economic situation is dire

[JulieB]

This is one brave man standing up in the House of Lords last week trying to expose yet another dodgy dealing to the tune of $15 Trillion dollars of Peek-abo accounting involving the world's global financial system!

Here's the video of his House of Lords speech 16th Feb 2012 discussing Europe the Eurozone speech and Cameron refusing to back Europe over bank regulation etc and fiscal policy being more centrally controlled, from Parliament UK now available on You Tube

Entire transcript: Lord James of Blackheath

16 Feb 2012 : Column 1016

5.20 pm

Lord James of Blackheath: My Lords, I hope the minute that that has taken has not come off my time. I do not wish noble Lords to get too encouraged when I start with my conclusions but I will not sit down when I have made them. I will then give the evidence to support them and, I hope, present the reasons why I want support for an official inquiry into the mischief I shall unfold this afternoon. I have been engaged in pursuit of this issue for nearly two years and I am no further forward in getting to the truth.

There are three possible conclusions which may come from it. First, there may have been a massive piece of money-laundering committed by a major Government who should know better. Effectively, it undermined the integrity of a British bank, the Royal Bank of Scotland, in doing so. The second possibility is that a major American department has an agency which has gone rogue on it because it has been wound up and has created a structure out of which it is seeking to get at least €50 billion as a pay-off. The third possibility is that this is an extraordinarily elaborate fraud, which has not been carried out, but which has been prepared to provide a threat to one Government or more if they do not make a pay-off. These three possibilities need an urgent review.

In April and May 2009, the situation started with the alleged transfer of $5 trillion to HSBC in the United Kingdom. Seven days later, another $5 trillion came to HSBC and three weeks later another $5 trillion. A total of $15 trillion is alleged to have been passed into the hands of HSBC for onward transit to the Royal Bank of Scotland. We need to look to where this came from and the history of this money. I have been trying to sort out the sequence by which this money has been created and where it has come from for a long time.

It starts off apparently as the property of Yohannes Riyadi, who has some claims to be considered the richest man in the world. He would be if all the money that was owed to him was paid but I have seen some accounts of his showing that he owns $36 trillion in a bank. It is a ridiculous sum of money. However, $36 trillion would be consistent with the dynasty from which he comes and the fact that it had been effectively the emperors of Indo-China in times gone by. A lot of that money has been taken away from him, with his consent, by the American Treasury over the years for the specific purpose of helping to support the dollar.

Mr Riyadi has sent me a remarkable document dated February 2006 in which the American Government have called him to a meeting with the Federal Reserve Bank of New York, which is neither the Federal Reserve nor a bank. It is a bit like "Celebrity Big Brother". It has three names to describe it and none of them is true. This astonishing document purports to have been a meeting, which was witnessed by Mr Alan Greenspan, who signed for the Federal Reserve Bank of New York of which he was chairman, as well as chairman of the real Federal Reserve in Washington. It is signed by Mr Timothy Geithner as a witness on behalf of the International Monetary Fund. The IMF sent two witnesses, the other being Mr Yusuke Horiguchi. These gentlemen have signed as witnesses to the effect

16 Feb 2012 : Column 1017

that this deal is a proper deal. There are a lot of other signatures on the document. I do not have a photocopy; I have an original version of the contract.

Under the contract, the American Treasury has apparently got the Federal Reserve Bank of New York to offer to buy out the bonds issued to Mr Riyadi to replace the cash which has been taken from him over the previous 10 years. It is giving him $500 million as a cash payment to buy out worthless bonds. That is all in the agreement and it is very remarkable. Establishing whether I have a correct piece of paper is just two phone calls away-one to Mr Geithner and one to Mr Greenspan, both of whom still prosper and live. They could easily confirm whether they signed it. Mr Riyadi, by passing these bonds over, has also put at the disposal of the US Treasury the entire asset backing which he was alleged to have for the $15 trillion. I have a letter from the Bank of Indonesia which says that the whole thing was a pack of lies. He did not have the 750,000 tonnes of gold which was supposed to be backing it; he had only 700 tonnes. This is a piece of complete fabrication.

Finally, I have a letter from Mr Riyadi himself, who tells me that he was put up to do this, that none of it is true, and that he has been robbed of all his money. I am quite prepared to recognise that one of the possibilities is that Mr Riyadi is himself putting this together as a forgery in order to try to win some recovery. But it gets more complicated than that because each of the $5 trillion payments that came in has been acknowledged and receipted by senior executives at HSBC and again receipted by senior executives at the Royal Bank of Scotland. I have a set of receipts for all of this money. Why would any bank want to file $5 trillion-worth-$15 trillion in total-of receipts if the money did not exist? The money was first said to have come from the Riyadi account to the Federal Reserve Bank of New York and from there it was passed to JP MorganChase in New York for onward transit to London. The means of sending it was a SWIFT note which, if it was genuine, ought to have been registered with the Bank of England.

When this came about, I took it to my noble friend Lord Strathclyde and asked what we should do with it. He said, "Give it to Lord Sassoon. He is the Treasury". So I did, and my noble friend Lord Sassoon looked at it and said immediately, "This is rubbish. It is far too much money. It would stick out like a sore thumb and you cannot see it in the Royal Bank of Scotland accounts". He went on to say, "The gold backing it is ridiculous. Only 1,507 tonnes of gold has been mined in the history of the world, so you cannot have 750,000 tonnes". That is true. The third thing he said was, "It is a scam", and I agree with him. The problem is that at that point we stopped looking, but we should have asked what the scam was instead of just nodding it off.

