So, I won't tell anyone if you don't.
It is remarkable to see the Tory getting itself tied up in knots over the economy. Iain Martin writes a most entertaining article in the Torygraph suggesting that little Georgie Osbourne should be moved to a role more in line with his skills. Like looking after the Shadow Cabinet tuck shop.
The Martin article is full of quotable sentences from beginning to end. So choosing one is like shooting fish in a barrel. But here goes with some of my favourite lines:
"There has been," says a loyal Tory MP, "a strange reversal of fortune, in which Gordon Brown focuses on the macro, big picture on the economy and David, the master of theatre, is bogged down with micro initiatives and over-complicated measures of the kind Brown usually specialises in." Osborne as shadow chancellor is blamed for this, because he is most identified with the judgment calls that brought his party here. Then it was Osborne's bad luck that, just as such concerns were stirring, he chose to board a Russian yacht when he would have done far better to remain on dry land.
However, Martin is wrong in this analysis:
One of the Conservative Party's roles is supposed to be that it exists for moments in history such as these, when Leftists who have spent all the money unwisely have decided that the answer is even more of what put the country in a hole in the first place. If it is doing its job properly, the Tory party says: this has to stop and here is a better way which will restore prosperity.
The whole point is that Brown is flourishing because traditionally socialist solutions, rubbished by the Tories for decades, are proving to be the ones needed now: state intervention and regulation, to name but two.
The Tory party has spent over 100 years opposing state intervention and regulation. Now those two actions prove to be about the only thing which is giving the British and world economies any hope of salvation.
Let's face it, the Tories are on the wrong side of history at the moment. Brown, that old Scots socilaista, is on the right side of history - and that's the reason for his smile and the Cameron/Osbourne discomfiture.
Showing posts with label George Osbourne. Show all posts
Showing posts with label George Osbourne. Show all posts
Thursday, November 13, 2008
Saturday, October 6, 2007
George Osbourne's Mickey Mouse financial proposals
It's fascinating to see how the public have warmed to the idea of a general election.
On 26th September, YouGov measured 29% saying GB should call an election this autumn.
On 30th September, MORI put the same measure at 39%.
Today, ICM say 48% want a poll now.
That's a remarkable trend, albeit from different pollsters.
I don't really buy this "Labour disintegration - Cameron riding wave" nonsense. Cameron's speech was only good in the sense that he didn't wet himself and cry in front of the cameras. Osbourne's tax package makes the rich richer, does nothing for the vast majority of people and is one of the most ill-thought-out policy packages ever advanced by any British political party.
Cameron's speech first. He learnt off by heart. It's not difficult if you have nothing else better to do with your brain cells. He wasn't making it up as he went along. There weren't sufficient pauses and "ums" or "ers" to indicate that it was truly "off the cuff". The speech got a few minutes on the news and a few favourable press pieces. It wasn't the Gettysburg Address. It was a very average speech which did, at least, give the impression that Cameron had some sort of idea of direction for his party. He would have to have a sub-cretinous level IQ quotient not to have achieved that.
Osbourne's tax package next. The married couples' initiative is a modest tax cut for the wealthy, especially for those with no children or adult children who have left home. The inheritance tax threshold change is reasonable up to £500,000 (as the LibDems have proposed) but beyond that, up to £1,000,000, is giving, again, to the already very wealthy. The Stamp duty relief is of questionable effectiveness and, certainly, there is huge doubt how it, and the other tax decreases, will be paid for. Clamping down on incapacity benefit to raise a projected £3 billion (Osbourne's estimate) is cloud cuckoo-land stuff. It's the fiscal equivalent of bottling fog. They would have to argue with doctors about their judgment in signing sick notes. Cameron talks about a revolutionary Duncan-Smith plan to get those claiming incapacity benefit back to work. At the reckless end of the estimates this would take about five years to perhaps see some small benefits. At the cautious end, it is the political equivalent of promising to push treacle up hill.
