Tuesday, 25 August 2015


One definition of tax is that it’s the fair dues we all pay to participate in our society – to fund significant projects that benefit us collectively and to provide a safety net for society. Tax is and probably always will be (and probably always has been) a subject that stirs people up. The trick to realising that you have been sold a pup, is to notice, the Party formally known and New Labour and the Conservatives have been hooked on the idea that either by cutting, reducing taxation for the rich (and corporations) or even perhaps by turning a blind eye to tax evasion, avoidance, etc - that wealth will trickle down from the top to the rest of us. 

This theory pumped out by Ronald Reagan (and Mrs T) in the 1980’s is still dominant; it’s not a new theory. US Presidential candidate William Jennings Bryan (in 1896); who noted ‘that if you will only legislate to make the well-to-do prosperous, their prosperity will leak through to those below’. ‘Trickle-down theory’ first appeared in the 1932 US Presidential campaign, when Democrats used it to hammer Republican Herbert Hoover’s plan to engineer economic recovery by making the rich richer.  

Fifty years later even Ronald Reagan’s supporters struggled to sell the idea to their own party, even George Bush (Senior) mocked Reagan’s theories of supply-side economics as ‘voodoo economics’ at least until he got the Vice Presidential slot. On this side of the pond there were monetarists who told Mrs T straight that the idea was nonsense and that it would not deliver results  - naturally she did not listen.

Reagan’s first budget brought in a moderate reduction in the basic tax rate, this was followed by the a drastic reduction of the top tax rate from 70 to 50 percent and later still to 28 percent. If the theory was correct then, the public coffers should have swelled with enough extra revenue to balance the budget within one to two years. Unfortunately, the theory was incorrect, within the eight years of Reagan’s Presidency the total Federal deficit soared from around $900 million to some $3 trillion dollars.

What followed has been described as an orgy of speculation in stocks, shares and real estate (this was the era of ‘Greed is good’), ordinary Americans stopped saving and started spending. Through the 1980’s there was a near continuous decline in long-term capital investment – on which economic growth and jobs were dependent.  To make matters worse the USA went into recession and the Federal Reserve had to raise interest rates to hold down the inflationary consequence of the tax cuts, by 1981/82 unemployment in the USA rose about 10% for the first time since the aftermath of the great depression in the 1930’s.

The gulf between the wealthy elite and the rest of the population became a chasm, the rich got richer and parallels have been drawn between the 1980’s and the Gilded Age of the 1870’s (income tax was abolished in the US and was only reintroduced during the First World War).  The 1980’s for the mega rich in the USA was an era of conspicuous consumption and extravagance – yet oddly enough very little of this prosperity tricked down to the American middle and working classes.

Average US family incomes did not return to the level they were at in the 1970’s until 1987 – wile this may have sounded good, the harsh economic reality was that Americans were now working harder and longer – in 1973 an average American worker had 26.2 hours of leisure time per week, by 1987 this was down to 16.6 hours per week. Jobs were also now less secure, Americans now worked on short-term of temporary contracts in increasingly un-unionised working environments. For blue-collar workers the 1980’s were a disaster, wages fell through the decade as employers threatened to move production overseas because the workers had priced themselves out of employment.

The right wing, in the US and here in the UK crowed about how government should not interfere with (or regulate very much) the ‘free market’.  This hands off attitude was also duly applied to the US savings and loan industry, laying the groundwork for the collapse that was to follow in 2007. The only exception being that if things went really pear shaped then it was expected that Government would collect the tab. One side effect of all this was fraud, 650 savings and loan companies collapsed, with the $1.4 trillion dollar tab being picked up by the US government.

On this side of the pond, building society after building society were floated on the stock market – and within a few years were readily absorbed by increasingly greedy banks.  In the US, exploitative working practices and sweatshops reappeared encouraged by the effective withdrawal of regulation and inspection. The 1980’s also saw the growth of increasingly powerful media empires and a concentration of power in fewer and fewer hands despite much reputed mantras from government about greater competition and choice for consumers.

We are all still living with the consequences of that period in the 1980’s when an ideologically driven obsession with the ‘free market’ and ‘privatisation’. Heaven help anyone who dare question these sacred truths – the very heavens may fall. The problem is that the market was rather than being ‘free’ it was pretty much increasingly unregulated as Governments in the USA and the UK largely looked the other way – tax collections fell and ironically tax evasion soared.

This state of affairs was tolerated by the long time dying Major Government and largely encouraged by the former New Labour governments of Tony Blair and Gordon Brown and barely mentioned by the former Con Dem government. Even the crash has not changed things - there was some talk about tacking tax evasion matched by continuing (significant) staff cuts to HMRC.

