Closed: while lockdowns bit into small traders’ funds, government help has been restricted only to those that meet arbitrary criteria – meaning many are going hungry, along with their children.
This is the reality of Covid-19 for millions of self-employed people across the UK.
The government trumpeted huge amounts of funding for scheme to keep businesses open – but failed to mention the small print that means some businesses don’t qualify.
It’s as though the pandemic was being used for political reasons – to clamp down on small enterprises and their owners. Isn’t it?
Jo Hill, of Cardiff, was denied any support because her business had only two years of profit on its books.
She had to rely on food banks and borrowed money to survive.
The money I have earned I have had to use for food for myself and my daughter. She’s growing like a bean pole, I couldn’t afford to buy her shoes over lockdown. At times we were so skint food was rationed, I’ve had to be really careful.
When the Chancellor announced [support for self-employed businesses] I breathed a massive sigh of relief. I was applying and it would say I’m not entitled, I was quite bewildered. The money should have gone to everybody.
“I’m too scared to spend any money at all since I don’t know what will happen in the future and how long that money will last. There have been times I couldn’t afford a food shop, I don’t know if my budget is going to last two weeks, three weeks.
The Welsh government has announced business support worth £1.7 billion to firms across the country.
And a fat lot of good it will do to single traders like Ms Hill if they don’t qualify because of arcane eligibility standards.
Have YOU donated to my crowdfunding appeal, raising funds to fight false libel claims by TV celebrities who should know better? These court cases cost a lot of money so every penny will help ensure that wealth doesn’t beat justice.
Rubbish: who does the bins in your council area? A private firm? Expect much more privatisation if smaller councils are scrapped; the £3 billion we’re told would be saved has to be spent somewhere!
It seems some people really do have a blind spot.
Whoever wrote the report that says the following, for example:
Abolishing 213 smaller councils in England and replacing them with 25 new local authorities could save almost £3bn over five years, a report says.
The report for the County Councils Network says one body in each area would reduce complexity and give communities a single unified voice.
However, others argue bigger councils are unwieldy and undemocratic.
It’s a good point that bigger councils may be unwieldy and undemocratic, but the better point is that they won’t save a penny while we have a Tory government.
The money will be spent outsourcing decision-making to private consultants like PwC, Deloitte and McKinsey, and outsourcing work to private firms like Serco – who will probably go bust because they habitually offer to do it for too low a price after the bosses and shareholders have taken their enormous cut of (council taxpayers’) cash.
If this happens, just watch what happens and see if I’m right.
Have YOU donated to my crowdfunding appeal, raising funds to fight false libel claims by TV celebrities who should know better? These court cases cost a lot of money so every penny will help ensure that wealth doesn’t beat justice.
This looks like Labour’s plan for a national investment bank, writ smaller.
A Labour government would halt privatisation because it would not profit the state. This makes perfect sense – far more than the current Tory plan to sell to the rich at a loss for the poor.
But the offer is only to delay continued privatisation of RBS – and only if the bank commits itself to lending money to the regions, and to small businesses.
For This Writer, it is not enough. RBS played a large part in the financial crisis of 2008 and it would be fitting if that bank were kept in public ownership and made to put right the damage it caused.
Put the Tories in Labour’s place, with a similar kind of offer, and I’d be calling them liars. History shows that Conservatives will say what they think others want to hear, to get them on-side. Then they renege on the deal.
I wouldn’t mind at all if Labour reneged on this one and turned RBS into a part of – or the basis of – the National Investment Bank in the party’s manifesto.
But Labour is not the Conservative Party and I have a feeling this is a sincere offer. But will the RBS bankers – and their shareholders – share my belief?
[The] Labour party would halt the privatisation of Royal Bank of Scotland (RBS) if it came to power but would not seek to exert day-to-day control, the opposition party’s shadow banking minister told Reuters.
RBS shareholders voted on Wednesday to approve the bank’s plans to begin buying back its shares from the government in order to accelerate a return to majority private ownership, with more than 98 percent backing the proposal.
RBS remains 62 percent owned by British taxpayers after a £45 billion bailout in the 2008 financial crisis, although the Conservative government has conducted two share sales as it looks to return it to private ownership.
The government’s two RBS equity sales so far have crystallised deep losses for British taxpayers on shares that have almost halved in value since the bank’s rescue.
“If RBS is now paying dividends, and the price of the shares is under what was paid, we cannot see the rationale for selling more shares,” said Labour’s Jonathan Reynolds.
