Welfare for tax dodgers, cuts for the rest of us

A man stands outside a BHS store in Leicester

The collapse of BHS has a bitter ring to it. It would seem that noted tax dodger Philip Greed Green, who sold the company for £1 just a few months ago, left a massive hole in the companies pension fund. Keep in mind that with the firm now in administration, if its liquidated (which seems likely), it is the UK taxpayer who will bailout the BHS pension fund.

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How the pension fund could be so depleted isn’t clear. Keep in mind, that even in November Phil Greed Green was reporting profits for his firm were up, although he predicted “tough trading conditions ahead”. BHS itself did make a loss in 2015, but it it is still difficult to believe the company could slide under so quickly, with him declaring a profit for the holding company year on year (i.e. taking money out…which he would not have paid any tax on). And now there’s a £571 million hole in the pension fund.

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It does unfortunately look like he and the other shareholders ran BHS into the ground, bled it dry, didn’t even bother to pay tax on any of these profits and have now dumped the whole sorry mess on the UK tax payers. I would note that a common tactic of organised crime was to do just this, buy up a business, run it into the ground (e.g. buying up stock on credit, selling it for cash out the back door, leaving the debt on the company books), then burn it down for the insurance money. The Kray twins pulled this trick all the time. The only difference is, they didn’t quite think big enough. Its all eerily similar to the banking crisis, leading one to question, has anything really changed?

And where’s the government in all this? Are they investigating Green’s Greed tax affairs? Looking into this dodgy pension deal? You’re joking right! No Cameron saw fit to hire Phil Greed Green to advise the government on ways Whitehall departments could save money. That’s like hiring the Hatton Garden robbers as advisers in bank security.

Needless to say this raises serious questions about Cameron and Osborne’s judgement, not to mention their commitment to dealing with tax avoidance. As it would appear that they favour welfare for billionaire non-doms, yet for taxpayers or those on welfare, its cuts galore, more austerity and more pain.

The Panama files

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The revelations from the Panama files of the law firm Mossack Fonseca have been on the one hand shocking, yet on the other oh so predictable. It is a well known fact that a large chunk of the world’s capital exists in a sort of “dark matter” like state. We know its there, we can see its effects when the rich flaunt their wealth, but nobody can pin down where it is, so its widely assumed to be tied up in tax havens.

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Note the data above based on a 2008 estimate, actual numbers may be much higher now.

Details are sketchy, but the estimate is that between $11.5 trillion and $20 trillion dollars is squirrelled away in tax havens, about 15% to 25% of the entire net worth of the global economy. That equals (or exceeds) the annual economic output of China. Its estimated that global governments lose out to the tune of between $100 billion to $255 billion in unpaid tax. And quite a lot of this money represents the proceeds of crime, or funds looted by corrupt regimes from the state coffers. At least $6.2 trillion of that money comes from developing nations (i.e. nearly half of the total, even though developing nations represent only about a quarter of the global economy).

What Mossack Fonseca were in the business of doing was acting as the intermediaries for transactions that allowed money to be spirited away, cached offshore in shell companies and then laundered back, often through the purchase of assets such as property in London for example. And as the BBC’s panorama reveals 95% of this company’s business was devoted to this kind of activity.

When most of us think of money laundering or offshore banking, we envisage some guy in a small office in the Cayman Islands wearing a Panama hat and Bermuda shorts with a safe in the back of the office. But no, Mossack Fonseca employs thousands of people and have many times this number in offices worldwide whom they will hire out to act as stool pigeons for dodgy deals. This is tax evasion and money laundering on literally an industrial scale. And the banks are clearly aware of this and compliant in such transactions.

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The top ten banks linked to the Panama papers

One of the methods that David Cameron’s dad employed, which was also used by the Brinks Matt robbers was “bearer bonds”. You’ve probably heard of these in a Hollywood film, where thieves break into a bank or an armoured car to steal a small suitcase which is somehow worth tens of millions because it contains “bearer bonds”. Well in truth bearer bonds have been largely banned in most of the world, given the obvious means by which they can be abused by criminals (or terrorists) to circumvent tax or money laundering legislation. However, it would seem that they are still in use, which is both shocking and on the other hand, not a surprise.

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In the wake of the Panama papers Putin searches for places he can hide away his millions in ill-gotten gains

And as noted many of the rich and powerful have been left with awkward questions to answer. A lot of the time its not what they have been saying, but what they’ve not been saying that counts. Osborne refused to answer any questions (then terminated the interview) on the issue of his offshore dealings. Parallels could be drawn with the same reaction from the Icelandic PM who has now resigned.

Cameron released a series of increasingly carefully worded statements which all but admitted that he had benefited from these offshore tax haven funds set up by his father. Indeed at the time of writing he’s actually now admitted that he had a stake. Now you’d expect Boris Johnson to use this as an opportunity to knife Cameron nice and quietly. Instead he’s been defending the PM, all but confirming that he too has had his hand in offshore deals like this. Oh, and search the Fox News site for “Panama files” brings up no hits (guess where Murdoch keeps his millions….).

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Cameron’s attempt to draw a line under all of this tonight, still leaves a lot of questions. Why would you set up a firm in the Bahamas, whose main beneficiaries (those that weren’t clearly front men….one was a local bishop) were all based in the UK, other than to avoid tax? He claims it was so they could trade in shares in dollars….then why not set up in New York or Delaware? And, given how many of these offshore shell companies often use property deals to re-shore funds, that raises questions as to how Cameron afforded a multi-million pound house in London. And it has also been revealed that while publicly talking tough about cracking down on offshore finance, Cameron has in private opposed efforts by the EU to crack down on tax havens.

