Fair play to Sir Digby Jones. he makes absolutely no bones about the fact he is a pro-business Tory. The only problem is he is in a Labour - a LABOUR - Government.In today's Telegraph, he spells out his unashamedly Thatcherite agenda. It's about time Labour MPs and union leaders started speaking out on this scandalous appointment. The only voices of dissent so far have been stalwarts of the Left like John McDonnell MP and UNITE General Sec Tony Woodley. What is the matter with the rest of the Labour Party?????
Digby Dastardly says: ""If I'm overseas, banging the drum for Britain, and they tell me they are worried about our rate of tax, I can promise you as soon as the wheels hit the tarmac in the UK I will be over to Number 11 to tell [chancellor] Alistair Darling. "I'd like to see more competitive corporate taxation. I don't mind if it's used to stimulate economy and business profitability, to encourage R&D and small businesses." PS: Competitive means "less tax."
Thursday, 5 July 2007
DIGBY WATCH
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I've always thought of Digby as a bit of a comedy figure myself, you can play a fantastic game of business lobby cliche bingo with his speeches.
Excessive burden of regulation.. tick
maintain our competetive edge..tick
curb trade union power..tick
excessive taxation..tick
But there is a question to be answered.
The way the technological world has developed over the last 50 years, capital, and capitalists, have become exceedingly mobile. They can do their business anywhere there is a computer terminal - and a bearable tax regime! The minute a tax regime becomes unbearable, ie, it is cheaper elsewhere, then off they go. I kid you not! You only have to look at the flight of capital from Frankfurt and New York to London in the last 5 years.
Now, you may think this regrettable, or even immoral, but it is a very real factor and the question you must answer is, do you want, say, 10% of what these capitalists build up in profits, or would you prefer 10% of nothing? And before you answer, just hesitate and think of all the things you want to achieve with that money!
The theoretical point at which putting tax up might accrue less revenue is a very long way off yet.
The good Doctor is behind the times. Take this from a man who should know, 'oor wee Gordie Broon':
"When we came to power, the richest 10 per cent paid 40 per cent of income tax," he said. "Now it is 52 per cent."
Fraser Nelson puts it better than I can in the Telegraph:
"More money is now managed in St James's, the hedge-fund district, than the whole of Frankfurt. Canary Wharf has become a capitalist Babel, with Chinese, Indians, French and Americans working together in a globalised mix that even Wall Street cannot rival. All this is a deliberate strategy by Mr Brown to keep regulation light and help London take on the world.
His trick has been to turn a blind eye to those issued with non-domicile tax status - a perk that has no equivalent in America or Europe. London is packed with such non-doms (many holding British passports) who pay about 25 per cent tax rather than 40 per cent. It is Mr Brown's discreet tax bait, to lure the world's financial elite to London. Everyone is at it. Even his own chief fund-raiser, Sir Ronald Cohen, is understood to have non-dom status.
In one of many role reversals in the political landscape today, it is the Conservatives who now want to close the loopholes that benefit those in the private equity world. "If it looks like income, then it would be peculiar not to tax it like income," says George Osborne, the shadow chancellor. Similar moves are afoot in America. But not in Brown's Britain."
I repeat my original question which is not posed to score points but to concentrate minds: Do you want 10% of 'loadsa' money', or 10% of sweet Fanny Adams? Or, to put it another way, are you prepared to cut some of your cherished projects for the poor and needy in order to stay idealogically pure?
'I don't know but I think we should be told!'
The good Doctor is behind the times. Take this from a man who should know, 'oor wee Gordie Broon':
"When we came to power, the richest 10 per cent paid 40 per cent of income tax," he said. "Now it is 52 per cent."
Fraser Nelson puts it better than I can in the Telegraph:
"More money is now managed in St James's, the hedge-fund district, than the whole of Frankfurt. Canary Wharf has become a capitalist Babel, with Chinese, Indians, French and Americans working together in a globalised mix that even Wall Street cannot rival. All this is a deliberate strategy by Mr Brown to keep regulation light and help London take on the world.
His trick has been to turn a blind eye to those issued with non-domicile tax status - a perk that has no equivalent in America or Europe. London is packed with such non-doms (many holding British passports) who pay about 25 per cent tax rather than 40 per cent. It is Mr Brown's discreet tax bait, to lure the world's financial elite to London. Everyone is at it. Even his own chief fund-raiser, Sir Ronald Cohen, is understood to have non-dom status.
In one of many role reversals in the political landscape today, it is the Conservatives who now want to close the loopholes that benefit those in the private equity world. "If it looks like income, then it would be peculiar not to tax it like income," says George Osborne, the shadow chancellor. Similar moves are afoot in America. But not in Brown's Britain."
I repeat my original question which is not posed to score points but to concentrate minds: Do you want 10% of 'loadsa' money', or 10% of sweet Fanny Adams? Or, to put it another way, are you prepared to cut some of your cherished projects for the poor and needy in order to stay idealogically pure?
