Bolitics The New Condem Government

[Richard]

Still, coming from a chancellor who thinks it makes sense to speak of showing 110% effort, perhaps it's all we should expect. This is the grasp of logic and arithmetic he brings to decisions of national policy.

I seem to remember a football manager we once had also speaking of 110% effort. Not sure he had a poor grasp of logic or arithmetic or that his decisions regarding team policy were that bad either.

Still, I suppose it depends upon how much store you put by a figure of speech.

I see that , despite the "worsening" position, the private sector has created 906,000 jobs since the electionthe vast majority of which are full time and permanent.

Deficit has been reduced by a quarter, interest rates remain low. But apparently it is "worsening".

I think what would make it worse is the solution peddled by some of more spending, more borrowing, more debt - that is what got us into the mess in the first place. You cannot borrow your way out of a debt crisis.

[Eames]

I think what would make it worse is the solution peddled by some of more spending, more borrowing, more debt - that is what got us into the mess in the first place. You cannot borrow your way out of a debt crisis.

Keynesian meltdown in 5.....4.........3......

[snowychap]

I see that , despite the "worsening" position, the private sector has created 906,000 jobs since the electionthe vast majority of which are full time and permanent.

Net or gross?

Deficit has been reduced by a quarter, interest rates remain low. But apparently it is "worsening".

Output is down (which together with the labour market survey figures would suggest a fair old slump in productivity), inflation is still above target and trade deficit growing.

[drat01]

Tory members and their deluded sympathisers try and typically fail to paint a glossy picture on the frankly apalling performance of their gvmt supported by the lib dems. The reality is that idealogically led cuts attacking he most vulnerable and supporting their own backers still remain at the heart of their policies. As was pointed out before they try to equate national to personal debt when reality is they are not the same. Core principles like the nhs is in the process og being killed off. Privatisation across the board mainly by stealth and typically to those who finance the tory part continues. A lack of real understanding shines through but is completelt ignored by the previously mentioned. We see all levels of politicians being rightly questioned on what the majority see as very shady links, i thought they were there o serve and not look after themselves.a few bs words dont hide the real facts.

[peterms]

I see that , despite the "worsening" position, the private sector has created 906,000 jobs since the electionthe vast majority of which are full time and permanent.

You make it sound like unemployment is going down, and there's hundreds of thousands of great new opportunities. In fact unemployment is pretty static, at around 8%, but the number of people in part-time jobs but who want full-time work is at a record high. Similarly, the rising figures for self-employment disguise a number of people who are barely working at all. And workfare has removed many people from the unemployment count, though no-one would call them employed. So all is not as the headline figures would suggest - as Stephanie Flanders points out, the figures are saying that despite the economy having been flat for two years, we are employing a lot more people to produce the same amount: how can this be?

...The latest figures suggest there were 501,000 more people in work in the UK in the second quarter of 2012 than there were two years earlier, when our economy is supposed to have been slightly larger than it is now.

To get rid of that longer term mystery, the ONS would have to decide that everything it had said about GDP in the past two years was wildly wrong -that instead of being flat, we actually grew by more than 2%...

So workfare, involuntary part-time work and "self-employment" covering underemployment explain part of it. That might also be why real wages are declining, which won't do much to get us out of recession.

Deficit has been reduced by a quarter, interest rates remain low. But apparently it is "worsening".

How do you work out that the deficit has been reduced by a quarter? According to the Treasury,,

Public sector current budget deficit was £13.0 billion in June 2012; this is £0.6 billion higher deficit than in June 2011, when there was a deficit of £12.4 billion.

It's to be expected. But the public sector deficit is simply a consequence of decisions made by the private sector, not a reason for panic or moral concern. Don't fret about it.

The economic situation is however worsening. This may be why support for Osborne is ebbing away even among those economists who previously supported him.

I think what would make it worse is the solution peddled by some of more spending, more borrowing, more debt - that is what got us into the mess in the first place. You cannot borrow your way out of a debt crisis.

