating more ways for big business to achieve it – to pay as little tax as possible.
In my article last Monday, I highlighted changes to the tax laws, brought in by Gideon, I mean Mr 0, that mean companies in the UK pay nothing at all on money made by their foreign branches and may claim the expense of funding those foreign branches against tax paid in the UK. That is exactly what Anglian and Yorkshire are doing, according to the Observer report.
Without knowing where the Thames debt is based, it’s hard to say for certain whether it falls into this category of tax avoidance.
Thames made an operating profit of £650 million last year, and Anglia’s was £492, while Yorkshire’s was £303 million. With Corporation Tax at 26 per cent (they should all pay the higher rate), this means the Treasury failed to collect nearly £376 million from the three companies.
The amount lost to the Treasury from these three companies alone would pay off three-quarters of what the government hopes to take away from people currently on council tax benefit, when local authorities implement their new council tax relief schemes – the ‘Pickles Poll Tax’ – in accordance with Eric Pickles’ Localism Act, next April.
Both Thames and Anglian told The Observer their tax was merely being deferred, and they would have to pay it in full at a later date. Yorkshire declined to comment.
My problem with this is that the UK is in deficit difficulties NOW. We need everybody’s tax money NOW. Not later. By exploiting a loophole in the tax system that the Chancellor irresponsibly created, they – AND HE – are extending the problem.
The absence of any significant tax bills means Thames and Anglian were able to pay out dividends totalling £1.5881 billion. I don’t have the figures for Yorkshire. Ask yourself how many of those shareholders have tax avoidance schemes of their own.
Meanwhile, those of us on PAYE have to pay the full amounts of our tax bills – and our utility bills – no matter what harm they do to our household finances. There can be no deferrals for the working-class citizen!
And what help do our bloated water companies give us?
The Guardian has reported that budget cuts are forcing the closure of breakfast clubs in primary schools across the country – despite increased demand. The research, by Labour MP Sharon Hodgson, shows 40 per cent of councils are cutting back.
This means vulnerable children will be going to school hungry and will therefore be unable to concentrate in lessons.
Think about the consequences of this. If they can’t concentrate because of hunger, they’re likely to misbehave – and this could set a precedent for the rest of their lives. Malnourishment leads to misbehaviour, leading to what? Crime, perhaps?
At the very least, the inability to concentrate means their grades will drop and their academic careers will fail – in some cases, before they have had a chance to get going.
Who knows how many will develop health problems associated with malnutrition?
This will happen, not because they are “bad kids” or because they are “academically sub-normal”, but because they come from poor families. The rich, meanwhile, will streak ahead in the race for The Good Life.
The Guardian reports that Essex County Council said it had 219 breakfast clubs in schools last year, but 169 this year. In Surrey, 2,870 children were being given breakfast last year but only 1,200 in 2012. That’s creating 1,670 potential problem children.
All this is happening in the country with the seventh largest economy in the world.
A Department for Education spokesman acknowledged the importance of the service, but said it was up to schools how they spent the funds they were given. The “pupil premium”, aimed at the most disadvantaged children, would be doubled, the DFE said, but not until 2014-15 – in time to buy your votes at the 2015 election, perhaps?
Until then, do you really want your kids to starve?
The benefits system is failing thousands of people every week, forcing more and more of them to seek help from Britain’s growing number of food banks. “Breadline Britain”, under the Tory-led Coalition, is now a literal expression. Previously it was just metaphorical.
The Trussell Trust, which runs the UK’s biggest food bank, in Coventry, is opening new food banks at the rate of three per week.
Almost half the people who go to food banks are there because of benefit changes. the Department for Work and Pensions does not work fast enough to arrange benefits for when claimants need them, leaving poor people in crisis for weeks, or months, at a time. Then the debts start racking up.
Sanctions, imposed as temporary punishments by the new benefits regime, are also adding to the queue at the food banks. Since 2010, the number of people getting their Jobseeker’s Allowance suspended has spiked, and we all know that the disability tests introduced for Employment and Support Allowance (and soon to come in for Disability Living Allowance) are causing hardship and – in fact – death for Britain’s most vulnerable people.
