Taxes. No one enjoys paying them, and they may well, in some sense be "too high" in Britain at the moment. Leaving that aside, there seems to be one theme uniting all the stories about the 10p rate, the non doms and the burgeoning tax avoidance/evasion industry and the tax havens. And that is - what can we do about the narrowing tax base? The rich, the larger corporations and even the upper slices of the middle classes increasingly pay taxes as a discretionary matter. If one country doesn't suit them, they move themselves elsewhere. Then there's a race for the bottom to see who can offer the lowest rates, though no mainstream nation can ever hope to beat the tax haven microstates such as the Cayman islands or Lichtenstein.
In all the post-elections coverage I've been struck by the way Not-So-New Labour are just unconsciously copying the John Major playbook of the 1990s. In response to John Rentoul's counter, here's half a dozen reasons why we're gong back to the future...
1. Labour never used to fall back on the arrogant and complacent line that no matter how badly they do in by-elections/local elections/European Elections it didn't matter l because they could go on and win the general election - not an argument as such, just a statement of psephological fact, if that. It's what the Tories said in the 1990s and it didn't work for them then. The losing gap is even bigger now. Anthony King on the BBC pointed out that the biggest gap between the parties where the governing party lost and then went on to win a general election was the Tories 11 point deficit against Labour in the 1985 locals. The gap last week was 20 points. The issue is that losing councils and councillors does a matter long term - it tends to hollow out and demoralise local activists who have no leadership to look to and nothing to campaign for. It helped kill the Tory grassroots 20 years ago.Why did Brown dismiss the elections as a "referendum on Labour" ?
Oil at $120 a barrel. Whatever next? Oil at $200, probably, if the president of Opec is to be believed. Oil is a wonderful thing because it melds politics and economics so well. This time is no different. A terror group named Mend has vowed to blow up all of Shell's installations in Nigeria, and they've just succeeded in attacking and shutting down more Shell operations. Turkish incursions in Northern Iraq have done most of the rest. A little, however, actually comes from the most surprising source of all - good news from the US economy, where jobs and output figures are looking encouraging.
Today's the day! Britain's first post-Blair politician will most likely be elected as Mayor of London. Boris Johnson. Post-Blair being even more informal, even more careless, even less interested in policy, even more self-ironic. For those like me just able to recall the age of Wilson and Heath, such a figure as Boris is scarcely credible. I will, though be making him my second preference after the very sensible Brian Paddick, simply because Ken Livingstone's congestion charge has cost me so much money. I don't mind the e £8 charge, it's the fines and the ever increasing cost and scope of the scheme that frighten me. Everyone in London knows that its a tax on absent mindedness as much as anything - £60 if you just forget an day the next day. There's a lot of people in London who feel like me, and it should be a warning to councils across the land about how to lose public goodwill. Send people a bill and give them a month to pay, just like any other utility or tax demand.
How do we cure the credit crisis? We may as well face up to it; the only realistic way of breaking the credit crisis is for the world's governments to actually buy all those mortgage backed securities - of varying qualities - that the banks can't off-load onto anyone else. Or at least lend the banks the money while we taxpayers, via the US Fed, the Bank of England, the European Central Bank and others stump up the money.
We'll still be shouldering the risk and paying up if things go wrong - with losses perhaps running into tens of billions. But things are going wrong pretty fast anyhow. So that sort of intervention may be the most realistic option, and probably the only one bold enough, to get the banks to start lending again, and for the world to avoid a calamitous collapse in asset prices (that's your house I'm talking about, by the way) and an economic slump.
This is a rate cut like no other - irrelevant. The credit markets are so frozen that it will mean little or no change in the cost of your mortgage, credit card or other borrowings. The Bank could have reduced rates by much more today, but it would equally have had little impact. The Government knows what needs to be done; the credit markets need to be loosened up again, which means banks have got to have confidence in trading those notorious mortgage backed securities.
Giving immunity to so-called City whistleblowers is a great idea - the only quibble being to ask why the FSA took so long to think of it, especially when the American example was there ready to copy. However it will take more than immunity to make such witnesses come forward - what about their job prospects after they've gained a reputation for being "disloyal"?
We'll need some pretty tough rules to ensure that they can obey their consciences without retaliation and victimisation. While we're at it - why not extend the idea throughout the economy? Drugs firms, tobacco companies, dare I say newspapers even might be made more useful socially if they had "internal consciences" watching their activities 24/7...
