Week 18 2013

Tendring Topics……..on Line

County Council Elections

            I have always believed that local government officers (and civil servants) should be prepared to give of their best in pursuing the policies, whatever they may be, of the authority that employs them and should refrain from playing any active part in local or national politics.  Although for most of my life my political outlook has been ‘leftish’ I have had no problem working for Conservative controlled councils and have always felt that I should not seek membership of any political party.

            That changed when I took early retirement in 1980.   I joined the Labour Party which at that time seemed the party with which I felt the greatest empathy.  Since I had both knowledge and experience of the ways in which local government functions, and had become an experienced writer and public speaker, I put my name forward as a potential candidate for election as a Labour candidate to the district or county council.   I had a very friendly interview with ‘party bosses’ in Chelmsford and was accepted as a potential candidate.  Fortunately perhaps, there were then no local elections in the immediate future.

            Hardly had I returned home than I began to have misgivings.  Would I really manage to toe the Party line as would certainly be expected?  Had I a thick enough skin to laugh off all the insults to which I knew all politicians, local and national, are subjected?   I had recently been commissioned to write a weekly ‘chat and comment column’ Tendring Topics for the local free newspaper, the Coastal Express.  Wouldn’t I be better able to use that column to further the causes in which I really believed, if I had no party ties?   Would I feel able to criticise the Labour Party (as I knew I would sometimes want to!) without being considered disloyal?

            I withdrew my application for candidature, though I remained a member of the Labour Party until Tony Blair and New Labour made the Party ‘electable’ and – in my opinion – less worth electing!

   

        

This blog is to be published on 30^th April, just two days before the current County Council Election.  For my Clacton North Division there are Conservative, Labour, ‘Tendring First’, Lib.Dem., Green Party, and UKIP candidates.  In recent blogs I have made it clear that I certainly couldn’t possibly vote for either the Conservative or the UKIP candidate.  The policies of the Green Party attract me but I know perfectly well that, under the first-past-the-post electoral system, a vote for their candidate would be a vote wasted. After giving the matter a good deal of thought I have decided that my vote will go to the Labour Candidate Samantha Atkinson.  Her election leaflet (on which she is portrayed with a friendly smile!) is attractive and doesn’t make extravagant promises.  She appears genuinely to have the interests of us Clactonians at heart.   I think too, that she is  the candidate most likely to deny electoral victory either to UKIP  or to  the Conservative Party that currently dominates the County Council. That was the Party that elected, and for many years supported, Lord Hanningfield as the Council’s political   leader!

Debt……or Deficit?

According to Wikipedia (the handy source of all knowledge for laptop users!) even top politicians sometimes get confused about the difference between the National Debt and the Deficit that the government is determined to reduce.   The National Debt is the total sum of money that the government owes – mostly to pension funds and savers in our own country but some to overseas sources.  It is an enormous sum but its significance depends to a great extent on its percentage of the GDP (gross domestic product, or the total value of the country’s production or services during any particular year).  By that criterion  the UKs National Debt is large but by no means as large as many other countries.  The Internet yields the information that in 2011 the UK’s National Debt was 68 percent of GDP while Japan’s was 180 percent and the USA’s 100 percent.  In the immediate aftermath of World War II our National Debt in terms of percentage of GDP was over twice what it is today.

            The Deficit, on the other hand, is the difference between the Government’s expenditure in any one year, and its income in that same year.  Mr Micawber, in Dickens’ novel David Copperfield  summed up the effect of this on a domestic scale like this, ‘Annual income twenty pounds, annual expenditure nineteen pounds nineteen shillings and sixpence, result happiness.  Annual income twenty pounds, annual expenditure twenty pounds nought and sixpence, result misery’.   Comparing domestic finances with those of the nation can be misleading, but an annual deficit inevitably means an annual increase in the National Debt – and cannot be allowed to continue.  Not just one, but several international credit agencies have now downgraded the UK’s ‘Triple A’ credit rating.  This means that it won’t be long before a higher rate of interest is charged on loans to the UK – and we shall be even deeper in debt!

            There are three main ways in which the deficit can be reduced; by cutting public expenditure, by increasing taxation, and by stimulating the economy to create more jobs. That would mean more money coming in from taxation and less spent on social security benefits.

            The Government has so far attempted only one of them seriously – and the effect has been to make matters worse instead of better.  They have desperately tried to reduce public expenditure by sacking thousands of public servants, both in the civil service, in the local government services, in the NHS and (with the exception of the totally useless Trident ‘independent deterrent’) in the Armed Forces.  This is resulting in an ever-growing army of unemployed, a run-down of public services and an increased demand on the depleted social services and for benefit payments.

