29th November 2014

Tendring Topics……..on line

'That’s the way the money goes…….'

        .  I was mildly surprised last week to get a communication from H.M. Revenue and Customs telling me, in some detail, how much money I had paid to the government in income tax during the last financial year and how that money had been spent. To make sure that I read it, the document announced in bold print This is for your information.  You do not need to contact us as this is not a demand for payment.   That was quite a relief.   

          It really was an admirable, easily readable and enlightening document and I understand that all income-tax payers will get one every future year.  On the one side was a summary of my taxable income during that year (state pension plus public service pension), how much of it was subject to income tax at the basic rate (20 percent), how much had been deducted from my total income and how much was left.

            On the other side was an estimate of how my contribution had been divided among fifteen sources of public spending.  The biggest was Welfare to which I had, so it seems contributed £513 and the very least (which must come as a surprise to Ukippers) was £24 for overseas aid and just £16 towards the UK’s contribution to the EU budget.  I don’t grudge a penny of it because I know that I’m extremely fortunate to have an income large enough to be liable for income tax.  By its very nature the payment of income tax, which is a relatively small percentage of total income, never has, nor ever could, result in homelessness or serious deprivation to anyone.

            But, of course, income tax is by no means the only way in which the government extracts money from our bank accounts, wallets and purses.  During the Thatcher years and continued by New Labour there was a shift from ‘direct taxation’ – income tax and death duties – to indirect taxation (they’re called ‘stealth taxes’ by political parties when in opposition!) such as VAT and customs duties.  They are regarded as ‘fairer’ by the wealthy because they do not depend on ability to pay.  The ‘rich man in his castle’ pays exactly the same amount of VAT on most goods or services and exactly the same customs duties on his petrol or bottle of Scotch as ‘the poor man at his gate’.  It will, of course, be a much larger percentage of the poor man’s income than that of the rich man – but that’s just his tough luck.

            Often we’re hardly aware that we’re paying 20 percent more on our bills for goods or services and that that 20 percent is going to the government in Value Added Tax (VAT).  When it’s a big bill though, we become aware of it.  A couple of years ago, for instance, I had to replace my existing central heating boiler with a new one.  Taking out the old boiler and fitting the new one cost £3,000.  Twenty percent of £3,000 is quite a lot of money and I bitterly resented having to pay the government for having carried out essential work on my home.  It would, of course, have been exactly the same had I paid for mending a leaking roof or repaired a car or a bike needed for work!  That extra 20 percent is just petty cash to the millionaire banker with his Rolls.  It’s a lot more than that to the workman with his car or bike

VAT is the most obvious indirect, or ‘stealth’ tax, but it is by no means the only one.  We contribute to the government’s coffers whenever  we fill up our car with petrol, buy a packet of cigarettes, some cigars or some tobacco, buy a glass, bottle or can of beer, cider, wine, whisky or any other alcoholic drink,  take a flight in an aircraft whether on holiday or for business, or are silly enough to buy a lottery ticket or a scratch card in the vain hope of winning the fortune that we know we’ll never acquire by hard work.  That’s how it is that someone who pays little or no income tax may in fact pay a bigger percentage of his or her meagre income back to the government than does a fat-cat higher-rate income tax payer.  I am not a teetotaller but I no longer drive a car and no longer fly away on holiday.  I don’t smoke and I have never bought, nor do I intend ever to buy, either a scratch card or a lottery ticket.  I don’t avoid indirect taxes altogether (that must be really difficult!) but I have reduced my payments to a bare minimum.  

Indirect taxation barely gets a mention in the Annual Tax Summary that I have received.  I am advised ‘For more information or for a list of indirect taxes such as VAT go to our web site; www.gov.uk/annual-tax-summary.  That yields little more information that the fact that VAT is currently 20 percent but that there is a lower rate for some items and other items, of food for instance, are VAT exempt.

