Tag Archives: tax havens

Welfare? Rebels are right to fight these well-UNfair changes

It looks as though (as I write this, early on January 23) the UK Coalition government is about to lose yet another vote on changes to welfare benefits, in the House of Lords. Quelle surprise.

The changes (I refuse to call them reforms), dreamed up by Iain Duncan Smith, have been pilloried by the public as attacks on the poor, and it’s easy to see why. The Guardian, for example, compares two families.

“One is an Islington couple who have never worked. The other is an Oldham family with four children, where the working parent has just lost his or her job,” writes Tim Leunig. “The Islington couple currently receive £250 a week in housing benefit, while the Oldham family gets only £150.

“Times are tough, and the government wants to save money. Which family should have its housing benefit cut? George Osborne has chosen the Oldham family. He is cutting its housing benefit to £96 a week, while allowing the Islington couple to continue to claim £250 a week for as long as they like.

“That is the reality of the £26,000 benefit cap. It takes no account of your employment history or family size. So a central London couple who have never worked are unaffected, because they currently receive less than £26,000 in benefits. But a large family – even in a cheap house – will be hit. That is not sensible.”

But that is the problem with the Tories – no eye for detail. They like to simplify (I believe that’s their euphemism) the benefits system – the classic example being the new Universal Credit, with which they intend to replace a whole bundle of dedicated payments. The problem is that this creates far more problems than it solves and will end up costing far more money. Count on it.

There is grim humour in the fact that this failure to understand the nuances, the details, of the system has become the defining characteristic of Tory leader David Cameron, who was described by Peter Snowdon, in his book Back From The Brink – The Inside Story of the Tory Resurrection, as having “an eye for detail”!

(Snowdon also states that Cameron has a “flair for words”. Considering the trouble his turn of phrase created for him after he described sitting opposite Shadow Chancellor Ed Balls as being similar to facing a man with Tourette’s syndrome, this also seems an unfortunate description)

David Cameron is a loser. His first attempt to get into Parliament was in 1997, when he contested the Stafford seat. He lost. Nobody should ever forget the fact that, with Labour at its lowest point in 13 years, Cameron totally failed to win a Parliamentary majority that was his for the taking in 2010.

And late last year, he managed to use the UK’s EU veto to sideline this nation from the main action in restructuring the Eurozone, effectively isolating us from decisions that directly affect British trade with its largest partner. This is the man who once declared (about Tony Blair): “The socialist Prime Ministers of Europe… want a federalist pussycat and not a British lion. It is up to us in this party… to make sure that lion roars, because when it does no-one can beat us.” In the event, it turned out that the roar was more of a mewl, and no-one outside the UK really noticed. Who’s the pussycat now, David?

People like Lord Ashdown, the former Lib Dem leader, have already stated they will oppose the welfare changes. They have realised that the Coalition is an alliance of losers and want to distance themselves.

However, both Cameron and his Tories are faring well in the opinion polls at the moment. Why?

It could be because Labour, under Ed Miliband and the aforementioned Mr Balls, has not created a well-defined image of itself as the opposing political force. The Labour leadership recently stated it would not reverse any of the Coalition’s cuts if it came into power – creating a stink among the trade unions and collapsing support from party members. If the Labour Party won’t change anything, why support it?

To me, it seems that the two Eds are trying to engineer a repeat of history. In the mid-1990s, according to George Bridges (the Tories’ former campaigns director), Tony Blair was “picking up Tory principles that he felt were appealing to middle England and playing them for all they were worth”. He also promised not to raise Income Tax and committed Labour to Tory spending targets for two years after being elected.

But the political landscape was very different in 1997. Inflation had been curbed and the economy was fairly secure, and the UK headed – under Labour – into the most sustained period of growth it had ever known (or certainly the most sustained in decades).

Now, that bubble has burst and we are, as a nation, having to pay. The Coalition, headed by the Tories, has dictated that the poorest of us must pay the most, and that is a weakness that Labour should exploit.

Labour should be attacking the belief that the economy is safe with the Tories. It isn’t. They took a national economy that was showing the beginnings of strong recovery and choked it off with their austerity programme; also, a programme that benefits those who are already rich while forcing the poor, the disabled, and the rising numbers of jobless into increasing penury is not good stewardship. How can it be? With more people out of work, whether they are receiving benefits or not, fewer are contributing taxes to the Treasury to help pay off the national deficit. The recovery cannot happen.