Having previously suggested full nationalization of RBS, Labour has been rowing back as it seeks to build bridges to the City of London and ease concerns about a Labour-led Britain.
The extent of state involvement would depend on RBS’ willingness to increase lending to Britain’s regions and small businesses.
“We don’t have a policy of day-to-day control of RBS,” he said. “But there is clearly unmet demand in lending and a problem with financial inclusion.”
Maureen Lipman: You’d think a performer of her standing would know the danger in ill-advised words.
“Who’ll go?” That’s what This Writer asked yesterday (April 7). The answer, we now know, is: Practically nobody:
Hundreds of protesters gathered in the rain outside Labour’s London headquarters today for a demo against anti-Semitism.
There were shouts of “Corbyn out”, “racists” and “shame”, and boos among the crowd of around 250 people when speakers named the Labour leader.
The protest was called by the Campaign Against Anti-Semitism, which has regularly criticised Mr Corbyn’s approach.
Brilliant. 250 misinformed sheeple, standing outside empty offices, howling lies about one of the strongest advocates against racism of any kind (including anti-Semitism) that the UK has.
On today’s protest by CAA ‘With great chutzpah (cheek/nerve), they call themselves Campaign Against Antisemitism, but the current butt of their campaign is someone who himself is one of the most longstanding opponents of all racism including antisemitism: Jeremy Corbyn’ pic.twitter.com/9B38TNN4JB
I also asked if Gideon Falter, chairman of the CAA, would take the right message from a poorly-attended event – that his organisation’s lies about Mr Corbyn, and about anti-Semitism in the Labour Party, were falling on deaf ears.
It seems he did not:
Thank you to the 2,000+ people who came and made our voices heard, calling on @UKLabour to hold @JeremyCorbyn to account. We did it, and we decided to return on 13th May if we are not satisfied with progress by then. Today, we were the many, they were the few!
She stood next to Mr Falter, to speak against the Labour Party – but brought instant ridicule on herself by attacking Ed Miliband, the party’s previous leader and a man of very clear Jewish descent:
Live on @SkyNews in an interview @maureenlipman says she knew Labour was becoming anti-Semitic when it elected Ed Miliband as it's leader. Sky reporter points out that Ed Miliband is of Jewish heritage.
LI comment: We wish this was #satire but sadly it isn't.
“Everything we’ve heard today points to the fact that we have an anti-Semite as the head of the British Labour Party,” she said.
In that case, everything that was said at the event was slander, because Mr Corbyn is accepted by rational people as the antithesis of an anti-Semite. Indeed, as David Rosenberg states, above, Mr Corbyn is “one of the most longstanding opponents of all racism including anti-Semitism”.
I wish Mr Corbyn would take legal action against Ms Lipman and the CAA for their outrageous lies. Mr Falter was standing right next to her and failed to correct the claim.
But he’s far too clever to be drawn in.
The CAA’s attack on Labour was a false-flag attempt to rid the UK of the best opposition to Theresa May’s diabolical Conservative government. It was clever to attack Jeremy Corbyn on the basis of a problem that everybody accepts exists in many organisations, but the claims of the organisation and its allies have stretched credibility too far and they have lost the confidence of the public.
Why give them the oxygen of publicity when their argument is dead?
Vox Political needs your help! If you want to support this site
(but don’t want to give your money to advertisers) you can make a one-off donation here:
Here are four ways to be sure you’re among the first to know what’s going on.
1) Register with us by clicking on ‘Subscribe’ (in the left margin). You can then receive notifications of every new article that is posted here.
He means business: Ed Miliband announces Labour’s plans for business and industry at Jaguar Land Rover in the West Midlands.
The Labour Party has announced a series of new policies intended to improve conditions for both small and large industries in the UK.
They are the latest in an apparently-unending flood of new policies to be placed before the public since the ‘long campaign’ began in earnest at the beginning of the year.
It seems likely that they follow on from a series of in-depth public consultations, such as ‘Your Britain’, that the party has always said would contribute to the shape of its 2015 manifesto.
For once, it seems, a political party was not lying!
Labour announced yesterday, “Ed Miliband will emphasise that Labour’s plan for creating wealth does not rely on just a few at the very top but on boosting productivity in every business and sector of the British economy.
“[He] will declare that Britain needs a better plan for prosperity than the Government’s failing plan which relies on allowing the most powerful and wealthy to do whatever they want.”
