...a blog by Richard Flowers

Monday, March 26, 2012

Day 4103: Cameron Plumbs New Depths


What's the difference between the Prime Monster, Mr Balloon, and the man behind that big boat movie (currently being remade for telly as ITV's Drownton Abbey)?

Answer: they're both FISHY stories, but we've yet to hit fluffy bottom in Mr Balloon's latest cash for access scandal.

And, like the big boat in question, Mr Balloon's denials don't cut much ice.

When he says "this is not the way the Conservatories raise money", it stretches credulity un peux since Tory Treasury Mr John "Judge Dredd bad word" Crudd has resigned because you can see him on video doing exactly that.

Saying that the visitors to the upstairs flat are in Mr Balloon's "private time" was never going to wash. It stopped being his private business the moment that a senior Conservatory was on the tellybox saying that "private time" was up for public auction. Nor is the excuse that there would be no proper record of private visitors believable. At very least, they'd need to be on the list of people for the police to LET IN. (Or are we to understand that you can routinely troll up at Downing Street and tell the office on duty: "no, I'm not on the list, I've got some private time with Mr Balloon"?)

And Auntie Maude's appeal on the The Today Programme was also less than convincing: look, he said, everyone knows you can buy access to the Prime Monster. We are completely open and honest about how nakedly venal we are.

That Conservatory menu in full:
  • "Treasurer's Club": £100,000 buys you a brief meeting with the Prime Monster
  • "Leader's Club": £250,000 and you get an intimate soiree for deux in the Number Ten flat
  • "Inner Circle": £500,000 and you can spend the weekend at Chequers and snog SamCam
  • "Masonic Rites of Dracula": £25,000,000 and he'll do bad bad BAD with a pig on live national telly.

(Look, Mr Charlie Brooker is not MADE of cash – they had to get an actor.)

It was with something approaching heroic stupidity that Hard Labour fielded Lord Levy on this subject, the man who was cleared of selling peerages by a Metropolitan police commissioner who later received a peerage. No relation. Fortunately it turned out to be a TOTAL COINCIDENCE that every single person to donate one million pounds to Hard Labour received a knighthood or a seat in the House of Lords, or THAT might have been AWKWARD!

Brave, too, of Mr Milipede to demand an inquiry into "Cash for Policymaking" given where that's likely to go in his own Party, and the way that Hard Labour keep on scuppering cross-Party agreement on donations so that the Unions can continue buying access to Hard Labour policymaking, er, I mean making fraternal donations for NO REASON WHATSOEVER and dropping those changes to Hard Labour's constitution last year was ENTIRELY a COINCIDENCE too. HONESTLY.

Another inquiry, though, will get us NOWHERE. We already KNOW what the answer is: limit donations, a proper register of lobby interests and lashings of HUMBLE PIE.

It is EASY to lampoon politicians as in the pocket of SHADY PLUTOCRATS... because they ARE. We ALL get tarred with that particular brush. Protesting that it's "just the Conservatories" will only get us slapped with a "well YOU'RE in bed with them".

Mr Mark Reckons is DEAD RIGHT on this: the Liberal Democrats need to announce an immediate self-denying ordinance of only accepting donations of ten grand or less.

(If nothing else, it would spare us the embarrassment of another Michael Brown fiasco – our one and only big donor in all of history and it was a bad-word up of such, forgive me, Titanic proportions that one suspects he was actually a Conservatory sleeper agent all along, intent on providing that Tory blogger Dale Winton with an "all Parties are corrupt" riposte to be used every single time that his own Party are caught red-fluffy-footed with another brown envelope.)

Friday, March 23, 2012

Day 4100: The Shocking Truth – Who is Worse Off under the Granny Tax


It warms my fluffy heart to see the great and the good of the left (La Pollyanna Toytown and chums) manning the barricades on behalf of those who don't earn enough to benefit in this week's budget, who face more cuts to welfare and tax credits and who...

Sorry, what's that?

They're ACTUALLY kicking up a fuss about people who ALREADY get extra benefits being told they're getting even more on top?


From the HOWLS and CARTOONS you'd think that Gideon was PHYSICALLY removing tenners from old ladies' purses and stuffing them into the thongs of passing Fat-Cat-Monsters.