And this brings us back to the EU referendum. The EU has been pushing quite heavily to end the “phantom zone” of offshore tax havens….which probably explains why so many of Farage’s hedge fund buddies favour Brexit  (Farage has been previously forced to admit he used tax havens). You can draw a direct correlation between EU efforts to crack down on tax havens and funds flowing the way of UKIP. The UK is a key hub around which many of these tax havens orbit. If the UK ceased to support them (Corbyn proposed direct rule be imposed on them) the system would start to break down.

And again, to be clear this is not a victimless crime. When Ian Cameron (or Farage) avoided paying tax, you paid the tax for them. Yes, Farage and Cameron as good as went around to every taxpayer in the UK and picked their pockets. And one of the facts that the Panama papers revealed is the degree to which the London property market is dominated by offshore dealings (Private Eye have a handy map tool available here). After all, the next best thing to a bearer bond, is the title deeds to a London flat. Of course the end result is British being priced out of the housing market by wealthy foreign billionaires using UK property (which they often leave empty) as gambling chips in a casino. Meanwhile Farage gets to blame foreigners for London being overcrowded.

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UK citizens now make up a minority of London property buyers…oh and the EU are just 4.7%

The company at the heart of this whole debacle have responded by pointing out that the only crime committed was by the person who leaked all this information. They also made some flippant statement about their e-mail being hacked. But its doubtful that anyone could access Terabits worth of data via e-mail (if they can what kind of an outfit are these jokers running!). No, I suspect an internal mole is involved. But unfortunately, they are almost certainly right, the only crime here was whoever leaked all this data, which perhaps highlights everything that is wrong with offshore banking.

Suffice to say action needs to be taken. Withdrawal from the EU will play right into the hands of those who want to turn the UK into essentially a giant tax haven (keep in mind that tax havens still need to be financed, typically through higher VAT rather than income tax, so those living in the country still end up paying quite a lot of tax). While I suspect Corbyn is going a bit far when he talks of imposing direct rule, some economic sanctions launched by Britain and the EU (block all trade, forbid anyone UK/EU citizen from owning shares in offshore funds, freeze all assets of said companies, travel bans, etc.) would have the desired effect.

However, perhaps the most obvious measure is to apply the blinding light of transparency. Make all companies that do any form of business in the EU, regardless of where they are based, declare all of their shareholders as well as the pay and earnings of senior company officials. Like vampires, these blood suckers prefer dark places, force them into the light and they’ll explode.

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Cameron’s Panamanian lawyer makes the mistake of opening the curtains

Unfortunately, neither the current PM, nor anyone else in the cabinet, are credible candidates to lead such an effort.

Easter news roundup

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The quiet civility of American democracy

Tripping up Trump

A meeting last week was convened by senior GOP members to figure out how to deal with Trump. Unfortunately the conclusion seems to be to support an existing third party candidate or (more likely) endorse Hilary.

One of the proposals floated at this meeting was to have some suitable Republican to run against Trump as a third party candidate  . He won’t have to go through the nomination process as in theory any American can stand for election to be president….even Canadians can apply. However in practical terms, such a move will now be very difficult, if not impossible, to pull off.

To get a candidate on the ballot papers in all 50 states there are local laws that must be met. And many of those laws were enacted by Republican states precisely to stop some third party breaking the GOP monopoly. In the state of Texas for example they will need a petition filled in with 80,000 signatures, from people who did not vote in the primaries. And they’ll need that paperwork sorted by May 9th, six weeks from now. In Florida they’ll need a whopping 119,316 signatures. The trouble is we probably won’t know whether or not Trump will get the nomination until June when California votes. By then it will be too late to do anything, although equally it will be too late for Trump to run as an independent if he is denied the nomination at the convention.

This creates something of a dilemma for the GOP. They can simply muddle along, hope for Trump to be denied the nomination and then go along with him if he succeeds. However, this would likely be catastrophic for the senate and representatives votes. The democrats would get to tar them with the same racist baloney Trump has been spouting and many anti-Trump Republicans would stay at home, leading to decimation on election day.

By backing a third party, while they will all but guarantee Hilary’s victory in the Presidential election, they will give themselves some chance of holding onto control of the senate and congress. But like I said, this is a window of opportunity that’s closing fast. Endorsing Hilary will stop her painting them as Trump’s goon’s, but its not clear whether that will be more effective in getting the vote out for the senate and house seats.

To my mind the solution lies in the hands of party supporters. If you agree that Trump, or for that matter Cruz (whose just as bad as Trump), is not an acceptable candidate and you can’t vote for Hilary, then vote for a third party. There’s plenty of options in this regard already without the GOP having to put up a third party candidate. The Libertarian Party for example (not that I support them, I’d likely vote Green, or vote for Hilary to stop some wingnut becoming president). Indeed this would have the positive effect of helping to break this corrosive and dangerous political duopoly that has wrecked American democracy.

Not so British

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Word is that British Home Stores (BHS) are in trouble. The media spent the week lamenting this fall of a high street icon. I saw, good riddance to them. They are owned by Phil Greed Green, a tax dodger who lives in Monaco to avoid paying tax here, then has the nerve to call his stores “British”. I’ve never shopped in these stores for exactly this reason. Perhaps if he started paying some tax in the country the company might not be in such trouble.

Banks warn about Brexit risks

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UBS fears that Brexit could hammer the value of the pound, with serious consequences to anyone on a fixed income

The EU referendum hots up yet again. The vote racist leave campaign published a list of 250 businessmen who supported Brexit….trouble is someone’s been checking up on them and already found a few who seem to have been randomly stuck on the list without their permission. Then again, its also emerged that the vote leave campaign have been hiring EU migrants to run their call centres….I’m sorry I think my irony meter just exploded there!

Meanwhile the bank of England has warned of the risks to the UK economy if the country votes to leave, warning it might spark another credit crunch. And this is backed up by those in the banking industry themselves, 2/3’s of whom have warned of financial insecurity if the UK votes to leave the UK.