Is there an end in sight to the scariness? It was always likely that little Northern Rock wouldn't be the only or the main casualty of the credit crisis. So it has proved. And while Bear Stearns is big, it is not one of the biggest and may well not be the last. Why? Because the credit crisis is a process not an event - and one that feeds on itself. As Larry Summers, former US Treasury Secretary under Bill Clinton point sought we are now in the midst of an economic vicious cycle, where falling US property values push bank losses up which makes banks unwilling to lend which makes the property market even weaker, with spending, profits and jobs all suffering along the way.
What should we expect from the Budget? "Stability" will be the keyword, which is code for as little change as possible. There may be a little more borrowing and some small tax rises but there won't be anything drastic. After the travails of the last few months Mr Darling will be looking for a quieter life. He could choose to save the planet, but I'd guess that's more trouble than the Treasury think it's worth.
The EU isn't mad to try and clamp down on the tax havens. If you take a rational step back you can see how crazy it is to have left them alone for so long - not least because so many are linked to the proceeds of crime. When the war on terror kicked off, the US and the EU showed how relatively easy it could be to force these microstates to divulge their secrets. However, I still think that the tax havens will survive one way or another; like someone in the accountancy profession said to me, it's the second oldest profession in the the world, and more tricky to control.
This morning Alistair Darling cheerfully told his audience on the Today programme that Northern Rock would continue to operate as a commercially competitive institution. Well, it's true that the EU has a few state owned financial institutions, but I'm a bit sceptical as to whether Northern Rock's UK competitors will take this lying down.
Does anyone else think Bush is doing the right thing in boosting the US economy now? OK, his crazy war got us into the mess in the first place (at least partly) and he ought to go for something more productive than tax cuts for the better off; but credit where's its due, surely?
On commercial grounds - i.e. the future of the Rock business - it may well be the best answer. The point Branson and his allies seem to have grasped is that the Northern Rock brand is, sadly but manifestly, dead. Virgin Money may sound a bit grim to old fashioned types like me (it sounds like a pre-payment service for a brothel) but at least it has some potential.
Otherwise it's much of a muchness, I'm afraid to say. The taxpayer will be underwriting the funding of the business for a very long time, but the wheeze of issuing Government guaranteed bonds keeps the dread option of nationalisation off the table.
I know this is a bit convoluted but bear with me. Gordon Brown's problems with public sector pay are a bit like those faced by a chap who buys a big thirsty car he can't quite afford to run. It looks great, but when he pulls up at the petrol pumps he's never quite sure if he can afford to fill her up. Mr Brown's huge investment, as he terms it, in the NHS and other public services has bequeathed him a much improved system; but also a much inflated payroll, and one that needs paying well. Nurses deserve good pay, no doubt about it. But the public finances really can't stand the strain; the government is quite sincere when it says it can't afford it.
So are the central bankers losing control? Looks like it. Market rates barley budged on news of their interventions, and the share markets are looking depressed. Have the markets finally conquered their last restraining influence?
A quarter point cut, then. Actually, it looks a bit like blackmail by the markets. A week ago the odds on a rate cut were 60/40 against - widely quoted in the City. Then came some bad news about housing and the service sector; fair enough reason to want to reduce rates. Not so fair was the way the stock market rallied yesterday by about 2.5 per cent, clearly predicated on a cut in rates. The implication? If the Bank of England disappoints by leaving rates on hold then there'll be a bloodbath on the stock market. The markets also know that the Bank doesn't like to upset them by doing anything surprising. So when the consensus moved to a cut the Bank duly obliged.
The usual definition is two quarters of consecutive growth. But even the NBER, the US authority on the matter, admits that that is not the only definition. The chances of the UK economy shrinking for two successive quarters are slim - but if you read between the lines of what the Bank of England's chief economist, Charles Bean, says then it is maybe just possible that we might and indeed that possibility is covered (although quite well camouflaged) in the Bank's growth forecasts. The point here is that the bank expects a sharp bounceback from any slowdown and thus, on a sort of rolling average basis, any downturn will be partly cancelled out by a quick return to trend growth.
Nick Clegg and Chris Huhne both pledge to see the Lib Dems on 150 parliamentary seats within two general elections. Good luck to them, but it seems to me a pretty arbitrary number, besides begging the questions about who they're going to be winning them from, though, it is perfectly possible.
Stranger things - like Labour's landslide in 1997 - have happened. Who'd have thought Labour would have a 179 majority as it surveyed the wreckage of the 1987 election, say? It would be great for the country; a genuinely radical, liberal voice arguing for a different kind of nation, a minority for sure, but a blocking majority.
It must seem a little like Groundhog Day at Number 11. Yesterday the Chancellor had to make the best of a bad job with his statement on Northern Rock. The taxpayer is being very slowly softened up for a multi billion pound hit; as big an economic defeat for a Government as was devaluation in 1967 or our falling out of the ERM in 1992.
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