More feeble arguments for staying in the EU.

Nick Clegg in yesterday's Evening Standard:

... this is exactly what the anti-EU campaigners claim: that we can merrily leave the EU, stop paying our dues, refuse to play by the rules, but still get all the benefits of being part of the world’s largest marketplace and ask the other EU member states to shoulder all the onerous duties for us...

Or, more foolishly still, they claim that Norway or Switzerland are paragons of unfettered freedom which we should emulate. The truth is that both countries have to abide by all the EU’s rules and pay into its coffers, surrender control over their borders — all without having any say within the EU itself. So much for unfettered freedom.

That is a wild exaggeration. 'All the rules'? Seriously? On this very blog, Kj has explained how things work in Norway and SumoKing has explained how things work in Switzerland . Those countries do follow a lot of EU rules (voluntarily or otherwise), that much is true, but they still have a lot of opt outs. Those countries do pay in, but they only pay 'market access' fees of hundreds of millions a year, not tens of billions. They have not 'surrendered control of their borders' anywhere near as much as EU member states in the Schengen area. It is true that they have little say in EU rules, but the UK doesn't either, and at least they can opt out of many of them.

Second — and this is a point for the pro-EU side — remember that people tend to vote with the heart, not the head. The referendum will not be won by statistics, but by emotion. I don’t just mean flighty emotion about the virtues of international solidarity and co-operation. Fear of the unknown is a powerful — and legitimate — emotion too.

Politicians love stoking up a climate of fear to get their own way and accrue more power. What's wrong with research, education and rational debate..?

Finally, safety in numbers is a precious thing. Our age is defined above all by a profound sense of insecurity. Terrorism, climate change, globalisation, mass immigration — all conspire to create an overwhelming feeling of insecurity among millions of our fellow citizens. Yet we cannot tackle a single one of these forces on our own.

Terrorism? Home-grown terrorism is our own problem, but we survived the IRA. Terrorists benefit hugely from porous borders, the Human Rights Act and our membership of the ECHR, which are all part and parcel of being an EU member state.

Climate change? To the extent that you belief in it - are Switzerland and Norway really more at risk? Aren't we always told that there have to be global agreements involving the US, China and India? Whether those three large countries are negotiating with the EU as is or with the EU excl. UK is surely neither here nor. More to the point, it is not climate change as such which is the worry, it is particular impacts like flooding, and as we now know, it is the EU which encourages us to subsidise upland deforestation and deters downstream dredging, that's why we have had these terrible floods over the last ten years.

Globalisation? We love buying cheap stuff from China and going far, far away on holiday. We like French wine and German cars. We are happy if UK businesses export a lot to other countries.

Mass immigration? What most people get upset about is foreign workers - skilled or unskilled - pushing down wages, and as we know, most of those workers are from other EU member states. I accept that this is a tad hypocritical - given we like buying cheap Chinese stuff - but so what?

And if we remain in, Ms Merkel will try and fob off a load of genuine undesirables on us, shipped via France. See above re Human Rights Act and ECHR.

His only halfway decent point is that France will cut up rough if we leave - which ignores the fact that they have always taken the piss in flagrant violation of EU rules. I like to look at this way round. If we had never joined the EU in the first place and had a referendum on joining, what arguments would Clegg be making then? You can take all his waffle and easily mould it into arguments for staying out, can't you?

Nick Clegg belatedly calls a spade a spade.

From The Tab:

A vote-hungry Labour party would scrap tuition fees and replace them with a graduate tax.

Ed Miliband’s party plan to cap fees at a maximum £6,000 a year and place an annual levy on wages.

Almost seven million students finish uni with up to £40,000 of debt with less than half will land a graduate level job. According to the Sunday Times, student loans are never paid off in full by 45 per cent of students, leaving a £90 billion black hole by 2042.

From The Metro:

Meanwhile, Mr Clegg admitted he ‘regretted massively’ the furore caused by his tuition fees U-turn.

‘What we have introduced is a graduate tax and I really wish we had called it a graduate tax at the time,’ he claimed.

That's the whole point, which most people missed at the time.

If the amount of the loan repayments are based on a graduate's income, with the unpaid balance written off after a few decades, then that is to all intents and purposes like a 'graduate tax'.

The Tories only changed the system to discredit the Lib Dems because of the AV referendum, keen eyed observers would have noticed that the new system is actually 'progressive', in that graduates on low incomes would pay little or nothing, i.e. less than the previous system, and graduates on good incomes would pay a lot more.