Sanction or disallowance of benefits happened to 167,000 people in the three months up to February 2012.
What do people do for money when the State fails them and they can’t get work? They fall into the debt trap.
High-interest, doorstep lending to poor people is Britain’s latest – perhaps only – boom industry. In other words, the government’s sick benefits regime is forcing the poor into debt to organisations that will take away everything they have left, in order to make up payments on a loan whose interest rate they probably made up on the spot.
And when they’ve taken everything, what do you do then?
Today’s blog entry will be relatively short. I had an operation on my leg yesterday (September 4) and it seems to be affecting my ability to think.
… And if you think that’s bizarre and illogical, let’s have a look at the decisions made by David Cameron in yesterday’s Cabinet reshuffle!
Firstly, the really shocking news: George Osborne is remaining as Chancellor of the Exchequer. Not really news, I know, but at the outset it makes a mockery of a process that is supposed to be about improving the government of the UK. Osborne’s policies are a disaster; he has sent British industry nosediving while increasing borrowing by £9.3 billion in the last four months. He was booed when he got up to give out medals at the Paralympics and he was booed at Prime Minister’s Questions today. But he remains in the Number Two government job.
Also remaining in post are Home Secretary Theresa May and Foreign Secretary William Hague; Education Secretary Michael Gove surprisingly keeps his brief, despite having proved by his activities that he is not up to the intellectual challenge (see previous Vox articles).
And Iain Duncan Smith will remain at Work and Pensions – oh yes he will! – despite having been offered Justice by David Cameron. This shows the weakness of the Prime Minister. As LabourList’s Mark Ferguson put it: “Cameron tried to move IDS. IDS said no. Cameron said ‘ah…um…ok’. Weak, weak, weak.”
Fellow Tweeter Carl Maxim added: “Iain Duncan Smith was offered a job at Justice but refused to take it. Therefore his benefits should be cut.”
And a fellow called ‘Woodo’ tweeted: “Gove and Duncan-Smith to stay in roles to ‘get the job done’. ‘The job’ being making educating poor kids harder and killing off the disabled.”
Biggest winner in the reshuffle has to be former Culture moron – I mean secretary – Jeremy Hunt, who has been moved up to take the Health brief. This has been seen as a reward for his work on the phone hacking controversy that led to the departure of former News of the World editor Andy Coulson from the Downing Street press office, and to the Leveson Inquiry into the behaviour of the media.
This seems a nonsensical move. Leveson has ordered not only Cameron, but Cameron’s friends Coulson, Rebekah Brooks (who now faces criminal charges for her part in phone hacking), and Hunt himself to give evidence in hearings that were highly embarrassing for those under scrutiny.
Hunt’s own close connections with Rupert Murdoch, whose News Corporation owns the papers that were mainly responsible for the crimes, is well-documented, and led to this tweet from James Lyons: “BREAKING – Rupert Murdoch to buy the NHS.”
This may not be far from the truth. Hunt co-authored a book dealing with the NHS at length, with Daniel Hannon MEP who called the NHS a 60 year mistake. The book states: “Our ambition should be to break down the barriers between private and public provision, in effect denationalising the provision of health care in Britain“.
He reportedly tried to remove the NHS tribute from the Olympic Games opening ceremony and his record in government is as dodgy: he voted to halve the time allowed for an abortion from 24 weeks to 12. His support of homeopathy has also attracted ridicule from some quarters.
Hunt’s arrival at Health follows the ejection of Andrew Lansley, the man who worked for eight long years on his Health and Social Care Bill, that effectively privatised health care in England. This work constituted the biggest lie this government ever sold to the public – that the Conservatives would safeguard the well-loved 64-year-old national institution. His reward? Demotion to become Leader of the House of Commons.
Former employment minister Chris Grayling, a man who believes bed and breakfast owners should be allowed to ban gay couples, has been promoted to the Justice brief. In response, one tweeter asked if Cameron will be building more prisons.
This means the oldest Cabinet member, Kenneth Clarke, has been ejected from Justice. David Cameron reportedly tried to sack him outright, along with departing Conservative co-chair Baroness Warsi, but ended up compounding his weakness by creating new roles for them instead. Clarke will be a minister without portfolio (although it is believed he’ll be sticking his oar into Osborne’s business at the Treasury), and Warsi will be minister for faith and communities.
