Tag Archives: Exchequer

The Autumn (non-) Statement: Why have there been so few howls of outrage in response?

Over a cliff: The Brexit bus, with all its claims of a new Golden Age for the UK, teeters on the edge. Boris Johnson, in the driver's seat, says: "Boys? I've got an idea."

Over a cliff: The Brexit bus, with all its claims of a new Golden Age for the UK, teeters on the edge. Boris Johnson, in the driver’s seat, says: “Boys? I’ve got an idea.” Then Philip Hammond walks up and pushes bus, Boris and Britain over the precipice.

Probably because there are very few people around with the economic expertise to know that outrage is the proper way to respond.

Philip Hammond’s Autumn Statement – his first real contribution to UK politics as Chancellor of the Exchequer – was a long admission that the Conservative Party has ruined the country, hidden behind an attempt to blame it all on Brexit.

No, Philip; your party’s policies are responsible.

So it seems the UK is going to have to borrow an extra £59 billion – just to cover the cost to the country of Brexit.

This means the claim on the side of the famous red Brexit bus, that we could put £350 million a week into NHS services was definitely a lie. Let’s not beat around the bush any more – it was a lie and the people who made that statement are liars who cannot be trusted with anything.

Oh – but Boris Johnson, one of the arch-liars, is now Foreign Secretary and has a huge responsibility to deliver the best possible exit from the European Union for the population of the UK. Honestly, how do you think that’s going to work out?

We now know there will be less money available for the NHS and other public services than before, due to lower productivity growth (because foreign countries aren’t buying from us) and – yes – lower immigration.

Your wages and prosperity will suffer like never before, because of this. But I bet your right-wing neighbour still thinks immigrant-bashing is a worthwhile activity.

Paul Johnson, of the Institute for Fiscal Studies, has said, “One cannot stress enough how dreadful that is.”

And all as a result of the vote for a Conservative Government last year.

It is worth emphasizing, as many commentators have, the almost-complete failure to mention the National Health Service or provide any more money for it, even though it is in a funding crisis of horrifying proportions. Mr Hammond says announcements about extra funding for the service have already been made, ignoring the fact that his government has not provided enough.

Perhaps one reason for this is the pitiful increase in public investment announced by Mr Hammond, at a time when interest rates are at an all-time low. There will never be a better time to borrow money and invest it in the UK’s infrastructure, but instead we’re getting 0.3 or 0.4 per cent of GDP, in each financial year leading up to 2020 – slightly more than from New Labour in the years before the financial crisis.

This tells us – although Mr Hammond will never say it aloud – that the Conservatives are continuing their squeeze on public services, started back in the dark days of the Coalition Parliament. One might say it is all part of the plan to take everything away from public hands, as started by Margaret Thatcher and her cronies back in 1979 – if only one had the experience and understanding to see that far.

There’s more – we could discuss the hidden policy not to increase fuel duty, that throws out all the economic predictions but gives the Tories a favourable headline in their poodle press; or we could mention the new fiscal rules which set the scene for panic cuts in public investment as we approach the now-fixed (rather than rolling) date for the deficit to be cut back to a new level set by Mr Hammond.

But it is all too depressing, really.

Someone recently said that, with a May as prime minister and a Hammond as chancellor, all we need is a Clarkson for the UK’s government to emulate the former Top Gear presenting team, now relegated to internet TV on their Grand Tour. It is true that Clarkson once considered standing in the 2015 election.

Some might consider that a good idea – a brand behind which to market the UK’s flailing government.

But let’s be honest: Clarkson, Hammond and May were successful because they presented themselves as three petrol-headed idiots.

With May, Hammond and Boris Johnson in the UK’s driving seat, we don’t need any marketing.

We already know they are idiots. Sadly, we also know that their calamities won’t just be television entertainment – we’ll have to live with the consequences.

But the response to the Autumn Statement has been muted. Some have even claimed that John McDonnell was wrong to challenge it by demanding more investment.

This is because we do not – as a nation – know enough about economics. Otherwise we would be on the streets in front of Parliament, right now, demanding a change of direction – or a change of government.

Source: mainly macro: 2016 Autumn Statement

Osborne’s ‘no gimmicks’ budget: How much can we trust?