We have never resolved it. Today, I have this quite frightening piece of paper, which is my justification for bringing it into this meeting. It is available on the internet and I am astonished that it has not already been unearthed by the Treasury because every alarm bell in the land should be ringing if it has. It is from the general audit office of the Federal Reserve in Washington-the real Federal Reserve-and its audit

16 Feb 2012 : Column 1018

review to the end of July 2010 on the Federal Reserve Bank of New York. It has on it some 20 banks listed to which $16.115 trillion is outstanding in loans. That is the sore thumb that was being looked for by my noble friend Lord Sassoon. But more particularly there are two other interesting things. The first is that Barclays Bank has $868 billion of loan, and the Royal Bank of Scotland has $541 billion, in which case one has to ask a question, because they could have earned back in three weeks their entire indebtedness and could pay off the taxpayers of Britain. Why have they not done so and could we please ask them to put a cheque in the post tonight for the whole $46 billion?

The next thing that is wrong with it is that every bank on this list, without exception, is an MTN-registered bank, which means that they are registered to use medium-term notes to move funds between themselves with an agreed profit-share formula, in which case these banks are investing this money and, most extraordinarily, not a penny of interest does the Federal Bank of New York want paid on that vast amount, $16 trillion. Anyone who knows what the IMF rules are will immediately smell a rat. The IMF has very strict rules for validating dodgy money. There are two ways of doing it. You either pass it through a major central bank like the Bank of England, which apparently refused to touch this, or you put it through an MTN-trading bank, which is then able to use the funds on the overnight European MTN trading market where they can earn between 1 per cent and 2.5 per cent profit per night. The compound interest on that sum is huge. If it is genuine, a vast profit is being made on this money somewhere.

I believe that this is now such an important issue that I have put everything that I have got on the subject on to a 104-megabyte memory thumb. I want the Government to take it all, put it to some suitable investigative bureau and find out the truth of what is going on here, because something is very seriously wrong. Either we have a huge amount of tax uncollected on profits made or we have a vast amount of money festering away in the European banking system which is not real money, in which case we need to take it back. I ask for an investigation and for noble Lords to support my plea.

5.30 pm

Lord Lea of Crondall: My Lords, I am quite happy to believe everything that the noble Lord, Lord James of Blackheath, has said. I will be very disappointed if the noble Lord, Lord Pearson of Rannoch, is unable to explain how this is all a conspiracy by Brussels. Will the Minister confirm that if you want to buy up the whole world you need a quadrillion? That is the latest figure.

This debate began with a presumption that what happened on 9 December was something of a mystery. It remains a mystery. In answer to the question posed by the noble Lord, Lord Kerr, as to why we walked away on that fateful night, I can only assume, because no other explanation has been offered, that in the middle of the night David Cameron's phone was being hacked into by Rupert Murdoch. The events of that night provided quite useful bulldog headlines for the

16 Feb 2012 : Column 1019

following day's newspapers, including the Daily Telegraph and the Daily Mail. The bulldog in question, cited by the chairman of the 1922 Committee, was, of course, Winston Churchill. It is worth quoting against that background of bulldogs from volume 3 of Churchill's A History of the English-Speaking Peoples, which he wrote in the late 1930s although it was published only in 1956. He said:

"But the Tories were now in one of their moods of violent reaction from continental intervention".

That is where we are at the moment.

[peterms]

I'm so tired hearing the fatuous self-serving nonsense spouted by bankers. That they make big profits and contribute to the economy; that they are the brightest and best, who achieve great things by the application of their brilliant minds, and if they left we'd all be up shit street; that they demonstrate stellar performance.

The truth is that banks are massively, scarily subsidised by the state, to the tune of tens and even hundreds of billions a year. The Bank of England recognises this to be the case.

They make profits by leveraging to a truly mad extent, without carrying the risk of their stupid actions. Of course it doesn't fit with the notion of them being clever entrepreneurs who build real value, but in fact what they do is exercise incredibly poor judgement based on always taking more risk which someone else will have to carry - hardly something you need to be especially intelligent or skilled to do.

Of course, they have managed to increase their pay enormously in the last couple of decades, for no good reason. Like anyone else who gets stupid money, they convince themselves that they are worth it, and that it reflects their special gifts, and that no-one else could do their job. All self-serving bollocks.

There's an interesting article here by the Director of Financial Stability at the BoE which says a few things about all this.

[Risso]

It's not an easily measurable value, but the level of consumerism and "gottohaveitnowism" has grown by similar amounts as bankers' pay, and that's why we're in the shite. Whether the chicken or the egg of demand or the bankers lending came first is almost irrelevant now.

