Bel is thinking

Gordon Brown’s misery deepens. On Wednesday, he was prancing around with a sharp knife, pretending to be a taxcutter. The ploy backfired, and he ended up slitting his own throat instead. Almost everybody saw through his illusory tax cut, and by his own actions, he has now freed the timid Conservative Party to start talking about tax cuts.

Today brings even worse news for him. A Yougov poll for the Daily Telegraph conducted after the Budget gives the Conservatives an eight-point lead. In addition:

• 36 per cent of respondents are not looking forward at all to Gordon Brown as Prime Minister, with a further 18 per cent not much looking forward to that happy day;
• 46 per cent think there is a black hole in the public finances, or there soon will be;
• 33 per cent think Gordon Brown should have cut income tax more, and announced smaller spending increases; and
• 75 per cent do not think that the next Labour Government will cut taxes.

So what next? Will Labour panic and start looking seriously for an alternative candidate? Most likely not. Most Labour backbenchers are as cowardly as Gordon Brown. They lack the courage to take their political destiny into their hands, despairing quietly and floating supinely towards their own doom.

And what about David Cameron? He should not rejoice too loudly. He should take another look at the Yougov poll. Only 23 per cent think his Government would cut taxes. What is he going to do about that? Taxpayers are labouring under the heaviest tax burden for many years, and he cannot continue to pretend that he is unaware of this.

If David Cameron wants to be taken seriously as a potential Prime Minister, he must begin to address this issue. I would like to hear about proper tax cuts, not cuts that are ‘offset’ by abolishing tax reliefs elsewhere, as George Osborne promised us earlier this week when he talked about a corporation tax cut. And no more mealy-mouthed talk of ’sharing the proceeds of growth’. Let us instead hear talk of ‘relieving the burden of taxation’.

As promised, a little more on the Budget. I know this topic has been covered in other places, but having spent yesterday conducting briefings on the Budget, I came up with an interesting exercise.

There is both good news and bad news for the taxpayer in the Budget. I thought it would be interesting to separate both, so that we can see when each takes effect. It seems to me that most of the good news takes effect later, while the bad news takes effect sooner. If this is the case, we will know exactly how Gordon Brown plans to fund the so-called tax cuts he has announced.

In setting out the measures, I have concentrated on those tax measures that are bound to affect directly how much tax we pay. However, I have not bothered with VAT and all the environmental taxes, etc. Life is too short, and besides, I expect there will be plenty of commentary on them elsewhere. I have also ignored changes aimed at correcting errors in the law, as well as press releases announcing consultation.

I will divide the post into measures taking effect before April 2008, and those taking effect after April 2008.

Measures taking effect BEFORE April 2008

• Increase in small companies corporation tax rate from 19 per cent to 20 per cent. Bad news.
• Withdrawal of balancing allowances on industrial and agricultural buildings, for contracts made after 21 March. Bad news.
• Withdrawal of balancing charges on industrial and agricultural buildings, for contracts made after 21 March. Good news.
• Tax relief for renovation of business premises in designated disadvantaged areas. Good news.
• Temporary extension of 50 per cent rate for first year allowances. Good news.
• Anti-avoidance measures to restrict capital loss and gain buying (takes effect 21 March). Bad news.
• Measures to restrict the buying of tax losses from loss-making corporate members of the Lloyd’s insurance market, who are ceasing underwriting activities. Bad news.
• Anti-avoidance measures to counteract attempts to circumvent the tax rules on the sale of lessor companies (takes effect 21 March). Bad news.
• Tightening the qualifying conditions (for tax relief) for venture capital trusts, enterprise investment schemes, and corporate venturing schemes (takes effect on 6 April 2007). Bad news.
• Relaxation of other qualifying conditions (for tax relief) for venture capital trusts, enterprise investment schemes, and corporate venturing schemes (takes effect on 6 April 2007). Good news.
• Stamp duty land tax relief for zero-carbon homes that satisfy very stringent conditions (1 October 2007). Good news, if you can jump through all the hoops to qualify.
• Targeted anti-avoidance rule for capital gains tax (takes effect from 6 December 2006). Bad news.
• Anti-avoidance measures targeting life insurance policies and commission arrangements (takes effect 21 March 2007). Bad news.
• Anti-avoidance measures targeting employee benefit trusts (takes effect 21 March 2007). Bad news.
• Relief from the 40 per cent trust rate for service charges and sinking funds in the public sector (takes effect on 6 April 2007). Good news.
• Small increase to the amount of benefit you can receive from a charity without your gift being disqualified from gift aid (takes effect 6 April 2007). Good news for charities.
• Tax charge for charities which hold large lotteries without a licence (takes effect 6 April 2007). Bad news.
• Anti-avoidance measures targeted at managed service companies. Bad news.
• Exemption for carbon trading business by investment managers trading on behalf of non-resident companies and individuals. Good news.
• Removal of tax charge from army officers’ Operational Allowance, and payments under the Armed Forces Redundancy Scheme 2006 (takes effect April 2006). Good news if you are an Army Officer.