I think you just don't get it. The problem is one of a lack of demand. You don't solve that by cutting demand still further. It is not, and never was, a crisis of public sector debt.

[Richard]

I know religion gets a rough ride and I would guess not many have read the bible but I have to say at times it really is quite insightful.

For example right now I think Ecclesiastes 1:9 about sums it up for me. Truly there is nothing new under the sun

[snowychap]

...Truly there is nothing new under the sun

Indeed, Richard.

Acolytes of respective governments using (selected) figures or stories to support the narrative their own side wants heard rather than looking at figures, stories and so on and asking what they may mean, how they fit together and what they should mean for future policy.

'Twas ever thus.

[Richard]

We see all levels of politicians being rightly questioned on what the majority see as very shady links,

What are the specifics of that?

[AVFCforever1991]

The bible is like reading Winnie the Pooh, Its Fiction. A bunch of Made up story's to control people over the years, by telling them 'you have to follow these 10 Commandments'.

[Dale]

Link

John Pugh, an MP who helped write the Lib Dems’ economic policy before the 2010 election, has called for ministers to return to the plans set out by Vince Cable, the business secretary, when he was the party’s Treasury spokesman.

Mr Pugh said: “We need to look again very carefully at the implications of the sharp reduction we have seen in capital expenditure.

“There are a fair number of people who think that if we returned to the plans as conceived by Vince Cable . . . we would be in a slightly healthier position than we are.”

Mr Pugh admitted this would be difficult for the chancellor, given it would be widely interpreted as a U-turn on his central policy of not breaking the spending pledges made in 2010 and effectively adopting a plan B. But the Lib Dem MP added: “The situation is serious enough now for people not to be bothered about what you call the plan.”

Annette Brooke, another Lib Dem MP and former economist, agreed with Mr Pugh. She said: “It is really important that we should be focusing on boosting growth. Even though a lot of really good ideas have come out of the government, they all tend to have involved small sums of money.”

John Leech, MP for Manchester Withington, said: “An easy way to take the construction industry out of recession would be to spend a significant amount of money building some housing very quickly. Even if we borrowed to do so in the short term, it would pay for itself in the long term.”

A senior economic adviser to the party said: “We may have to resort to emergency measures to stimulate demand. We have already let the timetable on eliminating the deficit slip: we may have to do that again.”

While Pugh and Leech have been openly critical of the government to this point anyway, Annette Brooke has generally been quite quiet... Spiky Lib Dems are starting to moving - I'm guessing this is through the Beveridge Group which John Pugh chairs.

I also assume you're all familiar with Vince Cable's leaked letter... Hopefully a more robust Lib Dems after the recess, there is literally nothing to lose anymore.

[blandy]

We see all levels of politicians being rightly questioned on what the majority see as very shady links,

What are the specifics of that?

There are loads of examples. Leveson brought more than a few to light, concerning various current and previous Gov'ts members links to Murdoch - Hunt, Cameron, Brown, Blair and so on.

And Parties being funded by crooks tax-dodgers, foreigners and exiles.

Links between people who fund parties and the awarding of honours.

twas ever thus, though the tories this time are taking shamelessness to a new level.

We're all in this together, what it needs is a tax cut for millionaires and an increase on the price of pies and pasties.

Never trust a politician is pretty reliable advice.

[Richard]

We see all levels of politicians being rightly questioned on what the majority see as very shady links,

What are the specifics of that?

There are loads of examples. Leveson brought more than a few to light, concerning various current and previous Gov'ts members links to Murdoch - Hunt, Cameron, Brown, Blair and so on.

And Parties being funded by crooks tax-dodgers, foreigners and exiles.

Links between people who fund parties and the awarding of honours.

twas ever thus, though the tories this time are taking shamelessness to a new level.

We're all in this together, what it needs is a tax cut for millionaires and an increase on the price of pies and pasties.

Never trust a politician is pretty reliable advice.

