Vir Cantium

I'm right, you know …

Monthly Archives: July 2010

As High Streets Struggle, Assembly Calls for More Aspic

It is tempting for us politicians to think that we can make things better by intervening, without stopping to take stock of our previous efforts, and whether they had any effect or even made things worse.

This is something the Mayor would do well to be aware of now that the London Assembly has delivered its opinion on the struggle faced by local shops; troubles not helped by the recession of course.

The report …

…. calls for changes to local, regional and national planning policies – including the Use Classes Order – to offer them more protection…

Deputy Chair of the Planning and Housing Committee, Jenny Jones AM, said:

“People in residential areas need local shops that provide essential services that they can walk to.  They do not need rows of betting shops and internet cafés, or to have to travel to supermarkets by car.”

Whether they need rows of betting shops and internet cafés is hardly for government to decide. They may not need to have to travel to supermarkets by car … yet they might want to.

It seems that some people have an idyllic view of the corner shop, open all hours, which is then brutally crushed by the big supermarket opening up down the road. Yet it’s not the supermarket that closes the shop – it’s the fact that so many people prefer to shop at the supermarket. Tesco et al know this. If they thought that their offer wasn’t better than the existing provision, they wouldn’t waste money opening up.

“Use it or lose it” goes the old saying.

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Greenpeace Gets A Free Pass

So Greenpeace yesterday mounted another stunt to draw the worlds attention to themselves an environmental concern, this time jumping on the BP-bashing bandwagon.

Sadly for the eco-warriors BP’s poor financial results took a lot of the limelight away from their acts of trespass and economic vandalism. The BBC did cover it, though, but only gave a brief mention to the reasons for the protest with a vague reference to the company’s environmental practices. I suspect that at least a few of those engaged in the stunt would regard all oil companies as the shopfronts of the devil, and thus their appreciation of the details of climate science and petro-chemicals is about as refined as their understanding of how the retail arms of oil companies are run: as Iain Dale pointed out, many forecourts are small franchised businesses such that yesterday’s efforts would have had a proportionately greater impact on struggling small traders than on any faceless multinational.

A BP petrol station, minding its own business

A BP petrol station, minding its own business.

Talking of the BBC, it displayed its usual moral relativism in its coverage of the events, describing the Greenpeace mob as “activists” (as opposed to what … “inactivists”?)

I appreciate the Beeb tends to avoid pejorative or loaded language when reporting on many issues, especially sensitive political ones, but there has to be a limit. I believe that, in a civilised nation, you don’t try to change the law by breaking it – that way lies anarchy.

Trespassing on someone’s private property and closing their business, just because your political opinions – like voices in your head – drive you to do so, is crossing the line, and should not be given such implicit endorsement from a respectable institution like the BBC, and one which sets the tone for reporting by many other outlets. Report it, yes, but sometimes you just have to call a spade a spade; or, to put it another way, report the facts.

Perhaps those of us who oppose the compulsory TV licence fee should trespass in Television Centre, maybe dig some allotments, and see how long the BBC continues to forgive such “direct action” as mere fluffy “activism”.

Who knows, perhaps we could learn from Greenpeace and other campaign organisations and register as a charity to get some tax breaks!

Lessons in Localism

Something that councillors like me are going to have to get used to is the fact that ‘localism’ means devolving power to the lowest practical level. That sometimes will mean bypassing us altogether, as with today’s “Community Right to Build” proposals from Grant Shapps, where local land trusts can obtain permission via local referenda to build small developments.

I expect that some of my own colleagues will not be happy with this one but, so far, I am.

One group that has already come out against the move, though, is the Council for the Protection of Rural England:

“A more democratic approach to house building is welcome as local people should always be given a say in development…. However, bypassing the planning process is not the way to deliver it and any proposals should include proper planning scrutiny.

“The level and location of development should be informed by a proper assessment of local housing need and an understanding of whether the local environment can accommodate more development. This capacity should be assessed through democratic local plans and not a simple public ballot [my emphasis].”

Yes, you read that last bit right. I think that the term “democratic” in this instance, describing central planning under a system introduced in the 1940’s, is used in the same sense as it is in, say, the “Democratic Peoples Republic of (North) Korea”. (Certainly, at least in the past, it has given us a fair amount of architecture in a similar style too).

I could even comment that the use of the term “Council” in the CPRE’s name is somewhat incongruous, as it suggests a body made up of elected representatives. Perhaps that explains why the CPRE (chief executive: former Labour MEP Shaun Spiers) is so confused about what democracy really means.

When we councillors do draw up our local development plans, we are doing so as delegates of the local communities in our wards, divisions or parishes. At a borough or county level, it is the most practical method of getting democratic input into the process over large areas.