It seems like a shit way of doing things, but that's how it is.

So assuming that Labour write off the nominal amount of loans, and just have a graduate tax of 9% on annual income above £16,910 (as at present), the amount which graduates have to pay will be no different; it's purely a psychological thing and bookkeeping entries.

So fair play to Labour, tactical genius.
------------------------
@ Mombers. The Universal Credit withdrawal rate is officially 65%, but that applies to income net of PAYE.

If you earn less than the NIC thresholds, the rate is indeed 65%. If you earn more enough to trgger NIC but no income tax, the rate = 1 - (0.35*0.88)/1.138) = 73%. If you earn more than £10,000, the effective taper rate = 1 - ((0.68*0.35)/1.138) = 79%.

UC is supposed to replace Housing Benefit but not Council Tax Benefit. But Council Tax Benefit doesn't exist any more, each local council just invents their own Council Tax Reduction scheme (which is a lot less generous than Council Tax Benefit, rightly or wrongly), whatever the withdrawal rate is, this will nudge the rates mentioned above that much closer to 100%.

"Clegg urges voters to ignore pre-election mud-slinging"

This headline was crying out for a re-write, but then I read the article and decided it was not necessary:

Nick Clegg has warned "a lot of mud" will be thrown in the run-up to May's election and said the Lib Dems will stand up for "optimism, not division" in the face of attacks from rivals.

In his New Year message, the deputy prime minister said his party deserved credit for "stepping up to the plate" in 2010 to form a stable government. Labour, he said, was still "in denial" about its economic legacy. And the Conservatives, he claimed, had "swerved off to the right".

So, not mud-slinging then?

Capital Gains Tax and the Laffer Curve

The Lib Dem conference this year was a big disappointment. Instead of proposing that we all ride round on bicycles powered by moonbeams or women-only shortlists for offshore windmills, it was all rather realistic and sensible.

The only really stupid idea was Clegg's suggestion that the rate of capital gains tax be increased in order to be able to reduce the tax burden on the lower paid. People get all heated about CGT, but it is a very minor source of revenue, it covers less than 1% of total government spending, a point which everybody, from Clegg to Booth missed.

Philip Booth in City AM yesterday:

Indeed, when the top rate was increased to 28 per cent under pressure from the Lib Dems, it was felt by the Treasury that this was the rate that maximised the revenue from the tax.

As it happens, CGT revenue has roughly halved since the rate was increased, although this may have been for other reasons. Nevertheless, it is quite possible that we are already on the wrong side of the Laffer curve – in other words, beyond the revenue-maximising rate (a notion popularised by the economist Arthur Laffer via his famous curve) – as far as CGT is concerned. Certainly, we are not far away from the top of the Laffer curve.

From this morning's City AM Reader's Letters:

The biggest yield from capital gains tax (some £7.4 bn) came under Alistair Darling's giveaway when liability could be crystallised at just 10 per cent for those who had held assets for a while.

People talk a lot of rot about the Laffer Curve, the lefties deny it exists and the right wingers often claim that every cut in rates leads to an increase in revenue.

The sensibles merely point out that if rates are too high, you can increase revenues by reducing the rate. This is the mathematically correct view, but ignores the fact that the revenue-maximising point still depresses the size or efficiency of the economy.

As it happens, I know from personal experience that ten per cent is the rate which clients were happy to pay, they weren't fussed about claiming deferment or hold over reliefs, or simply not triggering the gain or anything. They just sold what they wanted to sell and sent one-tenth of the gain to HMRC. A while ago I read that the Americans had noticed the same. So in all probability ten per cent is the revenue maximising rate.

It's still a bad tax of course. The irony is that the real point of CGT is not to raise revenue by taxing capital gains (hence and why the largest source of capital gains, owner-occupied housing, is exempt), the real point is to prevent people turning taxable income into otherwise tax free gains. So the system is quite different in different countries, and changes regularly in the UK, they are always struggling to reconcile these two quite different aims, but there you go.

"Michael Gove’s wife attacks Nick Clegg's wife for Spain trip while PM's wife is away"

From The Evening Standard:

Michael Gove's wife today accused Nick Clegg's wife of failing in her duty to help her husband do his Government duty by going on holiday at the same time as David Cameron's wife.