Nick Parry tweeted: “Now ‘Baroness’ Warsi really knows what it’s like to be Northern and working-class – she’s been made redundant by the Tories.”
And Rory Macqueen asked: “Who has replaced Warsi in the <issue off-the-shelf statement about “Labour’s union baron paymasters”> role? It looks really challenging.”
That would be tireless self-promoter and foot-in-mouth artist Grant Shapps.
Scraping the bottom of the barrel… The new Transport secretary, Patrick McLoughlin, is afraid of flying.
And the former minister for the disabled, Maria ‘Killer’ Miller, is the new Equalities minister. She’ll be victimising women, gays and ethnic minorities as well, from now on. If you think that’s harsh, bear in mind that she voted for a (heavily defeated) proposal to stop abortion providers like Marie Stopes counselling women, and is on record as being in favour of defining homophobia, racial hatred and prejudice as ‘freedom of speech’.
Beyond that, we’re into comedy territory. For example, Mid Wales Labour member Ryan Myles said: “Apparently David Cameron was planning on moving Eric Pickles but couldn’t afford the crane.”
All in all, it’s been a wholesale replacement of anybody with talent, by idiots. The tweeter who identifies himself with Yes Minister lead character Rt Hon Jim Hacker MP summed it up perfectly: “Expected a night of the long knives, may just be a morning of insignificant pricks!“
It is hard to believe the lengths to which some people will go, to stay in the public eye.
This weekend, Baroness Sayeeda Warsi appealed to David Cameron to keep her on as chair of the Conservative Party in his forthcoming cabinet reshuffle.
Incredibly, she claimed she fits the demographics of all the people the Tories need to get voting for them at the next general election, being a woman, who is not white, from an urban area, in the North, and who is – most unbelievably of all – working class!
Good luck to her. I’ve always found her inability to listen to – let alone respond to – any views other than her own extremely off-putting. Keeping her in place would be the best way for Cameron to lose support from the groups she claims to represent. And I’m all for that.
One person who will, it seems, certainly return to the cabinet is former Treasury minister David Laws. His creative approach to accountancy necessitated his retirement to the backbenches after only 17 days in place, back in 2010. But it seems the kind of crime that would put any other citizen in jail for six months – defrauding the state out of £40,000 – is not serious enough to warrant the continued punishment of an ex-minister.
One thing I’ll say in Baroness Warsi’s favour: At least she’s more honest. She admitted failing to declare rental income (and was eventually let off the hook for it).
The main cabinet posts are also likely to remain fixed, despite some of their holders being unpopular, according to a Vox Political poll. The question was: David Cameron is expected to reshuffle the cabinet in the very near future. Who should he sack?
Before I reveal the results, I should warn you that the number of respondents makes this nothing like representative of general opinion. But it’s fun, so let’s open the envelopes and see the results.
In third place, with 7.7 per cent of the votes, is cabinet pie-muncher and local government minister Eric Pickles! It seems Eric’s plan to abolish Council Tax Benefit and force everyone to pay increased local taxes just to stay in their home has got your goat.
Second, by a massive 30.8 per cent share of the vote, you asked David Cameron to remove himself from the cabinet! Perhaps if he had concentrated more on solving the nation’s problems than playing video games or jaunting off on jolly holidays around the globe, ‘Call Me Dave’ might have avoided the wrath of the public.
But your winner, with an overwhelming 61.5 per cent shareholding, was Chancellor of the Exchequer George Osborne! Gideon’s persistent inability to balance the books, letting his rich corporate buddies off paying their taxes while squeezing the rest of us until our pips have well and truly squeaked, have had you squawking in protest (and tweeting, too). His fiscal austerity plan that forced the UK economy into a nosedive was a serious enough misjudgement, but what really browned you off was his idea to charge VAT on pasties, depending on how hot they were.
George deserves a prize and, considering the nature of this vote, I propose we call it the Golden Boot Award. I’ll be keeping it at my house until he can be bothered to turn up for it, at which point I will gladly bestow it upon his posterior.
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