Thanks for that blandy. I'm sure you wouldn't expect me to agree with the last line

I just wanted to know what the specifics that drat was referring to. Maybe he could answer

[blandy]

You're welcome

Which Politicians would you, or do you trust, then, Richard? And why have they earnt that trust? and by trust I don't mean faith in what they might do,or belief that they're doing some kind of "right thing" but in actually keeping pledges and promises. Being true to stated ideals or promises.

Taking parties out of it, for example if Lib Dems say "no tuition fees" and then.... even though (say) you might think such and such a lib dem has the right "policies" or views. Or if a Tory says "I'm going to cut taxes for the rich" and then does it - that's honest, regardless of political point of view, or if a labour one says "I'll vote for war on Iraq" and then does so.....

Cus I can't find any mainstream ones like that. Principled and clear.

[Richard]

I just think your "pretty reliable advice" is far too much of a generalisation to be honest. Sure there may be some high profile politicians on ALL sides of the political divide that you may not trust and may feel safe in giving similar but qualified advice about, I just do not think you can apply it in all cases.

I have been very privileged to meet a lot of politicians of many political colours and the vast majority of the ones I have met , in my opinion, carry out the role for very principled and just reasons carrying out a, despite what many may think, selfless task due to the common misconception epitomised by the comment you have given above. For me this particularly applies to those politicians at a local level.

In terms of the national politicians and to answer your point about specific names , well too many to mention to be honest, of all colours. It may surprise you, and others no doubt, but one such example of that and someone who is not a current MP but Tony Benn, and not because I agree with his policies as quite obviously I don't but I admire his passion and commitment to what he believes in. Iain Duncan Smith as well, I have met a few times and people may laugh but for me he is totally committed to what he believes in. There are others , many others and some names you wouldn't recognise be they national or local but in terms of higher profile ones I guess these two immediately spring to mind.

[peterms]

I just wanted to know what the specifics that drat was referring to. Maybe he could answer

No doubt he will, when he has time. But it may be clearer if you look at the bit immediately before the sentence which seems to puzzle you:

Privatisation across the board mainly by stealth and typically to those who finance the tory part continues. A lack of real understanding shines through but is completelt ignored by the previously mentioned. We see all levels of politicians being rightly questioned on what the majority see as very shady links

and then think about things like, oh, maybe this sort of thing:

Top Tory donor Michael Hintze company earns £125million but only pays £77,000 tax in Britain

Top Tory donor Michael Hintze’s company pays just £77,000 in corporation tax in Britain despite annual ­earnings of £125million.

His hedge fund empire CQS handles £5.5billion worth of investments around the world and pays its UK staff salaries of £111million.

But Mr Hintze’s high-earning traders, while licensed to operate in the UK, are officially registered to the company’s off-shore operation in Jersey. This means potentially tens of millions of pounds of income and employment taxes to the British Government could be avoided.

Accounts also reveal that Mr Hintze’s UK operations are ultimately controlled through a company in the Cayman ­Islands, a well-known tax haven.

Mr Hintze is estimated to be ­personally worth £700million. Nicknamed a ­“sugar daddy” to PM David Cameron and senior Tories, he has become one of the most important figures in politics after ­donating at least £1.2million to the party and providing a further £2.5million in loans since 2005.

Among the list of Tory beneficiaries is Chancellor George Osborne, who has described tax avoidance as “morally repugnant”. He received £37,500 in donations from Mr Hintze and £1,254 in services from his company CQS.

The revelations about Mr Hintze’s complicated global structure of ­companies – and tiny corporation tax bill – will embarrass the PM, who criticised ­comedian Jimmy Carr for being ­“morally wrong” for using Jersey to pay just one per cent tax on his £3.3million income.

Former soldier Mr Hintze set up CQS, in 1999. Its traders put billions of pounds from rich individuals and ­international firms into high-earning investments. It charges commission for its services, generating millions.

CQS is not operating illegally and there is no suggestion of wrongdoing. But it will add to pressure on Mr ­Cameron to crack down on the use of ­complex tax avoidance company ­structures.

Prem Sikka, professor of accountancy at Essex University, said last night: “It is interesting to say the least that a ­company earns millions of pounds worth of fees and pays its staff millions of pounds in salaries yet is only paying £77,000 in corporation tax.