What hope would the UK have if THIS man continues as Chancellor of the Exchequer after the general election?

What hope would the UK have if THIS man continues as Chancellor of the Exchequer after the general election?

George Osborne will deliver his final budget of the current Parliament on Wednesday and – if it proves to be the last he ever gives – it won’t be a moment too soon.

Ever since his ’emergency’ budget of 2010, which ended the economic growth created by Labour’s Alistair Darling and ushered in three years of economic flatlining, we have had to endure an unending stream of nonsense from this chancer-among-chancellors, this most mini-among-ministers, this least-treasured Treasurer.

Today we heard that he is again attempting to bribe pensioners into voting Conservative, with a plan that encourages them to take out their defined contribution pension annuities for a lump sum – which, it seems likely, will then be used up in short order, leaving the pensioner to fall on the mercy of the state.

It seems to be more short-termism – getting senior citizens to spend, in order to create a minor boost to economic activity now, while storing up problems for the future.

Osborne says no, and told the BBC that it was “patronising” to suggest people might blow the money on an expensive sports car, then come back for more when they ran out of cash.

This is from the Chancellor who, prior to the financial crash, told Gordon Brown repeatedly that bankers could be trusted to run their businesses unregulated; and who, once in government, based his entire economic strategy on a theory that has since been comprehensively trashed.

The Guardian has listed a few more claims that Osborne might make in his Budget speech, along with the counter-arguments. We shan’t bother with the arguments in support of him here – let’s skip to the good parts. Here are the claims – and their debunkings:

The Government’s plan is working – Deficit reduction has been much slower than Osborne forecast five years ago. In his first budget, in June 2010, the chancellor predicted that he would need to borrow £37bn in 2014-5 and that tax receipts would cover day-to-day government spending. The actual figure will be almost three times that, and, when adjusted for the state of the economy, the 2015 budget deficit is expected to be higher than any other EU country barring Croatia, according to Investec.

Britain has the fastest-growing economy in the G7 – Osborne’s account of his stewardship is partial and misleading. It ignores the first two years, in each of which austerity measures knocked one percentage point off growth, resulting in a flatlining economy. Britain’s recovery from the 2008-09 slump has been the weakest of any in the past 100 years, slower even than the bounce back from the Great Depression of the 1930s. Real wages have at last started to rise as a result of falling inflation, but incomes per head are on average the same now as they were in 2006, before the financial crisis. Business investment has fallen for the past two quarters, and the current account deficit is higher than ever, at 6% of GDP.

We are helping hard- working people by raising tax allowances – Raising the personal allowance is not a well-targeted way of helping the low paid because it helps earners further up the income scale as well. Britain’s low-pay culture means millions of workers don’t earn anything like £10,600 a year. As a result, Osborne is thought to be toying with the idea of raising the threshold for employee national insurance contributions, which is effectively another form of income tax but kicks in at a lower level.

We will ease back on austerity while sticking to our deficit-cutting target – Even after a trim, Osborne’s cuts programme will still look drastic. Labour will argue that he is taking too much of a risk with economic growth and jeopardising essential public services.

We will launch a new crackdown on tax evasion – This is too little, too late, and many of the perks that help the super-rich avoid tax – including non-domiciled tax status – remain in place. Meanwhile, the Conservatives are under fire for appointing former HSBC chairman Stephen Green as a trade minister, apparently without checking his possible involvement.

Feel free to copy out the above and check it against Osborne’s speech on Wednesday.

One thing is certain – it will contain nothing that should persuade you to vote Conservative in May.

Follow me on Twitter: @MidWalesMike

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How national cuts are crippling local services

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How many more underhanded ways can our underhanded Coalition government find to sneak crippling damage to public services in by the back door?

A particularly vile method has just been uncovered here in my own county of Powys, involving the collusion of councillors who are supposed to be independent (but you will see that their political colours are more blue than anything else).

The Coalition government has cut back its Aggregate External Grant to local authorities for next year – its subsidy to councils – by many millions of pounds. This means that councils need to cut huge sums of money from their budgets if they are to balance their books. In Powys, the total that must go is £20 million – around one-eleventh of the total budget.