I’m actually suitably concerned myself that I’m thinking of pushing some of my savings into my Irish euro bank account where they’ll be safe, until after the referendum. But of course, I have the luxury of being able to do that. And the rich with their offshore accounts are probably already well ahead of us on that front (why else do you think Sterling is falling?). They will ride out the storm. Indeed some might well profit handsomely from it…at the expense of the poor saps who can’t move their money around, largely because they are living in it.

Its the very people who are more likely to vote for Brexit, pensioners and baby boomers who are most likely to get screwed over. As I’ve said before, if anyone is tempted to vote leave might I suggest that you buy a tin of cat food and taste it. If you don’t think you could live through retirement eating it in a stone cold house with no pension, then you really don’t want to vote leave.

Music for a jilted generation

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Joseph Stiglitz has an interesting article out in the Guardian in which he talks about the reasons for millennial anger of the economic and social divide that now splits Western society.

In essence, the baby boomer generation had it pretty good, most are better off now than when they started out as adults. They are retiring on a final salary scheme, debt free with not only the mortgage paid off, but the house worth many times more than they paid for it. Some are on paper millionaires from the value of their property portfolio alone. And while the Tories have axed everything not bolted to the floor, going after tax credits and other payments that benefit young working families, anything that benefits pensioners (regardless of their income) has been left largely untouched.

By contrast generation Y and millennial’s face a lifetime of job insecurity, with less a matter of what career they would like to choose but what kind of job they can get and still pay off their student loan. As for saving for a mortgage or a pension LOL! They’re only hope is that the baby boomers die off before spending too much of it and they can claim the inheritance (reminds me, I need to get my dad to take up smoking again!).

Generation X’ers like me meanwhile are somewhere in the middle. We have some debts, but nothing like those of millennials, we also suffer from job insecurity (no job for life anymore), but usually have a few more years experience to help give us some control over our careers. And most of us have some savings or have some chance of affording a house, even though it will probably mean spending a considerable part of our salary for it. Pension? That’s something we’ll need to work on!

So the end result is this massive divide between two generations. We can see it in politics with the older generation more likely to favour Brexit or vote for Trump (because they basically don’t care anymore), with the younger generations (who realise what a raw deal they’ve gotten) favouring more left wing candidates such as Jeremy Corbyn or Bernie Sanders.

We can see this too with issues such as climate change. Older people are more likely to be climate change deniers, even among those who are more left wing. While young people tend to be more willing to see some measures taken against it, even those who are fairly right wing. Presumably because they know they will have to live with the consequences of climate change, while the old fogies don’t care and worry about anything that might impact on their precious pension and fixed income.

Such a generational split is very worrying for society. Not least because it will likely be resolved by enough of the older generation dying off, eventually swinging the political compass the other way. While it may seem unlikely that a politician like Sanders or Corbyn might win power now in Britain, vote to leave the UK (or vote for Trump), give it a few years of economic disaster….a couple of cold winters with no heat (due to blackouts), with a resulting change in electoral demographics, and it doesn’t then seem that unlikely.

What happened to my Dad?

And of interest to the above is this trailer to a new movie “The Brainwashing of My Dad ” which charts the rise and the effects of the gradual shift to the right of the US media….or as the Daily Show’s Trevor Noah puts it how the f**k did we get here?

In other words the Republicans have been spinning the BS for so long its taken on human form, grown a wig and taken to the campaign trail. Same as here in the UK Farage and UKIP are the natural end state of several decades of Daily Mail tabloid bigotry.

Zika U-turn

The Catholic church has long promoted the idea that contraception doesn’t work, oh condom’s will explode every tenth time they are used and increase the likelihood of STD’s. However the Zika virus and its horrible impact on babies has prompted a rethink. Now the church supports contraception…but what about all the baloney they’ve been selling for the last few decades? Do they admit that was now all lies? And once this Zika virus goes away will they be promoting the same anti-family planning BS again, business as usual?

America’s dumbest presidents

Another item of interest is this ranking of US presidents, listing the 25 smartest….and the 25 dumbest…I’ll let you guess which end of the list G. W. Bush is on (4th from bottom) and which end Obama is on.

Hinkley C – pi$$ or get off the pot!

The Bataan death march that is Hinkley C continues without breaking step. The head of EDF energy has refused to give a date at which the plant will be built. Meanwhile the company is in a legal fight with Greenpeace to keep certain documents secret that could reveal the true costs of Hinkley C and that may well prove the company has known it was a $hit sandwich from day one.

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The Hinkley plant has its own Edstone of sorts!

And leaked documents of a different type reveal that a number of EDF’s senior engineers want the project delayed as they fear recent design flaws highlighted in other projects might mean the plant needs to be redesigned first. They are urging a delay.

So we now have the company’s own unions (whose chief just sent an e-mail around saying he will vote against Hinkley C in any board meeting), engineers, the former chief financial officer and quite a few shareholders all urging the plant to be abandoned or delayed.

Normally for a project to become this much of a white elephant it has to be part way through construction, too far in for it to be stopped. Yet the single minded obsession of those behind it means that it will be pushed through regardless. About the only positive is that it will be such a soul destroying process, generating such negative publicity that it will all but guarantee few additional reactors will be built, in the UK or beyond.

And hence the current trend of nuclear reactors being turned off quicker than they can be replaced will continue.

Two things you can’t avoid: Tory lies and Stealth Taxes

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The Tories like to portray themselves as the party of low taxes, cutting the deficit and that they are less likely to bring in authoritarian laws than the labour party. However that is contradicted by there actual performance and in particular, by recent events.

The recent living wage is generally seen as a good idea by many. However, the Tories have been tight lipped about how they are paying for it. Well anyone who pays taxes will find out on in April when your NI contributions go up by anything from £150 to £300 per year. Now while generally I’m okay with this, correct me if I’m wrong but doesn’t this count as a tax increase?

