Lib Dem duplicity knows no bounds!

The duplicity of the Lib Dems knows no bounds! Not only does Osborne`s "loyal ally" and right hand man Alexander suddenly realise how near is the election and turn on his boss, the party leader suggests, according to the Independent (24/12/14) their record of a "stronger economy" and "a fairer society" will prevent Labour taking his Sheffield seat next May. With the recent data from the Office for National Statistics challenging  the extent of the economic recovery, and everyone`s common sense disputing any existence of fairness in coalition policies, Clegg`s desperation is obvious. Who will forget that it was Clegg, two and a half years into his unprincipled alliance with the Tories, who said that it was time to "hardwire some fairmess" into government policies?

     He has even resorted to blaming Labour again  for the economic "mess", when only a few months ago, in efforts to display his statesmanship, he stated that it had been "greed" which "brought a banking collapse and misery and hardship"! Under his leadership, there is little chance of the party regaining the trust of young people after their notorious tripling of tuition fees, and hopefully the election will see their total collapse, necessitating a complete overhaul. 

 

  

Observer letter on co-operation with EU over tax avoidance

Will Hutton writes that "arguably the state is paying part of what should be workers wages".(Yes,we can reshape the state- if corporations pay more tax,14/12/14) There is no argument! Taxpayers are now paying an extra £900m in tax credits to ensure the  low-paid survive. How ridiculous is it that this happens so that companies can maximise their profits, pay executives huge bonuses, and collect "yet more cash for dividend distributions" to shareholder, especially when those same companies do their utmost to avoid paying their fair share of taxation. Adding to the absurdity, companies in the UK get rewarded for their greed by this government, with corporation tax being reduced  to 21%, a full eighteen points below the rate in America. 

     Hutton is optimistic about the effects of the recent "Google tax", despite it being targetted to collect only £355m a year by 2019, barely denting the current "tax gap" of at least £35bn, but he omitted to mention Osborne`s announcement regarding Northern Ireland. Despite the finance ministers of Germany, France and Italy stating that "the lack of tax harmonisation is one of the main causes allowing aggressive tax planning", yet again we see, in John Cridland`s words, another example of Britain "going it alone" by apparently allowing Northern Ireland`s corporation tax to match that of the Republic at 12.5%.

    Does not the "variety of tax regimes" in the "international system" play into the greedy hands of tax avoiding companies and their advisers in the "Big 4" accounting firms? Is it not time for action against tax avoiders to be taken in concert with our EU colleagues,rather than in opposition to them? Sensible and similar rates of corporation tax would be a start!

Morning Star letter on London`s apartheid

The news that "low-income families are being forced out of central London" because of "soaring rents" and "benefit cuts" comes as no surprise, just as there can be no shock to discover a pledge by the duplicitous mayor Johnson, that "families would not be evicted", to be worthless. (Morning Star,15/12/14) The London Assembly Labour spokesperson was right to say that, if this continues, "central London will become the reserve of the privileged", because that, clearly, is the Tory plan. This form of economic apartheid has been evident since the departure of Livingstone who at least attempted social mix, with his "pepperpot"policy of social housing mixed in with other accommodation. Workers are obviously using public transport to reach their low-paid cleaning, maintenance, service, nursing, caring and teaching jobs, reminiscent of the black workers being "bussed in " from their shanty townships in the days of apartheid in South Africa.

    How disgraceful that such policies are evident in the 6th richest country in the world! Labour has to promise more than rent caps if such practice is to be eliminated!

 

