Month: February 2010

The nasty odours that continue to rise from the Tory ‘project’

In the midst of all the allegations of bullying emanating from Downing Street at the moment (personally I’d be surprised if any incumbent of Number Ten never lost their cool) there continues to be precious little scrutiny of the Conservatives’ relationship with Andy Coulson, former News Of The World editor and David Cameron’s Communications Director. Of course, no one should be remotely surprised about this given the media’s ongoing failure to ask any searching questions of the Conservatives, despite their continuing position as bookies’ favourites to form the next government.

Nevertheless one might expect a bit more interest from newspapers and broadcasters around the murky recent past of the Tories’ answer to Alastair Campbell. I know that the vast bulk of the print media is in the Tories’ pocket, that the BBC is too scared of an incoming Cameron government to rock the boat, that ITV News are more interested in their continuing evolution into a free-to-air version of the Daily Mail, and that hardly anyone watches Sky News anyway, but aren’t we entitled to expect that front page coverage of real bullying allegations (linked to actual law-breaking) should extend beyond The Guardian?

Coulson’s difficulties (see the Guardian coverage here) don’t represent the only unpleasant odours seeping out of the Cameron Project at the moment. An egregious record on expenses (moats, duck houses and Anthony Steen) sits all too comfortably with Gideon’s social-climbing and squalid grasping on Deripaska’s yacht, not to mention the non-dom status of Zac Goldsmith and the endless unanswered questions about Lord Michael Ashcroft.

Add all of that to their continuing incompetence in the arena of economic policy and the absence of any constructive ideas on crime, unemployment, meaningful political reform, foreign policy and a whole host of other areas and you might be forgiven for thinking that perhaps a little scrutiny wouldn’t go amiss. Don’t hold your breath though – even if you do smell the odd rat.

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The Tory passion for VAT

In the run up to this year’s General Election there is continuing speculation that both Labour and the Tories have secret plans to increase the rate of VAT to 20%. There are grounds to suspect that, in the event of a majority government for either party, the continuing fear of raising Income Tax may prompt such a move. Of course the Tories have always been keen enthusiasts for regressive taxation such as VAT, and they look the more likely to push for an increase. After all, they do have something of a history.

When Margaret Thatcher arrived in Downing Street in May 1979 the rate of VAT stood at 8%. Within a month Geoffrey Howe, in his first Budget as her Chancellor, had raised the bar by almost double to 15% and thus prompted a massive shift in the tax system from what we earn to what we spend. So began the Tory love affair with VAT.

Value Added Tax was introduced by Ted Heath’s Conservative government in 1973 as part of the conditions for Britain’s entry to the European Economic Community and the initial rate was set at 8% (with a 12.5% rate for certain luxury goods). During the 1979 Election the Tories repeatedly denied that they had any plans to double the rate of VAT, hiding behind the pedantry that a rise from 8% to 15% wasn’t quite double the rate they inherited. No matter, twelve years on Norman Lamont completed the job by raising the tax to 17.5%, the rate it stands at today. The 1991 hike was supposed to be a temporary measure to cover the cost of the switch from the failed Community Charge (Poll Tax to you and I) to the only slightly less unfair Council Tax. Unsurprisingly the Major government never reversed the rise.

The Tories love VAT because it is a tax on spending, it is easy to collect and enables rates of Income Tax on the highest earners to be reduced. Taxes such as VAT always have the biggest impact on the poorest in society because naturally a larger proportion of their income is spent on day-to-day items. The net effect is that the lower your income, the larger the percentage of it that goes to the Treasury.

David Cameron and George Osborne are being very cagey on the subject at the moment, but if the Tories manage to form a government after the election no one should be surprised if VAT stands at 20% before the end of the year. The generational Tory denial about this most regressive of taxes is highlighted by the continuing lack of concern that their largest individual donor, Michael Ashcroft, seems strangely reluctant to clarify whether or not he pays tax in the UK at all. It’s hardly breaking news to point out that the Tory approach to taxation is based on two very different sets of rules: one for the rich and one for everyone else.

See also:

VAT: The Tories’ Favourite Tax

Why everyone’s vote should count

It seems strange that anyone should have to write a post explaining why, in a democracy, everyone’s vote should count, but it appears that the media’s favourite to be the next Prime Minister doesn’t agree. David Cameron is opposed to any form of proportional representation and this week spoke out against Gordon Brown’s (admittedly pretty cynical) plans for a referendum on changing the first-past-the-post (FPTP) system for the Alternative Vote (AV).

Of course, Cameron is acting in the interests of narrow party advantage as he knows that AV would be highly unlikely to deliver him an overall majority. (Strangely, however, while AV and its variants are not deemed suitable for the electorate at large, the Conservative Party has no issue with its use for their own internal elections.) Brown’s motives don’t seem to be a whole lot purer – the Commons vote on AV was a clear pitch for Lib Dem votes in Labour’s forthcoming attempt to avoid electoral armageddon.

Of course, AV is not proportional but it is at least a step in the right direction and Labour’s acceptance of it is a long overdue acknowledgement that FPTP is a bizarre anachronism in a 21st century democracy. The fairest solution would be the Single Transferable Vote (STV), a system which maintains the constituency link while providing a much clearer reflection of voters’ wishes than AV or FPTP.