However, if you are talking about a neighbourhood or village, then a local referendum could clearly be a practical option. (Incidentally, Grant Shapps has tentatively suggested a high approval threshold of 80-90%). Yes, consideration must be given to the effect on the local environment, transport routes, schools and other infrastructure, but surely those best placed to judge this are those living in that same neighbourhood? What makes us, the local great and good councillors, think that we know any better? Is that not the philosophy of the paternalistic central state bureaucrat?

Taking of which, just how “democratic” does the CPRE think it is when, under the current system of central planning, a development wins approval after a successful appeal to a planning inspector reporting to his superiors in Bristol? “Not very” would be the answer, I suspect, but there’s no point in being half-hearted if you want to overturn decades of anachronistic state planning machinery.

I Suppose A Flat Tax Is Out Of The Question?

Yesterday George Osborne launched the Office of Tax Simplification (OTS). Good on him. Now we’ve reached the point where even HMRC staff have trouble keeping up with the changes that are being made to the system all year round (not just at budget time) something had to give.

I’m not kidding myself that tax simplification won’t have the happy (for the Treasury) side-effect of increasing the tax take in some areas. The review of the IR35 rules, for example, may well see certainty of treatment in exchange for increased liabilities for taxpayers, but could still be widely welcomed.

The real challenge, though, will be stopping the system from regaining the flab of complexity after the OTS has implemented the crash diet.

Complexity in the tax system arises from two main sources: closing ‘loopholes’ (sometimes under the banner of ‘fairness’), and handing out ‘tax breaks’.

Closing loopholes are the staple silver bullet of many a manifesto. A few billion saved by tackling tax avoidance (as well as tax evasion, of course; a very different animal). Yet like so many drugs, the cure for one ill will give rise to a range of side effects, in the form of new ‘loopholes’, and so it continues until one eventually reaches a point where the cost of policing the anti-avoidance rules gives poor value for money in terms of the amount of additional revenue raised. It also has the knock-on effect of making the UK a less attractive place to do business. Businesses don’t all flock to tax havens, of course; after all, the UK is a major market. They do, though, require certainty so that can plan ahead, tax rates that are reasonable, and the cost of complying with all legislation to be manageable and proportionate.

A bigger problem, though, comes from what is meant by a ‘loophole’. Is the fact that someone in the 40% tax bracket gets 40% relief (instead of the basic 20%) on their pension contributions a loophole? Some do think that paying extra pension contributions to reduce your tax liability is a loophole, the Lib Dems included. Yet if you will have a tax system which ensures that those on higher incomes pay a higher proportion in tax, then general tax reliefs will logically (and equitably) benefit them more. Don’t like that? Then make everyone pay at the same rate – almost the ultimate simplification. The banker on £1m a year will still pay around fifty times more tax than someone on £20k.

A flat rate system won’t happen, of course, because making such a thing acceptable will inevitably involve a reduction in revenue, and in any case just won’t satisfy the guilt-ridden liberal middle class or the ranting banner waving class warrior mobs those who support a ‘progressive’ ‘fairer’ tax system.

Yet lower tax rates, flatter tax structures or both are the ultimate way to tackle tax avoidance and evasion, as well as making your country a significantly more attractive place to do business. It is ironic that the most recent example of a flattening of the tax system was when a Labour chancellor overhauled Capital Gains Tax to set a single rate of 18% (with ‘entrepreneurs relief’ giving an effective 10% where appropriate). Yet George Osborne has reintroduced a third rate of 28% at the higher rate. (Yes, to be fair to George, though, he is planning the move to a single general rate of Corporation Tax.)

Tax breaks are another problem. Some are genuinely aimed at helping certain people or industries. Now I generally support genuine tax reliefs; i.e. where a tax liability is reduced, perhaps to zero, but not where it goes further and results in a disguised state subsidy. However, this can all get out of hand, and there are also plenty of tax breaks buried away which have served little purpose other than giving the chancellor another good headline on budget day.

Remember the 10p tax debacle? Before then the personal allowance was gradually being brought into line with the National Insurance thresholds – all well and good and clearly a simplification measure. Over one short-lived good headline and a year of slow realisation by Labour MPs later, we have personal allowances that are now further away from the NI primary threshold than before, a panic as they realised the increased personal allowance might benefit those evil higher rate taxpayers more than the lower paid, and a 10p tax band that actually still exists, but only where income includes investment income and it doesn’t exceed the band. Simple.

So, in a nut shell, for tax simplification to be a long term prospect, we just need an end to the politics of envy, and for politicians to stop interfering for short-term political gain.

Yep, that’ll happen.

I Agree, Sort Of

Philip Hollobone, formerly a local councillor before he came down in the world and was elected to Parliament, has stated that he would refuse to see a constituent at his surgery who was wearing a full face veil.

On this I agree with him, though not quite for the same reasons. I’m not convinced that being unsure that the constituent is who they say they are is a sufficiently strong reason for refusing an appointment, but as a remark on the spur of the moment we shouldn’t assume that it is his sole objection.