(And why GRANNIES not GRANDDADDIES, I am not alone in asking. And does this only apply if you have offspring who have offspring?)

The truth is the rather-more-nuanced: "He's not sticking an extra tenner INTO the Grannies' (etc) purses".

(Something that the Hard Labour HYPOCRITES were doing for YEARS on the sly, but when Gideon is naive enough to TELL people what he's doing, they go all SHOCKED MITTENS.)

So who IS going to have to pay MORE because of this "mugging"?

(This is the SCIENCE BIT – you can tune out for the next few paragraphs if you want.)

It's not QUITE nobody.

No one over 65, not one single person, will be worse off because of the changes to personal allowances.

In fact, better-off older people, those earning between thirty and forty thousand pounds (those people still in work or with REALLY good pensions) will be even BETTER off because they don't get the age-related bonus either (one of those iniquitous "withdrawal of personal allowance" stings that we have talked of before), so they WILL benefit from the Liberal Democrat tax cut that raises EVERYONE'S personal allowance.

HOWEVER, in an example of the World's Smallest Inter-generational IniquityTM, people who are sixty-THREE now, would have gained an extra allowance when they turn sixty-five in 2013/14 and they now WON'T get the EXTRA allowance. So if they are earning more than nine grand (and many will be relying on a retirement income that is less than that) then, because they'll be starting to pay tax at the new higher personal allowance of £9,205 instead of the age-related personal allowance of £10,500, they could be paying up to £259 of tax that they would not have had to pay.

People who are sixty-TWO now would have gained the extra allowance in 2014/15. It is a reasonable guess, in fact a near certainty, that the personal allowance will go up to £10,000 in that year (a year faster than planned thanks to Liberal Democrats negotiations over the budget). They will miss out on £500 of bonus personal allowance, so, again if they have enough income, they will pay £100 in tax more than they might have done. Current sixty-three year-olds with similar incomes will also have to pay this £100.

(There is a similar effect on people who are SEVENTY-three, who – if their income is above ten-and-a-half grand – will pay an extra £32 in each year that they would not have done if the system hadn't changed, and people who are SEVENTY-two – likewise, earning more than £10,500 – who will miss out on that £32 tax cut in the second year.)

It looks pretty likely, though, that in 2015/16 the personal allowance will go up to MORE than £10,500... in fact ideally to more than £10,660... and the advantage of the age-related allowance will cease to exist.

(And I appreciate that there is a fairly subtle difference between not getting a benefit that you've never had BUT THAT OTHER PEOPLE HAVE HAD, and not getting a benefit that no one has ever had.

So, current sixty-three-year-olds (who earn between roughly nine thousand pounds and twenty-six thousand pounds) will be worse off by £359 (or less, and most by nothing).

Current sixty-two-year-olds (earning likewise) will be worse off by £100 (or less).

Current seventy-three-year-olds (you get the bit with the earnings by now) will be worse off by £64 (or less).

And current seventy-two-year-olds (earnings blah blah blah) will be worse off by £32 (or less).

And no one else.

No one else will be worse off.

Of course they'll not be BETTER OFF either. But that's because they're BETTER OFF ALREADY, and the effect of these changes mean that everyone else is just CATCHING UP.

All of the wheezing and groaning that we hear on this issue is coming from people who already HAVE more benefits than younger people AND EXPECTED TO GET EVEN MORE ON TOP OF THAT.

The IFS study has shown that actually, pensioners have contributed LEAST to the austerity.

So maybe, just maybe, it is RIGHT to ask them to shoulder a little of the burden too by GETTING EXACTLY WHAT THEY ALREADY GET and NOT PAYING MORE.

Which is SO harsh.

The big surprise is that it was the CONSERVATORIES who put this change into the budget mix. The Liberal Democrats' preferred option – as voted at Conference – was to restrict the benefit of paying into pensions for higher rate tax-payers.

You'll not be surprised to hear that Daddy Richard actually PREFERS the Budget's option, because it means that people will pay the tax on their income WHEN THEY GET THE MONEY, rather than when they are putting it into the pension fund.