[drat01]

The man is a complete and utter clearing in the woods of the highest order. He is frankly one of the most obnoxious individuals ever to set foot in any sort of parliamentary office

it's like Sesame street ... we've moved on from Odious to Obnoxious all brought to you by the letter "O"

next month from Labour central the letter "P"

but as to your claim I doubt anyone would ever take that title away from Prescott ..but i digress

the banking sector contributed almost 14% of the total in Government taxes in 2007 and 12% in 2009 ..not seen figures after that but i'd imagine it's still around that mark ..how much of that was in income tax from employees bonuses etc i couldn't tell you ..but lets say we call the banks bluff and let them leave and shout good riddance

there's a few billion in lost taxes which would have to be found elsewhere ..wouldn't it ?

It's funny, well no it isn't really thinking about it, how you constantly try to avoid any comments on Cameron, Gideon and the rest of this god awful Gvmt by deflection and snipes against the poster.

This obnoxious, odious Gvmt (supported by the **** awful LibDems) are imposing some of the worst policies ever to hit Joe Public, vindictive cuts in areas that will never recover while trying to impose long held principles to kill areas like the NHS and you (and other Tory supporters) think it's "jolly well fine" and we should blame public sector employees and defend at all costs areas such as the banking / finance sector, many of which not surprisingly contribute millions to the Tory party.

The reality is that Cameron and Gideon (backed this morning by that complete Prick Boris) are imposing cuts not with an intention to addressing problems caused by the finance sector, but based on idealogical thinking. Big Profit is the only aim they are working towards and they have no worries how that is achieved. Maybe the "slave labour" rules that they are so keen on the record youth unemployment they have created can then be applied to all not sharing their wealth and ability to contribute to the Tory party machine?

For all the idiocy and spin that the Tory party and it's media friends pump out, the reality is that their policies have already failed the majority in this country. They try and defend it by saying people and jobs will move abroad, total and utter bollox. Even if there was a shred of truth in that, should a whole country be held to ransom by such selfish and frankly disgusting thinking?

No doubt Cameron will litter his next PMQ challenge on this with more and more lies, that seems to be a trait of the Tory party and its supporters from top to bottom

[PauloBarnesi]

No doubt Cameron will litter his next PMQ challenge on this with more and more lies, that seems to be a trait of the Tory party and its supporters from top to bottom

And the same goes for Labour, Liberals, SNP, etc, etc...

Anyway the face of tax avoids tax...

Moira Stuart can avoid top income tax rate through her own private company

Public face of Inland Revenue not alone in practice, common to some BBC and NHS staff, but condemned by William Hague

Share 28 reddit this

Patrick Wintour, political editor

guardian.co.uk, Sunday 19 February 2012 19.05 GMT

Article history

Moira Stuart, the public face of the Inland Revenue from its 'tax shouldn't be taxing' advertisements. Photograph: David Fisher/Rex Features

The public face of the Inland Revenue, the BBC newsreader Moira Stuart, has set up a private firm that allows her to avoid the 50% top rate of tax on some of her income.

The revelation came as the foreign secretary, William Hague, became the first senior cabinet minister to condemn the practice of setting up companies through which to siphon salaries.

The Guardian revealed last week that as many as 25 full-time NHS staff, most on contracts as long as five years, are paid through companies owned by their families. Many were earning well over £100,000 a year. The department of health says it is investigating the position and whether the staff will be allowed to go on the payroll, and the Treasury is undertaking a wider review across Whitehall due to be completed by the end of March.

The device allows individuals to pay as little as 21% corporation tax, rather than the higher rate of 40% or top rate of 50%. Labour has been reluctant to challenge the practice in the NHS since it knows many of the agreements were cleared under the last Labour government.

On the BBC's Andrew Marr programme, Hague said: "I'm not very fond of that sort of behaviour. Sometimes people will have agreed their own arrangements and done it over a long time, and that's their contractual arrangement, so of course they will have their legal rights to that. But, particularly at this time in the nation's history, people should be paying their taxes fully."

Stuart fronts the Inland Revenue's advertising campaign with the catchphrase "tax doesn't have to be taxing" to remind tax-payers to send in their self-assessment tax forms.

The Sunday Telegraph disclosed that Companies House filings reveal she is sole director and shareholder of Moira Stuart Ltd, which was set up in April 2010. The firm's accounts reveals that £22,607 was paid into the company in 2010-11. After £1,749 of administrative expenses, she paid corporation tax on income of £4,380. Had these taxes been subject to income tax, she would have had to pay a bill of over £11,000.

Such service companies have been popular among senior BBC executives for many years, but the scale of their popularity across the public sector is only now becoming clear. They are entirely legitimate for freelancers, but the Inland Revenue is supposed to take action against disguised employees.

Such schemes are advantageous to employers since they may not have to pay national insurance.

It was also reported the chief executive of Britain's largest NHS trust receives his £400,000 salary through a private company that he owns with his wife. The payments are made to Mark Davies, interim chief executive of Iiperial College Healthcare NHS trust Imperial College Healthcare NHS Trust via a company owned by his wife Karen Johnson.

He is described as interim chief executive, but has worked there since May last year. After he was contacted by the Sunday Times, the trust announced that he was to become substantive chief executive, and his payments would be made at source.

The Trust said his appointment followed a lengthy recruitment process that preceded any inquiries by the Sunday Times.

Announcing his permanent appointment on Friday, the trust said in a press release "Since rejoining the Trust last year Mr Davies has taken the Trust from a forecast year end deficit of £35m to one of £19m which includes £44m savings".