No, I think he would be right to refuse on the same grounds that Jack Straw was right. Most communication is non-verbal, as we know, and a great deal of that non-verbal communication comes from the face. It is perfectly proper for anyone to raise an objection if one party is voluntarily placing such an obstacle in the way of that communication.

But what about the right to pursue one’s chosen religion? The key word there is “chosen”: if one chooses a particular belief system then they are choosing to place artificial restrictions on themselves (fine) and sometimes others (not necessarily fine). As it is, there are plenty of Muslim women who find no need to wear a face veil. (Even so, I don’t support a blanket ban on burqas or full veils.)

In an age of so many forms of communication, Mr Hollobone is not denying his services to a constituent and thus not stopping her from pursuing her own interpretation of her own religion.

Yet of course we are seeing the outrage from “Muslim groups” and potentially the media circus that Paul Goodman warns of over on ConservativeHome. But bear in mind just who these groups represent, and who, if anyone, actually elected them. Then compare that to the 23,247 who supported Philip.

Misdirected Bleating

The BBC reports:

An influential group of economists are expected to call for the assembly government to be given the powers to borrow money and to vary income tax.

It previously said Wales was losing out on £300m a year because of the way it was funded.

I’m sorry, but how does being funded by a system that doesn’t relate to ‘need’ equate to “losing out” on £300m?

I have Welsh blood - I'm allowed to make tired and predictable references to sheep.

I might need a bigger house so I can store my CD collection and the E-type roadster that I don’t have yet but require in order to satisfy my petrolhead leanings. Does that fact that I don’t have these things, because of the tiresome detail that I can’t afford them right now, mean I am “losing out” on £300k of bricks, mortar and arousingly gorgeous metal?

Of course not.

Even if one were to accept the subjective ‘need’ criteria, I’m unconvinced that it should apply in determining funding for such large political units as Wales, Scotland or Northern Ireland. If the Welsh government wants to re-distribute income then let them do so from the Welsh ‘rich’. Then they might come to understand that to tax the ‘rich’, you have to have some ‘rich’ within your borders to begin with, and that means putting a leash on the class warrior within so that people are able to make real money (not just recycling public spending) to create the wealth which can then be taxed.

Not that I support the Barnett formula; that fudged stop-gap that was put in place to keep the Celtic fringes from storming across Offa’s Dyke or the Tweed and making a ruckus. I would scrap the formula and replace it with … nothing. Scotland, Wales and Northern Ireland do need more autonomy over their finances, but what is suggested is a half-hearted compromise which, like Blair’s wrecking of the Lords, is probably worse than either the starting or ultimate end positions.

Let the other ‘nations’ raise their funding through income tax, VAT, etc, and pay a precept towards defence and other genuine pan-Kingdom (or dare I use the term ‘federal’?) functions.

Like a stopped clock, the economists quoted are right just twice: that the Barnett formula is deeply flawed and that the Welsh Assembly should have more fiscal autonomy.

Yet there’s a real irony here. According to the Welsh Assembly’s own research* (281kb), full fiscal autonomy might just fall foul of the EU’s ‘State Aid’ rules. So, a major move towards autonomy for Wales et al could be scuppered by the lack autonomy of the UK in the EU. Funny old world, eh?

* the contents list says page 19 … it’s page 27 in the pdf – must be a Welsh thing.

How The Left Don’t Get It (Part 94)

Q: “Why did the chicken cross the road?”

A: “The only reason the chicken had to cross the road is because of the crisis caused by the financial markets. Why should our members cross the road when it’s the bankers who have created this mess? It may be that the road is a lot narrower than the one the private sector chickens have to cross, but so what? It’s just not fair.”

So, in a way, goes any interview with trade union bosses at the moment. (Of course, it goes a little differently when they are asked about their own pay and benefits.)

Let’s try and get this straight, and not for the first time: the annual public deficit has been running for years, even in the good times. Thus the public debt was increasing, even in the good times (especially when you factor in all those PFI deals). The debt relating to the bank bailout will, in time, be repaid. However, the problem of government spending more than it gets in is a longer running problem which would have come to a head sooner or later.

If we’re looking for causes of the financial crisis – and there are many to varying degrees of culpability – then a basic knowledge of contract law would inform us that for an irresponsible lender, there must have been an irresponsible borrower on the other side of the deal. That, then, would bring into the dock many ordinary people, a for more uncomfortable prosecution in the court of public opinion than the easy targets of the banks.

Yet the point is that the financial crisis was only the spark that lit the forest fire of the bigger and deeper rooted fiscal crisis, growing from the seeds of short-termism, of wanting it all now and pay for it sometime later – if not on someone’s mortgage then let’s have it on the PSBR. How many such unsustainable instances of growth in public spending were rejected by the comrades in the trade union movement?