Crucially, the party is emphasising that “this modern industrial strategy is a different approach for Labour than in the past because it seeks to support working families not simply through tax-and-spend redistribution but by building a more inclusive prosperity.”
Here are the key points, as described by Labour:
Labour will back small businesses and new entrepreneurs who will provide the growth and jobs of the future.
· Cutting business rates
· Improving training and apprenticeships
· Promoting competition in energy and banking to ensure market efficiency, lower bills and better access to finance
· Handing more economic power to every part of the UK with £30 billion of devolved funding
Labour will back our biggest exporters which need certainty to invest:
· Staying in a reformed EU and not taking risks with our membership
· Building a strong economic foundation with a tough and balanced approach to cutting the deficit
· Guaranteeing Britain has the most competitive rate of corporation tax in the G7
· Promoting long-termism by changing the rules on takeovers
Labour will back our big employing sectors such as retail and social care by tackling undercutting, with firms coming together to raise productivity and standards:
· Industry led bodies to raise productivity, like we have now in the car industry
· Banning exploitative zero hours contracts
· Raising the National Minimum Wage closer to average earnings – £8 an hour by 2020
· Offering tax breaks to employers who adopt the Living Wage
· Making it illegal to undercut by exploiting migrant workers
Labour will back every sector of the economy by ensuring the public sector plays an active part in driving up productivity by:
· Recognising its role in supporting cutting-edge innovation and research
· Making strategic investment and procurement decisions
In a speech at Jaguar Land Rover in the West Midlands, Mr Miliband was expected to attack the current situation under the Conservative-led Coalition government: “When working people are held back, the country doesn’t prosper as it should. When families don’t have money to spend, it holds back our economy. When there is so much insecurity in the economy, businesses can’t plan for the long term. When people don’t have the chance to develop their skills and pursue a promotion, our companies become less productive and less competitive in the world.”
He was expected to promise support for both small and large businesses: “The jobs of tomorrow will come from a large number of small businesses, not simply a small number of large ones. Our plan recognises that. We will have a fairer tax system, keeping corporation tax the lowest in the G7 for large businesses, but also cutting and freezing business rates for smaller ones. We will create a British Investment Bank, supported by a network of new regional banks and more competition in business banking on the high street, to help small businesses grow. And a new Small Business Administration to co-ordinate work across government to help small businesses succeed.”
There are also plans to decentralise power, moving it away from London, and to help businesses plan for the long term.
That’s a lot of information to absorb in one go. What do you think of it?
Here’s a letter sent to houses here in Brecon and Radnorshire. It starts with the famous Lib Dem block graph, which is a mainstay of all their election communications in places where they have won seats. Presumably they keep using it because it is effective but one has to doubt this example, as it does not feature a European election result, but that of the last UK general election in 2010.
They cannot use a block graph to show a favourable result in the last European election because they don’t have any Welsh MEPs, and the result in the last Welsh Assembly election (in 2011) showed support was already eroding away as a result of their toxic alliance with the Conservative Party in Westminster, along with some spectacularly effective campaigning by the local Labour Party.
The result is a misleading graphic that shows a massive Liberal Democrat majority, coupled with the slogan, “Only the Lib Dems can beat the Tories here”, where in fact we have two Labour MEPs, one Tory and one representing Plaid Cymru.
It hardly encourages confidence when a political letter – from one of the ruling parties in Westminster – begins with a filthy lie.
The text of the letter, by the constituency’s Liberal Democrat MP Roger Williams, asks where the reader wants to be working in five or 10 years, and suggests we will be looking for more pay, promotions and a better quality of life. He states that it is important to protect the economic recovery, but “all that hard work could be undone” if Britain pulls out of the EU “as UKIP and many Conservatives want to do”.
Thanks to the UK’s Coalition government, ordinary hard-working people are receiving far less pay than before the 2010 election, with a corresponding drop in quality of life. Child poverty, for example, is rising fast. The economic recovery has helped nobody but the very top earners (like those in the Sunday Times ‘rich list’, published last weekend) – and besides, the Tory Democrats are not the only party keen to protect Britain’s place in Europe. For that, your best bet is still Labour or (in Wales) Plaid Cymru.