Indeed, any time during the labour government Gordon Brown made any sort of a fiddle with tax rates the Tories and the right wing media would be accusing him of implementing “stealth taxes”. Indeed, Osborne actually promised to cut NI rates (again accusing labour of “stealth taxes”).

For this is far from a one off. Numerous sets of taxes have been increased by the Tories, from stamp duty to VAT. The estimate is that the average UK household will be paying £2,000 more per year in taxes. At one point they were even talking of taxing churches. So far from cutting such taxes, the Tories have been responsible for far more significant rises in “stealth taxes” than labour.

And that’s before we even bring up their planned raid on pension funds. Admittedly this will primarily effect higher earners, which is something of a rarity for the Tories as the bulk of their tax increases have hit middle income earners, rather than the better off. Indeed, they very famously cut the 50p tax rate shortly after coming to power. Meanwhile the poor are feeling the brunt of Tory cuts.

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But at least the deficit’s down ya? Actually that depends on what you classify as a “deficit, but certainly they cannot claim to have halved it. Indeed in five years of government they have borrowed more than labour did in 13 years.

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Now okay, the bulk of that spending in the early years was due to the recession. However, this was true of labour (who were running surpluses prior the recession!). The Tories were quick to exploit this rise in borrowing and one of the key promises they made back in 2010 was to bring it down. However six years later and we’re still along way from this. Any sort of deficit reduction now largely depends on a series of events occurring that work in the Tories favour, notably an upswing in the economy. Something that seems unlikely if you’ve been paying attention to recent economic data. And the IMF are worried that fears over Brexit might be behind some of this market turmoil.

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In short, the finances of the UK look little different from those of other nations, indeed they actually look a lot worse. Take the US, where Obama has managed to pull down the deficit while raising public spending and not imposing painful austerity on the US. Indeed its generally been the Republicans who, rather hypocritically, both opposed any cuts that impact on their supporters (such as the loon’s occupying” a Oregon bird sanctuary) or corporate sponsors. And much like the Tories, they also accusing Obama of not bringing it down quickly enough!

And as for more open government, while the rest of us were eating our Turkey, the Tories were sneaking various bills through without any scrutiny from parliament. This included many potentially unpopular measures such as the abolition of student grants, welfare and tax break cuts and yet further cuts to solar power subsidies.

And we also have the disturbing story of asylum seekers being made to wear coloured wrist bands at all times, by one of the private contractor’s the Tories appointed to look after them. I recall joking a while ago, that the way the Tories were carrying on they’d be getting migrants to go around with little yellow stars soon….just to be clear this was a joke, not a policy suggestion!

The reality is that the Tories are the party of spin and hypocrisy. If labour are the party of tax and spend, the Tories are the party of tax and don’t spend, just redistribute the nation’s wealth upwards to the already rich.

The erosion of public sector work

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With a junior doctor’s strike this week I heard various opinions being expressed (on talk radio or Question Time), mostly by Tory voters along the lines of suggesting that public sector workers should not have the right to strike. They expressed the view that public sector workers have better job security, better pensions and fixed working hours compared to workers in the private sector and should be happy for what they’ve got. I’m afraid that while this might have been true a decade or two ago, its simply no longer the case, as the “perks” of a public sector job have taken a pounding as a result of Tory austerity.

Let’s take the issue of job security. These days a permanent job in the public sector is as rare as hens teeth. Many new entrants to the public sector will be on a temporary contracts. I’d say in most universities for example I’d estimate about half of the staff are on such contracts (this article suggests its closer to a third tho so I suspect it depends which department you are in), representing, I’d estimate, about the majority of recent hires.

Now if your lucky and persevere (like me) and get a permanent contract, that’s not quite as permanent as you’d think. You can still get the sack if certain “targets” are missed, or if your post is simply axed as part of Tory austerity. And keep in mind that about 300,000 public sector jobs have gone since the Tories took power, with another 500,000 under threat. While I’d still argue that job security is slightly better in the public sector….its only that, slightly. And in some sectors its probably a good deal worse.

And those who want to keep there jobs can expect to work longer hours and less regular hours. In many uni’s now lectures are increasingly being held later and later. My timetable stretches to 21:00 potentially (whether the students will show up at that hour I’m not sure!) and lecturing up till 18:00 is increasingly the norm (I’ve suggested 8am starts to compensate, but apparently getting students out of bed at that hour is seen as being impossible!).

This is a major issue, because often the whole reason why some people took a public sector job was because they wanted to fix their working hours. Imagine for example, you’re a single mum, you take a job with fixed hours so that you don’t have to worry about out of hours child care, even though the pay is lower. Then suddenly the boss turns around and tells you that you have to work after school hours and on weekends, how would you feel?

As for pensions, while many older public sector workers are on final salary schemes, most new entrants (such as me) are on less generous career average schemes, closer to the terms of those in the private sector get. And as part of the austerity, the Tories are talking about raiding the public sector pension schemes.

So given all these factors you can understand the frustrations. After all, the pay rates for public sector workers are generally lower than equivalent jobs in the private sector. If I left for a private sector job, I’d could expect at least 10-30% more on top of my basic salary, not including bonuses, company car or other perks.

Inevitably, you start treating public sector workers like private sector workers, take away all the historical benefits of being in the public sector and they are going to start demanding the same salary as private sector workers (with a similar level of experience and education). Or, as in the case of junior doctors, simply refuse such terms as not being what they signed up for when they joined. And its not as if junior NHS doctors are know for idleness or an unwillingness to work at odd hours.

And this is not helped by the fact that the Tories, under the cloak of austerity, are trying to impose a sort of stealth privatisation of certain public services, something that recent allegations involving G4S showed the dangers of. Often this can result in public sector workers having their jobs taken by less well qualified private contractors, who are often on higher pay! So you can imagine the reaction of workers isn’t likely to be positive.

