Miliband hollandaise..........

It is no easy task finding a way through the thicket of Miliband’s economic and fiscal ‘policies’, so let’s get hacking.

 

First up, there is his intention to restore the 50% income tax rate.

 

This was not introduced by Darling as a fiscal measure. It was purely political, an IED left by the departing Chancellor to discomfort Osborne. Now Ed thinks it’s a vote winner in the belief that the politics of envy nearly always is. He is right, of course – up to a point.

 

The tax raised £100,000,000, about enough to buy a couple of penthouse apartments in a fancy part of London, or two Premier League soccer players. But it will do much more than £100 millions’ worth of damage to Britain’s image and attractiveness as a place to do business and to encourage the brightest and best to come and work in the UK. Foreigners who might have brought investment and enterprise to Britain may well go elsewhere.

 

Top rates of tax elsewhere are 41% in Ireland, 45% in Germany and even in France it is 45%, disregarding the 75% wealth tax for earnings above €1 million. And the UK’s competitive advantage in its largest sector, financial services, will be under threat from low-tax regimes, such as Singapore (20%), Hong Kong (17%), and Dubai (zero).

 

Already 30% of all income tax is paid by 1% of taxpayers. How’s that for equality, Ed?

 

In any event, it is not difficult to avoid getting into the top tax band by some perfectly legal legerdemain.

 

Next is his assault on the banks.

 

This has already caused a sharp drop in share prices, which has in turn reduced the expected return on selling taxpayer-funded banks. He intends to break up the larger banks, as if he had the remotest idea about the optimum size for a bank. If this happens, early casualties will be small businesses because the need to downsize will result in smaller and higher-risk accounts being jettisoned.

 

He promises to freeze energy prices. The immediate effect would be to reduce investment in energy companies, and that means lower capital investment in desperately-needed new power generation.

 

Perhaps remembering the Marxist principles he absorbed in the parental home, he proposes to confiscate house builders’ land banks. He clearly understands little about the house-building industry. Land banks are absolutely essential for forward planning, security for funding, and to predict the bureaucratic delays by the planning authorities which are the greatest source  of under-achievement in the industry. He also proposes to launch state-funded competition to tackle the wrong issues in the wrong way.

 

His role-model is surely President Hollande, whose addle-pated policies for getting France out of the economic merde are higher taxes, a larger state and anti-business.

 

Or perhaps it is his former mentor  - the previous Prime Minister.

The 'clout' of the gay lobby...............

According to the NSO, the gay population of the UK is 1.6% of the population, so how does it come about that it is so hugely influential out of all proportion to numbers in law-making, politics, and society generally,  promoted by no less than 13 ‘gay’ rights national organisations.

 

There is a whole body of law dedicated to ‘gay’ rights – adoption, discrimination at work, civil partnerships and much more. If a crime is motivated by homophobia the sentence is tougher. With the exception of the ‘hate speech’ aspect all this is civilised and reasonable; (all ’hate speech’ is inherently oppressive and an affront to free speech, at times carried to the point of absurdity, such as the arrest of a student for suggesting that a police horse was gay).

 

 ‘Hate speech’ is a crime of its own, but it only cuts one way. Use the word ‘ginger’ and the ceiling will fall on you, as Jeremy Clarkson discovered. But if a ‘gay’ uses the word ‘breeder’ absolutely nothing will happen. You may use ‘queer’, but only if you are.

 

Equality of treatment for sexual minorities is the mark of a civilised society. Over the centuries the treatment of male homosexuals has been a blot on Britain’s legal and social history.

 

The Buggery Act of 1593 prescribed hanging. Imprisonment, stiff fines, beatings were the lot of gays. Chemical castration was used, as in the disgraceful case of Alan Turing. The personal consequences of being ‘outed’ were colossal; loss of employment, social ostracism, ruination of career, suicide – all for ‘cottaging’, loitering in or near a gents toilet.