[Awol]

..Like anyone else who gets stupid money..

I think this comment touches on a broader trend than simply bashing bankers, it is a reflection off the desire to attack anyone with wealth, particularly those arch criminals known as 'millionaires' - regardless of whether they have earned that money through their own hard work or not. If you have more than the average man then why should it be taken off you in ever increasing amounts in the name of 'fairness'? Fair to who, exactly? Many self made people have risked literally everything to build a good business and probably create jobs for others in the process.

Translated that spiteful attitude amounts to a belief that 'if I can't have it then neither should you'.

Clegg's proposed mansion tax is a case in point, believing people should pay an extra penalty equal to 1% of the property's value for owning a big house. Why? Should someone with a higher income or total wealth also pay more for a loaf of bread of a litre of petrol because they are relatively 'rich'? If not then why try to over tax them for having assets? The whole premise of the argument is ridiculous.

What happened to aspiration? Isn't it time people worried a little less about what 'so and so' has (and what can be taken from them), and a little more about improving their own situation?

Completely annecdotal but non-British expatriates I speak to are seeing the UK less and less as a place to invest and do business precisely because of this growing culture that wishes to punish people for being financially successful.

Until we all live in a communist utopia this anti-capitalist and anti-business culture is a dangerous thing to be fostering, imo.

Note: The above is not a defence of bankers, more of a general observation.

[drat01]

I think this comment touches on a broader trend than simply bashing bankers, it is a reflection off the desire to attack anyone with wealth, particularly those arch criminals known as 'millionaires' - regardless of whether they have earned that money through their own hard work or not. If you have more than the average man then why should it be taken off you in ever increasing amounts in the name of 'fairness'? Fair to who, exactly? Many self made people have risked literally everything to build a good business and probably create jobs for others in the process.

Translated that spiteful attitude amounts to a belief that 'if I can't have it then neither should you'.

Clegg's proposed mansion tax is a case in point, believing people should pay an extra penalty equal to 1% of the property's value for owning a big house. Why? Should someone with a higher income or total wealth also pay more for a loaf of bread of a litre of petrol because they are relatively 'rich'? If not then why try to over tax them for having assets? The whole premise of the argument is ridiculous.

What happened to aspiration? Isn't it time people worried a little less about what 'so and so' has (and what can be taken from them), and a little more about improving their own situation?

Completely annecdotal but non-British expatriates I speak to are seeing the UK less and less as a place to invest and do business precisely because of this growing culture that wishes to punish people for being financially successful.

Until we all live in a communist utopia this anti-capitalist and anti-business culture is a dangerous thing to be fostering, imo.

Note: The above is not a defence of bankers, more of a general observation.

So I suppose the phrase "we are all in this together" is no longer applicable then?

Completely annecdotal but non-British expatriates I speak to are seeing the UK less and less as a place to invest and do business precisely because of this growing culture that wishes to punish people for being financially successful.

This is a key statement in your post. How can you be a non-British expat? Maybe a desire and a willingness to actually pay taxes in a country that you are reaping millions and billions from is a more admirable and realistic stance?

Until we all live in a communist utopia this anti-capitalist and anti-business culture is a dangerous thing to be fostering, imo.

1950's USA rhetoric now?

[drat01]

And the same goes for Labour, Liberals, SNP, etc, etc...

The last time I looked there was only one PM. So a nice attempt at deflection Paul, but has no relevance whatsoever to the point raised.

[Awol]

Completely annecdotal but non-British expatriates I speak to are seeing the UK less and less as a place to invest and do business precisely because of this growing culture that wishes to punish people for being financially successful.

This is a key statement in your post. How can you be a non-British expat? Maybe a desire and a willingness to actually pay taxes in a country that you are reaping millions and billions from is a more admirable and realistic stance?

By being an expatriate in your country of residence but from a country other than UK, i.e. a non-British expatriate.

Not quite sure what you mean by the rest of the post quoted, but if you'd care to expand..

Until we all live in a communist utopia this anti-capitalist and anti-business culture is a dangerous thing to be fostering, imo.

1950's USA rhetoric now?

No, the seeming desire from those of a left wing political orrientation to punish financial success in the name of 'fairness'. Perhaps someone could define what 'fairness' means in this context?

[drat01]

AWOL - from your post, and correct me if I am wrong, what you are basically saying is that Profit = Good. Cameron, someone who's politics you often support, constantly claims that we are "all in this together", which completely then goes against your views as per

What happened to aspiration? Isn't it time people worried a little less about what 'so and so' has (and what can be taken from them), and a little more about improving their own situation?

Your use of the word ex-pat was confusing as though it was some sort of "badge of honour". Is your point that your experience is that foreigners are not looking to invest in the UK? Surely that is the case in many countries in the west, with money being invested in areas that provide cheap (often slave like) labour to maximise profits? The UK money is often invested in the far east etc, why? Social conscience?

No, the seeming desire from those of a left wing political orrientation to punish financial success in the name of 'fairness'. Perhaps someone could define what 'fairness' means in this context?

That is such a massive generalisation. The 1950's USA and the "hunt for Communists" used Rhetoric such as that. As said the man you voted for constantly claims "we are all in this together", are you saying that Cameron and his party are left wing? Society is a great starting point for definition consideration for this "fairness", but of course we all know what Tory party supporters and Thatcherites especially think of that :-)

EDIT: Just to clarify, profit does not mean bad. It's how that profit is generated that is the questionable thing.