Sarah Vine risked reigniting tensions between the Deputy Prime Minister's wife and herself with her criticism.

“Deputy PM Nick Clegg's wife has just one real job to do. Look after her husband while he looks after the country while the actual PM's wife is on hols watching her husband pointing at fish,” she wrote in her Daily Mail column. “And where has Cleggy's wife been all week? Spain. Great.”

Mrs Gove and Mrs Clegg have had a series of bust-ups over issues such as free school meals and who has the nicest handbags. They have sought to patch up relations several times but today’s comments are unlikely to help.

"Spain? "she continued, "Three days in Butlins, that's all we can afford now that Michael has lost his Secretary of State salary top-up. I know that she was behind that.

"The utter foreign bitch."

"Clegg and Cable pub visit show of unity"

From the BBC:

Lib Dem leader Nick Clegg and Vince Cable have put on a show of unity with a visit to a London pub.

The event, to highlight the fact that Vince is Nick's best mate and he loves him like a brother, came after Mr Cable was forced to deny fancying Mrs Clegg.

The younger of the two men caused confusion behind the bar by asking for a glass of the house white before sitting at a table in the pub, watched through the windows by bored commuters at a bus stop. The older man settled for a cup of tea with milk, noting that bitter "went straight through him".

As they left Mr Cable said they had talked about going on to a club, but Mr Clegg said they had had a "very nice drink and it was time he got back home to the wife and kids".

The rare joint appearance by the two men began with Mr Clegg taking on the wingman duties, trying to pull a barmaid while Mr Cable eyed up her better looking colleague.

"Nick Clegg booed off stage in Nottingham"

From the BBC and the BBC:

Liberal Democrats have grown used to disappointing poll ratings but Nick Clegg reached a new low when he was booed off stage and had pints of beer thrown at him at a concert with his band The LibDem Underground in Nottingham.

They've lost many hundreds of councillors since 2010 and ten MEPs since 2009 and have now been reduced to playing Velvet Underground songs with EU-themed lyrics and kazoo solos. Nick Clegg has said before that you have to have a thick skin in politics and when I interviewed it was clear that he was feeling the pain of having beer thrown at him.

"Why are you throwing those?" Clegg asked the crowd at the Rock City venue. "I'd rather drink them." Exhausted, red-eyed and pale, Mr Clegg lasted only 15 minutes before being forced to flee the stage.

"Thank you so much Nottingham," he tweeted later. "Sorry that a couple of UKIP voters ruined it for everyone. OK, 4.3 million, to be precise."

Clegg, 47, is best known for his childhood role as a Liberal Democrat Member of the EU Parliament between 1999 and 2004 and a little remembered stint as Deputy Prime Minister from 2010 onwards.

He formed The LibDem Underground in 2012, performing parody songs such as “An appeal for an open-minded, generous-hearted Britain” (Lou Reed's Walk on the Wild Side) and “Going head-to-head with UKIP leader Nigel Farage in a TV debate” (Velvet Underground's All Tomorrow's Parties).

Mike Flower of Mike Flowers’ Pops is said to have gone into hiding after his 1996 recording “Velvet Underground Medley” was rediscovered on Spotify.

Amazing videos of David Cameron and Nick Clegg swapping a black V-necked jumper

The video filmed this morning shows us Clegg in the black;


Later in the day, Cameron calls dibs and takes it off him because it's getting a bit chilly, Clegg shivering just in a shirt:


The BBC's evening news showed the whole shuffle. Video not yet available on BBC iPlayer, the sequence started at around 19:24 with Cameron in the jumper and Clegg shivering; Clegg is back in black in time for the interview with Nick Robinson at around 19:25.

"Nigel Farage 'can hardly wait' to debate EU with Nick Clegg"

From the BBC:

UKIP leader Nigel Farage has accepted a challenge from Nick Clegg to have a public debate on the merits of the UK's membership of the EU.

"I can hardly wait," he told LBC radio, saying the deputy prime minister was "all over the place" on the issue.

In

The Lib Dem leader threw down the gauntlet to Mr Farage on Thursday, saying he was the right person to debate the issue of Europe with the UKIP leader.

At the debate itself, Nick Clegg will open by stating that half of UK exports go to other EU member states and then drawing the unsubstantiated conclusion that "three million UK jobs depend on EU membership".