It is interesting because tax evasion and tax avoidance, at least outside of the UK, is rarely out of the headlines with many heavily indebted governments being particularly keen to hunt down every tax dollar / euro / pound that is owed by tax evaders avoiding (unlike the rest of us) paying their fair dues to society. The Westminster elite privately at least regardless of whatever they say publically, appear to pay scant respect to the idea of fair taxation and fair representation, we now appear to be as close as possible to being governed by the sons of bankers and the sons of the City in the interests of the City (of London).

The big problem is that the UK Government is in up to its neck when it comes to tax evasion. The UK Westminster is heavily involved in aiding and abetting tax evasion worldwide. British Overseas territories, including the Cayman Islands, help to hide around trillions from pounds from the different nation’s tax authorities.

In the belly of the Westminster beast lies the City, which may explain why the former New Labour government, the former Con Dem coalition government and the current now unrestrained Conservative government (were and) remain reluctant to do anything about the problem as some (but not all) of the city banks are hand in glove with drug dealers, dictators, rogue states and terrorists when it comes to money laundering . The inertia may be explained by the lure of comfy lucrative seats on the board for former Westminster politicians.

Thursday, 20 August 2015


Friday 21st August 2015 is the 47th anniversary of the Soviet led invasion of Czechoslovakia.  It has been 45 years since Soviet troops and most of their Warsaw Pact allies invaded Czechoslovakia on August 21st 1968. The well-planned invasion aimed to crush the political and economic reforms known as the Prague Spring, led by the country's then new First Secretary of the Communist party Alexander Dubcek. Leonid Brezhnev and other Soviet hard-liners in Moscow saw the reform movement as a serious threat to the Soviet Union's hold on the Socialist satellite states, they decided to act. In the first hours on the 21st August 1968 Soviet planes began to land unexpectedly at Prague's Ruzyne airport, and shortly Soviet tanks would roll through Prague's narrow streets. The Soviet-led invasion helped establish the Brezhnev Doctrine, which Moscow said allowed the U.S.S.R. to intervene in any country where a Communist government was under threat. The Soviet backed occupation of Czechoslovakia lasted until the velvet revolution brought an end to the Communist dictatorship in November 1991 as the Cold War ended. Even now Russia’s attitude to the invasion can touch raw emotions, especially in the Czech and Slovak republics.

Monday, 17 August 2015


The National Assembly is standing its ground over fracking - especially as the now unrestrained wholly Conservative Westminster government has announced its plans to speed up the processes by which fracking applications are considered. Here in Wales we have a temporary moratorium on fracking, while in England the pressure is growing from Westminster for fracking applications to be dealt with in 16 weeks. 

This cautious approach (at least in Wales) is a sensible one, especially as their are potentially serious environmental implications for the fracking process. During the last Westminster election, my former Conservative opponent was more than happy to demonstrate his lack of concern for the environment, presumably working on the assumption that he will dead and gone before having to face any environmental consequences. 

Wales is home to vast natural wealth, but for too long, Westminster has benefited from the exploitation and export of our resources. It makes sense to see control over our natural resources and major energy projects to be devolved from Westminster to the National Assembly so that the people of Wales benefit from them.

That way, we can dramatically increase our renewable energy capacity with a focus on tidal and hydro sources, and protect our communities from damaging Westminster policies such as fracking and over-reliance on fossil fuels. We need to introduce a Climate Change Act for Wales, adopting challenging but achievable greenhouse gas reduction targets for 2030 and 2050.

Our communities should be able to benefit more from energy generation, with local people owning and investing in energy projects as has happened in Scotland. We should also look into establishing local power grids and a Wales-wide national energy grid to secure energy transmission around Wales, linking north and south entry points undersea.

Some 85,000 households in Wales fell into fuel poverty between 2011-2014 bringing the total to 450,000. In such an energy-rich nation this is nothing short of disgraceful. That is why Plaid Cymru is committed to a fairer, greener, more prosperous Wales where our resources can be put to use in a manner that benefits our communities, our environment and our economy.

Thursday, 13 August 2015


The beginning of a beautiful friendship
The delays in the publication of the Chilcot Report are a telling indictment of the duplicity of those involved in making the decision to spin a web of lies to make the case for war in 2003. The inquiry was somewhat reluctantly set up by the then New Labour Government in 2009 - the hearings were completed in 2011. 

Disputes over the publication of evidence and the right of advanced rebuttal by those included in the report then followed, including arguments over whether or not memos between the then Prime Minister Tony Blair and US President George Bush could be published or not also followed. 

No matter how much spin was spun to add weight to the reasons for the invasion, the toppling of Saddam Hussein, the costly occupation of Iraq, etc - it is impossible to get away from the idea that the then New Labour Prime Minister simply lied to the House of Commons and the rest of us. The whole wretched process is yet another very public demonstration of the abject failure of the Westminster institution to call them to account and the lengths to which the so called elite will go to to protect their tarnished reputations.