How Labour can balance the books

With Ed Miliband now committing a Labour government to continue the austerity programme, albeit on a slower scale than the Tories, now is clearly the time for some proposals to be considered which make that awful prospect less harmful. By the way, a warning: Anyone who thinks that ten directors of the failing taxpayer-owned bank, RBS, should be paid £5.5m this year in allowances, or the CEO of Easyjet deserves £7m, look away now! This is about a bold Labour government transforming the way the economy is organised, not tinkering with it so that nothing actually changes fundamentally. How can it be sensible to have a situation where taxpayers subsidise the low wages paid by tax avoiding firms, thereby creating a deficit, which entails job and welfare cuts? That is simply nonsense!
   Furthermore, there is plenty of evidence suggesting the strong links between inequality and growth. In fact, the OECD has stated that inequality actually "hinders growth", and that if the gap between rich and poor had not widened since the 1980s, the UK`s economy would be more than 20% bigger now.
    It is well documented how Osborne, in his autumn statement, had to confess to the existence of much lower tax receipts; the OBR estimates that the total collected by the end of the 2014-5 financial year will be £646bn, £54bn less than Osborne predicted, and by 2017-8 receipts are still likely to be £23bn lower than previously thought. The chancellor also professed yet more determination to rid the country of what he called "morally repugnant" many years ago, tax avoidance. But like all Tory chancellors when facing the financial results of their mismanagement, Osborne chose to ignore the obvious and fair ways of solving the problem.
      The amount of income tax being collected is below the government`s expectations because so many working people are earning so little, they pay very little direct taxation, although why the chancellor and his advisers did not expect this, in view of how much is paid out in housing benefit and such like, beggars belief. Another reason is that so much tax is avoided, by rich individuals paying unscrupulous accountants to use the latest loopholes to divert their money from its rightful destination at the Treasury, and by businesses using similar methods to avoid paying their correct share of corporation tax. Without concerted action by all members of the international community, the end of such avoidance, not to mention the more obviously "illegal" tax evasion, appears unlikely in the imminent future.
 If companies simply refuse to accept their responsibilities to the countries where they do their business and make their profit, the government has to resort to more extreme measures. If businesses refuse to pay the correct amount of corporation tax out of their profits, the money has to be paid before it becomes the company`s "profit". The method is simple; raise the minimum wage to £8 an hour or more, with immediate effect, rising further if corporation tax continues to be avoided, and collect the tax as income tax from the workers. That way, much less tax is avoided, and furthermore, the workers would no longer be requiring state subsidies, so government expenditure could be reduced. What is really important, of course, that such a boost in pay would increase demand for goods and thereby stimulate the economy. Yes, demand for Bentleys might fall slightly, but the economy as a whole would benefit hugely. Companies with very small profit margins and few staff could apply for exemption, but the multinationals and such like would face massive fines if they failed to comply. The role of trade unions would be enhanced by the need to ensure the new rates were being paid to all staff.
    At the top end, the so-called "Laffer Curve" has been well and truly de-bunked by the economist Piketty, so there is no reason not to raise income tax rates for the obscenely rich to 60-70% for incomes over £200,000 per annum. A top rate of 60% existed for most of Thatcher`s time as PM!
   Profiteering private landlords would see, with wages rising, opportunities to add their vast wealth and increase rent, so that would have to be prevented; setting up an Ofsted-type government agency to inspect and grade all rented properties, so that the rent charged would have to be within set limits, would be vital if the current levels of tenant exploitation are to be decreased.
   The role of Britain in the world would need to be re-examined. Which is more important? The need for Britain to maintain, at vast expense, a huge military capacity, so that we can patrol the seas, police the middle east and interfere in other countries` business, or develop a society where all inhabitants can have equal choices and opportunities?
The mansion tax idea must not be dropped, whatever the "cash-poor" millionaires might say, and stressing how anyone connected with tax avoidance schemes in any way will never be awarded, or allowed to keep their honours by a Labour government, can only benefit the Treasury.
 At the moment Labour plans to raise the minimum wage by 2020; this is unsatisfactory both electorally and economically. Yet again bolder policies are the only answer if the electorate are to be won over; tinkering is no longer an option when the country cries out for transformation.

Culture-change needed at Ofsted too!

Whilst the Guardian editorial rightly says it is not part of the "Ofsted culture" to acknowledge the ways schools are getting better, and "thank everyone involved for their efforts", perhaps it is time for a culture-change?(Academy or community school , structures don't matter but support for good leadership does,11/12/14) Constant criticism of teachers and teaching, which has been the norm ever since the first Ofsted reports were published in 1992, does nothing to rejuvenate already overworked staff, or to encourage new entrants into the profession, at a time when "recruitment is becoming a serious challenge". Is it surprising that so many qualified teachers leave before completing five years in the classroom?

          Wilshaw acknowledges that "academy autonomy" can lead to dangerous isolation, but then names and shames local education authorities with too many under-performing schools, when many of the problematic schools are academies or free schools. It seems he takes every opportunity to criticise when a more sensible route of praise and advice is ignored. Teachers would appreciate much more some guidelines on marking expectations and progress monitoring; parents need to be informed by Ofsted that it is not essential for every piece of work to be corrected, and given five line comments on how improvement can be attained; sixty hour weeks for teachers are simply counter-productive!