The non-doms levy of £25,000 is the biggest joke of all. Being charitable, it will raise £1 billion less than Osbourne thinks. Less charitably, it leaves a £2 billion hole.
When Osbourne announced the levy on Monday morning on Today, I was particularly sceptical about this comment that, coupled with the £25,000 imposition, he would "guarantee" to the non-domiciles that he would not pursue them any further for tax.
First of all, that struck me, and still strikes me, as a ludicrous "get out of jail free" card for the richer non-doms. It lets them off the hook for all manner of tax avoidance.
Secondly, for the very reason that Osbourne's "guarantee" lets the richer non-doms off the hook, it is very likely that it is illegal.
Richard Murphy of Tax Research says that the measure "will fall foul of Europe". The Code of Conduct for business taxation was set out in the conclusions of the Council of Economics and Finance Ministers (ECOFIN) of 1 December 1997. Even though this code was for business taxation, these things tend to be "influential", according to Murphy.
George Osbourne's levy proposal would breach no less than six of the practices ruled as harmful in the code. The six outlawed practices are:
1. An effective level of taxation which is significantly lower than the general level of taxation in the country concerned;
2. Tax benefits reserved for non-residents;
3. Tax incentives for activities which are isolated from the domestic economy and therefore have no impact on the national tax base;
4. Granting of tax advantages even in the absence of any real economic activity;
5. The basis of profit determination for companies in a multinational group departs from internationally accepted rules, in particular those approved by the OECD;
6. Lack of transparency.
The measure is also likely to fall foul of OECD regulations. The legal doubts are bolstered by a precedent involving Mohamed Al Fayed when Lord Gill criticised the Inland Revenue for failing in its duty to raise as much tax as possible by agreeing a deal with Al Fayed.
Prem Sikka, professor of accountancy at Essex University adds to the doubts in Guardian:
It has not been thought through, is of questionable enforceability and could be in conflict with race relations legislation.
On 26th September, YouGov measured 29% saying GB should call an election this autumn.
On 30th September, MORI put the same measure at 39%.
Today, ICM say 48% want a poll now.
That's a remarkable trend, albeit from different pollsters.
I don't really buy this "Labour disintegration - Cameron riding wave" nonsense. Cameron's speech was only good in the sense that he didn't wet himself and cry in front of the cameras. Osbourne's tax package makes the rich richer, does nothing for the vast majority of people and is one of the most ill-thought-out policy packages ever advanced by any British political party.
Cameron's speech first. He learnt off by heart. It's not difficult if you have nothing else better to do with your brain cells. He wasn't making it up as he went along. There weren't sufficient pauses and "ums" or "ers" to indicate that it was truly "off the cuff". The speech got a few minutes on the news and a few favourable press pieces. It wasn't the Gettysburg Address. It was a very average speech which did, at least, give the impression that Cameron had some sort of idea of direction for his party. He would have to have a sub-cretinous level IQ quotient not to have achieved that.
Osbourne's tax package next. The married couples' initiative is a modest tax cut for the wealthy, especially for those with no children or adult children who have left home. The inheritance tax threshold change is reasonable up to £500,000 (as the LibDems have proposed) but beyond that, up to £1,000,000, is giving, again, to the already very wealthy. The Stamp duty relief is of questionable effectiveness and, certainly, there is huge doubt how it, and the other tax decreases, will be paid for. Clamping down on incapacity benefit to raise a projected £3 billion (Osbourne's estimate) is cloud cuckoo-land stuff. It's the fiscal equivalent of bottling fog. They would have to argue with doctors about their judgment in signing sick notes. Cameron talks about a revolutionary Duncan-Smith plan to get those claiming incapacity benefit back to work. At the reckless end of the estimates this would take about five years to perhaps see some small benefits. At the cautious end, it is the political equivalent of promising to push treacle up hill.
The non-doms levy of £25,000 is the biggest joke of all. Being charitable, it will raise £1 billion less than Osbourne thinks. Less charitably, it leaves a £2 billion hole.