[PauloBarnesi]

And the same goes for Labour, Liberals, SNP, etc, etc...

The last time I looked there was only one PM. So a nice attempt at deflection Paul, but has no relevance whatsoever to the point raised.

You original quote was “No doubt Cameron will litter his next PMQ challenge on this with more and more lies, that seems to be a trait of the Tory party and its supporters from top to bottom”

Its not deflection at all. You didn’t say Cameron alone, you said every person who is a member, and supported them. Do you know them personally? As I ve said of course the Tory party and supporters, will have amongst its number people who are liars (Archer?)

Its just the notion that every Tory is going to be as you portray them. Just as every Labour supporter or member isn’t going to be snow white or evil incarnate, or that every SNP member or supporter isn’t going to be like Alec Salmond. Or that every Liberal party member is like Simon Hughes or Nick Clegg, etc, etc

It strikes me if we are to be successful as a country; which one would hope we all would want, we want some consensus, not divisive politics. Seems to me that if some Tories are making politics divisive (which I think they are), then the same is reflected in the other parties. I don’t want politics to become like America, where its become so polorised

[Awol]

AWOL - from your post, and correct me if I am wrong, what you are basically saying is that Profit = Good. Cameron, someone who's politics you often support, constantly claims that we are "all in this together", which completely then goes against your views as per

What happened to aspiration? Isn't it time people worried a little less about what 'so and so' has (and what can be taken from them), and a little more about improving their own situation?

Yes profit is most definitely 'good'. Without it you don't have tax revenue, without which you don't have public services etc.

When Cameron (who I have repeatedly stated is a flip flopping snake oil salesman with the morals of a rabbit on viagra) stated "we are all in this together" he was quite obviously preparing people for cuts in public spending. That was, given the debt situation, an unavoidable reality.

Would those cuts hit the less wealthy disproportionately? Yes sadly, but would that justify taking ever more from those who were not poor? No, imo. Would it have been sensible to not cut and continue an unsustainable trajectory of increased borrowing? No.

The coalition was and still is faced with a selection of bad options when they came in and I wouldn't claim they have got them all correct. That they had to make those choices was down to Brown's decision to abandon capaitalism and socialise the debts run up by the bankers you hate. You would never admit it of course, but that's the reality.

Long term recovery of the UK economy is not helped by punitive and populist measures against anyone percieved to be wealthy, which was the - so far unanswered - thrust of my original post. Interpreting some sloganising (we're all in this together) as an intention to soak anyone with wealth is, imo, a little naive.

Your use of the word ex-pat was confusing as though it was some sort of "badge of honour".

Not at all, you're letting personal prejudices cloud your thinking.

Is your point that your experience is that foreigners are not looking to invest in the UK?

As stated the evidence was annecdotal but yes, and for the reasons given.

Surely that is the case in many countries in the west, with money being invested in areas that provide cheap (often slave like) labour to maximise profits?

That would depend on what the individual wished to invest in, wouldn't it. If one was looking at highly skilled and high tech industries in politically stable (relatively speaking) environments then the West is the obvious choice. Most people I speak to with the cash to make such investments are now putting their money into the USA, which still has a reasonably business friendly set up.

No, the seeming desire from those of a left wing political orrientation to punish financial success in the name of 'fairness'. Perhaps someone could define what 'fairness' means in this context?

That is such a massive generalisation.

More of a generalisation than "Tories are liars and so are their supporters, so there!!" ??

Society is a great starting point for definition consideration for this "fairness", but of course we all know what Tory party supporters and Thatcherites especially think of that :-)

Sorry, I can't make any sense of that if it is a definition. Society = fairness? Please expand, I'm interested to know what your definition of 'fairness' is in this context.

EDIT: Just to clarify, profit does not mean bad. It's how that profit is generated that is the questionable thing.

On that we agree.

[peterms]

..Like anyone else who gets stupid money..

I think this comment touches on a broader trend than simply bashing bankers, it is a reflection off the desire to attack anyone with wealth, particularly those arch criminals known as 'millionaires' - regardless of whether they have earned that money through their own hard work or not.

Here we go again. It's such a tired and lazy argument. If you attack bankers or any other super-rich people whose income and wealth is manifestly unrelated to any possible level of effort they have put in or societal benefit they create, then you must be attacking everyone who earns above the average, anyone who works hard, anyone who shows a bit of initiative and effort. Even to state the argument is to show how utterly ludicrous it is, and I can scarcely believe that you subscribe to it.

If you have more than the average man then why should it be taken off you in ever increasing amounts in the name of 'fairness'? Fair to who, exactly? Many self made people have risked literally everything to build a good business and probably create jobs for others in the process.

You don't think that a progressive tax system is fair? You think we should have flat taxes, like the Poll Tax? Is that really what you are saying?

The people who have risked their own assets to build things up tend to be small businesses. As you will know, while bankers have taken massive, unreasonable and extremely damaging risks, it was not in any way with their own assets. Which is rather the point. As the article I linked points out very well, in the days when bankers' assets were at risk, they behaved rather better.