The council launched a public consultation, asking residents for their views on which services should be cut and giving (in the broadest possible terms) examples of areas that could be changed. The total amount to be saved if constituents agreed to all the cuts was £16 million, with the rest to be taken from reserves – so there was no way to balance the books without making all the cuts listed in the document.

Hardly anybody was made aware of the survey in advance, and many have complained that they only found out about it after it had ended.

One of the “possible” cuts listed was to the Citizens Advice Bureau in Powys. The consultation document said all funding to advice services (£93,500 to the CAB, £36,500 to independent centres) would be cut, with alternative funding found from other budgets. This proved untrue.

As a trustee of the Powys CAB, I was told this week that the county council has no other budget that could be used, and that the intention is to cut the money no matter what the public consultation shows.

This means citizens advice services in Powys would be wiped out from the beginning of April.

You might think that’s not the end of the world. After all, who takes advantage of the services provided by this charity anyway – a few people with benefit problems and a few more who are in debt?

Wrong! Thousands of people go to Citizens Advice every year – and the numbers are increasing exponentially because of Tory and Liberal Democrat “savings” that were inflicted without consideration of the true cost on real people in our communities.

Not only will those seeking help with benefit entitlement and debt have nowhere to go, but those seeking advice because they are unemployed, have been unfairly dismissed, have housing concerns and the full range of advice that CAB provides through its proven quality advice will also have to struggle on their own.

There is a proven benefit to individuals’ health through the provision of advice; that’s why advice in Powys is provided through a number of GP surgeries. But that too will end, putting a greater burden on the National Health Service here in Wales (which is already under attack from the Tories in Westminster).

CAB brings millions of pounds into the county through ensuring benefit entitlement; there is also a considerable sum gained through renegotiated debts – the total comes to more than £11 million per year. This money benefits everyone in the Powys economy as it has been shown that it is generally spent locally – so there is a fiscal multiplier that can be added to it, meaning the total boost to the Powys economy could be as much as £20 million.

That’s the same amount as the county council wants to take out of the economy by cutting its budget. The total loss may therefore be said to be almost £40 million, just because a cut of less than £100,000 has been included in the council’s plans – 1/200 of the total amount of cuts.

If there is a similar knock-on effect attached to all the other cuts, the effect will be devastating.

You may think that it would be easy to seek advice elsewhere, but the nearest alternative bureaux are around 100 miles from the centre of Powys, in any direction – and they are already overburdened with their own clients.

You might think that councillors should be able to provide the necessary advice (especially considering they want to cut off the current source). Could you provide the kind of specialist expertise necessary to deal with difficult legal issues? No? Then you should not expect your councillors to manage it – they are lay people like yourself; they don’t have any training in these matters.

A petition has been launched to stop the county council from withdrawing its funding. If you are a Powys resident, I strongly urge you to sign it and ask your friends to sign as well. If you can’t be bothered, just ask yourself who will help you when the Coalition turns the screw again and you are the victim of its attack.

If you are not a Powys resident, consider this to be a warning. Is your own council planning to cut services? Will it launch a public consultation on what will go? And will that be as much a sham as the survey in Powys seems to have been?

Here’s the link: http://www.change.org/en-GB/petitions/powys-county-council-do-not-withdraw-any-grant-funding-to-powys-citizens-advice-bureau?share_id=annKPtMTpV&utm_campaign=signature_receipt&utm_medium=email&utm_source=share_petition

Above all, remember: This would not be happening if not for the Coalition government’s crippling programme of austerity-driven cuts which have had almost no effect in reducing the national deficit, even though we are told that is what it is for.

With its AEG, the government controls councils’ spending. Your local authorities are being used as puppets by the Westminster government, who can then wash their hands of the whole affair by saying the decisions were made elsewhere. And for what?

The deficit has dropped by a total of seven billion pounds – from £118 billion to £111 billion – in the time George Osborne has been Chancellor of the Exchequer.

You are suffering all the pain for absolutely no gain at all.

Why are you putting up with it?

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Drug-induced? Conservative policy is to increase the national debt and make you pay

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Isn’t it shameful that the Conservatives are attacking Labour because the Co-op Bank chief has been behaving like the Chancellor of the Exchequer?