The letter continues: “Across rural Wales the EU has invested £5.8 million into local businesses struggling to find funding to grow and create more jobs, this is on top of the £26 million invested in promoting tourism to Wales which is vital to our local economy.” Yes indeed – but that money was negotiated by either a Labour government in Westminster or a Labour government in Cardiff Bay. It has little to do with the Tory Democrats!
The letter ends with an exhortation to vote for the Yellow Party’s nonentity candidate, whose name is instantly forgettable.
Alongside this came a double-sided flier offering more of what the Tory Democrats do best – negative campaigning. “Don’t gamble with Welsh jobs…” it states, “Stop UKIP and the Tories from risking Wales jobs”. A box-out with a red background says, “Labour stay silent” – which is a blatant falsehood.
Flip the page and you’ve got the pro-Tory Democrat bit – but they can only say they have “helped deliver” funding for superfast broadband, funding for small-to-medium-sized enterprises, and cash to support tourism. And who did they help?
It’s a sad little screed from an organisation in its twilight days.
Struggling to make an impact: Ed Miliband must reject the Tory Party’s narrative about the need for austerity and bring forward a vision for the future that really does make us ‘One Nation’ again, rather than hanging on David Cameron’s neoliberal coat-tails, as many former Labour voters believe.
The political debate is all about the Labour Party again today – as it has been since the Budget.
The newspapers and websites are full of advice for the party, which is now clearly seen to be struggling to gain any kind of a foothold with electors who have become disillusioned at what might best be called the Party of Very Little Opposition.
Labour “must adopt new principles” according to an alliance of thinktanks and party intellectuals who have written to The Guardian; Ed Miliband has been told “don’t play safe” with the party’s manifesto according to an article on the same paper’s site.
We can probably discount the Telegraph article by Dan Hodges, claiming that Labour is “closed for business”. It plays to right-wing readers’ prejudices just a little too much.
Will Ed pay any attention to these pleas? Evidence suggests he will not.
I should clarify from the outset that, as a Labour member, I want the Party to win in 2015 (and also to gain the lion’s share of the vote in May’s European elections).
But Miliband seems to be living in a world of his own, insulated from the rest of the Labour Party – not to mention supporters of Labour ideals who are not members – by a small group of (not-so-special) advisers who, it’s claimed, intercept any decent ideas before they get to the party leader and spin them until they turn to drivel. Whether this is true or not seems immaterial as this is the perception of the general public.
And perception is everything.
As I write this article I have just received a comment stating that “Miliband’s strategy for the next election seems to be a) to accept the Tory frame of reference for any given argument and b) to then concede the field of battle on that issue, whatever it is, without a shot being fired.” This is a common complaint, and Labour has no answer to it.
Why do Miliband, Balls, Tristram Hunt (notably), Rachel Reeves (lamentably) and all the other Labour frontbenchers blithely accept the Coalition’s terms of reference on any issue, against the wishes of their own backbenchers, their party as a whole and the public at large?
Are they really just a gang of greedy moneygrubbers, determined to screw the country for whatever they can get? That in itself would be a betrayal of Labour Party ideals and their constituency parties should deselect them if members believed that to be the case for one moment.
Are they a gang of neoliberals, their political philosophy so close to that of the Conservatives that you can’t get a credit card between them? This rings threateningly true in the cases of Oxford PPE graduats Ed Balls and Yvette Cooper, ex-Bank of England employee Rachel Reeves and Tristram Hunt. But Ed Miliband is (famously) the son of a Marxist. He, above all, should know better.
The trouble is, David Miliband is the son of the same Marxist and he was as much a part of the neoliberal New Labour Red Tory deception as Tony Blair and Gordon Brown.
Oh look – another comment has just arrived. “More people don’t bother to vote because they feel that we as a people have moved on and all we really want is people who will represent us honestly, by majority and with no hidden agendas, backhanders or lobbyists pulling the strings. I don’t see any evidence that the present government or the Labour Party are capable or willing to do just that… They should have the courage to change and become the voice of the people.”
Become the voice of the people. The meaning is clear – Labour is not currently representing anybody at all.
Is this true? Let’s look at some of the other comments on my (left-leaning, let’s not forget) blog. These are from people who are generally sympathetic to Socialism and who should, therefore, see Labour as the natural home of their vote. What do they say?
“[Is it] any wonder [that] 1. People don’t vote because they are seen as “all the bloody same”? and 2. The perceived differences have become so minuscule?”
“Until Labour wakes up and realises it is the welfare cuts that are a major concern to most of us and to anyone who has a conscience, they will lose the next election due to apathy.”