What you might NOT expect, thought is that, even though pension contributions are NOT to be included in the Tycoon Tax limit of 25% of earnings being put into legitimate tax avoidance, we're not so sure that we would mind if they were!

We've had a LOT of discussion with Count Packula (...and, er, had a chat with Mr Danny... and, er, passed the word to Cap'n Clegg...) about how much paying into a pension is LEGITIMATELY providing for an independent retirement and how much is MANIPULATING the tax system by shifting income to a time when you are in a lower tax bracket. The evidence seems to be that a LOT of people dodged the bullet of the 50p rate by dropping extra income into pensions. It's persuasive that this – like many other tax-advantageous schemes – is being used as a DODGE.

And so we've come to the conclusion that LIMITING how MUCH of your income you can defer like this – and 25% seems like a FAIR amount – is a BETTER way to stop ABUSE than asking people to pay contributions from their taxed income.

Anyway, that's neither here nor there when it comes to THIS budget.

There's still plenty to be OUTRAGED about in the budget...

...although, as with MOST of the WRETCHED COMPROMISES that we have to make in this Coalition, it's possible to feel a bit better about our bits when you've looked at the details – e.g. we may not have got a mansion tax NOW, but that doesn't mean it's off the table; the Conservatories still want to get rid of that 45p rate. Never mind what you hear in the papers about Gideon being in two minds about whether or not they should get rid of the 50p: it was the first thing the Conservatories slapped on the table and their number one red line. They were GAGGING for it! So we've got a LOT of leverage left with the 45p, which will cost more and need a more significant wealth tax to pay for it. HINT HINT.

And the tax incentives for creative industries are very much to be welcomed, as they are in line with Mr Dr Vince's leaked letter about how the Government should have an industrial strategy that supports British winners. A BIG difference between us and the Conservatories is that a Liberal government would INTERVENE to help, as opposed to Conservatory LAISSEZ-FAIRE (or Laissez-FAIL more often than not). We can and must be the Party of the VISION THING!

On the other fluffy foot, Master Gideon talked about taking another ten billion away from welfare. It might not be what he meant, but it's certainly what he SAID. Which is terrifying!

And the politics of the 50p rate remain just AWFUL. And the mathematics looks quite risky. The 50p rate may only have raised around a hundred million because the high-earners avoided the tax (through contributions to pensions and other legitimate schemes and wheezes), but that DOESN'T mean that they won't similarly duck the 45p rate, and we could end up with a substantially larger hole in the finances that Gideon predicts.

And even if he's got his sums right, the effects of the Tycoon Tax and the extra Stamp Duty don't really start to be felt until year THREE of this plan. This year the budget shows what is called a "fiscal tightening" or LESS MONEY IN of nearly two billion pounds, and next year one billion. That's a gap that's got to mean accelerated restraint on the spending side. Or FASTER, DEEPER CUTS.

So get angry, if you have to get angry, but get angry about the RIGHT THINGS.

Get angry that the Liberal Democrats fought their corner WELL and got a tax cut for MILLIONS but still couldn't stop the Conservatories giving a bung to billionaires.

Get angry that there is less for those in poverty, and remember whose FAULT that is.

Get angry about the GREED of the Labour years that RUINED the economy and that the poorest, as always, have to pay for Labour's folly.

But if you REALLY want to get angry, get angry at the FAUX outrage of MILLIONAIRE lefties cynically playing politics with Grannies, scaring them that they'll be taxed into the poorhouse when really they'll pay NOT A PENNY MORE.

Wednesday, March 21, 2012

Day 4098: Oh What A Lovely Budget. Apparently.


A letter arrives. It's from Captain Clegg! He seems unnaturally happy about Master Gideon's latest budget. I'd better check the POSTMARK – ah yes, he appears to be writing from CLOUD CUCKOO LAND...
Dear Millennium, We can be proud that the biggest tax cuts in today's Budget go to millions of working families.
Well, the most EXPENSIVE tax cuts, perhaps. 'Cos with only 330,000 people paying 50%, it costs LESS OVERALL to give them a bung.

But anyone earning more than £155,000 has had a tax cut of more than £250, and that's MORE than the £220 a basic rate taxpayer will get.
As a result of this Budget, someone working a full week on minimum wage will see their income tax bill cut by over 50% compared to under Labour.