Ultimately Osborne seems to think that just because 25% of the electorate voted for the Tories (once you account for 66% turn out on election night and 37% of votes) this somehow gives them the mandate to tear up contracts and alter the deal for public sector workers.

And speaking of mandate, consider that Hitler had a greater electoral mandate than the Tories currently enjoy (he got 44% of the vote out of a turn out of 88%, giving a mandate from 38% of the electorate v’s the Tories 25%). Did this justify his tearing up of the German constitution? well of course not! Similarly just because you win one election does not give a government the right to undo a raft of policy from previous governments (hence why I suspect a vote to leave the EU will probably face legal challenges), nor does it grant the right to renege on contracts previously signed. If this was a contract for work signed with one of the Tories wealthy donors, they would be sued for such an action and rightly so.

Inevitably, if the conditions for public sector workers worsen, its only inevitable that they’ll start to protest, or demand a higher salary. There is, as it were, a price to be paid for austernity.

Inconvenient truths

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Cameron was probably thankful for events in Paris as it allowed him to duck away from a number of embarrassing revelations which have recently emerged.

Cameron has been under pressure for weeks to announce what concessions he’s planning to negotiate back off the EU. One of those is the right to stop migrants claiming benefits for 4 years. To back up this claim he tried to suggest that 43% of EU migrants have claimed benefits. This is a figure that is vigorously disputed by many, including the UK statistics Authority, not least because the data behind it seems fairly dubious.

However, even looking at the Tory figures, a large portion of these relate to working tax credits (which is more of a tax rebate after all) and other work related welfare payments. Their estimates (and they are just estimates, i.e. probably a wildly exaggerated guess) suggest 20-28% of EU migrants may have claimed what we would normally understand to mean “benefits” (about 2.5% of the overall DWP case load). However even within these figures, the government misses an important point – that more than 72% of EU migrants have paid taxes for benefits, which Cameron proposes to strip them of the right to claim. Obviously this raises the question, shouldn’t they be given a tax rebate? Or should they be allowed to reclaim such tax if they leave before the 4 year period is up? (which many will do).

Keep in mind that the whole argument in favour of non-dom status is that they don’t put the same level of pressure on public services, so they pay less tax. Well surely if we deny EU migrants certain benefits, shouldn’t they too get some sort of tax discount? Or perhaps we should pay the tax to their home state?

Indeed there is a precedence here, Ireland and the UK have tax arrangements which pre-date the EU. These rules mean that if I went home to Ireland tomorrow, the first thing the Irish government would do, once they realised I was back living in the country, is ring the DWP and request all of my NI contributions be sent to them. If I moved back to the UK (or as happened when I moved over here) my Irish and UK NI contributions would have followed me back to the UK.

So it would not be unprecedented for the Polish or Romanians to demand similar arrangements from the UK in return. Of course, the government isn’t going to go along with that…at least not without Osborne’s dead body being made available. The fact is that paying benefits to a handful of EU citizens (possibly only in the tens of thousands of claimants) is outweighed by the taxes that millions of EU workers pay into government coffers. This would cost the UK billions a year, more than enough to screw up all of Osborne’s austerity plans, likely requiring him to either abandon this policy, or raise taxes.

Meanwhile the government has been trying to come up with ways of how to implement such measures. Unfortunately at every turn the government’s own lawyers have warned that it will be next to impossible to implement them without denying large number of British people benefits, or opening massive legal loopholes. E.g. if a Polish plumber suddenly doesn’t have to pay NI rates, he can offer a 20% discount on all of his services and undercut British competitors. If workers (British or EU) lose working benefits, won’t they be better off quitting work and going on the dole? (so you’ll be needing IDS dead body along with Osborne’s!).

Meanwhile in Oxford….

And in rural Oxford, the local county council recently received a letter from a Mr Cameron (a local toff with a known pig fetish). He lamented how the council is cutting back on public services, reducing bin collections, forcing him to have to send his butler off to take his Bollinger bottles to the tip, meaning his smoked salmon was subsequently served lukewarm and late.

The council, lead by conservatives I might add, pointed out that they’d be glad to comply but they had a problem with these dickheads down in London who kept cutting their budget. Cameron, suggests that things weren’t that bad, why council’s had only been subject to a “slight” cut and why couldn’t they just turn off a few lights or sell up some property and everything would be fine.

Oxford council responded by pointing out that a cut of £72 million could not possibly be described as a “slight fall” (then again, to Cameron its probably about as much has he spends on Caviar and champagne per year) and that the council has already let go 5,000 staff. And selling off property is hardly a sustainable way of funding a council, quite apart from the fact that it would be illegal under the council’s own rules.

And in other developments, Cameron is accused of trying to lobby Thames Valley Police to save his local police service. The level of cuts to policing is so severe that already some crimes have been effectively legalised as the police don’t investigate them anymore. And with further cuts planned its now feared likely that bobbies on the beat” will become a thing of the past.

Cameron now faces the possibility of being reprimanded for breaking the ministerial code, by putting pressure on civil servants for the sake of his posh neighbours.

Meanwhile another leak (which I take as a sign civil servants are getting fed up) suggests that behind the scenes the Tories now accept that their cuts to renewable subsidies are going to mean missing their green energy targets. This could well cost the country more than it saved via the subsidy cuts when you factor in the fines from the EU the UK will face and the costs of buying and installing a lot of power projects in a hurry to keep the lights on.

The fact is that what these events show is just how out of touch Cameron and his government is. How they are easily the most incompetent, self serving government the nation has ever had. The position that Cameron now faces, be it in Europe or rural Oxfordshire was entirely predictable. No concessions he could wring out of the EU were ever going to placate the euroskeptics, this policy of austerity is inevitably going to mean cuts to services and if the latest info is to be believed their cuts too renewable subsidies now raises the risk of power cuts from January onwards.

