Monday, 27 January 2014

David Cameron hates tax but the public are getting the fairness message.

David Cameron used a speech to the Federation of Small Businesses today to say that he doesn’t like taxes, I mean he really doesn’t like them; hates them in fact.

What he said was ‘I’m a tax cutting Tory. Frankly I don’t really like any taxes.’ Who’d have thought it eh? People who will get the most awful shock if they ever find out what bears get up to in the woods I’d imagine.

Here’s the kicker though, as Citizen Dave puts it ‘You can only keep taxes down if you’re prepared to take difficult decisions about spending,’ so there you have it, if you don’t want to be squeezed until the pips squeak a lot of poor people who don’t vote Tory will have to have the services they depend on cut to the bone, and they say politicians are professional cynics who play to the electorate’s most base instincts.

He also promised that his would be ‘the first government in modern history that at the end of its term has less regulations in place than at the beginning.’ This, he assured his audience would let small businesses get on with ‘what you do best enterprising, innovating and most importantly creating jobs.’

Personally I doubt Mr. Cameron cares a fig for small businesses, if he did he’d do a lot more to stop a handful of large companies hovering up government contracts and take a tougher line with corporate tax avoiders. The purpose of the speech was to respond to the announcement made by shadow Chancellor Ed Balls that were Labour to win the next election they would reinstate the 50p tax rate for high earners.

Earlier he had described the policy as an ‘anti-business, anti-enterprise, anti-growth measure, politically convenient but very, very bad for the economy.’ He didn’t go so far as to call Ed Balls the anti-chancellor, but the message is if given control of the economy it would only be a matter of time before the sun fell from the sky and life as we know it came to an end.

Defending the proposal on the BBC’s Andrew Marr show yesterday Ed Balls said reinstating the 50p tax rate for high earners was ‘a fair way to get the deficit down. The phrase is we’re all in it together that is part of the policy.’ He denied the policy marked a return to 1980’s style old Labour and was instead a response to the ‘failure’ of George Osborne’s austerity policies.

Criticism of raising taxes for the highest earners came from a number of other business figures, Digby the Lord (gawd almighty) Jones, briefly a trade minister in Gordon Brown’s government described is was ‘lousy economics’ based on a desire to ‘kick’ anything that creates wealth. Xavier Rolet, Chief Executive of the London Stock Exchange said it would discourage businesses from investing in the UK.

The public though seem more supportive, back in 2012 when the Chancellor announced the top rate of tax would be cut from 50 to 45 pence 55% of voters wanted to keep the higher rate; a snap poll by Survation for the BBC showed 60% would like it brought back.

On one level the argument over the 50 p tax rate for high earners is a storm in a teacup, the sum raised is paltry in public finance terms, anyway any plutocrat deserving of the name will in all probability have a good enough tax lawyer on hand to sidestep the whole thing.

Anyway it probably won’t return because Labour still don’t look capable of winning the next election outright. If, as looks ever more likely, 2015 produces another coalition there is a good chance of David Cameron managing to string one together from a mixture of UKIP newbies dazed by their good fortune and the battered remains of the Liberal Democrats.

On another level though it is hugely informative since it suggests a new and possibly more positive direction for our political culture.

For a start it shows that David Cameron is more than a little rattled, not so much by anything the none dynamic duo of Milliband and Balls have done so much as his inability to convince the public that his government really do share their pain. Despite loud protestations from George Osborne that the recession is coming to an end and blue skies are around the corner most people feel no better off than they were a year ago.

More importantly public support for taxing high earners more marks a significant sea change in attitudes towards fairness. Suddenly working out a fairer way to share wealth is no longer a lefty project, it’s the common currency of conversations in pubs and at bus stops across the land.

In response all David Cameron can do is fall back on tired lines about keeping taxes low and cutting red tape that even a tame audience must have heard ring hollow dozens of times before. He looks and sounds like the leader of a government that has run out of ideas before the end of its first term in office.

Promising to tax high earners more isn’t a magic bullet and there is a strong possibility Labour might even do some nifty footwork and move away from the whole idea when it comes to writing their manifesto. However, now the fairness genie is out of its bottle it will be impossible to put it back in again.

If the Labour Party want to be relevant again and to stand a real chance of winning power outright in 2020 they need to find a way to make a vaguely well intentioned aspiration into a workable policy; then hunker down behind it and get ready to take flak from vested interests with everything to lose. Change is always possible; but bringing it about is never easy.