      After an "unsatisfactory" verdict of a school by Ofsted, a Training day for the staff, with the same inspection team giving advice on how lessons could be improved, must be a way forward. If standards have indeed, "stalled" in secondary schools, Ofsted should surely be calling for smaller class sizes, more classroom assistants, more units for the badly behaved and more hi-tech facilities? Not every school can simply appoint a new "superhead" to come in and immediately expel sixty or so pupils as a method of improvement; some may see such action as strong leadership but others might simply regard it as "passing the buck".

"Big" government is essential

With the recent American election results showing Republican gains, television screens were briefly dominated by the sight of preening politicians predicting the imminent return of "small" government. On similar lines, in this country, we remember the recent pledges of Cameron and Osborne to shrink the state back to levels last seen in the 1940s. Even worse is the revelation that, following Osborne`s autumn statement this month, government spending will be akin to that of the 1930s. This, of course, means the rich associates of the Tories end up paying low income tax, and very little inheritance tax, whilst low corporation tax enables profit-making companies to enrich further their CEOs and shareholders. 

     With little government interference in the lives of people, and in the practices of businesses, the return of the 19th century idea of laissez-faire is made possible. Students of history will need no reminding that, in practical terms, it meant not only the rich getting richer whilst the poor`s suffering increases, but the virtual abrogation of responsibility by the state for hunger and deprivation; the workhouse was the result!  When Gladstone practised the doctrine in his 1868-74 administration, it ended disastrously, with its replacement, Disraeli`s government, having to invent the "One Nation" idea, and to pass reforms to improve housing and food standards, and even increase trade union rights. How "shrinking the state" can end up any different, widening the wealth gap, and increasing the problems for the less well-off, defies logic, and Labour should be shouting about the dangers from the rooftops!

   To reduce the role of the state further in the 21st century would lead to increased inequality and suffering, decreased regulation and more privatisation. Only those few who stand to benefit from the privatisation of the NHS are in favour of it, the rest of us want it firmly in state hands, and the same now applies to energy companies and railways, which since going into private hands, have continued to raise prices and exploit customers, despite their huge government handouts. At least when nationalised, such companies paid their proper share of corporation tax!

       The rich don`t welcome the concept of "big" government because it means increased rules and regulations, and fines imposed when they are broken.Of course, we have them now, but how many people believe the recent "record" fines imposed on the banks for manipulating the foreign exchange market will lead to improved behaviour in the banking sector? The fines, anyway, only amounted to a few days` profit for the banks involved. More regulation is needed if the various "cultures", like those in the banking and tax avoidance industries, and amongst profiteering private landlords, are to be forced to change. Without it, as history shows us, slums flourish and exploitation is rife.  "Big" government also means more tax inspectors employed to ensure as much tax is collected by the Treasury as possible, and it means those who can afford to do so paying rather more.

     With "small" government, the reverse is true; help for the needy is reduced, the welfare state is cut, and foodbanks multiply. It also means more complaints from the rich when ambulances they need in emergencies are late because of funding issues, when the police can do little about the spate of burglaries in their area for the same reason. Strange, too, that a reduced role for government does not always lead to less; "small" government inevitably is accompanied by increased surveillance, as we know from news relating to the growing role played by GCHQ, the government`s spying department.

    The majority of the British electorate do not want the state shrunk back to these ridiculous levels; indeed, what would many think of reduced scrutiny of our borders? Fair-minded folk want more tax inspectors not less, more help for the less fortunate not less, and more government departments and agencies well staffed to ensure the return of "government for the people", not simply for the rich.
      It is Labour`s responsibility to make certain that the voters are aware of the consequences of voting Tory or Ukip, and that they do the right thing, come May,2015.

letter to i on minimum wage

How ridiculous is it that taxpayers are having to pay "an extra £900m in tax credits" because firms are paying such low wages, especially when many of these businesses pay huge amounts to accountants so that they can avoid paying their proper share of tax.(Fall in wages means government`s tax credit bill rises by £900m,12/12/14) With the government having a much lower level of corporation tax than the rest of the EU, making co-operation to prevent tax avoidance unlikely, the obvious solution is to raise the minimum wage exponentially. Taxable profits would be much lower, but at least the tax would be paid, in the form of income tax!