 

The legal sanctions were abolished post-Wolfenden, but not the social stigma. Even in the supposedly liberated ‘80s, discrimination was rife. The Tory MP, Harvey Proctor, was hounded out of his seat after he was convicted of a minor offence. Now the prevailing attitude seems to be that people are not particularly bothered about sexual orientation.

 

This is not so in too many parts of the world. At this time, Uganda is proposing life imprisonment for homosexual acts. Gays go in danger of their lives in Nigeria and other African countries. Jamaica is intensely homophobic. As for Islamic countries……………

 

It is assumed that gays want to be seen as ‘normal’. And why not? In many cultures homosexuality is a matter of indifference.

 

So why does the gay community act so ‘in your face’, with their ‘gay pride’ marches and other unwarranted displays of blatant homosexuality, which most ‘breeders’ will find inexpressibly vulgar, offensive and repellent?

 

On a different plane, we have had the politically damaging, divisive debate on gay marriage. In itself this is an oxymoron; ‘marriage’ is the union of a man and woman for life (hopefully).  The House of Commons may have many powers but changing the English language is not one of them. But it was pushed by the gay lobby, even though a tiny minority of gays will take advantage of a law that gives no practical advantages that are not conferred by a civil partnership; gesture politics at its worst that caused massive divisions in the Tory grass roots.

 

And what is this ‘coming out’ malarkey all about? Who cares,  unless sexuality has some relevance. A few days ago an obscure American footballer or some such declared that he was gay. How this is of interest to anyone except his team-mates is beyond comprehension.

 

If gays wish to  be regarded as ‘normal’ than perhaps they should behave ‘normal’, to be as discreet as heteros in their sexual lives. Few people are in the least interested in what other people get up to in private.

 

As the actress Mrs Pat memorably said ‘It doesn’t matter what you do as long as you don’t do it in the street and frighten the horses’.

What is it with Obama?

A question from GB:

 

What do Americans really think of Obama?

 

The ether is full of venomous blogs calling him a socialist, a liar, a foreigner, a socialist, a business-hater and much more besides. It’s just as well that US defamation laws are much more relaxed than ours.

 

The degree of vilification is breath-taking. Some of the cartoons are an affront to decency.

 

Was there ever a time when POTUS was subject to this torrent of abuse? American tradition is that regardless of the incumbent the office of President is treated with respect. Dubya took a lot of stick, but it was mostly good-humoured and focused on his malapropisms, many of which were pure invention (he never did say that the French have no word for ‘entrepreneur)’.

 

I note that his approval ratings have gone far south, but they are far above those for Congress. He started with so much hope and enthusiasm. What has gone wrong? His domestic policy is obscure and his foreign policy non-existent.

 

Politics itself seems to be in a bind. The Constitution is predicated on compromise. This seems to be almost totally absent, with Congressmen interested only in re-election without any regard for the big issues. Inter alia, it keeps buggering up O’s painstakingly crafted FTAs. The Tea Party mob comes across as right-wing extremists with no interest in democracy, only in imposing their views on the majority Republicans. The consequence seems to be widespread disillusion with the political process and withering contempt for its practitioners.

 

Politics in the UK is a brutal pastime; PMQs are a blood-sport. But everyone knows the boundaries between what is and what is not acceptable, and the electorate would not accept the character-assassination that is commonplace in the US, or indeed the muck-raking that goes on simply to besmirch a character which surely deters  sound people from offering themselves for election.

 

And, of course, defamation laws are much tougher under English law, with Judges and juries tending towards the plaintiff.

 

A reply from Texas:

 

There has been no marked change in these attitudes except for a minority of thinking people who initially supported O for their own reasons, but who have since changed their minds based on his antics over the past 5.5 years. If an election were to be held today, O would win. Why? Because of  our changing demographics. O has the black vote, the Hispanic vote, the youth vote and enough of the liberal white vote to tally over 50% of the electorate.

 

Our population is kept so much in the dark with respect to international news that we could easily believe O has singlehandedly upstaged China, kept Russia in abatement, brought warring factions in Syria together, put Israel in its place and restarted relations with Iran. The mainstream media continues to dote on and revere almost every word Obama utters while ignoring almost completely his lack of compromise, his abuse of power and the various scandals in which he has been involved, e.g. NCA, IRS, Benghazi, Fast and Furious.