One small piece of information on the Annual Tax Summary that particularly interested me is that the amount that I paid in income tax during the year was just 10 percent of my taxable income, so that for every £1 of taxable income I paid 10p in income tax.   That’s a tenth (or as they used to say ‘a tithe’) of my income – and that’s the proportion of everyone’s income that the medieval church expected to receive from from its members.  It is interesting to reflect on the fact that the medieval church then undertook many of the responsibilities that we now consider are those of the government – education, helping the poor, the provision of hospital services for instance – as well as, so it was believed, holding the keys of Heaven and Hell.

I reckon that today, if everyone (including Richard Branson, Lord Sugar and the like) paid a tenth of their income to the government as I do, George Osborne would find that ‘deficit’ that causes him so many headaches, disappearing without the need to penalise the poor and the disabled.  I believe very strongly that all adults, rich and poor alike, should pay the same proportion of their income to the government as a universal tax (or annual subscription for citizenship of the United Kingdom).  Furthermore that tax should be levied on gross income, before the taxpayer has a chance to channel it into offshore accounts or charitable trusts or some other tax avoidance dodge.

It should also be levied on all state benefits and allowances.  Currently the state retirement pension is taxable but other state benefits like children’s allowances, winter fuel allowances for pensioners, the cost of free tv licences, an estimate of the cost of free prescriptions, attendance allowances, job seekers allowances and so on are all tax free.  Under the present system, if these benefits became taxable those who pay no income tax would continue to get all those services free and unchanged, while those who do pay income tax would pay just a little bit more – but certainly not enough to cause serious deprivation.  I personally would have to pay extra tax amounting to one tenth of my winter fuel allowance, my free prescriptions, my tv licence and the attendance allowance I get for my very limited mobility.  None of that would distress me if I could be assured that top bankers and their equivalent in other fields of activity were paying the same proportion of their gross incomes as I was.

Ideally, I’d like to see every British adult – the wealthiest and the very poorest – paying this universal tax of the same proportion of their income.   This would mean that the minimum wage, job seekers allowance and other subsistence allowances would need to be increased so that recipients could pay their proportion without their being rendered either homeless or hungry.

Then that shameful gap between the wealthiest and poorest in the land would be seriously reduced, we would be a true ‘commonwealth’ and we could truly claim, to quote George Osborne,  to be all in this together.  Yes, I know I have said all this before – and I’ll no doubt say it again because it is so important for Britain’s future, if Britain is to have a worth-while future.

'What's in a name?  That which we call 'a rose' by any other name would smell as sweet'

      So asked the love-lorn Juliet in one of Shakespeare's best-known tragedies.  Her family, the Capulets, thoroughly detested that of Romeo, the Montagues.  I am quite sure that neither family, dislike each other as they did, ever thought for a moment of sneering at them as 'Plebs'

I am astonished at the importance that has attached itself to the word 'pleb' in the long-running 'Plebgate saga'.  My trade is words.  The only real skill I have ever possessed is that of stringing words together to create a readable narrative. I thought too that, thanks to seven years as a gunner in the Royal Artillery including three as a POW in Italy and Germany, I was familiar with every word of abuse in the English language, and quite a few in Italian, German and Russian. I feel almost ashamed to admit that until I learned of the heated exchange between the government's then chief whip and the policeman on duty at the gates in Downing Street, I had never heard the word Pleb used by anyone.  It is presumably short for Plebeian the name given to the underclass in Ancient Rome; not much of an insult really.  After all, it was those Roman plebs who did all the hard work and the fighting that made Rome great.

Perhaps I'm just showing my age by suggesting that I would have expected one of the Eton-and-Oxbridge 'upper class' to display his anger and contempt for someone he regarded as of the ignorant lower classes by referring to or addressing him as 'an oafish Oick!'    Now had I been that affronted copper, that is a phrase that might have found me searching my mental vocabulary for an appropriately insulting response!

But 'pleb'?   Mr Mitchel really used much more offensive words than that during his fit of bad temper, but it's his use of 'pleb' that has cost him his job, lost him his libel action and is - according to press reports - going to cost him millions of pounds in legal fees!  In the 21st century there can be more 'in a name' than 16th century Juliet Capulet could ever have imagined possible.

!

           

           

Week 15 2014

Tendring Topics…..on line

Reviving the Poll Tax?