Out

Nigel Farage might mention that other member states have every interest in keeping free trade with the UK because following Clegg's logic, about four million jobs in other EU countries depend on exporting to the UK, but the likelihood is that he will respond with the entirely irrelevant fact that Norway and Switzerland export more to the EU per capita than the UK, entirely glossing over the fact that small countries always export (and import) more per capita than large ones.

In

Nick Clegg will then completely change the topic and say that the EU has guaranteed peace and freedom in Europe for sixty years. Instead of the UKIP leader pointing out that this would have happened anyway, the Western world being largely peaceful, the UKIP leader will go off on a tangent and say that we should be thanking NATO, an organisation which most people have forgotten still exists.

The Deputy Prime Minister is widely expected to extol other supposed benefits of EU membership, such as free movement of people, goods and services.

Out

Mr Farage is again expected to miss the obvious point - that these could be negotiated anyway on a bilateral basis on terms to suit ourselves - and will instead trot out some populist, borderline xenophobic nonsense about "millions of immigrants from Roumania and Bulgaria" and point out that most voters thought that free movement of people and capital was a disadvantage of EU membership, not an advantage.

Having thus gained the upper hand with the last few people still paying attention, Mr Farage will then throw it all away by putting in a special plea for the UK financial sector and saying that EU capital and supervisory rules would "throttle Britain's banks", something which most sane people would be fully in favour of.

Shake it

Similarly, Mr Clegg will lose what little sympathy he has managed to elicit for the integrationist cause by pointing out how many people from Middle England now own a holiday home in France or Italy and then going completely off piste by claiming that the EU is combatting global warming.

The debate is likely to continue in this fruitless tit-for-tat vein for until the last viewer or listener has switched over to another channel.

All about

Neither politician is expected to mention the amount of money which the other has claimed in salary and expenses from the EU because neither wishes to remind voters about how well they have done for themselves out of politics.

Pundits expect that no more than half a dozen people will change their view on the EU one way or another and the majority will decide that the whole thing is a complete wank fest, although Farage hopes to strike a chord by closing his arguments with the completely baseless claim that "Britain is a small, overcrowded island".

Great British Understatement

From The Guardian, no less:

... in a letter to Treasury select committee chairman Andrew Tyrie, published on Thursday, Carney makes clear that while the Bank's financial policy committee (FPC) could advise the government at any time if Help to Buy is putting financial stability at risk, the final decision about if it should continue will lie with the Treasury.

"The FPC has no power to require the Treasury to vary the terms of, or close, the Help to Buy scheme," Carney writes in reply to a letter from Tyrie earlier this month asking him to clarify the Bank's role. "The FPC only has the authority to make recommendations in connection with such matters … the FPC is not constrained by the government's timetable for any such advice; it could make recommendations at any time."

That message appeared to contradict statements by senior coalition figures, including Conservative chairman Grant Shapps, who told BBC Radio in September: "We put the Bank of England solidly in charge of this scheme. We've said to them: 'You look at this every year, and if you're not happy with this Help to Buy Scheme, then you'll be [able] to cancel it."

Deputy prime minister Nick Clegg said of the policy last month: "Of course we need to moderate it, even turn it off if we think it is not appropriate and is providing inappropriate stimulation to the housing market. That is precisely why we have transferred the right to do that to the Bank of England so they can keep an eye on it – not politicians, not George Osborne, not the Treasury."

Common sense? (2)

Lola said on Monday that there was hope yet:

[Nick Clegg] sayeth, in response to a question about Mansion Tax, something on the lines of 'we think that it is a good thing to reduce taxation on labour and enterprise and increase it on property and wealth'. Now we know he's a bit confused about the factors of production and 'wealth', but really that is pretty good for the Cleggster.

The Cleggster was a little more specific on yesterday's Channel 4 News, video below. You can skip the waffle and crap and start at 3 mins 10 seconds in, the debate about Lib Dem tax and spend policies.

Interviewer: "Who else are you going to clobber if not the richest ten per cent?"

Cleggster: "... if you start at the top, it's how you define the top which I think is at stake here... [interrupted by interviewer] ... what does represent our thinking, unsurprisingly, which is actually what we've decided in this conference where we set out our overall approach to taxation.

"We've been very clear, we actually want to see lower taxes on income and effort and enterprise, but higher taxes on wealth and land."

Yup, he actually said "land", which is a quantum leap for a politician, seeing as "wealth" can mean whatever you want it to mean, it means everything and nothing.

:

Common Sense?