 

Untested rumours abound that Michele Obama is livid with O's carousing and lack of family solidarity She hopes to get even with some post-tenure actions beginning with a divorce. Meanwhile, she is gadding about in designer frocks while bemoaning the status of our burgeoning poor classes.

 

One might say with respect to abuse of power, that the US Constitution is predicated on the concept of compromise. I might trump that by suggesting it is predicated on the balance of power. By averting Congressional oversight through very iffy Presidential Decrees, O has gone way out of line and risks being challenged through impeachment.

 

Although unlikely to be successful, such action would serve notice that our dear leader has gone seriously over the top. It is abundantly clear to many political pundits that O's pen and phone style of leadership violates the Constitution by impinging upon Congressional powers. At the same time, O has pretty much ignored the Supreme Court which, in the end, may well decide against him should embryonic legal efforts to curtail him through adjudication based upon abuse of power.

 

Meantime, back in the Senate, Minority Leader Jon Bohener has managed to tone down Republican antipathy against O to the point where the annual issue over default spending limits will not be contested. This is a wise move as Senate Republicans, especially those of the Tea Party persuasion, were becoming labelled as spoilers and sore heads over their past antics to embarrass, curtail and generally hamstring Presidential spending programs.

 

This is not to say, however, that our ultra Conservative members of the Senate and House have been outflanked. They just got smarter and will surely not pull any punches over future spending and budgetary issues.

 

 

All in all, most Americans who dislike O  are more and more content to wait him out. They will focus immediate efforts at gaining a Republican majority  in the Senate and holding on to their majority in the House while simultaneously planning for a decisive Republic win in 2016. 

Where are we going?

At the start of a New Year the futurologists emerge in force. They are usually wrong, sometimes hilariously so. In ‘The Witch Doctors’, in which some years ago the authors put the gurus through the salami slicer, they recount how at the end of WW1 there was a solemn prediction that the number of cars on the road could be limited by the supply of chauffeurs; another that the oil would run out in 1973.

 

What is clear is that the two key emerging issues are energy and climate-change.

 

There have been two seismic shifts in perceptions about energy supply.

 

Five years ago it seemed as if nuclear was the way to go. Since Fukushima, enthusiasm has dwindled. Some countries are in ‘wait and see’ mode; others, notably Germany, have turned their faces against it. And there were assumptions that the US was running out of oil. Since then, crude oil output has more than doubled and imports have dropped by around 40%. It was predicted that the US would become the largest importer of LNG. But due to advances in fracking, it is now set to become a net exporter. The effect on US foreign policy towards MENA might be dramatic, a ‘who needs ya, baby?’ shift.

 

Having given up on nuclear, Germany went headlong into renewables. The consequence is high energy and loss of competitiveness. ‘Renewables, have been a disappointment. Wind turbines have fallen out of public favour; they are increasingly seen as subsidy-gouging, bird-macerating, failures. They produce little electricity at high cost and blight the environment.

 

Electric  cars have stalled.

 

Recent predictions* hedge the bets by suggesting three alternative scenarios.

 

The first scenario is ‘global redesign’.

 

It predicts a massive growth in energy supply, especially LNG. One adverse effect will be on the energy-dependant Russian export market due to falling prices. It is anticipated that output will be rapidly increased in the next ten years through exploitation of gas and oil from major discoveries in East Africa, the Mediterranean, Brazil and elsewhere, bringing new countries into the ‘club’ – Israel, Cyprus, Uganda and others.

 

Better technology will improve the efficiency of wind turbines, probably ensuring their survival, but still at a large cost in subsidies. Battery-driven cars will remain a niche market because of sluggish development of cheap and efficient batteries.

 

The second scenario is ‘the age of renewables’.

 

The governing facto is climate change.