The ex-chairman of the bank, Paul Flowers – who is a former Labour councillor, is being investigated by police after he was filmed appearing to buy drugs. How is that different from the above photograph of one G. Osborne (now Chancellor of the Exchequer), raving it up at a party with a lot of cocaine on the table (ringed in red)?

Comedy Prime Minister David Cameron made much of the Flowers investigation at Prime Minister’s Questions – even suggesting, after the unimpeachable Michael Meacher asked an important question about business investment, that the honourable gentleman might have “been on a night out on the town with Reverend Flowers” and the “mind-altering substances have taken effect”.

Apparently it is all right for Gideon to be a drug casualty because he is a Tory; only Labour supporters who take drugs can be bad in Cameron’s addled world.

No wonder Labour MPs chanted “Shame!” at Cameron as he slunk out of the Chamber.

His attitude seems wrong-headed because, as managed by Mr Osborne for the past three and a half years, the economy can only be regarded as improving if one has the aid of Mr Cameron’s “mind-altering substances”.

Economic figures released this week are being touted as good news, with tax revenues “boosted” by “a recovering economy and housing market”, according to the BBC.

Take a closer look at those figures and they fall down. Borrowing (excluding the cost of interventions like bank bailouts, so we’re already in the realm of made-up figures) fell by two one-hundred-and-thirds, from £8.24 billion in the same month last year to £8.08 billion in October. Less than two per cent and they’re calling it a “boost”. It might be wiped out again in November’s figures.

Also, it should be borne in mind that growth in the housing market is due to the bubble created by our formerly-substance-abusing Chancellor, while any other economic growth has nothing to do with him and, in any case, does not help the vast majority of the population.

Total public debt has risen again, to £1.207 trillion or 75.4 per cent of gross domestic product – the highest it has ever been – under the Conservatives.

The aim for the national deficit, we are told, is to keep borrowing for 2013-14 at £120 billion or below. In his ‘Emergency Budget’ of 2010, Osborne predicted that borrowing this year would be down to half that – at £60 billion, and estimates have been rising ever since.

The 2011 budget had the 2013-14 deficit at £70 billion; in 2012 it was expected to be £98 billion; and now – £120 billion. Perhaps his original estimate was a coke-fuelled fantasy?

Of course – as this blog repeated only days ago – the Conservative-led Coalition never intended to cut the national debt. This was just a claim ministers made while they changed the system to take as much money as possible from the poor while making it possible for the rich to remove their personal earnings and corporate profits from tax to the greatest extent possible.

Result: Increasing debt and lower-than-necessary tax returns, making it possible for the Tories to claim they must cut public services and the benefit system, while laughing all the way to the banks (the ones that were never penalised for burning all our money in the first place).

So much for “We’re all in it together” – unless that was another reference to “mind-altering substances”, and we didn’t understand it until now.

Osborne’s big plan: falsify unemployment figures under the Workfare banner

A swivel-eyed loon, earlier today. [Picture: Left Foot Forward]

A swivel-eyed loon, earlier today. [Picture: Left Foot Forward]

So Gideon wants the long-term unemployed to go on Workfare indefinitely, does he?

Forgive me if I’m mistaken, but doesn’t this mean the Chancellor of the Exchequer’s big announcement – at this year’s Conservative Party Conference – is a tawdry plan to massage the unemployment figures?

I’m indebted to The Void blog for the following information, which I recalled while reading reports of Osborne’s drone to the swivel-eyed masses. An article from May stated that the Department for Work and Pensions (DWP) had been forced to admit a rise in unemployment was down to a fall in the number of people on Workfare.

“According to the Department, the number of people in work fell by over 47,000 over the last three months – which they say ‘reflects’ amongst other things a drop of 16,000 in the numbers on Government employment schemes,” the article states. As far as I know, this is still correct – if a person is put on Workfare, they are removed from unemployment statistics, even though they only receive social security payments for the work they do.

Putting the long-term unemployed on Workfare indefinitely, therefore, will effectively wipe long-term unemployment from the national figures. This will make Osborne’s administration look very good indeed – despite having done nothing to improve anyone’s chances of finding a job. In fact, those prospects will have worsened because every Workfare place removes a paying job from the market.

And what will this do for the Bank of England’s scheme to raise interest rates only if unemployment drops below seven per cent?