Labour should be attacking the culture of greed and arrogance that Mr Cameron tried to shake off whilst in Opposition, but has reared its ugly head again, now that the Tories are in office.

Labour should be attacking the divisions in the Tory Party – Europe is an example of this. Conservatives are held together, not by any strong, unifying ideals, but by the thirst for power and money, and members of the Party have widely varying views on almost any issue you care to put before them. It’s just a matter of finding the right pressure-point and applying enough leverage, and they’ll splinter.

And then there’s Tory sleaze. This is never far away. Who can forget the extramarital affairs enjoyed by multiple Tory ministers in the administrations of 1979-97, or ‘Cash for Questions’, to quote just two famous examples?

All Labour has to say about its own policies, in government, is that the Party will do what works. The Tories have proved themselves to be wedded to ideological programmes – stripping back the welfare state, creating tax havens so the rich can keep their money and not contribute to public services, and so on. These are harming the nation. In contrast, Labour need only state it will level up the playing field, re-balance the nation’s finances, and set us up to get back on our feet, and the votes should come rolling in.

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When you can’t do right for doing wrong

An acquaintance of mine collapsed at work a few days ago, I’m told. Apparently he’s been having trouble reconciling his love life with his duties as a father and it has, in colloquial terms, ‘done his head in’.

As I understand it (from a mutual friend down the caff, so you know it must be true), this chap has managed to start a relationship with a young lady half his age, who is therefore closer in maturity to his teenage daughters than to the gentleman himself.

As a result, rivalry as erupted between the girlfriend and the daughters, with the result that several of them have threatened to move out on more than one occasion.

But he seems to be totally smitten with his paramour, to the point where he spent a small fortune taking her to the theatre in London at Christmas (to see Les Miserables, I believe. What an appropriate title. If they’d gone to Cinderella, they might have been having a ball by now).

It seems that, after his collapse, our old boy was saying he had so many different things going around in his mind, it had made him completely dizzy, confused, and disorientated.

I can’t really sympathise too much. I think he’s trying to maintain a situation that is untenable. In my opinion, he wants to keep his relationship at the initial, euphoric, erotic-romantic heights at which it probably started, and it can’t be done. Every lasting relationship eventually settles down into something a little less fragile, a bit more durable, and a lot less exciting. I’m sorry, but that’s the way it is.

In trying to stay at the dizzy heights (probably because he thinks that’s what the girlfriend wants), my acquaintance seems to have neglected his duties to his daughters somewhat. No wonder they’re angry with him.

Now they’ve reached the point where everybody’s in an entrenched position and nobody’s willing to negotiate at all. No wonder he fainted.

If I was in that situation, I’d turn to the girlfriend and say, “Things have to change. I have a responsibility to my girls and need to look after them. You will receive less attention and fewer treats because I can only stretch my time and money so far. That’s the way it is. If you don’t like it, maybe you should leave. I don’t want to see or hear about any animosity between you and the girls about this; if that happens, you should leave. I’ll be heartbroken, but I know where my duties lie.” Or words to that effect. It’s the only fair solution.

I say this from the vantage point of a relationship that has lasted nearly 12 years now. Mrs Mike and I fell from the lofty plateau of mutual infatuation long ago and our life is now a concentrated effort to survive, really. We manage all right.

We still argue, though. Of course we do. Only today she was telling me how little I do for her around the house and that I should lay off all those silly frivolous things I do in my office room – like this blog.

On the surface, that’s an attack on the choices I make about my leisure time, but if that’s what you thought, you’d be wrong. It’s about money.

Mrs Mike is disabled; I’m her carer. The benefit money that we receive is not enough to pay all our outgoings, so I have to go out and work to earn some more. When you’re on Carers’ Allowance, this is permitted, within limited parameters. Most of the time, when I’m holed up in the office, I’m either working, or I’m working on getting more work.

The blog is what I do to relax. Writing about heavyweight subjects like disability benefits, depression and suchlike is what I do to relax. Get used to it; you talk about what you know.

So she’s really arguing that I should spend less time ensuring our survival and more time doing housework. This would be nice, but I simply don’t have the luxury. I’m caught between a rock and a hard place.

This is why – and here comes the politics, in case you were wondering if I’d ever get to it – the debates over the Welfare Reform Bill, coupled with the revelations that Vodafone might owe even more billions in unpaid taxes than we had previously suspected, greatly concern me.

The government wants to cut £9.2 billion from its budget for services and benefits payable to disabled people, at a time when we find that Vodafone might owe £8bn in unpaid taxes that HMRC haven’t demanded! That would nearly pay what the Coalition wants to cut!