 

We are already experiencing freak weather characterised by hurricanes, drought, storms and extensive flooding in many parts of the world. Over the next 15 years this could no longer be ‘freak’. This might push climate-change issues to the top of the agenda. In this event, expect to see massive investment in electric-powered transport, tidal power (for which the technology already exists but which has been under-exploited due to the obsession with wind-power), a return to nuclear including the development of mini-plants that could be factory-assembled and transported to the installation site.

 

But gas will be king.

 

Last is ‘vortex’, the doomsday option.

 

This centres on another and more catastrophic collapse of world financial a systems, possibly generated by the bursting of the Chinese credit bubble.

 

Ominous signs are already there. The ‘shadow banking’ sector is in deep trouble. A $500,000,000investment trust has already been bailed-out, and others are likely to follow. The ‘shadow banking’ sector  holds nearly $5 trillion, 55% of GDP. There must be a limit to the extent to which the Government can prevent defaults given the scale of the sector.

 

The likely outcomes are the return of protectionism, one of the major causes of the Great Slump; flight from the market economy; extensive Government intervention and over-regulation; and a collapse in private sector investment. And perhaps the return to cheap coal as the major source of electric power, heedless of the climate-change issue.

 

This may be our antifragile moment; to expect the unexpected, to think the unthinkable  and to anticipate the impossible.

 

.Daniel Hergen; Information Handling Services; Cambridge Energy Research Associates.

Obama: Don Quixote of tax havens................

Obama has set off once more on his crusade against foreign tax havens. His tactic is to extend the jurisdiction of the IRS to cover the whole world. His weapon is the Foreign Account Tax Compliance Act which requires all foreign financial institutions to supply full details of accounts held abroad by American taxpayers.

 

There are a few problems.

 

The first is that foreign banks have not taken too kindly to being tax gatherers for the US Government at their own expense, which is estimated at 10 times the tax gain. Neither do they appreciate the regulatory costs and  penalties that will be imposed on them for any backsliding.

 

The US has promised reciprocity to countries signing up to the deal, which should have lawyers salivating at the prospects of actions against the Federal Government on constitutional grounds. A number  countries have signed-up. The snag is that only two of them are ‘tax havens’; the remainder are high tax regimes which are hardly likely to be the destinations of American funny-money, and there are plenty of potholes in the form of privacy laws and data protection. The big tax havens have ignored Obama altogether.

 

Americans abroad are none too impressed either; there has been a surge in renunciations of US citizenship.

 

Amazingly, no cost/benefit analysis was undertaken before the Act was passed; it is estimated that the collection costs will outweigh revenue collected, and that capital flight could be substantial, but nobody really knows.

 

The UK has also ventured down the same bumpy road.

 

A couple of years ago the it negotiated a ‘transparency’ deal with Switzerland.

 

In return for disclosing the 20% or so of undeclared accounts that are identifiably British, the Swiss will not be required to reveal anything more. But  most off-shore accounts are blind or discretionary trusts or some other vehicle that does not identify the owner. Off-shore banks specialise in these, and there are entire law firms that do nothing else.

 

And the levy only applies to accounts still held as at May 2013, so anybody idiotic enough to keep his off-shore account in his own name had 18 months to shift his wedge to another ‘tax haven’. True the Swiss will be required to reveal the number of accounts shifted and the 10 most popular destinations, but not to disclose how much money was moved or by whom.

 

What’s more, the Swiss and Brits have agreed not to make public any information gathered, so Freedom of Information Act inquiries will get nowhere.

 

Not that any of this will bother the Swiss or make any difference. The really big amounts of tax-dodging money come from Africa, Eastern Europe, Asia and China.

 

But the UK Government is in another bind; over the years most public buildings have been financed through PFIs – public/private finance initiatives which are really lease-back arrangements where the money is provided by the private sector and the Government is effectively a tenant. The £450 million Ministry of Defence offices are owned by a PFI outfit that is incorporated in Jersey and has a Dublin tax residency (Irish corporation tax is much lower). Even more embarrassing, the Home Office is owned by a consortium of financiers through a Luxembourg holding company and a parent registered in Guernsey. And a former Trade Minister was Chairman of an off-shore bank which has been investigated for laundering money from Pakistan, Qatar and Zimbabwe. Oh, and the Labour Minister in charge of beating up tax havens had £250,000 stashed in an offshore blind trust.