          It was the introduction of a Poll Tax, a government demand for an equal sum per head from every adult without consideration of ability to pay, that provoked the Peasants’ Revolt in the 14^th Century, a revolt that was put down only by the treachery and cruelty  characteristic of rulers in ‘the age of chivalry’.

It was the Poll Tax (the government preferred to call it the Community Charge) that in 1990 finally led to Mrs Thatcher’s downfall as Prime Minister.   She had long promised to get rid of the rating system – raising a proportion of local government finance from a local tax levied on households calculated on their home’s estimated rental value.  It wasn’t popular (no taxation system ever is!) and by the 1980s was out of date. It had been years since there had been a revaluation.   However, imperfect as it was, the rating system meant that there was at least a rough relationship between the amount on the ‘rate demand’ (that was an unfortunate word if there ever was one) and the wealth, or lack of it, of the ratepayer.

            Mrs Thatcher abolished the rates and, as had been promised in her party’s election manifesto, replaced it with the Poll Tax levied equally on every adult resident in every flat, bungalow, dwelling house, mansion, or palace in the local authority’s area.  The rate per head (per ‘poll’) was set by each local authority.  There were modifications.  The unemployed paid only 20 percent of the local poll tax for instance but generally speaking ‘the rich man in his castle’ paid exactly the same as ‘the poor man at his gate’ or in his tied cottage or squalid tenement.  ‘What could possibly be fairer?’ –  that’s what the rich man in his castle asked!

            As in the 14^th century there was fury among the have-nots. There were protests all over the country and, particularly in London, demonstrations that evolved into riots.  Mrs Thatcher faced a revolt from her colleagues in government. She resigned as Prime Minister and Party Leader and was replaced by John Major.  He abolished the Poll Tax and replaced it with ‘Council Tax’, very similar to the old ‘rates’ except that there were ‘bands’ according to the estimated value of the property; undeniably less unfair, though still very generous to those in really palatial homes.

            Now, Lord Warner, a Labour Peer and one time Health Minister in Tony Blair’s New Labour government is suggesting something very similar to the old discredited poll tax to fund the NHS which, he says, is facing financial collapse.

            He thinks it would be a good idea if every adult in the country paid £10.00 a month for their ‘membership of the NHS’ and their right to NHS services. He also suggests that adult patients should pay £20 a night for stays in hospital.  There are a number of exemptions including us pensioners!  I’d like to think that this is out of genuine concern for the old and not just because all politicians (including those who have safe seats in the Lords) are aware that it is us greybeards who actually bother to vote at elections.  We’re the ones who can decide election results. 

            Supporters of Lord Warner’s idea say that there’s a black hole of insolvency in the finances of the NHS – and how else is it to be filled?   I believe that this can be done, without reducing anyone into either homelessness or starvation, by using the income tax system.  Income tax is the one form of taxation that, by its very nature, can never reduce anyone to penury.  Thanks to the latest budget no-one whose taxable income is less than £15,000 a year has to pay it at all and even the highest rate taxpayers,  those with a taxable income of £150,000 a year or more, only have to pay in tax 45% of their income above that level.

            First of all I suggest that all state benefits – children’s allowances, disability allowances, job seekers’ allowances, attendance allowances, pensioners’ winter fuel allowances, free tv licences, NHS prescriptions and bus passes be added on to any other taxable income, and income tax at the appropriate rate charged.  The state retirement pension is taxable so why should other benefits be tax-free?    Those with an income below £15,000 a year (and there are plenty of those, both in and out of work) would be completely unaffected by this change.  The rest of us would have to pay a little extra.  I, for example would have to pay income tax at the standard rate on my winter fuel allowance, my attendance allowance (that I get because of my very limited mobility), my free tv licence and an estimate for the cost of my free prescriptions.  I wouldn’t have to pay it on the cost of my bus pass because my mobility is so limited that I can’t use one.  I think that that is all.

            I wouldn’t enjoy paying that extra tax, but it would only be a percentage of my total income and wouldn’t leave me either hungry or homeless.