Who else risks everything in the selfless crusade to create work for the less enterprising? Emma Harrison or Craig Whyte, for example? Do people like this put their assets on the line in order to do good for society? My arse.

Translated that spiteful attitude amounts to a belief that 'if I can't have it then neither should you'.

Clegg's proposed mansion tax is a case in point, believing people should pay an extra penalty equal to 1% of the property's value for owning a big house. Why? Should someone with a higher income or total wealth also pay more for a loaf of bread of a litre of petrol because they are relatively 'rich'? If not then why try to over tax them for having assets? The whole premise of the argument is ridiculous.

The argument for some form of wealth tax, whether that takes the form of a "mansion tax" or whatever, is not at all that anyone should pay more for the same goods. Where did you get that idea from?

The reason that tax on assets as well as income is proposed, is that income tax is easily and systematically evaded, most obviously by exactly those who it is intended should be paying most, because they have most. A land tax is far less easily evaded.

If we don't tax assets, then someone who is fabulously wealthy but has little income would pay nothing. Does that seem like a sensible policy?

What happened to aspiration? Isn't it time people worried a little less about what 'so and so' has (and what can be taken from them), and a little more about improving their own situation?

In what possible respect can daft pay for bankers and others create "aspiration" among other people? Twenty years ago, when bankers' pay was far below what it is now for doing a better job than they do, was there consequently less "aspiration"? Again, it's one of these fantasy arguments which seeks to morph together excessive pay with something which might be a benefit for others, without there actually being a link between the two. What next? The "trickle-down" argument? Come on, Jon.

Completely annecdotal but non-British expatriates I speak to are seeing the UK less and less as a place to invest and do business precisely because of this growing culture that wishes to punish people for being financially successful.

The problem is more that we are sucking in the super-rich because they can evade tax more easily here. But they "invest" in inflating the London property market, rather than anything more socially useful. There's this notion that the extremely rich are "wealth creators", a term meant to imply that they create wealth for all of us. Mostly, they extract it from the rest of us, and amass it rather than create it. Read this.

...The capital of the UK has one of the world's largest concentrations of the super-rich, and the reason for that is that we have chosen to have them here, as a matter of deliberate government policy. The relevant policy is the notorious provision in relation to "domicile", as a definition of an individual's tax status. Every other civilised country in the world taxes its inhabitants on their income and capital: the basic rule is that if you live in a place, you pay its taxes. But it's different in the UK. Here, if you come from overseas, and can prove strong links with overseas, and can prove that you are going to return to overseas, and can therefore establish a "domicile" overseas that is different from your "residency" in the UK – well, in that case, you are treated entirely differently for tax purposes. You pay tax on your income in the UK, like the rest of us; and you can remit capital to the UK; but your overseas income, as long as you keep it overseas, is out of the reach of the Inland Revenue....

Until we all live in a communist utopia this anti-capitalist and anti-business culture is a dangerous thing to be fostering, imo.

This sounds remarkably like saying that to criticise something is to undermine everything. It's an approach most commonly used in totalitarian systems, and I'm astonished that you should have any truck with it, given your wider views.

[snowychap]

...those arch criminals known as 'millionaires' - regardless of whether they have earned that money through their own hard work or not.

I think this touches upon something rather important - that it isn't necessarily hard work that translates in to financial success and vice versa (something which your post seems to acknowledge). There are plenty of people who work incredibly hard who don't become millionaires or even close to it and plenty of people who work no harder than the majority who do. Very few wealthy (those who have become wealthy rather than fallen it to it) achieve that wealth without the assistance of others (often working very hard themselves) and happenstance.

It's how that profit is generated that is the questionable thing.

Possibly as important, too, is what is done with these profits (are they reinvested and used productively and so on).

[meregreen]

Hard work doesn't seem to come into it. Bankers seem to qualify for huge bonuses regardless of their performance. Does anyone know what a bankers performance has to be for them not to qualify for an obscene bonus ?

[Awol]

..Like anyone else who gets stupid money..

I think this comment touches on a broader trend than simply bashing bankers, it is a reflection off the desire to attack anyone with wealth, particularly those arch criminals known as 'millionaires' - regardless of whether they have earned that money through their own hard work or not.

Here we go again. It's such a tired and lazy argument. If you attack bankers or any other super-rich people whose income and wealth is manifestly unrelated to any possible level of effort they have put in or societal benefit they create, then you must be attacking everyone who earns above the average, anyone who works hard, anyone who shows a bit of initiative and effort.

No, that isn't what I meant. I do think there is a popular feeling stoked by the media to attack anyone who has done well. It started with the bankers and seems (to borrow a phrase) to be 'trickling down'. Rather than attacking those at the top we'd be better off following the Japanese model of linking the wages of the top earners in an organisation to those at the bottom. I think their formula states that a CEO can only be paid 20 times more than the lowest paid employee. Such a formula is fair and would begin to even out the disparities in pay, however it is a long term solution.

Short term we might consider that the top 1% of earners pay 27% of all income tax, and in that 1% I'd guess a fair chunk are in some form of finance role. The top 5% of earners pay 45% of all income tax and undoubtedly the big executive salaries will fall into that bracket.