On R4 this morning I actually heard the Cleggster say something almost sensible.  No.  Really. He did.

He sayeth, in response to a question about Mansion Tax, something on the lines of 'we think that it is a good thing to reduce taxation on labour and enterprise and increase it on property and wealth'.  Now we know he's a bit confused about the factors of production and 'wealth', but really that is pretty good for the Cleggster.

And then I read BoJo's piece in the Telegraph.  The first bit of which is 100% ignorant home-owner-ist.

And then I read this at the Adam Smith Blog. (Penultimate paragraph)

This got me thinking about and reading up on - when I should be working - Citizen's Income.

Combining CI with, or if you prefer funding CI from, LVT is so shatteringly sensible it is impossible to see why anyone objects to it.

The beauty of combining the two is that it makes clear that a large part of rent - the location value - is just privatised taxation.

It's a genuine example of commonsensical joined up thinking.

Does that make it doomed?

"Clegg and Alexander reject Cable's warning over Help to Buy"

From The Guardian:

Nick Clegg and Danny Alexander have dismissed a call by their Liberal Democrat colleague Vince Cable to restrict the second phase of the government's Help to Buy mortgage scheme to areas of the country with depressed property prices.

In a sign of tensions over the economic policy at senior levels of the party, Clegg and his close ally Alexander rejected Cable's warnings that Britain was facing a dangerous housing bubble.

Does not compute.

The justification for Help To Buy was that houses are too expensive and so first time buyers have to be "helped". The very existence of the scheme is the government's tacit admission that house prices are in a bubble.

If prices were "affordable" by whatever measure, then there'd be no need for such schemes. So Cable's idea about restricting it to "areas of the country with depressed property prices" is even more stupid than Clegg and Alexander's state of denial - because people don't need help to buy a cheap house.

The only way that any of this makes sense is if "Help To Buy" is in fact "Help To Sell", then it makes perfect sense from the point of view of a Home-Owner-Ist government trying to win a general election from a majority Home-Owner-Ist electorate.

H/t Alan at HPC.

Letter From Marie Antoinette

A Lib Dem member forwarded me an email he'd received from head office (see below), adding that:

Cleggie’s advisors have clearly not heard of Marie Antionette, who built a pretend rural idyll called Hameau de La Reine where she would dress up as a milkmaid. No doubt she would have said (but in a Frenchified way) "It’s about practising what we preach and selling the benefits of apprenticeships to young people and employers. Check out that delicious cake!"

As Wikipedia remarks, “The extravagance and subtle mockery of peasant life did not help Marie Antoinette’s already suffering image.”

I should be banned from the dinner table, says Clegg as he lashes out at 'curse' of modern politicians

From The Daily Mail:

* Deputy PM backs checkout worker refusing to serve him

* He is not allowed at the Clegg dinner table despite sons' protests

* Complains about colleagues in government glued to each other in meetings

Politicians should be banned from the dinner table, Nick Clegg said today.

Despite many parents being forced to rely on modern politicians to run the country, the Deputy Prime Minister said meal times should be free of elected representatives. And he lashed out at the 'curse' of colleagues in government who sit glued to each other's mumblings during meetings.

The nation has been divided over etiquette after the 46-year-old was told he would not be served in a Sainsbury's branch in London until he resigned as an MP. Mr Clegg said he had a 'sneaking sympathy' for the checkout worker in Crayford, south east London.

He said it drove people 'round the bend' when people like him constantly had their 'noses glued' to smartphones and iPads unless posing for photographs. The Lib Dem leader said he 'strongly suspects' he once stood in a queue in a shop to burnish his 'man of the people' credentials.

"Harvey Nichols does count as a shop, doesn't it? I'll tell you what's worse though," he added, "Politicians swanning into a pub and pretending to sip a pint of beer in the hope they'll have their picture taken."

Nick Clegg: Incorrigible fucknut

On the topic of the Tories' proposal for a Married Couple's Allowance worth £150...