I hope anyone who voted Tory is proud of how things are going.

Weekly Roundup

The country that went out into the cold….

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Meanwhile Cameron was in Norway this week to discuss trade. Of course this also led to some reflecting on how much of what is said by the UKIP brigade about how much better off we’d be outside the EU (like Norway) is basically bolix. Does Norway have less issues with Immigration? Quite the opposite if anything in fact! There’s been a recent trend of migrants and refugee’s using a loophole to simply cycle across the border from Russia and entering Norway legally. And of course Switzerland also has many issues with immigration, indeed the swiss are actually a minority in their own country in some districts.

Does Norway have less trouble with them pesky EU regulations?….actually, no they just rubber stamp and sign up to anything the EU passes, they have no right of veto or even a right to discuss such measures. But it costs them less money than actually being a member? Well marginally, the estimate is the UK would still end up paying 94% of what it currently pays, once the costs of EU inspection and regulation are accounted for (like Norway, we’ll be paying eurocrats to come over and make sure we’re obeying the EU’s trade rules). And once the inevitable drop in GDP (of 3-14%) is accounted for, one assumes that would probably make the country much worse off.

Meanwhile Cameron’s secret “negotiations” with the EU seem to have come a little unstuck, after several EU leaders claimed they still hadn’t a clue what changes he’s actually after….presumably whatever cosmetic changes he can get to hoodwink the tabloids into supporting a Yes vote one assumes.

Also this week the US again reiterated the point that Brexit would invalidate all US trade deals with the country. The UK would therefore need to renegotiate such deals, and its doubtful they’d get the same generous terms as the EU has managed. Now to anyone with half a brain this should be obvious. I’ve pointed this out myself several times and this isn’t even the first time the Americans have said this, nor that they’ve expressed disquiet at the idea of Brexit.

However, Farage and the UKIP bigot brigade in Mr Men land don’t seem to be aware of this. They’ve been working under the delusion (one could draw parallels to some of the SNP’s pre-independence delusions, such as automatically becoming an EU member and keeping the pound) that somehow the US will reward Britain’s efforts to destabilise the NATO alliance and harm transatlantic trade by lavishing gifts on the British.

Farage even went so far to accuse the US official in question of being a paid stooge of some shadowy pro-EU conspiracy. Now ignoring the fact that, as mentioned, this is not the first time the US has pointed this out. There is also a certain hypocrisy given that Farage himself is in the pay of various shadowy hedge fund types who plan to profit from the chaos Brexit will unleash.

The Hungry for power games

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The Hunger for power games in the US continues, with the first two cannon’s of resignation fired. This came in the wake of the democratic debate, where it became evident that this is clearly a two horse race between Bernie Sanders and Hilary Clinton, leading to two of the trailing candidates dropping out.

Meanwhile, in the GOP debate, an attempt by Jeb Bush to cut Marco Rubio down to size failed rather spectacularly. Donald “only a few million” Trump (he’s been telling a story about how he had to work his way up because his father would only led him “a few million” to get started) has now slipped in the polls and is trailing Ben Carson, a retired brain surgeon…..who constantly looks and sounds like someone who conducted brain surgery on himself. Basically if you think Trump is bad, wait till you hear Ben Carson.

The GOP debate has to stand in stark contrast to the democratic party debate (the only time anyone brought up Benghazi et al, was when Bernie Sanders said he was sick of hearing about Clinton’s “damn e-mails”). Which means that on the plus side, its very likely that after the Republicans have finished knocking chunks out of each other, they is less chance of whoever they put forward getting elected.

Argie hypocrisy

You may recall how the Top Gear team were chased out of Argentina over a number plate that seemed to allude to the Falklands war? Well the Argentinians are reopening the case. Are they going to put on trial the “war veterans(many in there twenties who fought in a war thirty years ago!) who attacked the BBC crew and burnt their cars? No, they are going after Clarkson for altering the number plate as they attempted to flee the country. Needless to say this stinks of hypocrisy. One wonders what Interpol will make of it when they ring up. “What you want us to arrest Clarkson for a minor offence regarding a number plate? Ya, why don’t we arrest him for being an arse in a denim free zone while we’re at it?

The imfamous car sporting the offending number plate, several months prior to filming (indeed this source http://jalopnik.com/more-proof-the-original-offensive-top-gear-license-plat-1644835449 points to DVLA data suggesting its been registered to the offending plate since 1991)

The imfamous car sporting the offending number plate, several months prior to filming (indeed this source points to DVLA data suggesting its been registered to the offending plate since 1991)

Also I don’t think the Argentinians understand how this plays out for neutrals. I mean personally, I can’t fathom why the Brit’s nor the Argie’s want the Islands. There is oil in the seas nearby, yes, but I’d argue this is a separate claim’s issue. But instead the Argentinians constantly choose to come across as them being bonkers mad. Ultimately one is forced to ask the question who should control the Falklands, the nutters who foam at the mouth and scream Malvina’s whenever some mentions the Falklands, or the people who are already there (okay, not very sane either, they seem to have this strange thing for Maggie Thatcher…and sheep!)

Every now and then a retired UK Admiral will pop up and say how its impossible now for the UK to protect the Island thanks to recent spending cuts. However I would argue that the Argentinian behaviour on this issue (not just Top Gear, but their defacto blockade of the Island) has now so alienated neutrals that the fact is, it doesn’t matter. Even if the UK failed to protect the Islands they would likely find their western allies taking the UK’s side. Argentina would face sanctions similar to those Russia’s been hit by, except that Argentina isn’t Russia (no oil) and its economy would quickly collapse. No doubt a US carrier battle group would soon show up to conduct “exercises” (Operation Handball?).

In short the British military won’t have to do anything, it would be just a matter of time before the Argentinians retreated with their tail between their legs. And they would have no one to blame but themselves.