Amounts payable from other companies would clear that deficit completely, with plenty to spare for other benefits and public services the government is determined to cut – or for clearing the much-debated national deficit.

Why isn’t it happening?

Well it’s a choice, isn’t it? The Conservative-led coalition wants to cut public services and is using the deficit as an excuse to do so. In order to make this strategy succeed, it must also ensure that those who pay the highest taxes receive tax breaks of some kind. It’s called ‘Starving the Beast’ and I refer to it in another blog here.

The reason they have tabled legislation to cut benefits for the disabled isn’t that they have to; it’s that they want to.

If the proposals that were blocked by the House of Lords on January 11 had gone through – and if those which deal specifically with Disability Living Allowance, which go to the vote next week, do get passed, there will be many more arguments about money and the allocation of carers’ time, up and down the country. Perhaps couples will split, creating an even greater burden on the country as they move into different residences and claim Housing Benefit (the government was defeated in its plans to cut this in December last year).

Looking at the government’s plans in this way, and this is only my opinion, they make about as much sense as my friend’s confused love life. At least he’s trying to do what’s right.

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A few more notes on my ‘Tory days of Christmas’

Day 6: Raised VAT

This one speaks for itself, I hope. VAT was raised from 17.5 per cent to 20 per cent, in a regressive tax move that hits the lowest earners far harder than the wealthiest. There are fairer ways of bringing £12bn per year into the Treasury and, by the way, doesn’t the amount accrued depend on the amount that people spend? With their spending power reduced, that amount must diminish. I wonder if the Coalition ever considered that.

Day 5: Five Days Of Riots!

Lots of reasons have been given for the now-infamous ‘Five Days in August’. The spark was the alleged shooting, by the police, of a young man in Tottenham who they claimed was carrying a gun. However, many believe that deprivation and a lack of hope had much to do with the way the rioting that followed spread like wildfire through London and then into other towns and cities across the UK. Government supporters have claimed that much of the rioting was carried out by opportunists who wanted to, for example, nick a new pair of trainers from Foot Locker, but this argument skims over the fact that the riots had to be going on in the first place, in order for this opportunism to break out.

Here’s some further reading:

The competing arguments used to explain the riots

Public lacks confidence in Tory leaders following disturbances

Rioting is the choice of young people with nothing to lose

Day 4: Tax-havens for their wealth

There is a theory that the current UK government is carrying out a policy known as ‘Starving the Beast’. In this instance, ‘The Beast’ is government spending and the aim is to diminish the amount spent on public services as much as possible, as quickly as possible. The rise of the current national deficit – which, let’s remember, is not as high as it has been for most of the last 200 years – provided a good excuse to claim that austerity is the way forward (it isn’t; more on that later), and that spending needed to be reined in.

Alongside this, as practised in the USA by that genius and rocket-scientist George W. Bush, come efforts to ensure that the wealthiest in society – who should, by rights, contribute the most in terms of tax, which should then be spent on public services – get to keep just as much of their wealth as possible. To this end, governments engaged in ‘Starving the Beast’ ensure that their wealthiest supporters can squirrel their cash away in tax havens, and that loopholes in tax law allow them to do this, avoiding the necessity of payment. We have already seen that HMRC has been engaging in ‘sweetheart’ deals with large firms such as Goldman Sachs, allowing them to write off large amounts that are owed to the Treasury (and therefore, by proxy, to you and me). Here’s some further reading on the subject of tax havens:

To us, it’s an obscure shift of tax law. To the city, it’s the heist of the century

Fury over UK-Swiss tax evasion deal

The tax haven firms running our public services

Tax haven responses underline need for government action

Day 3: Privatised health

I’ve got more material about this than everything else on the list. It seems that the Coalition’s plan to privatise the health service has become the main issue of this Parliament – and rightly so. I call it a plan to privatise because that’s what it is, never mind the rhetoric and spin that they give it. They want to allow private companies in to run NHS services – that’s privatisation. It means that some of our tax money will be used to provide profit for these firms, rather than paying for much-needed healthcare. And this in turn means that some of our money will go into tax havens, as many of these firms operate from locations with tax haven status. It means those amounts, paid by the citizens of the UK in good faith, will do nothing other than fill the foreign bank accounts of already-wealthy businesspeople. Do you consider that a responsible thing to do with our money? Because I don’t.