            It may be that that reform alone would be sufficient to fill the ‘black hole’ in NHS finances.   If not, then an extra penny or two on income tax would certainly be unpopular – but not, I think, as unpopular as the imposition of a new ‘Poll Tax’ on every adult to fund the NHS.

            I am beginning to think that the big divide in our society is not between black and white, between atheists and believers, or even between rich and poor – but between those who believe that ‘fair taxation’ is achieved when everyone, wealthy and poor alike, has to pay the same amount (poll tax, VAT, customs payments and so on) to finance the purposes of central and local government, and those who believe that we should all pay the same percentage of our income   The strange thing is that those who are most opposed to taxation being based on an equal percentage of taxpayers’ income are those who are most insistent on percentage rather than flat rate pay increases!

‘We won’t play with you – so there!’ 

            That childish playground threat came to my mind when I learned from a tv news bulletin that, because of the Ukraine/Crimea crisis, NATO was ceasing all co-operation and ending all communication with its Russian equivalent.   I’d have thought that a time of crisis was just when it was important for the two sides to get together and each try to see the other’s viewpoint.  The Presidents of the USA and Russia have recently had an hour-long telephone chat and their foreign ministers have also met – sadly fruitlessly – but this is the time to try, try and try again!   It is not the time to draw apart, start to mobilise forces, and make vague threats.

            I had feared that, in suggesting that Russia’s claim to the Crimea might have some justification, I was a loan voice crying in the wilderness.  Agreement has come from unexpected areas. In an interview on tv, a right-wing American Republican Senator has affirmed from his visit to the Crimea last summer that most Crimeans were either ethnic Russians or wanted closer friendly ties with Russia.  He fears that NATO is dragging the USA into distant squabbles in which the USA has no interest.  I had thought that Nigel Farage, leader of UKIP, was blinded by his Europhobia when he suggested that the EU was partly responsible for the riots in Kiev that had preceded Russia’s recovery of the Crimea. He had even found a kind word to say for Vladimir Putin, the current favourite bogyman of the press. However, a thoughtful email from a regular blog reader has made me wonder.  Here it is:

Crimea is a problem isn’t it?   I do think though there has not been much effort to see it from the Russian point of view. Putin sees the “enemy” – NATO – getting closer and closer – and in the end threatening to take over his main naval base.  The pattern is always the same; first of all the EU woos nations with promises of open markets, infrastructure investment, a stable currency etc.,  and then the NATO boys come in behind and sign them up to an organisation which was actually set up to confront the Soviet Union. So ‘annexation’ without a shot being fired has been a pattern of NATO for the last 2 decades.   As a result the Baltic States which border Russia and have large minority groups of Russian workers, become part of the enemy – in Putin’s eyes. Clearly he could see Ukraine going the same way, and I think he may have been right.  Even the EU trade deals will probably disadvantage Russia by cutting off its access to Ukrainian products.  He probably thinks Belarus might go the same way, leaving Russia isolated economically and militarily.   He comes over as “tough and dictatorial” but do you really imagine he could have secured his Naval bases in the Crimea by negotiation?

On top of that, the “democratic and legal high ground” is not all with the West. After all, the elected government of Ukraine was overthrow.  There has not yet been an election to confirm a new mandate, yet already deals with the EU are being signed. It looks very much as if when the Pro-Russian government came to power, the EU continued its discussions with an opposition that had no legitimacy. They thereby aided and abetted civil unrest. Now that Crimea is not part of Ukraine, remaining Ukrainians will probably vote to go West.  That might not have been the case while Crimea was still part of Ukraine.

  

The most important part of that email is right at the beginning.  No effort whatsoever has been made to see the Russian point of view.  Fortunately we do know how the USA would react under comparable circumstances.  In the Cuban missile crisis the then USSR wanted to put missile launchers on Cuba to protect it from the very credible threat of an invasion from the USA.  There had been such an attempt at the Bay of Pigs, that had been foiled.

            The siting of missiles capable of striking into the heart of the USA was sufficient for President John F. Kennedy to threaten the USSR with armed retaliation and the world with nuclear war.  Fortunately Nikita Khruschev, the Soviet President, was wise enough to communicate with John Kennedy, and to withdraw his missiles; but – no doubt as a result of that friendly chat between the two Presidents – there was no invasion of Cuba.