Lording it over

Normally the house of lords is the sort of place you expect to more or less rubber stamp the legislation of a Tory government. However this week instead, they chose to reject Osborne’s attempts to emulate Thatcher’s poll tax by cutting working tax credits.

This is a rare, but entirely justified action by the upper house. The Tories went through the election repeatedly claiming that they won’t touch tax credits, yet blink and they were cutting them within a few months. Obviously if the Tories have now moved so far to the right that a bunch of hereditary rich guy’s think they are going too far, this should serve as a warning of how far they’ve drifted from the centre ground.

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Cameron is now talking about expanding the upper house to stack it with pro-Tory peers. Already the Lords has over 800 peers, even thought the seating capacity of the chamber is closer to at most 400. What’s he going to do, find a few hundred right-wing dwarves? High ho, high ho, its off to cut we go, with a hovel and a pick pig and a racist shit….

While I agree that there is a need for some serious reform of the House of Lords, this means cutting the number of peers and making it more democratically accountable, not stacking it with more old rich guys.

Tampon Tax

Finally, we come to the “Tampon Tax. While pistachio nuts and Jaffa cakes are subject to no VAT (because they are seen to be essentials) tampon’s are instead taxed. If ever you wanted to see evidence of how chauvinistic this government is its this. Presumably its never occurred to Cameron why his wife is always running to the bathroom and a little anxious about once a month or so.

Blogging Catch up

Pandering to the UKIP mob

Teresa May’s speech on immigration was something that got the news commentator’s talking. In it she claimed that the benefits of immigration are zero….which is somewhat at odds with the data from within her own department. As the Guardian points out  on every one of her claims not only does the data not support her claim, it strongly suggests the opposite conclusion.

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All such claims are of course just myths put out by closet racists. The UK is not “full or overcrowded by any stretch of the imagination. Migrants are not a threat to British culture, they do not push up crime (actually crime rates often fall when migrants move into an area…because they generally work for a living!) and they are not putting undue pressure on the NHS. Indeed without the taxes paid by migrants its questionable how the UK can afford to continue to fund the NHS or the generous pension provisions.

More worryingly is that this speech confirms that the Tories have completely lost the plot on this issue. They plan to ignore any and all data that happens to contradict the mantra of the tabloids and push ahead with a radical policy. Of course the whole point of responsible government is to prevent rule by the mob.

But if the Tories want to pander to UKIP why not just go the whole hog and have a racist themed costume party next time. Cameron can go as a pig-screwing upper class twit (he won’t even have to put on a costume), Theresa May can go as Eva Braun, Eric Pickles as can go as Goering, Osborne as Himmler, etc.

Syrian Refugee’s

Indeed speaking of tabloid miss-information, the Daily Mail has recently claimed that only 20% of those arriving in Europe from across the Mediterranean are Syrians. However, a more reasoned analysis of the data, suggests a very different picture. The data set they focus on precedes the recent influx. While it might have been only 20% before June, the UNHCR figures suggest 51% of documented arrivals are now Syrian refugees.

And of course, this only accounts for “documented” refugee’s but most of the Syrians aren’t being documented. And we’re assuming that Syria is the only country where people have a legitimate right to flee from. However, it is a known fact that many of the refugee’s are coming from other war zones such as Eritrea and Afghanistan.

This highlights the dangers of letting right-wing tabloids set policy. They have a nasty habit of being wrong and manipulating data to suit their own ends.

Tax does have to be Taxing

I recall pointing out in the lead up to the last election that the Tories spending plans were unaffordable without major welfare cuts. And the fact is that the bulk of welfare spending is not spent on unemployment benefits or welfare to the disabled (3% of the welfare budget). Instead its working tax credits and pensions (about 50% of welfare budget).

Thus the only way the Tories could pull off their plans is by significant cuts to working tax credits…or pensions. The latter of course is unlikely given how many pensioners vote Tory. So anyone voting Tory was more or less guaranteeing that tax credits would go.

The Tories naturally, denied this. However, blink and a few months later and now working tax credit cuts are on the agenda. Needless to say, this is the reward for all those who were silly enough to vote Tory!

The Billion dollar flat

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The impoverished East European state of Moldova has been hit by a number of dodgy corruption scandals, including what was basically a massive pyramid scheme. As much as 1/8th of the country’s GDP has essentially been stolen. However, more surprising is the connection between this theft and a modest two bedroom flat in a Scottish council estate.

This flat is the headquarters to 530 companies, many of them involved in the recent theft. Yet, despite this nothing has been done by the British authorities. The attitude of the Tory government seems to be its okay to rob people, so long as they are abroad. And no doubt when hordes of Moldovans start migrating to the UK they will complain about how the plight of these people is hardly their problem.

Security Theater

An interesting wee video from comedian Adam Conover, in which he points out the ridiculous nature of airport security. The reality is that the TSA (the American security drones who waste your time at airports, boss people around and make you go through the “smut machines”) are a massive waste of time and money. Not only have they never caught an actual terrorists (including the shoe or underpants bombers, nor the 9/11 hijackers) but when they’ve been tested by the FBI, they failed to find dummy weapons on 95% of the occasions.

In essence its what’s called “security theatre. Whereby the TSA engage in a ritual meant to reassure people about security for the benefit of the closet racists who are scared of any dark skinned people on the same plane. Frankly, they may as well start sacrificing chickens to the gods of the air for all the good it actually does.

Failing the AI test

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An American Professor has a thought experiment to highlight what he claims is a flaw in so-called artificial intelligence. Basically machines think differently to us, so they perceive things in a very different way.

Imagine the scenario where you are on a road in a wood and you see a underground bunker door leading into a dark room. Standing in the doorway is a clown smiling next to a sign saying “free hugs. Now to a human, no way we’d go down to a creepy bunker to go near an even creepier looking clown. But an AI would think, well clowns are good, hugs are good, and free hugs are better.