Wait – it gets worse. We can also see a now-traditional Tory ‘bait-and-switch’ going on, supported by a justification narrative based on a bit of voodoo polling. This one pushes lots of our favourite buttons!

Osborne’s rationale for imposing the scheme – the justification narrative – is simply that people want it. He’s basing his reasoning for this on a voodoo poll by the right-wing Policy Exchange, as described on The Void today.

“The general public’s opinions on workfare have been grossly distorted by the nature of the questions asked in this survey – of which there were only two,” the article states.

“The first question asked whether people thought ‘The government should require people who are unemployed for 12 months or more to do community work in return for their state benefits.’ The truth is that only just over half agreed at 56%. But the public were not asked if this workfare should be full time. In fact it does not even specify that the work should be unpaid – previous workfare schemes have come with a top up payment to benefits attached. Whilst those engrossed in welfare policy might assume workfare to mean 30 hours a week, every week, without pay, there’s no reason a survey respondent would think that. They might think yes, they should volunteer in an old people’s home for an afternoon a week, or do a couple of days a month helping out in the local park, for reasonable expenses. This 56% in no way gives a mandate for full time unpaid workfare.”

It continues: “The second question is even more dubious. The Policy Exchange are attempting to use the answers to this question to claim that only 22% of the public support disabled people being exempt from workfare. That incidentally is disabled people “who are capable of working” – another devious phrase as who is and isn’t capable of working is clearly open to debate as the Atos scandal has shown. The obvious inference from the from this figure is that 78% of the public support workfare for disabled people. Yet in question 1 only 56% of people support workfare for anyone at all. There must be something in the going on to explain this bizarre discrepancy.

“Question 2 asks respondents to imagine that compulsory workfare exists and then questions who should be exempt. Now a disabled person completing this survey may think well if I have to do workfare then why shouldn’t a lone parent, and vice versa. That doesn’t mean they support workfare, it means they support equality, of a sort.

“There is no option available for those who think that everyone should be exempt from workfare, although it is possible to answer that every group of claimants given should undertake unpaid work.”

So: Extremely dubious findings, used to support a dubious claim that the public supports increasing Workfare and this is why the Coalition is doing so. In fact, this is a thinly-veiled attempt to falsify unemployment statistics and trigger an interest rate rise.

The swivel-eyed loons must have lapped it up.

Now, why wasn’t Vox Political‘s best friend, Iain Duncan Smith, making this announcement?

New attempt to demean benefit claimants launched by right-wing loonies

Bin it: We don't need the Taxpayers' Alliance or its rubbish ideas.

Bin it: We don’t need the Taxpayers’ Alliance or its rubbish ideas.

For a change, it isn’t the government!

The Taxpayers’ Alliance, an organisation of right-wingers determined to turn the UK into a low-tax economy by any possible means, has decided that Universal Credit claimants need to do community service-style unpaid work – or they shouldn’t receive a penny.

According to the BBC, the group reckons people should do 30 hours’ unpaid activity every week, and has suggested this could save £3.5 billion in social security payments every year.

Is that because it has worked so well in the past?

Schemes like this are already in place for jobseekers and, guess what, they don’t work. It costs more money to employ the private firms that administer them than they ever succeed in saving, and their success rate in getting people into jobs is so bad that benefit claimants would have a better chance of success if they just go and look for work by themselves.

In addition, Universal Credit will be paid to working people who claim, for example, tax credits and/or housing benefit. They have to claim these benefits because their employers do not pay them enough money to cover all their necessary outgoings – food, rent, electricity and so on. That is a result of right-wing government policy that aims to keep wages low. How are these low-paid working people supposed to fit another 30 hours’ work into their already-busy week?

Also: Community service? That’s what convicted criminals do. Unemployment is not a criminal offence and every TPA member should be ashamed that their leaders have conflated the two.

Finally, for every person carrying out unpaid work, a paid job is removed from the economy. Has it not occurred to the Taxpayers’ Alliance that the amount HMRC collects from them might drop, if more people were actually paying taxes?

Probably not, but then – oh, look – it seems the TPA is being investigated for, don’t laugh, dodging tax.