 

If O is looking for a place to start, how about the State of Delaware? Or Nevada, where there is a ‘tax-efficient vehicle’ for every six members of the population? And although the US insists that the IMF investigates transparency into other countries’ offshore banking practices, it will not allow the IMF into its own banks, notwithstanding that America is the world’s largest tax shelter.

 

'Time, gentlemen, please' for the village pub.

The village pub has closed, sold by the brewery as a week-end cottage to a City fat-cat with a Chelsea tractor and green wellies.

 

This was the last of the village amenities.

 

First to go was the corner shop, which meant also the newsagent, so no daily deliveries anymore, and the sub-post office, forcing oldies to take a pricey bus ride into town on pensions day.

 

Next was the primary school; the kids now have a 10 mile bus ride to school instead of a 10 minute walk.

 

Then the village bobby was no more.

 

Finally, the vicar departed, along with Holy Communion, Matins, Evensong, the Book of Common Prayer, the King James Bible, and the congregation. The parish has been merged with seven others.

 

The village will now become a dormitory for week-enders and middle-class retirees.

 

‘The Three Horseshoes’ was not just a place that sold alcohol. It was the community centre where people went to socialise. Its customers were the doctor, the farmworker, the city gent, the bookies runner, the parson within minutes of finishing his sermon at morning service . It was the ultimate classless society. The only distinction was between the public bar for the darts players and dominoes devotees. The saloon bar was for the talkers, Saturday evening quarterbacks, Sunday lunchtime philosophers, the sort of people who simply enjoyed the company of others in congenial surroundings.

 

It was home to the darts club and the folk club and the venue on Plough Monday for the Molly Dancers. It was where you laid your bets and  joined in the sweepstake on the Grand National and the Boat-race. It hosted most of the village at its New Year’s Eve party, when permitted hours were a tad flexible. It was a centuries-old part of the social fabric.

 

And it was killed by the Labour Government.

 

The rot had set in some years ago, resulting from brewers’ greed in jacking up rents to a barely sustainable level and putting oppressive ties on landlords banning them from buying stock except through the brewery monopoly. At more or less the same time the supermarkets began selling alcohol at less than wholesale prices so that beer cost less than bottled water and far less than a pub pint. This undermined the habit of pub-going; people began to stay at home with a cheap six-pack watching endless football on the telly.

 

But the kiss of death was the smoking ban.

 

Prior to this the number of pubs closing each week was in single figures. Now it is more than 25 a week, 50% up on last year and rising.

 

The percentage of smokers who are pub-goers is much higher than amongst the general population. It was self-evident from the start that a ban on smoking would lead to a massive loss of custom, and so it has proved. And the pub trade is so marginal that only a small loss in turnover leads to unprofitability.

 

And yet there is not a shred of evidence that a risk analysis was carried out before the law was drafted. The original proposal was that there would be limited smoking in separate air-conditioned ‘smoking rooms, a reversion to old practice. Clubs would have been exempt so we would not have had the outrage of old soldiers being banned from a drag in the British Legion club, many of whom would have received a vacuum-pack of 50 Players as part of the rations on active service.

 

But the law as it stands was forced through by a tee-total, non-smoking Presbyterian bigot.

 

There is a simple solution. Permit smoking in restricted areas. Reduce the beer duty so that it reverts to an affordable ‘on’-sales price. Put a swingeing duty on ‘off’-sales to stop unfair supermarket competition (and also discourage binge drinking by yoof).

 

The excuse for the draconian ban was to protect the health of bar staff from the dangers of passive smoking.

 

The thousands who have lost their jobs through pub closures must be duly grateful.

 

 

Damn their eyes if they ever tries to rob a poor man of his beer