Mr Clegg said:

"I have never understood the virtue of a policy that basically says to people who are not married: you will pay more tax than people who are married(1) or, more particularly, married according to the particular definition of marriage held by the Conservative Party.(2)

"If you have got hundreds of millions of pounds to spend on tax breaks like that then I would much rather spend it on all working families to improve the tax breaks we are going to give them on childcare, for instance. We have offered, from 2015, tax-free childcare for working parents worth about £1,200 per child. I would like to see that expanded.(3)

"Instead, for reasons that I have never quite understood, the Conservatives want to basically say to a widow...you are not going to benefit from a tax break even though you were married and you lost your husband.(4) A woman who has been abandoned by her husband suddenly doesn't get the tax break even though she believes in marriage.(5)"

The £150 MCA is a stupid Tory gimmick of course, that is the first thing to be pointed out. Most people (two-thirds?) are married anyway, they will end up paying two-thirds of the extra tax needed to fund it, so actually they will only be £50 better off than now.

1) In the tax system, there are a lot of marginal situations where married couples are at a disadvantage (relative to unmarried ones) and plenty of marginal situations where married couples are at an advantage, and nobody knows what the overall net plus or minus of all these tax breaks/burdens is. The £150 is quite simply not big enough to clearly tip the balance in favour of marriage.

But the welfare system is absolutely and completely biased against couples, particularly married ones. If the Tories had any brains, that is what they would be focussing on.

2) Woah! Spiteful! We had the gay marriage debate a couple of months ago and it was nodded through (word on the street is, it's an EU thing which all governments have to nod through) by a majority Tory government. And on the whole, the Tories made it clear from the start (at a time when only "civil partnerships" existed but not "gay marriage") that gay couples would get the MCA as well.

3) Irrelevant. It's always easy finding An Even Worthier Cause. I'm sure that there are stories which tug the heart strings even more than the thought of a "hard working family only getting £1,200 tax-free childcare" and so on, until we finally establish The Single Most Worthy Cause Of All. Should the government should only ever spend its entire budget on that Single Most Worthy Cause Of All?

4) Ah yes, but widows get something called Bereavement Allowance, which is like dole money for widowed housewives. This starts at £32.49 week, so is worth a lot more than the proposed Married Couple's Allowance. And the fine details of the scheme have not been outlined, it's just a mad idea to keep the back benchers happy, and there's nothing to stop there being a rule that widows can't continue to claim it. And widows can claim all the same goodies as other single women (if they have kids).

5) Ah yes, but an "abandoned woman" (how come nobody talks about men being abandoned?) can claim all manner of benefits, just like any other single woman, which she wouldn't be able to claim if she were still married. These can be worth tens of thousands a year. And she'll have the whole machinery of the state on her side screwing every last penny out of the errant husband, more or less at no cost to her. The value of these benefits are worth rather more than £150 a year to her, I think you'll find.

Nick Clegg gives a master class in Indian Bicycle Marketing

Exhibit One from The Deputy Prime Minister's Office, April 2012:

Helping young people into work through the Youth Contract

We introduced a £1 billion Youth Contract in April 2012 to help young unemployed people get a job. The Youth Contract is a range of support to make it easier for businesses to give young unemployed people a job, training or work experience.

It will provide nearly half a million new opportunities for 18 to 24 year olds, including apprenticeships and voluntary work experience placements.

Exhibit Two, from Personnel Today, 25 June 2013:

A survey of 200 employers has found that the government has failed to win their support for the coalition's flagship policy for tackling youth unemployment, the Youth Contract. None of the employers polled by the Recruitment and Employment Confederation (REC) had used the programme to employ a young person to date.

Nearly half (46%) of respondents, who have responsibility for hiring decisions at their organisation, confirmed they had heard of the scheme, but did not intend to use it, and almost one in three (30%) were "not aware" of the Youth Contract.

Exhibit Three, from an inteview with the self-same Deputy Prime Minister in Lib Dem Voice, 24 June 2013:

We’ve got a much bigger issue, which is a generational issue as we all know, which is that the squeeze has fallen harder on the shoulders of the younger generation.

That’s why I’ve come to the view that one of the urgent bits of work we need to do both in government and more widely is look at the way in which we support particularly that generation of 16-24 year olds, the education-into-work group, who are very poorly served at the moment by a hotchpotch of different and often conflicting government initiatives which are very confusing, a pea-soup of acronyms, and the money is not well spent.

One of my top priorities over this summer is to really get to grips with this, because we’re spending hundreds of millions of pounds as a society and we’re not serving them well at all.

Emailed in by BobE.

"[insert name] is only party leader to challenge/criticise Google on tax"

From The Daily Mail:

Clegg outflanks Cameron and Miliband to become ONLY party leader to challenge Google's Eric Schmidt about tax avoidance

From the BBC:

Ed Miliband has criticised Google's tax arrangements at an event organised by the internet search giant. The Labour leader said the firm had gone to "extraordinary lengths" to limit levels of tax it paid in the UK.