'I don't know but I think we should be told!'
Sorry for the 'double vision' but your site informed me that teh first post had failed to go through.
I suppose my answer would be that Gordon Brown seems to have lost much of his famous moral compass.In my view, private equity companies should be taxed @ appropriate levels and so should the rich in society who are getting richer......Tax avoidance ( the Treasury admits to £97 billion a year) would fund an awful lot of schools and hospitals
David, I would agree that there is a question to be answered here, but on the original subject of Sir Digby Jones, I believe he is a simply a corporate lawyer who has spent the last few years acting as a glorified business lobbyist. I do not see him as the kind of person who can provide much in the way of valulable insight to the government. He is a man of no great talent in this government of all the talents.
With regard to taxation and level of taxation, a more serious look is needed at individual cases. As far as I'm concerned the loss of some of these people would be no great loss to the British economy. Pemira and CVC's buyout of the AA essentially ended up channelling corporation tax revenues towards their creditors, that's not good business, that's not innovative, it's ripping off the government.
There is also the question as to whether this mega-wealth is quite as beneficial as it seems. The presence of the city's mega wealth means has had a definite and pronounced effect on London house prices (although far from being the only thing to effect them), pricing out many at the lower income scale.
The 10% of mega money seems tempting, but it has economic side effects as well as the inherent unfairness.
Thank you both for your replies but, if I may say so, you have both avoided the central question. Brown, himself, has told you that the "wealthy" (no, I don't know how that is defined, either!) now contribute 52% of the tax take. I think you must take it as a fact of life that if you increase taxes to these people they will simply leave town.
Were I a redistributive socialist, red in tooth and claw, I would have a problem with this paradox which might be summarised thus: is it better for a Labour government to be pure and poor, or rich and profligate?
As for the local effect on London property prices, there are 'zillions' of house *owners*, many of whom vote Labour, who are very grateful for the rise in values. There are also several Labour councils who are even more grateful for the increased Council taxes they now realise on these increased house values.
Pesky business, this economics! You push here and all you get is a bulge there. But, hey, to govern is to choose.
£97billion every year inj tax avoidance is one hell of a lot of money........
David, on houses, a house that is a primary residence provides a fixed amount of utility. It doesn't matter how the price fluctuates the house still provides that same amount of utility. An increase in a homeowners house value provides little in the way of tangible gain beyond the ability to unlock capital within that house. Gains in house prices provide little real gain to homeowners.
On your central question, I don't feel that the answer has to be one of the two options you suggest. The treatment of corporations, private equity funds, non domiciled individuals and such all need to be addressed in different ways. For the most part I believe it is not necessary to choose between poor and pure and rich but compromised. I would err on the side of poor and pure though.
I have just been talking to a good socialist whose elderly father died and the family were talking about using a discretionary trust to avoid paying Alastair the £40,000 extra they would pay in inheritance tax. Now is that Tax avoidance?
No doubt the parents of your niece "who is over the threshold for her grant" and who you blog into the public domain as an example, will not be doing anything similar when they, as no doubt sensible atheists, head towards the redistribution of their atoms to other purposes?
The issue you raise about £97 billion "tax avoidance" is going to be an increasing issue for good socialists across the dinner table and you don't need to be an "early adopter" Daily Mail hack to realise that.
Out of interest I speak as someone who has made a consious decision not to be an owner occupier and now in my 40's is unlikely to have the capital to change my mind anyway. However I welcome the economic growth driven by entrepreneurs even though I believe they are fundamentally misguided for their own families long-term future when they don't put back enough into society themselves. Funnily enough media exposure of them seems to be more effective than the taxman in screwing money out of them!
However I also find it a tad irritating to hear lectures of capitalists from the sort of people with stored capital that then end up ensuring the stored capital they have accrued through owner occupation remains within their family.
If you have such a strong critique of capitalism, what actions will you be taking to ensure your own household contribution to avoid "tax avoidance" when you reach the end of your life?
Why not tell the kids - or the nieces - sonner rather than later that you are intending to donate any stored capital you accrue to a community land trust? Now that would be rather radical action rather than radical talk!
Too often we don't debate these things as they are not nice or proper but surely we need more of a debate on issues like this as the level of stored capital in the uk in the long-run, despite the occasional recession, is likely to rise and as Marx would no doubt tell us that will inevitably have an impact on the way we all collectively act!
Fair point. In my defence I could have chosen (like many I know) to invest money in my father's council house ( where he still lives) and cream the profits. I didn't. So I will inherit nothing on that score beyond a few thousand saved by my mother many years ago.As an owner-occupier with no children, what to do with the capital is an issue. I have not made a will yet ( which I should) but would hope to leave a significant sum to an appropriate organisation. However, If, at a future date, I go up the property ladder, will lose most of the capital anyway. In truth, these sums pale into insignificance compared with the billions accrued by big business in tax avoidance.
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