“Labour have to do something different to what they have up to now but they don’t seem to want to. Are they scared of being in government over a country in the state it is?”
“Labour have had four years to do something – anything – to fight against the welfare cuts, and to help the people they are supposed to be the party for! They’ve really done nothing when all is said and done.”
If Ed Miliband was reading this, I would be asking if he was getting the message yet (are you, Ed?) and what he proposes to do about it. You think not? Let’s have some more comments from people who should be supporting Labour – I’ve got plenty of them!
“There has been absolutely no fight in this opposition and I am ashamed of them.”
“People need a reason to apply their votes to Labour and Miliband-Balls are not providing them with one. They are sleepwalking into another hung Parliament and a very real risk of the Tories teaming up with UKIP. Then we’ll really see Nazism grip this country.”
“The would-be voters demand change and need bold new policies to blunt the Tory cutters. If the Labour Party cannot come up with policies which are radical then they don’t deserve to be in power at the next election, or ever.”
“Ed Balls worries me because he seems intent on copycatting Osborne. For example Osborne says he will run a surplus by the end of the next Parliament and Balls promises the same. Osborne say he will be introducing a Benefit Cap on social security spending on working age benefits (which could have devastating effects and lead to real terms cuts in benefits for years on end) and Balls says that Labour will vote with the Coalition to introduce it.”
“Surely we need some clear red water between Labour and the Tories? Surely Labour needs to differentiate itself more from the policies of the Coalition?”
“I sent an email to the Labour Party asking for its policy on TTIP (the rightly-feared Transatlantic Trade and Investment Partnership that will force employment standards down to third-world levels, or below), amongst other things. They were decidedly equivocal and I felt no reassurance at all. I think it’s about we faced facts, Labour aren’t being coy in a pre-election year to avoid frightening the horses, they really are just another pack of neoliberals.”
This is how left-wing voters (and the squeezed-middle waverers to whom Ed Miliband keeps trying to pander) see the modern Labour Party: Carbon-copy Tories with no fresh ideas who aren’t worth the effort of voting.
If any of Ed’s shadow cabinet is okay with that description, he needs to sack them and bring in someone with a clue. And he needed to do it last year.
If the Conservatives win in 2015, it seems clear that responsibility will lie as much with Labour’s failure to provide any clearly-visible alternative.
We have already seen carnage inflicted on the poor, the sick and disabled, and a Conservative-only government (or in collaboration withUKIP) would increase that bloodshed tenfold (senior citizens take note: the bribe you were given last week was a trick and if you vote Conservative, many of you will not live to rectify your error at another election).
Unless Ed Miliband sorts out his party – pronto – that blood will be on his hands as well, and the people will not forgive him.
Note that I did not say they won’t forgive Labour. I said they won’t forgive Ed Miliband.
Words cannot describe the way people feel at what has been done to them by the Coalition. If Labour reveals even the slightest element of complicity, I wouldn’t give a farthing for Miliband’s safety.
Vox Political relies on popular support for its livelihood!
This independent blog’s only funding comes from readers’ contributions. Without YOUR help, we cannot keep going. You can make a one-off donation here:
Alternatively, you can buy the first Vox Political book, Strong Words and Hard Times in either print or eBook format here:
Doesn’t he look like a puppet? In fact the correct term is ‘marionette’ – for a puppet on strings, worked from above. But who’s pulling Nick Clegg’s strings this time?
The Government is running an independent study into the impact of the Bedroom Tax, in order to find out if it is really possible for social housing tenants to move into smaller accommodation to escape its effects. The result should more likely be feared than welcomed.
Nick Clegg announced that the study was taking place in response to a Parliamentary question from Harriet Harman – but was immediately undermined by the Department for Work and Pensions. A government spokesman said the DWP routinely commissions research on new policies and an independent consortium was already carrying out evaluation work.
Clegg had to say he was taking action after his own party voted to change its policy on the Tax – the Liberal Democrats now oppose it – but this is not cause for celebration.
Who will carry out this independent study? We are told it is an “independent consortium” but what does that mean? What will be their terms of reference? What questions will they be asking and will they be the questions that need to be asked?
Observers should be raising serious doubts about all of these because this is not a government with a good track record on evidence-led policy.