At the very end of 2011 it was announced that 49 per cent of NHS hospital space is to be given over to private patients, in an attempt to help the NHS pay its bills. This may tie in with a narrative that Andrew Lansley, the Health Secretary, was trying to put out last year – that Labour initiatives had left hospitals in dire need of funds. That didn’t work at the time because the hospitals themselves complained that his figures were inaccurate. More importantly, though, it points towards a future in which the Health and Social Care Bill has become law, in which hospitals will be unable to limit the number of private cases they have to take on. This will mean that NHS patients must join an ever-lengthening queue for care, if they can’t afford to pay for it. In a previous blog, I suggested that William Beveridge must be spinning in his grave. I have a feeling that, because of the above, Aneurin Bevan’s body may have also become a whirling dervish. Here are just some of the many references relating to this:

Andrew Lansley bankrolled by private healthcare provider

Revealed: the pamphlet underpinning Tory plans to privatise the NHS

Department of Health guidelines falsely inflate NHS costs

What MPs must know before they vote to wreck the NHS

The end of the NHS as we know it

Lansley’s unhealthy double whammy: what you won’t know or find out about the NHS

NHS private income cap to be lifted

Hospitals furious at Lansley’s debt claim

Health Secretary must reveal DOH assessment of restructuring costs (Despite the fact that the government has been ordered to reveal the extent of the risks that his shake-up of the NHS poses for the service, the government is still, at time of writing, refusing to publish the risk assessment – illegally)

Andy Burnham: These health reforms are an affront to democracy

NHS executives told to resign under plan to cut trusts

Day 2: Sky-high student fees

This was the move that brought shame upon the Conservatives’ Liberal Democrat partners, who had campaigned during the 2010 general election against raising fees for college and university students. The top end of student fees was raised to £9,000 per year. The Tories promised us that only a very few universities would charge that much – and the majority duly announced that they would be charging the maximum. Students protested, organised marches against the change, and got ‘kettled’ by the police – who have, once again, become political pawns of a Conservative-led government, after a pleasant break under Labour when they were allowed to actually do police work. Here’s some further reading:

Why aren’t we supporting the students? Maybe we’ve been psychically kettled

What really happened in Trafalgar Square

Day 1: And a broken economy!

So much has been spoken and written about the economy – how it got into its current condition, who’s to blame, and what’s to be done, that it almost seems pointless to mention it here. But I’m going to, anyway!

Some say that responsibility lies with Gordon Brown, who failed to regulate the banks strictly enough, allowing them to behave irresponsibly, providing unsecured loans to people who could never afford to pay them back, and that this led to the credit crunch of 2008 and the subsequent actions that led to the growth of the national deficit – Mr Brown bailed out the banks to stop them all collapsing in a domino-effect sequence. This seems completely wrong-headed to me. Mr Brown was persuaded by leading bankers of the time that they did not need heavy regulation and were perfectly capable of running their own businesses in a responsible manner – and this is what he expected them to do. Therefore, it is with those bankers that the blame lies, and it is a sad fact that both the previous Labour government and the current Conservative-led government have let those people get away with it. Labour could be excused, as there was very little time to go chasing the bankers before the election of 2010. I wonder what excuse the Coalition has?

The Conservatives, propped up by the Liberal Democrats, got into power on a platform of austerity. I have already mentioned the ‘Starving the Beast’ policy that, in my opinion, lies behind this. Any Liberal Democrat who dismisses the possibility out of hand is, also in my opinon, a fool and a Tory dupe. In the meantime, the figures speak for themselves. In the 20 months since Mr Osborne took over at the Treasury, growth figures have been revised down time and again, and now we are being told we will go back into recession this year. Austerity has failed. Mr Osborne – and his leader, Mr Cameron – has lost the argument.

Do they admit it? Do they accept that they need to invest in jobs and growth? Not a bit of it. They are adamant that if they carry on, the economy will turn around and parts of the private sector (that don’t actually exist) will inject the necessary cash (that also doesn’t exist) to get the country on its feet again.

My opinion is that, when the economy does finally turn the corner (and it will, eventually), it won’t have anything to do with Mr Osborne or the Conservative Party (and less to do with the Liberal Democrats). In fact, I think they’ll probably be the last to know. Sadly, I’m sure they will still trumpet it to the rooftops as their achievement. Here’s the further reading:

Osborne given stark warning on cuts’ impact

Now the cuts are biting and the figures are terrible

The case against austerity

For every £4 spending is cut, it only cuts borrowing by 75p

All pain, no gain: forecasts predict longer dole queues and higher deficit

Keynes was right

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