“The Government needs to adopt a very simple principle that tax should be payable where the economic transaction took place.

“These people work in the UK ­according to the company’s accounts, its turnover is entirely in the UK therefore all ­related taxation should be in the UK.

“The Treasury acknowledges that it loses £35-£40billion a year to tax ­avoidance and some economic models suggest £100billion a year plus. The Government can and should stop it.”

CQS is made up of a number of ­companies in cities including Hong Kong, New York, Geneva and Sydney.

A key part of the empire is based in London consisting of CQS Investment Management Ltd, CQS Asset Management Ltd and CQS (UK), which is a limited liability partnership (LLP).

An LLP is generally used as part of a multi-company corporate structure, helping it to be more tax efficient. ­Individual partners are personally liable to pay income tax on the LLP’s earnings rather than the LLP itself.

Only the CQS limited companies have to pay corporation tax and according to the latest available accounts they paid just £77,000 in 2010.

Its website states that the London companies operate from luxury offices close to Belgravia, overlooking ­Buckingham Palace Gardens.

According to Companies House ­documents it employs 10 staff – up from two the previous year – with an annual wage bill of just £700,000.

The Financial Services Authority lists up to 100 individuals who are licensed to undertake investment services in the UK for the three CQS firms registered with the watchdog.

A crucial operation in Mr Hintze’s complicated structure is CQS (Global Services) Limited and the trail leads to an office block in St Helier, Jersey.

Mr Hintze’s CQS Channel Island ­operation is based on the first floor of the four-storey building. About 20 ­employees work in the sparse, ­functional room. According to the ­company website, CQS (Global Services) Limited recruits people of the “highest calibre” who are seconded to the various CQS offices around the world.

A source said the Jersey office is an administrative and recruitment base while traders registered with the off-shore subsidiary are ­seconded to the money-making London offices.

The latest accounts reveal the transfer of money from the London offices to Jersey to pay for the bulk of the ­“seconded” staff registered in the Channel Island.

The documents show the movement of £105million from CQS (UK) LLP to a fourth company called CQS Management Limited and then on to CQS (Global) in Jersey for the “secondment of staff and other employment services”. A further £6million is transferred to Jersey by another CQS company. Staff registered with companies in Jersey could ­potentially avoid paying the top 50 per cent tax rate on salaries, even if they work here.

Salaries could be paid through trusts and complex transactions, costing the Treasury tens of millions of pounds.

Registering staff in Jersey also benefits the company as the employment taxes are lower off shore than in the UK.

The Sunday Mirror put our story to CQS but they did not comment.

A Conservative Party spokesman said: “We are not going to give a running ­commentary on the tax affairs of others. All donations to the Conservative Party are properly and transparently declared to the Electoral Commission.”

[chrisp65]

In terms of the national politicians and to answer your point about specific names , well too many to mention to be honest, of all colours. It may surprise you, and others no doubt, but one such example of that and someone who is not a current MP but Tony Benn, and not because I agree with his policies as quite obviously I don't but I admire his passion and commitment to what he believes in.

I wouldn't be surprised by someone admiring Tony Benn. He does come across as principled and consistent.

The only caveat I'd put in there is that having read a couple of diaries of that particular time in politics (Downing Street Diary by Bernard Donoughue and Benn's own diaries up to 2001), the only thing Benn really really believed in was Benn.

Don't get me wrong, I'd put him on my album cover montage of heros. But in his own way, he's flawed. Just not bent.

To completely condense the 'problem' with Benn, if he were offered a chance to nationalise 99% of UK production he would vote against it and keep the current status quo, as he'd wanted 100% nationalisation and couldn't compromise his principles.

A very complicated character.

Incidentally, and way off topic, when he heard his mother had died he went along to the hospital and moved her bed to the window so he could take her death photo with the London skyline in the background.

[Ads]

I suppose it depends what he does with the other 35 and a half million. If he squanders it all abroad or squirells it away then he is something of a gimp.