Therefore if one starts going after those salaries/bonuses and follow the line of "sod the bankers, let them go abroad" it blows an atom bomb sized hole in short term tax receipts. A price worth paying maybe? Not unless the cuts in public spending such action would necessitate are considered a fair trade.

I also think such a position reduces the appetite for foreign investment into Britain, and not just blowing up London's property bubble but investment into business which is the only thing that can drive a recovery.

I suppose my point is that attacking the foundations of capitalism (risk and loss vs success and profit) in a fit of revenge for the wrongs of a minority is short sighted.

Yes the system itself needs structural reform but we are in danger of throwing the baby out with the bathwater, as it were.

If you have more than the average man then why should it be taken off you in ever increasing amounts in the name of 'fairness'? Fair to who, exactly? Many self made people have risked literally everything to build a good business and probably create jobs for others in the process.

You don't think that a progressive tax system is fair? You think we should have flat taxes, like the Poll Tax? Is that really what you are saying?

We already have a progressive tax system and the figures I gave above for income tax I think show that. Should more and more tax be piled on top? IMO no it shouldn't because it is a) wrong in principle to simply take from people who already contribute their 'fair share', and it will become counter-productive to do so. As discussed before on here, money is mobile and fickle and those with it (and with the means therefore to benefit the exchequer) can move it to a more friendly environment if they feel they are being unfairly targeted. That's the reality of globalisation.

Who else risks everything in the selfless crusade to create work for the less enterprising? Emma Harrison or Craig Whyte, for example? Do people like this put their assets on the line in order to do good for society? My arse.

Who said it was selfless, more importantly who cares? It's about economics not emotions. Their risk doesn't need to selfless, it needs to fulfills one of two criteria to be socially useful: creating jobs and/or providing tax revenue to government. Over and above that if the people doing it are successful and reap the financial rewards then more power to them. It doesn't mean we should then be looking for ways to take more from those people. That's capitalism as it should work.

Translated that spiteful attitude amounts to a belief that 'if I can't have it then neither should you'.

Clegg's proposed mansion tax is a case in point, believing people should pay an extra penalty equal to 1% of the property's value for owning a big house. Why? Should someone with a higher income or total wealth also pay more for a loaf of bread of a litre of petrol because they are relatively 'rich'? If not then why try to over tax them for having assets? The whole premise of the argument is ridiculous.

The argument for some form of wealth tax, whether that takes the form of a "mansion tax" or whatever, is not at all that anyone should pay more for the same goods. Where did you get that idea from?

I think you know I was using it as an example of how absurd and unfair the idea of a wealth tax is, i.e. 'you have more savings/assets etc, so you should pay more'. It's punitive and wrong, imo.

The reason that tax on assets as well as income is proposed, is that income tax is easily and systematically evaded, most obviously by exactly those who it is intended should be paying most, because they have most. A land tax is far less easily evaded.

Fundamentally I dislike the State looking for ever more ways to part people from their assets in the name of 'fairness'. What passes for the Conservative leadership seem to disagree and I sometimes think Cameron is Brown's successor as the leader of the Labour.

If we don't tax assets, then someone who is fabulously wealthy but has little income would pay nothing. Does that seem like a sensible policy?

At some point the wealth required to purchase those assets has already been taxed. Why the desire, need or justification to tax it again, and again, and again )?

Until we all live in a communist utopia this anti-capitalist and anti-business culture is a dangerous thing to be fostering, imo.

This sounds remarkably like saying that to criticise something is to undermine everything.

No criticism (certainly in the bankers case) is fully justified. The problem, as I've tried at length to highlight, is the seeming economic incoherence of the popular drive to attack people with wealth. Until we can monetise and tax righteous anger then perhaps a more measured approach would be sensible.

[tonyh29]

I do think there is a popular feeling stoked by the media to attack anyone who has done well. It started with the bankers and seems (to borrow a phrase) to be 'trickling down'.

in the 80's it was estate agents ..then yuppies ..now it's the bankers turn .... guess the public just like to have someone to bash ? it's like there is a natural chip on the shoulder of the Uk population by and large ... but we are not alone I have friends in Hungary and some other friends who are Polish and they often say that the older generations "back home" preferred it under the old communist system where everybody was poor but at least they were all poor together ( apart from the glorious leaders of course )

[tonyh29]

it's only cost us £850 Bn so far but Browns legacy bears its first fruits

UK taxpayers are expected to make a net profit of up to £11bn from the nationalisation and resale of Northern Rock, according to UKFI.

nice one Gordon ......

[peterms]

Rather than attacking those at the top we'd be better off following the Japanese model of linking the wages of the top earners in an organisation to those at the bottom. I think their formula states that a CEO can only be paid 20 times more than the lowest paid employee. Such a formula is fair and would begin to even out the disparities in pay, however it is a long term solution.

Yes, that would be a big step forward. The reason that the super-rich are so often attacked is not because they are rich (I don't see lottery winners being attacked, or someone like JK Rowling) but because in so many cases they seem to be rewarded far, far beyond anything which seems remotely fair or in proportion to what they have contributed; and that unlike the lottery winner, it couldn't have happened to anyone or isn't the obvious reward for real talent (this is not a reference to Rowling), it's the product of a closely guarded network which few can enter. When on top of that they are found to have dodged tax like Philip Green, or dumped costs and other problems on the rest of us like the bankers, then it is very easy for that feeling of unfairness to tip over into real anger. And that seems to me to be perfectly understandable, entirely legitimate, and in fact quite healthy.