Measures taking effect AFTER April 2008

• Reduction in income tax basic rate from 22 per cent to 20 per cent. Good news.
• Abolition of the 10 per cent tax rate. Bad news. 
• Reduction of mainstream corporation tax from 30 per cent to 28 per cent. Good news.
• Reduction from 25 per cent to 20 per cent in rate of writing-down allowances one can claim for expenditure on capital items. Bad news.
• Increase from 6 per cent to 10 per cent in rate of writing-down allowances one can claim for expenditure on long-life capital items. Good news.
• Writing down allowance of 10 per cent for fixtures integral to a building.
• Payable tax credits for capital losses on certain green technologies. Good news.
• Increase in research and development tax credit. Good news.
• Small increase in subscription limits for ISAs. Good news.
• Extension of non-repayable dividend tax credits to holders of shares in non-UK companies in prescribed circumstances. Good news.
• Removal of benefit in kind charge where an employee makes private use of a property abroad which has been bought through a company. Good news.
• Tax discount for company car drivers who drive a car capable of running on E85 fuel. Good news.

So judge for yourself. Seems to me that the extra tax revenue the Chancellor will get from the pre-April 2008 changes will more than pay for any tax cut. In particular, the anti-avoidance measures targeting businesses will yield a lot of tax revenue. One other point to make is that the Good News items in the pre-6 April 2008 list are of very narrow application. They apply to charities, soldiers, buyers of zero-carbon homes, and such small groups of people. So good news for them, but not for everybody else.

Just got in after a hectic day which I spent giving briefings and analysis on the finer points of today’s budget. Interesting (and depressing) how the Chancellor always manages to hide all the bad stuff in the press releases. This year, we had 81 Budget Notes, some of them containing the hidden tax news. The Chancellor has been very sneaky, as usual.

Off to bed now. Will post some more on the Budget tomorrow, if I’m not sick of it by then.

Gordon Brown has been proposing for a while to get hold of any money we have lying in ‘dormant’ personal bank accounts, and spend it on youth and community projects.

This is not a new proposal. He first mentioned it in the pre-Budget Report of 2005, and I wrote about it at the time. The idea is to target money in account that haven’t been used for the past fifteen years.

There is something deeply worrying about this proposal. At its most basic level, it is an assault on property rights. If I wish to leave my money sitting in a dormant bank account for over fifteen years, I do not see why that should entitle the Government to swoop down and take it. And no, it doesn’t matter that the Government is trying to reassure me that I can still reclaim it, even after the Treasury has taken it. That does not make a difference to the fact that the Government has helped itself to my property without my permission.

In addition, it doesn’t matter that the money is to be spent on youth projects, and such ‘good causes’. That is nothing short of emotional blackmail, trying to paint the owner as a selfish dog in a manger who has no use for the money, but doesn’t also want the well-intentioned Government to spend it on deserving and vulnerable people. Or even worse than emotional blackmail, one can compare the Government’s proposed actions to those of a thief who breaks into your house and steals your goods, but it’s alright because he’s only going to give it to the poor.

The point is that it doesn’t matter how the Government spends it. So-called good intentions do not legitimate the act of theft.

The Government will argue that it is not stealing the money because an account owner can still reclaim it if they want it back. But that’s not the point. Why should one be required to take positive action to recover their property? And for those who may not realise that they have some money in a long-forgotten account, the Government’s appropriating of that money is nothing short of theft. They cannot, after all, claim back money that they had forgotten they owned.

Some people may argue that if you cannot remember that you have some money sitting in an account, then perhaps you don’t really need it, and the Government should spend it as they wish. I disagree. That is a dangerous proposition. Property rights should not be qualified in that manner. The fact that you do not make active use of your property should not disentitle you to ownership. For example, the land law provisions under which squatters sometimes acquire rights to property are so tightly drawn because the law recognises that depriving a land owner of his property is not to be done lightly.

To my mind, there is a worrying philosophical issue at the root of this proposal, and this is that the State’s rights to our income and property extend beyond what it may lawfully collect through the conventional laws of taxation. This proposal seems to me to be saying ‘we have the right to take your property, unless and until you show us that you need it.’ This changes the relationship between us and the State. Rather than us yielding up our income, it is the State taking it as of right.

But why should I be surprised by this? As a lecturer in financial law, I have been watching intently as the language of the tax code has changed over the years since Labour came into office. Tax avoidance laws are framed in aggressive language, and even when reliefs are given, they are framed in such language as to leave one in no doubt that the Government sees it as bestowing unto us from its largesse, rather than giving back to us that which we gave it in the first place. Against this ideological framework, I suppose that the current proposals should not surprise us at all.