When Osbourne announced the levy on Monday morning on Today, I was particularly sceptical about this comment that, coupled with the £25,000 imposition, he would "guarantee" to the non-domiciles that he would not pursue them any further for tax.
First of all, that struck me, and still strikes me, as a ludicrous "get out of jail free" card for the richer non-doms. It lets them off the hook for all manner of tax avoidance.
Secondly, for the very reason that Osbourne's "guarantee" lets the richer non-doms off the hook, it is very likely that it is illegal.
Richard Murphy of Tax Research says that the measure "will fall foul of Europe". The Code of Conduct for business taxation was set out in the conclusions of the Council of Economics and Finance Ministers (ECOFIN) of 1 December 1997. Even though this code was for business taxation, these things tend to be "influential", according to Murphy.
George Osbourne's levy proposal would breach no less than six of the practices ruled as harmful in the code. The six outlawed practices are:
1. An effective level of taxation which is significantly lower than the general level of taxation in the country concerned;
2. Tax benefits reserved for non-residents;
3. Tax incentives for activities which are isolated from the domestic economy and therefore have no impact on the national tax base;
4. Granting of tax advantages even in the absence of any real economic activity;
5. The basis of profit determination for companies in a multinational group departs from internationally accepted rules, in particular those approved by the OECD;
6. Lack of transparency.
The measure is also likely to fall foul of OECD regulations. The legal doubts are bolstered by a precedent involving Mohamed Al Fayed when Lord Gill criticised the Inland Revenue for failing in its duty to raise as much tax as possible by agreeing a deal with Al Fayed.
Prem Sikka, professor of accountancy at Essex University adds to the doubts in Guardian:
It has not been thought through, is of questionable enforceability and could be in conflict with race relations legislation.
Friday, October 5, 2007
Osbourne's package will disappoint
7.10am today. Woken up with an electric cattle prod ruthlessly applied to my cojones...also known as a GMTV appearance by Edwina Currie, my all-time lift breakdown companion from hell. Trite, over-simplistic, ridiculously partisan, smug, arrogant, pig-headed....the list is endless. I resorted to the old "Hey Jude" humming trick as wifey wanted to listen to her, for some reason. I thought La Currie had been safely buried at midnight on a FiveLive phone-in programme. How wrong I was.
Anyway, the reason for GMTV drafting in the Great Curried Egg was to comment on the current political situation.
The Tory bouncette is not because of the Cameron speech. It's too recent. It is because of the Osbourne speech on Monday. Little Georgie has had a good week. I have revised my view of him, especially after his Question Time appearance last night (Ming was also superb, mainly because he continues to shamelessly milk the applause for being old and an Olympian).
Politically in the short-term, the Monday Osbourne speech was a master-stroke. However, in the medium to long-term his little package of tax measures (the fiscal equivalent of scratching a pig's back when compared to our 16p standard rate of income tax - the three Osbourne measures equate to less than 0.5% of government spending) are a damp-squib waiting to go off. Never mind Labour warning of a "search and destroy" mission on them. No searching is required.
Take the inheritance tax proposal first. The LibDems already announced, with typical shyness, virtually the same measure two weeks ago. We proposed to increase the threshold to £500,000. In fact, that takes most of the affected people out of inheritance tax anyway. (The Evening Standard says that the average price of a house in the highest priced area in the country, London, is £338,950) The area from £500,000 to £1 Million is the much smaller tail of the distributive dragon, and, far from a "Robin Hood" measure when coupled with the non-doms proposal, represents what Polly Toynbee called promising "to steal from the outrageously, stratospherically rich and redistribut(ing) it to the already very-very rich."
The tax on non-domiciles seems very attractive until you think about it for more than two milliseconds. About 135,000 of the 150,000 non-doms which Osbourne factored into his maths either don't exist or wouldn't be able to afford staying here when the tax comes in. Most of the non-doms are nurses, low paid city workers etc, not Roman Abramovich. Osbourne says that the £25,000 tax will release the highly rich non-doms from further fiscal scrutiny under the Tories. That's a joke. £25,000 is like one penny to a billionaire. The measure would put at risk further measures on the non-doms (such as the constraints on capital gains tax avoidance proposed by Vince Cable two weeks ago - I know we are so boring with our policy announcements, aren't we?) and put at risk £4 billion of tax already collected from them each year.