            Their attempts to stimulate the economy seem so far to have had little, if any effect. They have managed to avoid an unprecedented ‘triple dip’ recession – but only just!  Many private contractors depend upon orders from public authorities, who have been starved of funds.  The attempt to encourage house building by helping would-be home buyers with their initial deposits is likely to drive up house prices and create a bubble similar to the one that preceded the current economic depression.  The sensible course of action would be to repeal the ‘right to buy’ (better named compel to sell) legislation and encourage local authorities to build homes for letting as they did successfully during the century before the advent of Thatcherism.

            It has been in the field of taxation that the government’s actions have been particularly perverse.  An increase in VAT added to already rising inflation (oh yes, of course – inflation is yet another, thoroughly bad, way of reducing the deficit!) and the Chancellor seems to have gone out of his way to reduce his revenue from income tax – the only tax that relates directly to ability to pay, and which has never brought anyone to starvation or homelessness.

            Raising the level at which income tax becomes payable takes thousands of people out of income tax altogether.  I believe this is a mistake.  It perpetuates the myth that there are hard-working beings called ‘tax payers’ who keep a non tax-paying underclass in idleness.   We are all tax-payers and those who only pay VAT, customs duties on cigarettes and the occasional drink, and buy lottery tickets in the vain hope of winning a fortune, probably hand to the government a higher proportion of their meagre earnings than many of those of us who are fortunate enough to be liable for income tax.

            It is sometimes overlooked too, that raising the lower threshold of income tax doesn’t just help the poorest – it reduces the amount of income tax paid right through the system. As for the Chancellor’s actually reducing the highest rate of income tax; quite apart from the obvious unfairness of rewarding the wealthy at a time when the poor are being penalised, it seems incredible that this should have been done at a time of national financial crisis. A correspondent tells me that the revenue lost by that hand-out to those with an income of over £150,000 a year will be twice as much as that likely to be saved by the ‘bedroom tax’ on those in Council and Housing Association homes.

            The same correspondent points out that a great many wages are at or very close to the minimum wage of about £15,000 a year and that the average salary is about £26,000.   ‘Why on earth then’, he asks, ‘is the threshold for ‘very high earners’ liable for the highest rate of income tax, set as high as £150,000?   Surely few people would have considered £100,000 unreasonable – and I personally would have set it at £80,000, or about three times the average wage’.

             Would the only possible alternative to this government do much better? Possibly they wouldn’t – but perhaps there’s some comfort in the thought that they could hardly do any worse!

The Money Fiddlers!

          It seems that when, in my blog last week I suggested that the modern equivalent of Old King Cole’s ‘fiddlers three’ were the money fiddlers who advise their wealthy clients how best to avoid paying income and corporation tax without breaking the law, I was being inadvertently and quite accidentally topical.  I had no idea that the Parliamentary Public Accounts Committee had been considering that very issue and was about to make public some very disturbing conclusions.

            It seems that there are nowadays not three, but four, major firms of accountants in operation in this country that, among other services, advise their clients on means of legal tax avoidance.  They are Deloitte, Ernst and Young, KPMG, and Pricewaterhouse Coopers.  Between them they employ 9,000 staff and make a profit of £2 billion a year in the UK and £25 billion a year globally.

            Parliament’s all-party PAC (Public Accounts Committee) discovered that financial experts from these commercial organisations have been seconded to HMRC (Her Majesty’s Revenue and Customs) to assist in the drafting of legislation to prevent tax avoidance – and are then in a position to point out to their real employers the loopholes that will enable them to circumvent that legislation!   Margaret Hodge, Committee Chairman, says that it is as though poachers have become gamekeepers and are then using the ‘inside knowledge’ they have obtained to poach more successfully.

            Margaret Hodge is, of course, a Labour MP and might be expected to be critical of a system introduced by the government.  Richard Bacon though, is a Conservative MP serving on the PAC.  He is reported as saying, ‘The United Kingdom’s Tax Authority is outmanned and outgunned by the four big accountancy firms.  Their resources far outstrip those of the taxman, but they also help HMRC to draft tax legislation.  The big four know exactly where the loopholes in the tax system are to be found because they helped to create them.

             There is nothing that I can usefully add to that.

And the Good News is……..

            ………..that the amount of violent crime in the United Kingdom has fallen substantially during the past decade.   The murder rate has been almost halved from 1.90 per 100,000 population to 1 per 100,000 and violent crime generally has fallen from 1,255 to 933 per 100,000 though, in the county of Essex, our own Tendring District comes second only to Southend-on-Sea in having the most violent crime!.

          An ageing population may be among the factors responsible for this general improvement (we nonagenarians do tend to be non-violent!)  However I believe that the development of DNA identification and the ubiquitous CCTV cameras in town centres and large retail outlets have reduced the chances of the criminal ‘getting away with it and that, rather than the severity of the punishment is  surely the most effective deterrent to crime.

            How ironic that the knowledge that ‘Big Brother is watching you’, one of the most sinister features of George Orwell's. 1984 should prove to be a blessing in 2013!