We all know what this is about – the government’s hugely flawed scheme to claw back Housing Benefit cash from social housing tenants, taking 14 per cent of payments from those with one spare bedroom, and a quarter of the benefit from anyone with two. The Discretionary Housing Payment scheme for local councils was boosted to £60 million in anticipation of extra demand from struggling tenants.
It is true that evidence about the policy is conflicting. Lord Freud, introducing it in the House of Lords, apparently refused to listen to arguments that there were too few single-bedroom properties into which under-occupiers could downsize. Now he is blaming local authorities for the shortage.
The government said the policy would save £480 million, but the increased cost of DHPs must be subtracted from that, and also the costs of people who do manage to downsize. This could range from just four per cent of the 660,000 affected households to 20 per cent, depending on who you believe – a recent study by the University of York suggested that 20 per cent of households intended to move (which isn’t quite the same as actually doing it), but this was based on evidence from just four housing associations.
It seems unlikely that one-fifth of everyone affected nationally is moving to a different property – but even if they were, this would not create a saving for the government because it would have to pay out, not only increased Housing Benefit for those who have moved into smaller but more expensive private rented housing, but also Housing Benefit for people moving into the now-vacant larger social housing.
And then there are the people who cannot downsize but cannot afford the rent if their Housing Benefit is reduced. Recent reports had 50,000 households facing eviction – around one-thirteenth of the total number affected.
If they become homeless, local councils will have to find temporary accommodation for them – and this is paradoxically much more expensive than putting them in social housing, because they have to go into bed-and-breakfast rooms. Homelessness was already on the increase before the Bedroom Tax was introduced, rising from 44,160 households in 2011-12 to 53,540 in 2012-13.
Tax: Nobody likes paying it but progressive tax reform could be one of the fastest ways to rebalance the UK budget.
It seems I have been challenged. Commenting on my post ‘Iain Duncan Smith – what went wrong?’, a correspondent calling himself ‘Brian’ suggested I should use “a little grey matter and suggest where to cut instead”.
This is a question that has exercised my intelligence for much of the last two years, ever since it dawned on me that the current Conservative/Liberal Democrat coalition was not going to do anything at all to help the UK economy in real terms.
In fact we have seen them try to make it worse – look at Gideon George Osborne’s changes to tax laws, that make it easier for multinationals to put their profits into tax havens rather than pay the UK Treasury what it deserves; look at the way Workfare keeps unemployment artificially high; look at the proposals for a two-tier road tax system that will disproportionately affect small businesses.
In fairness, I haven’t updated my ideas over the 12 months since I have been writing the blog. What follows must stand as a document of what could have been done. I put together more than 20 ideas at the time. Some of them may be impractical now, due to the many and various incompetences of the current government. I will try to include the best.
This is looking like the first part of a series, as there is an amazing number of possibilities available. I’ll try to concentrate on just one issue at a time.
“What we need now is a deficit cutting policy aimed at increasing government income.
“There are three ways to achieve this. The first is for the government to stimulate a moribund economy by encouraging investment. This is the Keynesian solution that is proven to work. The second is to raise selective new taxes on those best able to pay them. This is possible. The third option is to tackle the tax gap.
“The tax gap has three parts. The first is tax avoidance. I estimate this to be about £25 billion a year. This arises from the exploitation of loopholes in UK tax law and between UK tax law and that of other states – especially tax havens. The second part is tax evasion – that is breaking the law. I estimate this to be £70 billion a year. H M Revenue & Customs claim it is much less, but their methodology for estimating anything but VAT evasion is very weak. Lastly, there is unpaid and late paid tax – currently according to H M Revenue & Customs at least £26 billion.
“Put these figures together and they come to more than £120 billion, or enough, at least in principle, to close the whole current government deficit.” – Richard Murphy, Director of Tax Research UK.
If we compare the estimate of the tax gap with the DWP estimate of benefit fraud, we can see that benefit fraud is less than 1 per cent of the total lost in the tax gap; tax is therefore far more important than welfare in the struggle to balance the UK budget book.
So the first measure must be to minimise personal and corporate tax avoidance by requiring tax havens to disclose information fully and changing the definition of ‘tax residence’; these two reforms are estimated minimally to yield £10 billion.
Introduce a 50 per cent Income Tax band for gross incomes above £100,000. This reform introduces a new 50 per cent band of Income Tax for taxable incomes above £94,000 per year (approximately £100,000 a year gross income). This would raise £4.7 billion compared with the 2009/10 tax system, or an extra £2.3 billion compared with introducing this band at £150,000 as proposed by the previous chancellor. (The Coalition has lowered the previously-existing 50 per cent band to 45 per cent, giving a £40,000 tax break to the richest in society when the UK economy needs the money far more than they do).