In essence, what our Professor is trying to do is create a form of intelligence test, or perhaps more precisely a common sense test for AI’s. Often when the topic of artificial intelligence comes up, many point to the Turing test. This has never sat well with me, as I’d argue its flawed. It relies on the fact that a human can’t be fooled by a machine, if the machine is less smart the human. I’ve known situations where dogs and cats have outsmarted their owners, so that’s not really an appropriate benchmark.

So a more effective test of future artificial intelligence would be to apply tests to it that test the machines ability to reason, its common sense, its ability to learn new things independently, its morality and its capacity for independent thought. Several similar tests like this “clown test” could produce a more objective AI test with which to gauge artificial intelligence.

Of course, one flaw in this is that we have to ask the question, would all humans pass our test? Let us take this idea of perceiving risks. Recently a school kid in the US was arrested because his teacher thought a clock he’d build himself was a bomb. And this is one of a whole host of similar incidents. I myself have seem airport security take holy water off some old fella. And the US TSA have a reputation for taking all sorts of stuff off people.

Now I suspect computers won’t have to advance much further to realise that an Irish grandad with holy water is no threat to anyone…..other than vampire’s and Tories 😉 . So by this logic we have to conclude that many in the security services lack sufficient common sense and fail the test and hence do not count as intelligent concious beings.

And similar we have the issue of bible literalism or the likes of ISIS and other religious puritans. Again, most of us will understand that works such as the Bible or the Koran are not to be interpreted as literally true word for word (not least because there is ample scientific and historical evidence to counter a literal interpretation). They are instead works of allegorical literature, which was a common writing style at the time of their creation. So again, by this yardstick, as Baptists (or ISIS) can’t exert basic common sense, we would have to judge that they fail any AI test.

And lets not even get onto climate change deniers, anti-vaccine quacks, Gun nuts  who follow a literal interpretation of the 2nd amendment or those tinfoil hat wearers who still think MH17 wasn’t shot down by the Russians Separatists…..

The point I’m trying to get across here is that any test by which we judge a future AI has to be fair. If a large proportion of the human race would fail it also, or demonstrate that they too lack basic common sense, then perhaps we judge machines a little too harshly….or maybe we let our fellow humans off a little too easily!

Getting piggy with it

I’m presuming everyone’s heard the story by now about Cameron’s “indiscretion” with a pig, as part of an initiation ceremony to some toff club at Oxford. I’m not sure if anyone’s seen cassette boy’s response to it tho….or John Oliver’s…..

I’m hoping Jeremy Corbyn has the good sense to let this one keep sneaking into questions during PMQ’s for the rest of the time Cameron is in office, e.g. “we have to cut down on government pork….” “The government has made a pig’s ear of the economy….” “….and the chancellor is now relying on China to save our bacon…” “what does the PM plan to do about the police….”

Of course, jokes aside there is a more serious story here. These posh clubs for spoilt rich kids (the Bullingdon of Oxford, the Skull and Bones of Yale, etc.) serve two purposes. Keeping them away from the riff raff, but serve as an initiation into the Good olde boys network. Given that they now have the dirt on one another, this means that they can pressure one another to act in their favour – which creates a massive conflict of interest as it essentially means that the PM, Chancellor and many other Tories (such as a possible future PM Boris Johnson) are all at risk of being blackmailed into doing things not in the interest of the country.

Ten years for benefits fraud, but for tax fraud…..?

The government has just announced a proposal to give benefits fraudsters a jail term of up to ten years. Now while I certainly see the need to clap down on the small number of professional criminals who do defraud the system. However I worry that it might frighten away genuine benefits claimants who need the cash but are reluctant to “make a fuss” or worry that the might get caught out (e.g. they claim for benefits, their circumstances change and they don’t inform the council quickly enough) and are forced to endure poverty as a result.

I would also put this in the context that the job seekers allowance and housing benefit (the two that the Daily Mail brigade protest the most about) is less than 3% of public spending, indeed the bulk of the benefits bill goes as working tax credits to working families…of course this means that Middle class families who’ve maybe gotten their claims wrong could go to jail (love to see Cameron try selling that on door steps in a years time!).

But what I find odd, is that the maximum penalty for tax fraud in the UK is only seven years. And while councils are spending millions trying to catch out people claiming the odd few quid a week more than they should the government is making little or no effort to catch people defrauding the exchequer out of tens of billions a year, more than the entire welfare budget!….although that might have something to do with the fact that some of them are sitting around the cabinet table!

Indeed a BBC episode of Panorama, How to Dodge Tax, showed last night that while the coalition might well talk the talk about getting tough on tax avoidance, they are not walking the walk . Indeed far from closing loop holes they’ve been opening them and advising businesses on how to take advantage of them. And the beeb even caught an advisor to the government on tax giving a £1000 a day session of tips and pointers on tax avoidance!

If the penalty for benefits fraud is going to be that severe, then judicial equality requires that anyone found guilty of tax evasion should be even more severe again, a lengthy jail term and an unlimited fine.

Certainly I would argue we could eliminate much tax evasion and avoidance by adopting two rules.
Firstly applying a fine of ten times the amount avoided (plus interest, back dated to the year that it first started) to any accounting firm and the client for any errors they made in a tax return. Secondly, apply heavier prison sentences for outright tax evasion. These would instantly make tax avoidance and evasion a fairly risky business financially (one small typo on a ledger and a billionaire is could be looking at tens of millions in fines, a spell in prison and his accountant winds up bankrupt) and my suspicion is many will decide it’s not worth it.

But clearly, this story just goes to show how out of touch the present government has become. And how beholden they are to upholding right wing myths. If the Tories keep this up, they’ll be burning benefits claimants at the stake pretty soon, or making them go around in orange jump suits.