Panama and Voting

Hot news, apparently, dictators, the super rich, corrupt politicians and criminals try to hide their ill gotten gains. Add to this list the moderately rich and various investments funds try to to avoid paying as much tax as possible. This is news?

In the spirit of openness I too have investments in offshore funds. It’s called my pension. I can’t confirm that I don’t own shares in Panama registered companies. Don’t look shocked, I have heard lots of people say that recently. Why can’t I confirm? Investment funds.

The pension company offers multiple funds in which I can buy units. Some of these funds trade in oversea shares. Frankly I have no idea if any of these units are linked to operations in Panama, The Cayman Islands, Belize and many other tax efficient locations. Just because I am several steps removed from the investment and income does not mean I do not want a good return on the deal. I want interest and investment gain too.

Of course I will have to pay tax on the income just like I already do on my salary, savings’ interest and directly invested share dividends. By the way every single person in this country that has an ISA is trying to avoid tax. Every investment in a personal pension avoids more tax. Every claim of business expenses is another bit of tax avoidance, why do you think your employer wants a VAT receipt? A little less hypocrisy please.

I think we all knew that bad people do bad things. The 11 million Panama sourced documents just confirmed this knowledge. It used to be the notorious Swiss bank account. The use of shell companies and hidden investment funds should also be no surprise. If anyone has watched The Big Short or read any of the extensive reviews of the financial crash, the rich bankers were peddling AAA rated investment funds as if they were solid gold. In reality they were derivatives bundled with other derivatives sold into other funds. Your pension fund may well have invested in these funds.

This was probably criminal behaviour, although precious few have gone to jail, whereas avoiding tax may be morally questionable but it is not illegal. Those few of you who have been kind enough to buy my book, The Persuasive Man, know that I have included a lot of financial wheeling and dealing in that fictional account. Fictional yes, but based on several financial stories and some personal experience.

Avoiding tax is a national pastime. Ask a tradesman if he’ll do the job for cash and you contribute to tax evasion which is illegal. Of course morally we are happy to have got a deal. We, the purchaser, have not done anything wrong. It is not our responsibility to declare the income, but are we a co-conspirator?

Directly in the UK, the Prime Minister has been dragged into the mess as the documents showed that David Cameron and his spouse had shares in an investment fund set up by his father. As usual with political scandals it’s not the actual thing that’s the problem, it is the cover up or the failure to come clean. Then of course we have the reporters dramatically trying to turn a drama into a crisis

The BBC were interviewing voters in Bedfordshire about whether they have changed their opinion of the Prime Minister, then came the most ridiculous question. Will you vote for him? Last time I checked, Cameron’s constituency was Whitney in Oxfordshire not Dunstable in South Bedfordshire; so how exactly were these voter going to vote for him? He has also said he will not stand at the next election. Therefore, no one is going to be able to vote for him.

You can vote in May local elections. In June you can vote for the EU referendum. Scotland, Wales and Northern Ireland have their respective Parliament and Assembly elections, (English Democratic deficit anyone?) but except for by-elections no UK MP will get elected until 2020. It’s like asking the vox pop interviewee, the archetypical man on the street if they would vote for Trump – had to get him in somewhere – irrelevant and just bad journalism.

With 11 million documents to sift through who knows which name will turn up next. Of course Cameron has got himself in this mess for not being open and forthright at the start of the week, not for what he has actually done with a relatively small amount. Yes, I know £30,000 is a lot of money to most of us, but compared to the billions hiding in Panama shell companies, it’s not really.  By the way as the shares were co-owned by him and his spouse that’s £15k each. Capital gains are only due on the element above the yearly allowance depending on how long the investment had been held. Income from the fund should have been declared each year on the individual tax return. So a £30k fund on a very good year may have paid out 10 percent per annum so £1.5k per year each at 40 percent tax is £600. Not exactly a new duck pond. The selling story is already 6 years old.

Jeremy Corbyn the Leader of Her Majesty’s Opposition is making political hay out of the alleged scandal but is it just me? Not many Labour MPs are making a song and dance about this nor Liberals. Even the Scottish Nationalists are being relatively quiet. Have I missed something?

We can add UEFA and FIFA to the list of those being embedded in the scandal, Iceland has already lost its Prime Minister. It seems this leak even makes other news disappear although the press are desperately trying to link the revelations to the EU in/out referendum. After all we need something to make that more interesting.