Introduce minimum tax rates. This reform introduces a lower limit to effective rates of Income Tax above certain levels of gross income. As gross income approaches each threshold, the personal allowance and other reliefs (for example, tax relief on pension contributions) are ‘clawed back’ at a high marginal rate until the average tax rate – as well as the marginal tax rate – on income above each threshold is equal to tax rates of 40 per cent and 50 per cent on incomes of above £100,000 and £150,000 respectively. Such a reform raises an additional £14.9 billion.
Introduce a special lower tax band of 10 per cent below the poverty line (below £13,500 per annum), while restoring the ‘basic rate’ to 22 per cent – in order not to hit the poorest hardest. This costs £11.5 billion, far less than the extra tax take outlined above.
Uncap National Insurance Contributions (NICs) so they are paid at 11 per cent all the way up the income scale (continuing to exempt pensioners). In 2009/10, employee NICs were payable at 11 per cent from £100 a week up to £884 per week – and at just 1 per cent above this level. Self-employed NICs have an equivalent structure based on annual profits, paid at 8 per cent up to profits of £43,875 and then at 1 per cent above this. Also, unearned income (for example, income from investments and savings) is not subject to NICs. This reform removes the upper threshold so that employee NICs are payable at 11 per cent on all earnings above £884 per week for employees and at 8 per cent on all profits above £5,715 per year for the self-employed. Additionally, all investment income above £110 per week (or the annualised equivalent) is made liable to NICs at 11 per cent. This results in further revenue of £9.1 billion; thus uncapping NICs would rake in a great deal of money. It would also turn NICs into a flat tax, making it ‘merely regressive’ rather than ‘über regressive’.
Increase the tax payable (higher multipliers) for houses in Council Tax bands E to H. This would raise a further £4.2 billion.
£5bn could be raised every year with an Empty Property Tax on vacant dwellings which exacerbate housing shortages and harm neighbourhoods.
Urge that all current small limited companies be re-registered as limited liability partnerships to simplify their administration and reduce opportunities for tax avoidance.
These measures alone are likely to bring at least £34 billion into the UK Treasury every year.
The Madness of George: Mr Osborne’s latest attack is on the smaller businesses and sole traders who prop up the UK’s economy. Does he understand nothing at all about his job?
It seems George Osborne wants to focus his next attack on the small businesses of the UK – the firms that form the vast majority of the nation’s business base.
Lunacy, you might say. Craziness. You may ask why he would want to do such a thing, and what evidence I have to suggest it.
Well, let’s start with the letters going out to 1,500 people suspected of taking part in a tax avoidance scheme – which is currently legal, although the BBC report suggests its legality will be challenged. These people are suspected of depriving the Treasury of £10 billion per year.
The National Audit Office said HM Revenue and Customs was dealing with a backlog of 41,000 cases of aggressive tax avoidance involving individuals and small companies.
That’s all very interesting. Why not write to the shareholders of the Thames, Anglian and Yorkshire Water companies, whose tax avoidance history received an airing in the press and on this blog very recently? The evidence suggested they were removing a combined total of £1 billion per year to tax havens offshore and, to me, it seems far simpler to write letters to three companies, and investigate them, than to 150 individuals.
Could it be because the water companies were exploiting tax loopholes that had been created especially for them, and other large businesses, by Mr Osborne himself in 2011?
Could it be that shareholders in those large concerns might also be donating money to the Conservative Party? Attacking them would be the political equivalent of self-harming, if that were the case.
So the focus of attack goes down to the smaller business or sole trader.
Were you aware that Mr Osborne is considering changing road tax rules, to introduce a new two-tier system?
It seems he wants to create a class system for the roads, in which second-class citizens will be licensed to use the smaller roads, while first-class citizens will be able to pay for the extra tax disc, entitling them to use the motorways.
I see that as an attack – on the private driver, yes, but also on the small businessperson. Think about it. Small businesses can spend a lot of time on the roads, zipping around between jobs. An extra expense on the balance sheet could be the difference between being a profitable concern and going under.
At a time when the UK is relying on small and start-up businesses to re-ignite the economy, this is nothing short of madness.
But then, when’s the last time anyone ever suggested George Osborne had sense?
The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.