Click and highlight to reveal the names of the only two party leaders to have complained.

Nick Clegg learns a few valuable lessons

From The Independent:

Older people affected by the Liberal Democrats’ proposed “mansion tax” could have payments deferred until after death if they are unwilling to pay up during their retirement, Nick Clegg has suggested.

Good. That's always KLN #1 and you need an answer to that. The roll-up deferment option is not perfect solution, but it's the least imperfect.

... the caller explained that his home in the up-market St John’s Wood had “sky-rocketed” in value since he bought it.

He said: “I earn a reasonable salary. I do not earn as much as Mr Clegg but I’m happy with what I earn, but no way could I afford to buy a house now for anything like £5m." He said he would face a £30,000 annual payment under the tax, which he could not afford and which would take his total tax rate to 78 per cent. “My only option would be to sell the house my family and I have lived in for 20 years and withdraw my children from school,” he told the Deputy Prime Minister.

Mr Clegg agreed that John would indeed be better off if he moved out. He said: “I’m obviously not urging you on selling your home but if you were, as your children get older and so on, to decide to sell your home, you would be millions of pounds better off... That’s one thing which I don’t know whether you’re prepared to do anyway.”

John retorted: “It’s my home and I have to move out of the area.”

That's a tricky one, politically, there are infinite variations on the retort and Clegg appears to have gone for a middle of the road one.

The more extreme retort would be: "For fuck's sake, man, any couple on above-median wages is paying £30,000 a year in various taxes (check the figures here), and what do they get for it? The privilege of spending half their net income on the mortgage on a semi-detached somewhere; you pay £30,000 a year and get to live in 'desirable' St Johns Wood."

Or possibly, if you've had time to check on Rightmove: "For fuck's sake, man, you can get a perfectly decent 4-bed house in St Johns Wood for less than £2 million, there's no need for your children to change schools - by the way, you'll get into trouble with the authorities if you just withdraw your children from school, as a good parent I hope you know that - and that still leaves you with a handsome cash lump sum of well over £2 million. And you're complaining?"

Or possibly: "For fuck's sake, you Home-Owner-Ist. It's your kind who have engineered things so that a whole generation is priced out of the area in which they grew up. Do you imagine that your children will be able to afford to buy in the same street as they grew up?"

But politicians get into trouble if they say things like that. I don't think they're allowed to say "For fuck's sake."

The other valuable lesson to learn here is that people hate transitions. Quite realistically, if they did introduce a Mansion Tax, people like "John" would end up moving. If the rate is nudged up in future, people like "John" will be complaining all over again, that they are now cruelly forced to trade down to a humble £1 million home in the less desirable part of St Johns Wood etc.

So actually, it is better to go for broke and start with a fairly full-on LVT (which on a £5 million house would be £100,000 a year or more) and make it clear that over the next five or ten years, all other taxes are going to be phased out and the LVT rate bumped up accordingly. "John" has to do his sums carefully, the same as every tenant or mortgage borrower, and trade down to whatever frees up enough cash to enable him to pay [a large chunk of] the LVT on his next house for the rest of his working life and he is, politically, out of the picture.

So for example, if we knew that in five or ten year's time LVT would be (say) about 6% of what houses sell for now, "John" could settle for a £1 million home, spend £2 million on an annuity to pay the LVT for the rest of his life and still have £2 million play money.

"Actually, I think even Miriam has a sneaky regard for them....

... whereas I of course despise the place, absolutely... we Lib Dems prefer "traditional" sources of funding and not from City Spivs. Not of course that they are all spivs... some are thoroughly decent upstanding donors, I mean people."

Electoral Commission report of August 2012:

The Liberal Democrats' largest donation was £250,000 from Brompton Capital Limited, a property development company owned by entrepreneur Rumi Verjee, who last year dined with party leader Nick Clegg at his grace and favour residence Chevening, in Kent. The largest individual donor was Lib Dem peer Lord Loomba, who gave £100,000.

The Guardian, February 2013:

Nick Clegg: Labour and Tories 'bewitched by Square Mile'

But actually despite what you might read into that headline (completely unintentionally of course, the G doesn't do misleading headlines after all!), he isn't launching an attack on the place or its morals, no not at all.

Emailed in by Bob E.