Meanwhile 1.5 million migrants/asylum seekers/immigrants/terrorists (delete as applicable) have tried to enter the EU and the new deal with Turkey has allowed 200 to be returned to Turkey. Perhaps we are missing the scale of the problem and not addressing the priorities. Mr Putin (be respectful) seems to be connected to Panama via some friends who seem to have a lot of state money. What about EU funds are there no documents connecting EU officials. Of course we have the overseas aid budget from the EU and the UK which have often been suspected of ending up in odd bank accounts. No news there then.

Back to the scale of the financial misconduct, what efforts are actually being made to get the money. Has the Panamanian Ambassador been called in, have any executives of the legal company been arrested, is anyone going to be charged with anything? Is any money going to be returned? More likely it will all disappear, the money and the story.

Perhaps a sequel is needed but would anybody buy it? Perhaps I should set it up as an offshore investment fund opportunity?

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Will They Ever Change – The Price of Fish

An old saying – It won’t change the price of fish.

It’s a deeply pessimistic or cynical view of the efforts of our government to actually make a difference.

The next UK General Election will be held on 7th May 2015. Between now and then we have a further By-Election which comes hot on the heels of the two on 9th October 2014. In those By-Elections UKIP won one and came a close second in another. It now has it’s first UK Member of Parliament (MP) via the First Past the post election system for Westminster. This achievement goes with its 24 Members of the European Parliament (MEP) elected under proportional representation. Before the next General Election it may have another MP. All this turmoil for the main political parties comes after the Scottish Referendum and poll ratings that should concern any political leader from any party, apart from Nigel Farage of UKIP.

In the usual dull analysis that has followed the By-Elections the usual culprit of the immigration debate has been raised as the main source of discontent with Labour, The Conservatives and the almost forgotten Liberal Democrats. The SNP and Plaid Cymru have their support in Scotland and Wales respectively as do the Northern Irish political parties yet UKIP has made inroads even in these areas.

Why?

My personal view is that this goes back to the the scandals before the last election i.e. MPs expenses and behaviour. I had hoped that after the scandal and the anger caused that there would have been a sea change in attitude form the political class and a huge change in representation in Westminster. It did not happen, of the 650 sitting MPs before the last election…

In all, 148 MPs (100 Labour, 35 Conservatives, 7 Liberal Democrats, 2 Independents, 1 Independent Conservative and 1 member each from Plaid Cymru, the DUP, and the SDLP) decided not to contest the election. Alex Salmond did not stand for re-election in order to focus on the role of First Minister of Scotland but the SNP retained the seat with a different candidate and a reduced majority over the Conservative Party. (Wikipedia)

What is still amazing to me is that 502 MPs carried on regardless.

Now not all those MPs had behaved wrongly in the scandal but they all followed the expenses regime even if they technically did not abuse it. I personally challenged my sitting MP during the hustings on his behaviour. Along with many others in the audience we pointed out that if we had behaved as he had done in our military careers we would have been subject to a court-martial. He apologised, stated that he had paid the money back, then got re-elected alongside his fellow 501. The old saying that the British Electorate would elect a pig if it wore the right rosette remained true, but might that change?

Despite the so-called expert analysis that it’s Immigration and Europe that account for UKIP’s popularity, I am not sure. Nearly every interview I have seen recently with actual UKIP voters explains that there is more than this. The words Westminster elite, which the SNP has used in its campaigns, are reflected in the comments from these voters. There is an underlying anger with all our current politicians. Their weasel words, their blatant insincerity but mostly their sheer failure to address problems. These problems remain irrespective of which colour rosette is in office or which white middle class male is heading the other white middle class males (one notable exception I know but she behaved no differently). It is no use blaming the school they went to after all that choice was their parent’s not theirs.

An example – I am a fan of Grand Designs yet in virtually every design the builder gets their windows, materials etc from Germany because they are the only country that manufactures to the right specification. Is it really the case that our manufacturing and construction industries cannot build a window frame to the right high-tech standard? Come on Mr Branson, Sugar et al or the Dragon’s Den entrepreneurs why are you not investing in this capability or do we really need another branded train/bank,sauce experience! Where is government in this, why can BT take public money for fibre broadband then only deliver it to the cabinet up the street. Why aren’t new house built with fibre to the property with solar panels built in and with those high tech windows that save energy. The old manufacturing centre of the North of England are apparently desperate for work so why would I have to go to Germany to get a descent set of windows?