“Taxpayers rightly expect something back for the enormous amount they pay for out-of-work benefits, at the very least a real commitment to find a job as soon as possible,” said TPA chief executive Matthew Sinclair, proving in a single sentence that he understands neither Universal Credit nor the fact that people who claim it are also taxpayers.

No – this is not about helping anybody. It won’t save government money; it won’t help businesses and it certainly won’t help people on Universal Credit.

This is about demeaning people who are already in a very difficult place through no fault of their own. It is about pretending that they are a burden on society when it is the government’s own schemes – and the schemes that the TPA wants brought in – that are creating the burden.

Still, today’s misguided and wholly wrong-headed outburst does allow us to clarify what is needed.

People in work need to be paid a living wage, and should be respected by their employers for the work that they do.

And firms currently taking part in unpaid ‘workfare’ schemes need to be told that enough is enough; they’ve had the benefit of free workers for many years, and now it’s time to give something back by turning those positions into paid jobs – again at the living wage.

People in paid work pay taxes – and those earning enough that they don’t need any benefits at all are a double boon to the Exchequer because they pay into the Treasury but do not take anything out.

That is the way forward.

The Boring Osborne Drinking GamE (BODGE)

Get it down you: George Osborne's trying to be 'one of the boys' in this photo, but you'll need a stiff drink when you hear what he has in store for the country (even if it is only likely to last one month)!

Get it down you: George Osborne’s trying to be ‘one of the boys’ in this photo, but you’ll need a stiff drink when you hear what he has in store for the country (even if it is only likely to last one month)!

Today, for one day only, Vox Political will be extolling the virtues of alcohol. Yes, Gideon will be announcing the much-fought-over results of his spending review negotiations with other government departments and, here at Vox Towers, we think you’ll need an anaesthetic to get through them.

What you need to do is get hold of the ‘anaethetic’ of your choice. Bear in mind that Chancellors of the Exchequer are known for drinking their way through their own budget statements, with the anaesthetic of their choice (Ken Clarke liked whisky) so this is entirely permissible.

Pour some into a glass, and listen to the speech, starting at 12.30pm or thereabouts.

Any mention of Coalition achievements is worth ONE FINGER. Osborne is probably going to trot out the usual list – more than a million new jobs (not true), spending on the NHS protected (not true) and so on. You’ll know them when you hear them. The correct procedure is to use one hand to drink while raising the middle finger of the other hand in the direction of the equipment you’re using to listen to the speech, in symbolic gesture to the part-time Chancellor himself.

Mention of Coalition investment may also be worth ONE FINGER, depending on whether you think it will actually do the country any good or be just another bung for his rich buddies in private companies. That’s a judgement call depending (most probably) on how drunk you want to be at lunchtime.

At some point, Osborne will mention the size and shape of the cuts he wishes to impose on us all. Each one is worth TWO FINGERS. Raise the index and middle fingers of your spare hand in the direction of the equipment you’re using to hear the speech, as you drink the appropriate amount.

By the time he stops talking, you should be about as drunk as the other ministers had to be to let him impose these dangerous and unfounded measures on their departments.

Government talks tough on tax-dodging – while helping corporations cut bills

Public unrest: Thousands of people across the UK have demonstrated against government decisions that have increasingly burdened poor people with higher taxes while the rich, and fabulously wealthy corporations, have received tax breaks. The government's response has been to order water cannons from Germany. Think about that.

Public unrest: Thousands of people across the UK have demonstrated against government decisions that have increasingly burdened poor people with higher taxes while the rich, and fabulously wealthy corporations, have received tax breaks. The government’s response has been to order water cannons from Germany. Think about that.

How long does George Osborne expect us to believe his blather about cracking down on corporate tax avoidance when we have evidence all around us that he is helping multinational firms to get out of paying the tax they owe this country.

This is taking place at a time when the UK tax take should be maximised, in order to get borrowing down and help the country pay its bills.

And it is being organised by the Chancellor of the Exchequer – the government member whose principle job is to ensure that those bills can be paid.

All this doubletalk suggests he has a personal agenda that is different from what he’s been telling us, doesn’t it?

Vox Political has already dealt – at length – with the fact that the Coalition government has legislated to make it easier for UK-based multinationals to shift their income into ‘mailboxes’ in tax havens, in order to avoid paying tax in this country.

Why is Osborne doing this, when he knows we need the money?