The change in the stamp duty next. Brilliant - but how will it be paid for? We've just seen that the non-doms measure is a joke which would bring in about £1 billion less than Osbourne estimates. His other brainwave to pay for this little package is to clamp down on incapacity benefit claimants. Those naughty people with doctors' notes. Ah yes, the people Peter Lilley tried hard to squeeze as Secretary of State for Social Security from 1992 to 1997 - and failed.
Back to the politics of this. Although these measures seem snazzy in a Daily Express sort of way, they really have nothing to do with the vast majority of people. The bribe to be "given" to married couples maybe does, if anyone can work out who it applies to (and, anyway, it would be not paid for in the ways outlined above). The problem is that this is the Tory party returning to the old core Daily Express vote.
So, enthusiasm for the Osbourne package will soon evaporate.
Anyway, the reason for GMTV drafting in the Great Curried Egg was to comment on the current political situation.
The Tory bouncette is not because of the Cameron speech. It's too recent. It is because of the Osbourne speech on Monday. Little Georgie has had a good week. I have revised my view of him, especially after his Question Time appearance last night (Ming was also superb, mainly because he continues to shamelessly milk the applause for being old and an Olympian).
Politically in the short-term, the Monday Osbourne speech was a master-stroke. However, in the medium to long-term his little package of tax measures (the fiscal equivalent of scratching a pig's back when compared to our 16p standard rate of income tax - the three Osbourne measures equate to less than 0.5% of government spending) are a damp-squib waiting to go off. Never mind Labour warning of a "search and destroy" mission on them. No searching is required.
Take the inheritance tax proposal first. The LibDems already announced, with typical shyness, virtually the same measure two weeks ago. We proposed to increase the threshold to £500,000. In fact, that takes most of the affected people out of inheritance tax anyway. (The Evening Standard says that the average price of a house in the highest priced area in the country, London, is £338,950) The area from £500,000 to £1 Million is the much smaller tail of the distributive dragon, and, far from a "Robin Hood" measure when coupled with the non-doms proposal, represents what Polly Toynbee called promising "to steal from the outrageously, stratospherically rich and redistribut(ing) it to the already very-very rich."
The tax on non-domiciles seems very attractive until you think about it for more than two milliseconds. About 135,000 of the 150,000 non-doms which Osbourne factored into his maths either don't exist or wouldn't be able to afford staying here when the tax comes in. Most of the non-doms are nurses, low paid city workers etc, not Roman Abramovich. Osbourne says that the £25,000 tax will release the highly rich non-doms from further fiscal scrutiny under the Tories. That's a joke. £25,000 is like one penny to a billionaire. The measure would put at risk further measures on the non-doms (such as the constraints on capital gains tax avoidance proposed by Vince Cable two weeks ago - I know we are so boring with our policy announcements, aren't we?) and put at risk £4 billion of tax already collected from them each year.
The change in the stamp duty next. Brilliant - but how will it be paid for? We've just seen that the non-doms measure is a joke which would bring in about £1 billion less than Osbourne estimates. His other brainwave to pay for this little package is to clamp down on incapacity benefit claimants. Those naughty people with doctors' notes. Ah yes, the people Peter Lilley tried hard to squeeze as Secretary of State for Social Security from 1992 to 1997 - and failed.
Back to the politics of this. Although these measures seem snazzy in a Daily Express sort of way, they really have nothing to do with the vast majority of people. The bribe to be "given" to married couples maybe does, if anyone can work out who it applies to (and, anyway, it would be not paid for in the ways outlined above). The problem is that this is the Tory party returning to the old core Daily Express vote.
So, enthusiasm for the Osbourne package will soon evaporate.
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