Instead we have proposals for hundreds of thousands of new homes. Homes that are built to the same poor standards we currently have. Homes that will be plopped into villages and small towns with no additional infrastructure, no new schools doctors etc. At least when the garden cities were built this was included. Now adding an estate of 200-300 homes results in a playground if you are lucky.

I believe there is an underlying unease with the political establishment and those that report on them alongside the bureaucrats that implement policies so badly. There smugness, their unnamed sources reported and constant manoeuvring for their own gain. If we are to have a better election with better MPs then our media need to do a much better job, but of course if they are to critical then they won’t get the inside story. It is in no one’s interest to have a reasoned sensible debate. Instead minor differences are blown up into fake huge rows where no facts are present just interpretation of carefully selected statistics.

Perhaps UKIPs rise is due to protests on immigration, Europe or is it something broader. The votes that used to go to Lib Dems in by-elections are now UKIPs, because the Lib Dems in government have shown themselves to be no different from the rest.

As I wrote earlier I had hoped for a major change in attitude if not parties after the last election. Perhaps it will come this time round but somehow, after months of campaigning I doubt that it will. We will have a combination of white middle class men from the same schools and universities carving up the offices of state for their own fulfilment.

What we can all be certain of is – it won’t change the price of fish.

The West Lothian Question

I have refrained from blogging about the Scottish Independence referendum on the grounds that anything an English person living in England says on the subject will be ignored or treated as either patronising or irrelevant and probably both. Following last night’s debate, between Alex Salmond First Minister, SNP and leader of the campaign for a Yes vote and Alastair Darling former Chancellor of the Exchequer and leader of the campaign for a No vote, I felt it was high time I did write something.

Firstly, I am annoyed that I don’t have a vote. There was an act of Union between Scotland and England, Wales and then Ireland and yet only one part of the union is getting a say on the subject as to whether it should continue. This does not seem to be democratic to me. Of course there is no telling what the voting in the rest of the United Kingdom might deliver. Perhaps they might vote Yes!

Secondly, the talk is that if there is a No vote (current poll prediction is 56% for No), Scotland will be offered further devolved powers. In this scenario what about England? We have devolved powers from Westminster to the Northern Irish and Welsh Assemblies and a greater range of devolved powers to the Scottish Parliament. Scotland has always had it’s own legal system for example. Despite current devolved powers Scottish (and Welsh and Northern Irish) MPs and Peers have continued to vote in Parliament on matters that are devolved to the individual nations and principalities. This is the famous West Lothian question and has not been addressed by any of the political parties. As part of any further devolution settlement can we at least address this undemocratic system. As all MPs represent geographical constituencies having no votes on particular subject like NHS in England would only be fair in exchange for devolved powers. Given the ability of any TV programme to count and handle millions of votes in a TV talent contest in a few broadcast minutes it seems inconceivable that our elected representatives cannot agree out of 650 MPs who can vote on any given subject.

Thirdly, demographics matter and one of the comments I heard today was on the relative voting power of London and Scotland. London has 73 constituencies serving a population of 6.5 million living there, whilst Scotland has 59 MPs for 5.3 million. This is out of 650 MPs. The ratio is approximately the same 89,000 eligible voters per MP. Yet London MPs cannot vote on devolved matters but 59 Scottish MPs do when it does not impact their own constituents.

Relative economies are interesting as well. London as 22% of the UKs GDP of $2.5 Trillion dollars (approx $550 billion). Scotland has $214 billion of that. London’s share of the UK minus Scotland would therefore go up to nearly 24% and the runt of the UK would drop to $2.3 Trillion. These figure are I’m sure disputed by the SNP and Yes campaign.

In terms of a democratic and economic deficit it is London that is being ignored and on a wider scale England. Scotland has no prescription charges (nor does Wales) and no University tuition fees for residents. According to the ONS here, Scotland receives £10,152 per head of population of Public Sector spending compared to England’s £8,529. Again who has a democratic and economic deficit? It is not Scotland.