Short term we might consider that the top 1% of earners pay 27% of all income tax, and in that 1% I'd guess a fair chunk are in some form of finance role. The top 5% of earners pay 45% of all income tax and undoubtedly the big executive salaries will fall into that bracket.

What is certain in this area is that they don't pay what they are meant to. To take just one example, the piece here states that "Freedom of Information requests revealed that, of the more than 400 UK-based individuals who earn or are capable of earning more than £ 10million a year, only 65 filled in a tax return in 2004-05".

Therefore if one starts going after those salaries/bonuses and follow the line of "sod the bankers, let them go abroad" it blows an atom bomb sized hole in short term tax receipts. A price worth paying maybe? Not unless the cuts in public spending such action would necessitate are considered a fair trade.

I also think such a position reduces the appetite for foreign investment into Britain, and not just blowing up London's property bubble but investment into business which is the only thing that can drive a recovery.

I suppose my point is that attacking the foundations of capitalism (risk and loss vs success and profit) in a fit of revenge for the wrongs of a minority is short sighted.

Yes the system itself needs structural reform but we are in danger of throwing the baby out with the bathwater, as it were.

I'm not clear whether you think the Japanese approach denies tax receipts, reduces foreign investment, and attacks the foundations of capitalism. Presumably not, if you advocate it. If not, then I don't see why you think your argument that having more effective limits on extremes of wealth would have this effect here, holds up.

We already have a progressive tax system and the figures I gave above for income tax I think show that. Should more and more tax be piled on top? IMO no it shouldn't because it is a) wrong in principle to simply take from people who already contribute their 'fair share', and it will become counter-productive to do so. As discussed before on here, money is mobile and fickle and those with it (and with the means therefore to benefit the exchequer) can move it to a more friendly environment if they feel they are being unfairly targeted. That's the reality of globalisation.

But the point is that the people we're discussing don't pay their fair share - both in the sense of getting too much in the first place, and then evading the taxes they should be paying. And money can be moved if it is allowed to be. It could be made quite a bit harder.

Who said it was selfless, more importantly who cares? It's about economics not emotions. Their risk doesn't need to selfless, it needs to fulfills one of two criteria to be socially useful: creating jobs and/or providing tax revenue to government. Over and above that if the people doing it are successful and reap the financial rewards then more power to them. It doesn't mean we should then be looking for ways to take more from those people. That's capitalism as it should work.

Surely those two criteria aren't enough. What about for example doing no harm? Harm could be environmental damage, health damage to workers and customers, or financial damage, for example. If a baker poisons his customers, we don't see him as socially useful because he's employed someone and paid some tax. We look at the whole picture. Down the years, capitalism has continually tried to dump on society the costs of coping with the harm that businesses do. That's why we needed public health legislation in the first place, because they were dumping poison in the rivers, giving their staff deadly diseases and so on. Nowadays, it seems that crashing the economy is more in favour.

I think you know I was using it as an example of how absurd and unfair the idea of a wealth tax is, i.e. 'you have more savings/assets etc, so you should pay more'. It's punitive and wrong, imo.

Fundamentally I dislike the State looking for ever more ways to part people from their assets in the name of 'fairness'. What passes for the Conservative leadership seem to disagree and I sometimes think Cameron is Brown's successor as the leader of the Labour.

Well, we have to look at how the assets were acquired, not just accept that is someone has something, it's theirs and there's no more to be said. When the assets derive from theft, exploitation, expropriation and corruption, as in so many cases they do, then I'm not minded to accept the plea that it's their wealth and we have no say in the matter. And why a wealth tax? Simply on the principle that is we need to levy taxes, then those with most should pay most.

At some point the wealth required to purchase those assets has already been taxed. Why the desire, need or justification to tax it again, and again, and again )?

Some proponents of a land tax suggest that it should replace income tax, not be added to it. I'm not sure about that, but I think it could certainly replace some forms of tax, and make things simpler. But your argument applies to any form of tax. The income required to buy a tv or a litre of fuel has already been taxed - why tax it again through VAT or fuel tax? And of course, in many cases the wealth which bought the assets wasn't taxed, as the example above of the very wealthy taxdodgers shows.

No criticism (certainly in the bankers case) is fully justified. The problem, as I've tried at length to highlight, is the seeming economic incoherence of the popular drive to attack people with wealth. Until we can monetise and tax righteous anger then perhaps a more measured approach would be sensible.

The gap between the richest and the poorest, and the richest and pretty much everyone, is increasing. It is the size of the gap which creates resentment and anger, and as the gap increases, so will the anger. To quote a rich man, again from the article quoted above, "Sir Ronald Cohen, one of Britain's richest men, has warned that rioting could erupt on the streets because of the growing divide between the haves and the have-nots". He said that before the riots. It hardly takes a genius to predict that, though.

[tonyh29]

has warned that rioting could erupt on the streets because of the growing divide between the haves and the have-nots". He said that before the riots. It hardly takes a genius to predict that, though.

62% of arrests made were for Burglary ..would suggest that the rioting was just sheer opportunism by a load of toe rags rather than have's v have nots ?