We know that Osborne has cut Corporation Tax by a quarter – from 28 per cent to 21 per cent – during the course of this Parliament, even though changes in the rate of this particular tax have been proven to have no effect on economic improvement. Look at the USA, where a Corporation Tax rate of 40 per cent has done nothing to hinder the resurgence of that country’s economy.

Why is Osborne doing this, when he knows we need the money?

Meanwhile, we have been hit with a large increase in sales tax (VAT) which hits poor people hardest. As a result, they have to reconsider their purchases and buy fewer items, meaning the Exchequer takes less money, with this tax, than it should.

Why is Osborne doing this, when he knows we need the money?

The European Commission reckons it has declared war on tax evasion and avoidance – but has instructed member nations to single out only non-EU countries as havens, even though member states including Luxembourg, the Netherlands, Ireland and Belgium are known to have engaged in potentially harmful tax behaviour.

Why are these countries doing this, when they know they need the money?

Beginning in 2009 (meaning we started this under a Labour administration, please note), the UK began switching from taxing worldwide income to solely taxing profit that companies claim is earned within the country, a so-called “territorial” system. It eliminated taxes on dividends paid to a UK company, even if coming from a subsidiary in a tax haven.

Why is Osborne continuing with this, when he knows we need the money?

Beginning last month, the UK slashed the tax rate to 10 per cent from the regular 23 per cent rate on profit attributed to patents and intellectual property.

Why is Osborne doing this, when he knows we need the money?

Here’s why, according to Yvette Hodgson, a spokeswoman for the Treasury. She said the government is “committed to creating the most competitive corporate tax system in the G20.

“Global tax rules have stood still for almost a century. Britain is leading the international effort to bring them into the 21st century.”

So 21st century taxation means beggaring not only populations but governments as well, while allowing multinational corporations to make off with all the cash?

No wonder people in Britain are so angry. We have every right to be.

Let’s cut the link between politicians and tax avoidance firms

Laughing all the way to the bank: Thanks to these two grinning goons, UK tax law is now totally bent - in their favour.

Laughing all the way to the bank: Thanks to these two grinning goons, UK tax law is now totally bent – in their favour.

Why are the ‘Big 4’ accountancy firms – the companies at the heart of every major scheme for tax avoidance – being allowed to make the law on – guess what – tax avoidance?

Could it be because our comedy Prime Minister, David Cameron, and his part-time Chancellor, Gideon George Osborne, are both either tax avoiders themselves, or have strong connections with tax avoidance? I think it could.

Cameron’s family made their fortune by establishing a tax dodging empire after Margaret Thatcher abolished capital controls in 1979.

And there was a major campaign by 38 Degrees to get Gideon to pay his taxes after Channel 4 revealed he was paying accountants to help him dodge £1.6 million in tax payments every year.

The firms implicated – PricewaterhouseCoopers PwC, Ernst & Young, KPMG and Deloitte – received a damning verdict from Parliament’s Public Accounts Committee today. An internal HMRC study estimated that these four firms “were behind almost half of all known avoidance schemes”. But that doesn’t mean their government contracts will be terminated.

Look at Robert Edwards, senior manager in international corporate tax from KPMG, who was seconded to the Treasury for 20 months to help develop policy on Controlled Foreign Companies (CFC). His speciality was advising multinationals on tax-efficient cross-border financing and restructuring.

What is the UK’s new policy on CFCs? If a British company has subsidiaries overseas, and it transfers ownership of its brands to a tax haven country like Switzerland, its profits on those brands will no longer be subject to UK tax – meaning the new system encourages firms to switch their money into tax havens. Previously, their profits would have been taxed on the difference between what they pay in the tax haven and the UK rate – a disincentive to moving the money as the amount paid in tax would be much the same.

Only UK-generated income will be taxed in the UK, while the costs of funding overseas operations remain allowable against UK profits for UK tax – in other words, the costs of overseas operations will be subtracted from company profits by HM Revenue and Customs, when it considers how much tax to charge.

This is Osborne’s economics in action – big bonuses for big businesses, and all tax-free. Alongside the huge cuts in Corporation Tax (down by a quarter since the Coalition came into office) the loss to the Treasury is expected to be around £20 billion over the lifetime of this parliament, according to its own estimates.