            ‘Treat others exactly as you yourself would wish to be treated’, is sound advice for Nations as well as individuals.   How many bloody conflicts might have been averted had governments followed that advice!

Late comment

I have this morning (7th April) heard on the tv news that there have been riots in several towns in the Eastern Ukraine.  The suggestion was made that Russian Agents had provoked them.  This just as likely (and just as unlikely) as the suggestion that British and/or American Agents provoked and encouraged the riots in Kiev and elsewhere in western Ukraine that led to the overthrow of the elected pro-Russian President.

I think the situation is a very dangerous one and I hope, for the sake of all of us, that both Russia and NATO will refrain from interfering and from encouraging either side.  Certainly this is not the time for threats or promises of reprisals or other 'consequences'.

           

                                                                              

           

           

           

.

           

           

             

           

Week 24 2013

Tendring Topics…….on Line

‘Cash for Questions?'

            ‘Goodness me - No! That would be quite contrary to the standard of integrity expected of ‘honourable gentlemen’ and ‘noble lords’ of both Houses of Parliament. Remember all that fuss there was a few years ago about twenty pound notes in little brown envelopes? Cash for Questions is definitely not on the programme.  Cash for Consultancies? – well, that could be quite a different thing.’

            According to reports on tv and in the press, conversations on the lines above took place a few weeks ago between some of our parliamentary representatives and under-cover journalists who pretended to represent well-heeled business interests.   It seems that the MPs and/or members of the House of Lords involved were - perfectly legally – offered well-paid spare-time consultancies and agreed to further unobtrusively the interests of their paymasters ‘in the House’.  There would be nothing so blatant as ‘cash for questions’, nor so squalid as ‘bulging brown envelopes’.  But the consultant could organise an all-party group of parliamentary friends and colleagues who might raise matters of concern and perhaps ask questions of the relevant Minister.   No-one would suggest for a moment that those friends received any payment for this but (who knows?) they too might be glad of a favour one day.

            David Cameron (who actually foresaw this kind of problem before the last election!) has been spurred into action.  All ‘lobbyists’ (professional benders of MPs’ minds!) are to be registered and steps taken to limit their activities.  Big business will no doubt be relieved to learn that the working poor are also to be prevented from using theiir meagre contributions, entrusted to their trade unions, to influence the minds of MPs! The members of the Government really do imagine that they are thus ensuring that, we’re all in this together!’

            Cash for questions, fiddled expenses and now ‘cash for consultancies’; is there no end to it?  Ordinary members of the public may be astonished that men (no women have so far been involved in the latest scandal) who are in the public eye and who, by most people’s standards, are handsomely remunerated for representing us in parliament, should behave in this way for a few extra quid.  It is surely a result of the general market-driven conviction of the past twenty or thirty years that the desire for money is humankind’s sole motivation; that the rich can only be goaded into action by the promise of even greater wealth, while the poor are kept working by the threat of homelessness and starvation. Everything and everyone has a price! We haven’t yet reached a state that justifies the cynical trans-Atlantic comment that, an honest politician is a politician who, when he’s bought – stays bought!’  - but we’re getting there!

New Labour’s ‘Bright Ideas’

          ‘New Labour’ might almost be called ‘New Conservative’ because, when they achieve power, they seem to have a penchant for conserving the results of their predecessors' actions – no matter how disastrous they may have been.  They didn’t, for instance, repeal the disastrous ‘right to buy’ legislation that compelled local authorities to sell off their community’s housing legacy at a fraction of its true value. Despite its malign effects becoming more and more obvious as the years have passed, Ed Miliband has even apologised for the Labour Party’s having opposed that legislation while in opposition!   Similarly, the new hard-line Conservatives of Mrs Thatcher and her successors might well have been called the ‘New Revolutionaries’. They had no qualms whatsoever about systematically destroying everything established by a Labour Government chosen by returning‘victorious’ servicemen and women from World War II; thus changing the nation’s zeitgeist from service and co-operation to greed and cut-throat competition.