Increasing the personal allowance to £9,205 takes us within touching distance of our number one manifesto pledge – ensuring no one pays any tax on the first £10,000 they earn.
Successfully not benefitting EITHER of my Daddies, because one earns too much and one earns too little. Congratulations to the households of TWO top-end basic rate payers, though. You earn more than both Daddies put together AND get two tax cuts. Plus you keep your Fluffy Child benefit! Hooray!
Thanks to our changes, a basic rate taxpayer will be paying £45 a month less in tax than they would have been under Labour.
Although strictly speaking, that's £45 LESS the extra that they are paying in VAT and duties on fuel, beer and ciggies. And yes, Hard Labour WOULD have put those things up too (especially the VAT) but you're not comparing a fictional Labour budget with Gideon's actual figures – you're comparing the actual tax rates they had in 2010.
We can be proud that we've ensured the richest in our society will be paying more, much more.

The Tycoon Tax, an increase in stamp duty for high value properties and other new taxes on wealth...
Oh please! At Conference you were implying that the Tycoon Tax should be a tax on INCOME, some sort of minimum percentage that billionaires like Mitt Moron ought to pay. Today it's a hike in stamp duty. STAMP DUTY?! This just looks like spin. And not very good spin.

And Stamp Duty is a tax on BUYING property, not on HAVING property – it's not really a wealth tax, more a barrier to entry to the Tory Toff circles.

Or maybe it's just misplaced punctuation!

To be fair, some of the more EGREGIOUS get-out-of-tax-free loopholes have been, well not closed but made considerably more modest and that DOES gain us back a sizeable whack more tax, clawing back about a BILLION quid over five years.

So if you take the Tycoon Tax to mean the capping of some of those tax avoidance schemes PLUS a similar amount from the Stamp Duty then you might get to...
...will raise five times as much as the 50p tax rate. Those with annual incomes of more than £150,000 a year will be paying on average an additional £1,300 a year in tax, as a result of this Budget.
Of course, this is a Coalition Budget and we did not get our own way on everything.
Well, it IS true that the budget has been an obvious case of a Liberal Democrat tax cut at the bottom and a Conservatory tax cut at the top, and that's GOOD, we can work with that. But the question is WHERE DOES THE MONEY COME FROM. And it looks very like it's come from FASTER and DEEPER cuts.

And then we see ANOTHER TEN BILLION off Welfare payments.
Conservative priorities are not ours. But as on so many other issues...
We rolled over and let them have their way?
...we have made sure that there is a real Liberal Democrat stamp on this Budget.
And a real Conservatory kick in the badwords.
Lower taxes for more than 20 million working people; effective new taxes on the rich.

This is a Budget we can be proud of – a Budget for the many, not the few.
Really, Cap'n? Proud?
Thanks for all the support you give to the party. Best wishes,
Well, I support the Party because we're supposed to be BETTER than this. We ACCEPT that we cannot do the ALL things we want to do, nor that we can stop the Conservatories doing many bad things we'd rather that they didn't.

But that DOESN'T mean taking pride in a Budget that basically tickles the Tories' tummies and gives us one concession and sending us off with a pat on the head.

How did we manage to let them NOT put up any serious wealth taxes?

How much* of that ten billion welfare cut goes towards mitigating the cut in BENEFITS for RICH PEOPLE?

And how about we STOP trying to OWN the whole Government, take CREDIT for what we HAVE got (a basic rate tax cut) and ADMIT to where we DIDN'T get our way (oops, no mansion tax!).

I'll be PROUD when we HAVE a Lib Dem budget. Until then, I'll stick with being thankful for small mercies and APOLOGISING for shaf... bad-word-ing the poor. AGAIN!


*It's about two-thirds of a billion a year, actually. Look, I LIKE universal benefits, they're simple, unbureaucratic and get to the people who need them, but that doesn't mean I'd choose child benefit for duchesses over employment support for the disabled.

Featured on Liberal Democrat Voice

Monday, March 19, 2012

Day 4096: Ask Not For Whom the Road Toll, it Tolls for You!


This is starting to get SILLY. Apparently we're now proposing to privatise the roads.