There is no benefit to small- and medium-sized British companies.

Look at the predatory schemes set up by these companies. The Guardian has reported that in November 2012, a tax tribunal threw out an Ernst & Young inspired scheme that enabled Iliffe News and Media to create a new asset – newspaper mastheads. This asset was created for a nominal sum of £1. It was leased back to its subsidiaries who paid the parent company over £51 million in royalties and thus reported lower profits.

PricewaterhouseCoopers devised a scheme to avoid capital gains tax on profits involving a series of circular and self-cancelling transactions resulting in the creation of assets and disposals which somehow managed to cancel out the profit. This scheme was sold to 200 entrepreneurs and, if successful, would have enabled them to avoid capital gains tax on profits of around £1 billion.

KPMG cold-called an amusement arcade company with a scheme to avoid paying VAT on its operations, using Channel Islands entities.

And Deloitte devised a scheme to enable bankers – bankers! – to avoid income tax and national insurance contributions on £91 million of bonuses.

These are just schemes that have become public knowledge. Many more are sure to exist. The predatory practices of major accountancy firms include creating sham transactions, phoney losses and phantom assets to enable their clients to dodge taxes.

But no accountancy firm has ever been disciplined, the UK Treasury has never sought to recover legal costs from the promoters of the schemes and, instead, the big accountancy firms continue to receive taxpayer-funded contracts.

Bankers, accountants, politicians – right up to the Prime Minister. If the proposal in my e-petition – to prevent MPs speaking or voting on legislation likely to make money for them – became law, either Osborne would not be Chancellor of the Exchequer or UK tax receipts would be much healthier than they are today.

Feel free to think about that while you’re signing the petition.

The blame game: How to cause a problem and then blame your opponents

Brecon and Radnorshire's Assembly Member, Kirsty Williams: Sometimes it's better to keep your mouth shut.

Brecon and Radnorshire’s Assembly Member, Kirsty Williams: Sometimes it’s better to keep your mouth shut.

Sometimes the behaviour of our politicians is so irrational it becomes laughable.

You may feel that way about the attitude adopted by Kirsty Williams, Liberal Democrat member for Brecon and Radnorshire in the Welsh Assembly, who seems to have been desperate to lash out at the Assembly’s Labour administration over its plans for council tax.

We all know by now – don’t we? – that the Conservative/Liberal Democrat Coalition in Westminster is slashing the amount of support for people who don’t pay the full amount of council tax by 10 per cent. It is abolishing Council Tax Benefit and has told local authorities to create their own “reduction” or “support” schemes.

The aim was to put the blame for the cut onto local councils rather than the national government, and it failed.

In Wales, responsibility was put onto the Welsh Government in Cardiff Bay, which was told it would get £222 million towards the scheme – but the announcement was delayed because the UK Government – them again! – had refused to identify the amount of funding to be transferred until after the Chancellor of the Exchequer’s Autumn Statement on December 5.

It was delayed still further after the Welsh Assembly – including Liberal Democrat members – failed to reach agreement on how to administer its new scheme.

So it wasn’t until last week that the Welsh Government was able to make a final announcement – that it would take £22 million from its own reserves, plug the gap in UK government funding in its entirety, and ensure that nobody would have to pay any more than they are at the moment.*

This wasn’t good enough for Ms Williams, who said the Welsh Government had created “uncertainty and mess” by its failure to act before Christmas.

“Assembly Members were astounded that the Welsh Labour Government left regulations to the very last minute and refused to put up this extra money while the Scottish Government and many councils across England had managed to put in place replacement council tax benefit programmes in good time,” she said.

Sorry, Kirsty, who caused “uncertainty and mess”? Didn’t the Welsh Government put forward plans that were then kicked into the long grass by other parties, including your own?

Didn’t the UK Government, of which your Liberal Democrat is a part, delay the funding announcement for political reasons, making it extremely difficult to hammer out plans before the Christmas recess?

Aren’t you making an ass of yourself by trying to make a fuss about Labour’s actions when your Liberal Democrats bear more of the actual responsibility?

I think you are.

*Proportionately. The actual amount may vary depending on how much council tax rises in different council areas; council tax benefit is worked out as a percentage of the full rate.