            Ed Miliband has made it clear that, should he become Prime Minister, he will continue in the tradition of Tony Blair and his New Labour colleagues.  There will be the same old devotion to the cut and thrust of the market place, the same deference to the money-changers in ‘the city’, the same preference of private to public enterprise.   He’ll try to make the whole system just a tad less unfair, a little less deferential to cosmopolitan multi-millionaires, perhaps even just a shade more efficient than the present cowboy setup.

            He will, for instance, stop the payment of the winter fuel allowance to those who pay the higher rate of income tax.  He will stop payment of children’s allowance to households where one member has an income above £50,000 a year.  The latter seems a good idea until it is realized that the household of a family with a member whose income is just over £50,000 a year might include a mother who stays at home, making a home for the family and bringing up her child herself, instead of passing the baby to the care of a child-minder while she makes more money.  That family would lose its child allowance while next door may be a couple where husband and wife each earn £45,000 and pass their child on to a day nursery at the earliest opportunity.   They’d keep their child allowance!

            Hasn’t it occurred to Ed Miliband, to George Osborne, or to anyone concerned with the nation’s finances that there is one way of making all ‘universal’ benefits fairer – and that is by making them subject to income tax?  This wouldn't penalise the poor in any way while the better off would be asked for no more than they can afford.  The state retirement pension, a universal benefit if there ever was one, is taxable.   There’s really no reason why children’s allowances, winter  fuel payments, disability (or whatever they’re now called) benefits, attendance allowances (that would affect me, but I’d gladly pay tax on it if all benefits were similarly taxed)  job seekers allowances and so on, should not all be subject to income tax.  Even with our income tax system as it is today it would make for fairness – and bring extra revenue to the government.  A reformed system taking a fixed proportion of the gross income (it’s between the gross and the net that all those wonderful tax avoidance schemes operate!) of every one of us, the poorest as well as the wealthiest, could make our income tax assessment the only means test to which any of us need be subjected – and it would mean that we really were all in this together

Art for Art’s sake

'Modern Art - in Jaywick

Folk of my generation tend to be dismissive of what I believe is known as ‘conceptual art’.  We can see no artistic merit whatsoever in, for instance, an unmade bed, a disembowelled sheep, a light flashing on and off, a pile of bricks, or the ‘acclaimed work of art’ resembling a half-finished poultry shed (on the left!) on which residents of Jaywick were able briefly to feast their eyes a year or so ago.  What’s more, we’re inclined to think that everyone sees them as we do, but that members of a younger generation (as with ‘The Emperor’s new clothes’) don’t like to say so.

This kind of ‘art’ (though, I think, a rather more attractive form of it) is found in the Orient too.  Here is a photo, sent to me by my niece in Hong Kong, of a giant inflatable duck that has been seen floating in the harbour there for several days.   She tells me that it has also been seen in Sidney Harbour in Australia.  Perhaps one day it’ll turn up in the Thames – or even perhaps in Harwich Harbour!

 

A giant duck in Hong Kong Harbour

Thinking about the far-flung members of my family made me realize that a completely original, and of course deeply meaningful (aren't they all?), work of modern art might be created by joining them up by pencilled lines on a globe.  There’s niece Christine in Hong Kong, grandson Christopher in Taipei (in Taiwan).  Then there’s grandson Nick who regularly commutes between London and Brussels. His journeys could make an art-work of their own.  He’s founder and Managing Director of an international tourism consultancy, SE1 Media Ltd.  (www.se1media.com) and on any given day is as likely to be found in Beijing or Brasilia as in either Belgium or the UK.

The ancient grandfather ('monarch of all he surveys!)

Then there are second cousins in Canada of whom I learned only through Facebook, and an even more remote relative (my grandsons’ Aunt) in Western Australia, plus a granddaughter in Sheffield and, right at the centre of the web in sunny Clacton-on-Sea, the ancient patriarch, the not-yet-quite-moribund nonagenarian grandfather!  I can’t wait to get those lines drawn to reveal the artwork of the century!  Where, I wonder, should I apply for an award – and perhaps a cash grant?