[blandy]

I just think your "pretty reliable advice" is far too much of a generalisation to be honest. Sure there may be some high profile politicians on ALL sides of the political divide that you may not trust and may feel safe in giving similar but qualified advice about, I just do not think you can apply it in all cases.

I have been very privileged to meet a lot of politicians of many political colours and the vast majority of the ones I have met , in my opinion, carry out the role for very principled and just reasons carrying out a, despite what many may think, selfless task due to the common misconception epitomised by the comment you have given above. For me this particularly applies to those politicians at a local level.

In terms of the national politicians and to answer your point about specific names , well too many to mention to be honest, of all colours. It may surprise you, and others no doubt, but one such example of that and someone who is not a current MP but Tony Benn, and not because I agree with his policies as quite obviously I don't but I admire his passion and commitment to what he believes in. Iain Duncan Smith as well, I have met a few times and people may laugh but for me he is totally committed to what he believes in. There are others , many others and some names you wouldn't recognise be they national or local but in terms of higher profile ones I guess these two immediately spring to mind.

Thanks, Good point about Tony Benn, now sadly retired. IDS, my perception is to an extent different from yours. I would have shared your view while he was studying the situation in Glasgow, perhaps, but I think the results have differed from the words, personally. And not in a good way.

I actually agree my advice doesn't apply to absolutely all politicians, which is why it's IMO pretty reliable, as opposed to totally reliable - i.e. it's mostly right.

Local politicians suffer from 3 things, IMO - 1. centralisation of power to national gov't, rendering them less able to influence/change things.

2. Party adherence - national party policies and actions may lead to them being voted in or out, regardless of their own actions or records. They also, in many cases feel they have to slavishly adhere to or defend their party line or actions against all reason. Which in my book makes those who do dishonest/dishonorable. More could be achieved if they were more prepared to loosen up on the party stuff.

3. In some cases - Personal ambitions to be a MP candidate or climb the greasy pole, or chase the money they get can overcome what starts out as good intentions.

4. Unrealistic expectations, placed on them, often resulting from points 1 & 2 above. Again, being clearer about what they can and can't do would be democratically better for us all.

[Richard]

I actually agree my advice doesn't apply to absolutely all politicians, which is why it's IMO pretty reliable, as opposed to totally reliable - i.e. it's mostly .

not sure I agree that your statement says what you want it to. I mean "never trust a politician" is pretty categorical whether you think it is qualified by the "pretty reliable" or not.

If you had said "never trust some politicians" I think there would be no disagreement and it would have said what you wanted.

On the local politicians , I can agree with some points not all. National politics does not have as much influence, IMO, in the policy setting at a local level as you suspect. It is true though that, sadly, it does influence voting intentions more than it should! IMO obviously

[peterms]

IDS, my perception is to an extent different from yours. I would have shared your view while he was studying the situation in Glasgow, perhaps, but I think the results have differed from the words, personally. And not in a good way.

It's interesting to consider the views of Bob Holman on IDS. Holman was the person behind IDS' visit to Easterhouse in 2002, which apparently made him understand that there is such a thing as poverty and that blaming the victims is wrong.

By 2008, Holman was still describing IDS as a friend, and a man of integrity.

By 2010, Holman was saying that IDS had changed out of all recognition.

Now, he says IDS should resign because his actions in office are in complete opposition to his much-vaunted beliefs:

Since becoming minister, Holman believes Duncan Smith's analysis of the causes of poverty and the best way to tackle it have been constrained by the pressure to make cuts. "Within two years he was claiming that poverty was not directly due to a lack of money but was the result of bad parenting, drug and alcohol addiction, laziness, and the breakup of families," Holman writes.

"When I went to Westminster last year to challenge him, he acknowledged that he was under pressure and had to make trade-offs and compromises. My understanding is that to divert blame away from his policy failures he directed it at the poor themselves."

He suggests that Duncan Smith should resign and "become a campaigner for the end of poverty". A spokesman for the Department for Work and Pensions said there would be no comment.