In the end as with all independence movements around the world the vote (at least there is one) will be down to the Scottish voters who turn out and tick a Yes or No vote. In the last Scottish Parliament election in 2011 turnout was 50.4%. I would hope that more than half of the Scottish residents on the electoral role would bother to vote in this referendum, after all the SNP has changed voting rules to allow persons over the age of 16 to vote. Let’s say that the turnout is 100% of the 4 million on the electoral roll; therefore, each campaign needs a minimum of 2,000,001 votes to win. Out of nearly 64 million people in the UK it’s future could be decided by less than 3.2% of the population. How’s that for democracy?

Intolerance

After my excursion into religion last week I did think of writing on a less controversial subject like gay rights or paedophilia. This week’s headlines have been dominated by the events in Iraq whilst Ukraine nervously continues. Elsewhere the impact of missing girls in Nigeria has not gone away nor has the continued fighting in Afghanistan even if it is now local troops fighting rather than American or UK troops, or the other NATO forces that have been deployed there and shed their blood as well. As with Iraq, coalition forces will soon have departed and we can fully expect Afghanistan to return to its historical state of occasional tribal warfare. The Pakistan forces have just launched a major offensive.

All of the conflicts have one thing in common – religious intolerance. Just as my previous blog attracted some comments it does not mean I shall give up on my view in that all religions behave appallingly, given half the chance, and yes I do include Christianity in that view. This time I am not focusing on historical inaccuracies or whether the Bible say this or that or the Koran , Torah, and onward into whatever belief system or set of rules that for one reason or another the individual believes is the truth.

One thing is clear they cannot all be right, they cannot all have their version of God and religious duty. At the moment the conflict spreading from Syria to Iraq is between different branches of Islamic faith, Sunni and Shia. With perhaps the ISIS or ISIA forces another version of Sunni. Once Europe was full of competing version of Protestants and Catholics, helped by tribal rivalries amongst warring families so to see the Islamic faith fighting their wars should not be surprising.

Then we have on-going issues between in Muslim, Sikh and Hindu faiths in India.

The common factor is religion, not resources for a change. Organised religion as a proxy for the power of individuals. Whether it’s a leader in Iran, Saudi, Syria or or the never-ending fight of the Jewish faith and Arbia still seen in the battles over the future of Israel and Palestine. It was not that long ago that Hammas and Hezbolah were taking their fight onto the streets of what passes for a modern city in Palestine.

Compare and contrast these activities with more secular liberal societies. Has Western Europe become immune to religious tension. Certainly on the scale seen in other nations. The argument falls down where we have Syria and Lebanon. Both partially secular on the surface, Assad’s regime was and is oppressive but there did appear to be some religious freedom.

1960’s Lebanon was seen as a typical Mediterranean European-like city before it descended into chaos which thanks to the activities of Syria and Israel (expelling Palestinians) remains on the precipice of civil war.

What of the role of West in all this, the West a loose term for the alliance of USA and it’s allies. Falsehoods led to the second war in Iraq. The world’s moral indignation after 11th September 2001 has been lost. Instead of concentrating on fixing Al Qaeda and the Taliban in Afghanistan. Iraq was attacked and Afghanistan ignored until it was too late. Just like Afghanistan was ignored after the Soviet Union left until the Taliban were firmly in charge.

Now we have nations whose idea of the rule of law is secret courts and mass surveillance of their own citizens using carefully worded statements to explain how they comply with a law. We have had secret rendition, we still have Guantanamo and even here in the UK we need the new Supreme Court to tell us whether a trial, for the first time in our legal history, can be held completely in-Camera.  Is this the freedom we believe we want. Judging by the lack of outrage ot these events I suppose it is. I looked at the Newspaper headlines today. There were more stories about the sex lives of minor celebrities and various free offers than there were about any of these issues.

Judging by the number of people who bother to vote in the UK approx 30% in the latest local and Euro polls and approx 60% in last general election. No one cares. The scandal of MP expenses rumbles on but virtually all of the MPs were returned at the last election just because they wore a particular rosette. The average MP is elected with 35% of the vote from 60% of the electorate who bother to turn out. Democracy in action but at least it’s better than a religious dictatorship, although it’s no guarantor of freedom of expression, religion or action and as for equality don’t get me started.