Why all the outrage over Flintoff’s drunken behaviour? I don’t remember any condemnation at all when he displayed similar antics after the England cricket team won the Ashes in 2005. If I remember right, his behaviour then was met with amused tolerance, and in some quarters, even something approaching admiration.

It seems that Flintoff has forgotten, or perhaps never knew, one of the cardinal rules governing Britain’s relationship with its sportsmen: you can be a drunken lout and as thuggish as you like. As long as you win something. 

Over at Ellee’s place, a moving letter to Sally Clark who died today. It says everything I would have wanted to say.

A commenter on my previous post took issue with my use of the term ‘envirofascist’. I have been thinking, and while unrepentant, I have decided that, in future, I will no longer use this term when discussing our hypocritical politicians. I will instead call them ‘pharisees’. Why? Because they prescribe how we should live our lives, while they merrily carry on doing whatever they please. Someone once condemned pharisees thus:

“They tie up heavy burdens and lay them on men’s shoulders, but they themselves are unwilling to move them with so much as a finger.”

I will reserve the term ‘envirofascist’ strictly for those environmental activists who want us to swallow their untested ideology without question.

And yes, it is possible to be both a pharisee and an envirofascist.

The doomsayers of climate change are not having a good week. They are being ‘beset round about’, as the Bible would put it.

First, Channel 4’s splendid documentary, and now a hard-hitting article in the Telegraph by Janet Daley. She pours scorn on their repressive tactics and self-righteous manner, and restates the case now resounding everywhere that before swallowing their burdensome dogma, we must first see scientific evidence:

I don’t know about you, but before I can feel comfortable asking people in emerging economies such as India to forgo the benefits of economic growth and mass prosperity, before I can sentence some of the poorest people in the world to living indefinitely without modern technology, before I am even prepared to ask the lower-paid of this country to give up the improvements in their quality of life to which they have only just become accustomed - I want to hear any and every argument that is to be had about this theory.

And to the comrades in the green movement, I would say this: before you slam the lid on debate, and put your invasive restrictions into place to deny people freedoms and comforts that have transformed their condition, you had better be damned sure that you are right.

And she is right. If climate change is a scientific fact, then the green movement should not be nervous about allowing debate. It is only a religion that would insist that contrary evidence be not countenanced. So far, we have seen envirofascists telling us that ‘the climate change debate is over’. It is not over. In fact, it is only just beginning. It will not be over until we have incontrovertible proof one way or the other.

If we are to accept wholesale the claims of the green lobby without investigating their veracity, then we are dealing with the subject as one would a religion. However, even in religion, there are false prophets, and every religion has guidelines for determining who are the false prophets in its midst.

I don’t know how it works in other religions, but this is the Biblical test for if a prophet is true or false: look to the evidence. We are asked to ‘examine everything carefully, [and] hold fast to that which is good’.

Yes, as far as pronouncements by prophets are concerned, not even religion (at least, not Christianity) demands unthinking acceptance. We are to be rational, use our God-given faculties, test the evidence, and then ‘hold fast’ to whatever passes that test.

So having satisfied neither the scientific nor the Biblical standards, perhaps these repressive false prophets may wish to think again.

A Government-commissioned review is recommending that primary school pupils be given compulsory foreign language lessons. They hope that this will ensure that interest in those languages survives up to GCSE level.

Good idea, and while they’re at it, some proper English grammar lessons for the little darlings would also be desirable.

I was tagged last week by James Higham of the Nourishing Obscurity blog, to set out the two posts that have received the highest traffic on my blog. However, I decided to wait until the page load speeds on my blog were back to normal. No point linking to archives if they take a long time to load.

Here we are:

The post with the highest traffic was the second one I had written about the BNP ballerina. I later gathered from Google Analytics that it was the subject of fevered debate on BNP blogs and forums.

The post with the second highest amount of traffic was the one entitled ‘Prisoners’ payout for cold turkey in jail’. Many of the people who had found their way there had done so by searching google with the words ‘How to claim compensation for cold turkey’. Interesting, that. Didn’t know there were so many affected prisoners out there. Unfortunately, my article didn’t address the ‘how to’ aspect of the thing, so I wonder where they went after that.

While we’re here, I might as well add my third and fourth highest traffic posts:

Third highest: yes, the BNP again. My first article on the ballerina, in which I condemned the Guardian for ‘outing’ her, and questioned whether holding unpleasant views automatically stripped one of all rights, including the right to privacy.

Fourth highest: an article criticising a charity for suggesting that the morning-after pill should be as accessible as Nurofen.

If you haven’t read them before, Sunday afternoon would be a good time. The BNP and morning-after pill articles yielded great debates in the comments, and I learnt a lot from the people who gave their views.