So buying large public works on the never-never is BAD when it is Hard Labour's crazy PFI schemes but FINE when it's giving the nation's vital road infrastructure over into the fluffy feet of MAMMON, is it?

Because we're all so PLEASED with the way that the OTHER privatised monopolies have worked out.

(So long as by "we" we mean "the foreign companies who now own our utilities".)

It's not QUITE up there with slashing disabled people's benefits, but it is a VERY Conservatory-led policy.

If we want a JOBS and GROWTH strategy, wouldn't it be a BETTER idea to keep the key underpinnings of our civilisation in public ownership?

And for a government that is supposed to be obsessed with NOT lumbering our children with debt the way Hard Labour did, do we really want to be using some of Hard Labour's Enron-style OFF-BALANCE SHEET accounting to spend money now and pay later?

Sunday, March 11, 2012

Day 4088: NHS – a Typical Liberal Compromise


Just back from the NHS debate and we've succeed in voting for EVERYONE! We agreed with Ms Dame Shirl the Girl that the amended bill was now better, and we agreed with Mr Dr Evan that the Lords can still vote to nuke it anyway!

Many good points were made, about the complexity of the new arrangements and that there is more centralisation going on under cover of devolving some other powers. And of course that none of the doctors, nurses, midwives, surgeons or psi-judges who have looked at the bill actually want it.

BUT, Dame Shirl made the MOST telling point.

Hard Labour's 2006y bill – which we default to if we kill this one – laid the foundation for PRIVATISING the Health Service, with their PFIs and sweetheart deals for private clinics and paying for operations that don't even happen.

OUR bill, now we've amended it, STOPS LABOUR'S PRIVATISATION OF THE NHS.

On the whole, I think that the CORE of this bill is a GOOD IDEA that has been VERY BADLY IMPLEMENTED.

Giving the POWERS and the RESPONSIBILITIES for YOUR care to YOUR doctor is a GOOD THING.

But we should have done it VOLUNTARILY and we should have run LOTS OF TRIALS so that people could SEE if it worked.

And if it DID work, people would have been CALLING for the changes not shouting "traitor" at queues of people that they ought to be persuading. (ACTUALLY HAPPENED – good way to persuade people that!)

And if it DIDN'T we could have agreed to drop it based on the evidence.

Instead we have the mess Mr Landslide and Mr Balloon dropped us in.

"No top down reforms of the NHS" – it's almost like Mr Balloon wasn't paying any attention to what his ministers wanted.

At least the Lib Dems are listening!

PS: Got stuck in the lift with Mr Dr Vince this morning and it carried us away to the fifth floor instead of the ground. Still, if you're going to be trapped with the Business Secretary it's better to on your way to the top!

Wednesday, March 07, 2012

Day 4083: A Super Tuesday for Dr Vince


It was a GOOD day to be the President*... of the Board of Trade.

A welcome announcement of much-needed new jobs and investment always puts a spring in the stride of the Business Secretary.

Add to that a subtle hint that we Liberal Democrats might trade off the 50p tax rate that raises millions for a proper wealth tax that raises billions.

And then SOMEONE leaked a letter showing our Vince is the "Man of Vision", with a policy for social market intervention that will make George Osborne's head explode.

(And it's usually Fantastic Doctor Fox who does that!)

Many people with large property portfolios don't even NEED a large income so they don't pay lots of income tax. And with 5% of the population owning more of the wealth than the other 95% put together, it is surely fairer to ask them to contribute a bigger share.

But even before we GET to fairness, there is a good ECONOMIC case for taxing WEALTH. At a time when the economy is crying out for INVESTMENT in jobs and businesses, far too much of the nation's money is being LOCKED AWAY in PROPERTY.

That's a simple consequence of SUPPLY and DEMAND – years of planning restrictions and under-investment in housing stock means that demand for houses outstrips supply, forcing up prices. The Hard Labour Government was more than indulgent of this dangerous house price bubble; in fact, most of their so called economic policy rested on convincing people that the rise in house prices meant that they were getting richer as an excuse to keep on borrowing. Not that the Conservatory government of the Nineties and Eighties was any less guilty of encouraging house price speculation with their selling off council houses on the cheap and nation of homeowners rhetoric.