One of the biggest problems associated with the current arrangements is the relatively small number of votes which actually have any impact. In the coming election the main parties will be fighting over around 150 seats which may actually change hands, and within those marginal constituencies they will target a relatively small percentage of swing voters. Estimates of the total number of these voters vary but there are probably fewer than 1,000,000 people whose votes will decide who forms the next government. (In 2005 more than 70% of the votes cast made absolutely no difference to the outcome of the election.) There is no incentive for the parties to talk to anyone else.

STV means that there are no safe seats and every vote counts. Therefore political parties need to tailor their policies and campaigns to everyone, not just the small minority who happen to live in a marginal constituency. And in the case of the Tories, it would lead to a much more even distribution of the Ashcroft money which is currently only targetted at the key marginals. There you go, in addition to the other obvious benefits STV achieves something which the taxation system can’t.

(See also: Electoral Reform Society – PR Myth Busting.)

No surprises at the Bridge

I couldn’t honestly say that Arsenal’s defeat to Chelsea at Stamford Bridge today came as a terrific surprise – it hasn’t been a good week or two for Arsene Wenger’s team.

What was billed as the defining period of the season (Premier League matches against Aston Villa, Manchester United and Chelsea, and a Fourth Round FA Cup tie at Stoke) has yielded one point and the end of Arsenal’s Wembley dream for another season. Anyone with a passing interest in today’s fixture could have predicted the Gunners might yet again suffer at the hands of Didier Drogba, and indeed the Ivorian managed to hit Arsenal where it hurts with two killer goals within the first half hour.

Funnily enough for most of the game Arsenal looked the better side at Stamford Bridge (in stark contrast to the desperate non-performance against Manchester United at the Emirates) but yet again there were those well-documented frailties where the team looked naive in defence, highly vulnerable to the counter-attack and seemed to be carrying a goalkeeper whose confidence looks to be completely shot. In spite of what the manager will say, Arsenal’s title challenge is certainly over now. Four games against the other title contenders, four defeats. Enough said.

But before we get into too much of an Arsenal downer it’s probably worth remembering what was predicted for the Gunners before the season started. If the media were to be believed the top three was going to consist of Man United, Chelsea and Liverpool (whatever happened to them?) and Arsenal were going to do well to roll in sixth behind Man City and Tottenham. While I don’t think third place should be the summit of Arsenal’s ambition, the club has definitely made progress since last year, but the question still has to be: how much longer can the team be an exciting project awaiting fruition?

We have, in Cesc Fabregas, unquestionably one of the finest midfielders in the world. His loyalty and commitment to Arsenal have been more than impressive and he never looks like he’s angling for a move to sunnier climes, but who could blame him if he succumbed to this summer’s inevitable advances from Barcelona? Arsenal haven’t won anything since the FA Cup in 2005 and players of his calibre can’t be expected to simply settle for Champions League qualification every year. The Gunners need to win something, and soon.

Don’t be in any doubt that Arsene Wenger has a rather better idea about what he’s doing than any of his critics, and I certainly wouldn’t want to see anyone else in charge of the team, but the Champions League is now the last hope of silverware this season. If Arsenal are unable to surpass the top teams from Spain, Italy and the UK to lift this year’s trophy then the club will inevitably find itself at a crossroads in the summer. Will Fabregas stay? Will Wenger make a significant move in the transfer market? Will next season be more of the same?

Can someone – anyone – give a straight answer on Ashcroft?

Another day, another story about Lord Michael Ashcroft, frequent-flyer and chief benefactor to the Conservative Party. This time the Information Commissioner, Christopher Graham, has accused the Tory hierarchy of being “evasive and obfuscatory” over the tax status of their Deputy Chairman and effectively given everyone 35 days to come up with some answers.

Strangely, the onus appears to be on the Cabinet Office (rather than the Tories) to outline what undertakings were given by Ashcroft and those acting on his behalf (most notably the then Leader of the Conservative Party, William Hague) when the Tories were fishing for a peerage for their largest donor back in 2000. Ashcroft, who had previously been a resident of Belize for tax purposes, agreed to become ‘domiciled’ in the UK as part of the conditions for his ennoblement.

Since then it has been less than clear whether the Noble Lord has actually complied with this gentleman’s agreement. In theory the Treasury should be receiving its annual share of Ashcroft’s multi-billion pound fortune, but in practice the only place his money clearly shows up is in the coffers of the Conservative Party, as the lion’s share of their General Election fighting-fund. No one – least of all David Cameron, George Osborne or William Hague – seems capable of giving a straight answer on this.

It might help if the media (with a few notable exceptions) were actually prepared to ask a few straight questions to the Tory leadership. If Labour had a similar donor and were anywhere near as ‘evasive and obfuscatory’ you could bet your last Belize Dollar that the press would be all over them like a rash. In the case of the Tories, however, this issue is treated like an unsightly boil on the face of a dinner host – everyone can see it is there but nobody wants to ruin the evening by being so impolite as to mention it.

Time is running out for these questions to be asked (and answered). In a little over three months Ashcroft’s money may well have played a key part in a Tory election victory. And who will ask the awkward questions then?

See also: Some are more equal than others