Sunday, 19 January 2014

Cameron offers cash for fracking as IDS lives down to expectations

The government is to let councils that allow fracking to take place within their boundaries to keep 100% of the business rates generated. Chancellor George Osborne is also set to offer shale gas extraction companies the ‘most generous tax breaks in the world’ in return for setting up shop I the UK.

This isn’t a bribe though, oh dear me know; perish the thought. They don’t have to go to the trouble of bribing anyone, not since planning minister Nick Boles announced last month that fracking sites could go ahead without local people being consulted or even informed.

In a written statement reported by Mr Boles says the current rules meant a ‘disproportionately large number of individuals and businesses’ need to be informed that drilling is about to take place in their neighbourhood. The cheek of people, fancy their wanting to know someone is going to be fracking around with the ground under their feet; the only thing they need to know is their place.

A spokesperson for Friends of the Earth described the move as ‘a new low in the government’s attempts to curry favour with local people.’

Lawrence Carter of Greenpeace said Mr Cameron was telling councils to ‘ignore’ the risks of fracking ‘in exchange for cold hard cash.’

Even by the not very high standards of the Cameron government this marks a new low for political cynicism. The Prime Minister knows only too well that it won’t be prosperous Tory councils in the leafier corners of the home counties who will be tempted to take a gamble on the risks fracking may pose for the future in return for a slug of desperately needed cash now; it will be bust ones in the struggling North where his party Hs few votes to lose.

The people living in areas where fracking will take place though have lots to lose; almost everything in fact.

Leave aside the environmental impact of fracking, over which scientists are still arguing the whole project is being sold to them on the basis of a huge con trick. The promised jobs bonanza is unlikely to materialise, shale gas extraction companies will bring in their own specialist staff from outside and once the reserves are used up they’ll pack their bags and go away again. As for the money generated by the business taxes so generously handed over to councils, their accountants are doubtless already planning some clever weaves and turns through to tax laws to minimise the sum paid, and we all known how brave the government is when it comes to standing up to corporate tax dodgers.

Anyway, is cheap gas really worth the potential damage to the environment caused by fracking? Probably not, with a little imagination and some courage the government could produce similar results from investing in green technology and renewable power; what a shame they are sadly lacking in both.

What are we to make of the antics of hapless French president Francois Hollande, just as he was about to announce a plan to revive the flagging Gallic economy he has been engulfed by a tsunami of scandal over his extramarital activities.

Viewed from this side of the Channel it is surprising that nobody has even suggested that a senior politician who turns his private life into a sort of Brian Rix farce might think about tendering his resignation. Were a British Prime Minister to be even suspected of playing away he would be out on his ear quicker than the Daily Mail can say moral panic.

What really mystifies me though it just what the frankly dull Mr Hollande could have done to capture the affections of two intelligent and attractive women. If nothing else it proves that power, even when ineptly wielded is an aphrodisiac.

It’s that man again, Work and Pensions Secretary Iain Duncan Smith I mean, this week he risked accusations of homophobia by calling Labour MP Chris Bryant a ‘pantomime dame’ during a commons debate.

What he said was ‘I know Christmas is over but I think one of the pantomimes left a pantomime dame on the front bench.’ What a rib tickler eh; laugh, I thought they’d never start.

Mr Bryant has previous form when it comes to attracting playground taunts from cabinet members, in 2010 George Osborne also called him a ‘pantomime dame’, though to his credit Boy George did have the grace to apologise.

The standard od witty banter in the commons has never been high, but when someone like IDS sinks to a new low it seems all the worse. Not too long ago he was being touted as if not a ‘good Tory’ then at least one who was willing to try and understand how people who don’t spend their weekends on the grouse moor live.

This cheap crack along with his high handed attitude to the pain caused by his benefit reforms just shows that Tories change their attitudes about as readily as leopards change their spots.

Ambitious Labour Shadow Education Secretary Tristram Hunt wants to give teachers an equivalent status to doctors and lawyers by licensing them to practice. His intentions are good, but the thinking behind them is flawed.

The status of the medical and legal professions has declined massively in recent years but what kudos they still have depends on both having a huge degree of autonomy. Politicians tread carefully around their interests, not least because there has never been a shortage of doctors and lawyers with second careers as politicians.

Their treatment of the teaching profession is far less gentle, its significant feature is a tendency to meddle with anything and everything and then to go on and meddle with it some more for good measure. For that reason a licence to practice won’t be a passport to respect for teachers, it will be just another bureaucratic hurdle thrown in their path.