With governments of both old-Party persuasions tacitly conniving in the housing inflation, property becomes an investment that is, self-evidently, safe as houses. And BANKS prefer to lend mortgages (with a nicely-guaranteed-to-retain-its-value property to secure the loan) than business loans (which are risky in the current post-crash climate).

BUT if people had to spend LESS on just keeping a roof over their heads they would have MORE to put into investments, savings, pensions or just plain old spending – all of which are GOOD for economic growth in a way that makes locking it all away in bricks and mortar look deeply UNHEALTHY.

Now, obviously, there are DECADES of abuse laid up there, and one thing we DO NOT WANT is a property price crash to leave people with NEGATIVE EQUITY. So the government has to tread terribly softly here.

What a MANSION TAX would do is put some GENTLE pressure on house prices at the upper end while at the same time UNLOCKING some of that locked-away capital.

Meanwhile we SHOULD look at the bottom end of the house market too, because the OTHER big contributor to the swelling of the housing bubble has been the indulgent way that Housing Benefit – a benefit that benefits LANDLORDS way more than people in the house – was treated by successive governments. Daddy Alex has – quite rightly – suggested that we should be looking again at proper RENT CONTROLS.

It certainly should not be substantially more expensive to pay the rent than a mortgage on the same property – a practice that leave the HAVES (as in "have the money for a deposit") sitting pretty on their buy-to-let mini empires while trapping the HAVE-NOTS in rental dependency forever.

The best possible outcome would be to engineer STABLE house prices while the rest of the economy GROWS to CATCH UP. If anyone DOES know how to do that, answers on a postcard to Danny Alexander at the Treasury.

In the meantime, probably best just build a lot of new homes.

(*Actually, it was a pretty decent day for Barry O, too, as Mr Mitt Morony continued to play the role of wounded MOOSE, floundering through another set of Primaries, limping to near-victories while the neo-creationist fruitloops continue to bite chunks out of his synthetic credibility.)

Monday, March 05, 2012

Day 4081: Man Who Has Never Seen Snow Demands Right to Define Skiing*


*Well, that's about as silly as a frock-wearing man who has vowed never to marry insisting against all sense and evidence that only he can define marriage.

Look, I'm just THRILLED to learn that the concept of HUMAN RIGHTS has penetrated the previously-entirely-inured-to-new-thinking sanctums of the Eternal Apostolic Catholic Church, prop Mr the Pope, but I think someone needs to inform the Holy Father's representative in Scotland, Mr Cardinal Keith – the aforementioned man in frock – that he can't just go making them up.

That's a little bit NAUGHTY.


For starters, it's a lovely idea that everyone has a Human Right to a mummy and a daddy – although I'm not completely sure that Mr the Pope will be okay with Cardinal Keith deciding that the immaculate conception was a breach of Mr Jesus's human rights.

Nor, I'm afraid, does article sixteen define "marriage" as between men and women. What it ACTUALLY says is that "men and women have a human right to marriage". So it does say that men have a right to marriage and women have a right to marriage. But it doesn't say that you need one of each to practise that right. Which is fair enough because some people – including some Christians and some Muslims – have believed in having, for example, more than one woman in a marriage. And we couldn't go condemning people just for their weird religious beliefs, could we!

On the other fluffy foot, I do not think that Cardinal Keith has entirely thought through his insistence that it is not for the State to define marriage. After all, the Vatican is a State.

Day 4078: Why Don't We Just Tax Chutzpah?


Warming up to take a pop at our own tax policy, I'm reassured to see that the Conservatories continue to be driven into conniptions over the 50p tax rate, this week with another group of concerned businesspersons contacting the Hello-o-graph to express their anxiety that rich people contributing to the coffers and not being driven to leave the country is in some way bad.

Still, you've got to be impressed by their CHEEK!

"We believe the richest should help the poorest in society..." they say. Before demanding to help just that little bit less.

Here's a DIFFERENT taxing idea instead: LOWER the threshold of the 50% band to £140,000 as we raise the personal allowance to £10,000 and get rid of the withdrawal of personal allowance – a tax cut for the rich paid for by the richer, and a more HONEST and TRANSPARENT way of raising the tax from the most well off.