GONGS AND TAXES

No doubt much to the irritation of David Cameron and Ed Milibland tax evasion is back in the news – this time in relation to Take That singer Gary Barlow. At the end of the day it is a matter of semantics and legality when it comes to the differences between tax evasion from tax avoidance, one is a criminal act and one is permitted under the law.  

It is a matter of public record that the PM is against aggressive tax avoidance schemes. He has also been pretty forthright in stating that tax evasion is illegal, and that people can be prosecuted for that, and people can go to prison.

It is also a matter of public record that the Con Dem government ill-advised and perhaps ideologically driven public sector spending cuts have seriously cut staffing levels in HM revenue and Customs. The PM interestingly enough was pretty firm when it came to rejecting calls for particular individuals are stripped of public honours for wrong doing. If you started stripping individuals of titles and honours for wrong doings heaven knows where you might end up even the possibility of party donors ending up embarrassed not to mention devaluing legitimate honours awarded to deserving recipients.

Previously various Westminster governments have been a little half-hearted when it comes to clamping down on tax avoidance. The current PM may have slagged off celebrities, for using a tax avoidance scheme in Jersey. Yet he has seemed to be acutely reluctant to deal the tax havens that happen to be UK Crown Dependent territories. 

Most reasonable people accept that there is a real need to deal on a global basis with the problem of off-shore companies and those individuals who are actively engaged in tax avoidance, tax evasion and / or money laundering. It’s all a little embarrassing as the problem is that the UK is at the heart of the problem and has chosen not to regulate its own crown dependencies let alone the periodically iffy if not criminal goings on in the City. 

The scale of the on-going off-shore tax avoidance problem may leave you breathless. The Cayman Islands were home to some 12,000 corporations yet have a resident population of 50,000. They were home to around 70% of the planets hedge funds (as of June 2012). The British Virgin Islands with a population of some 22,000 people just happens to be home to some 823,502 registered companies.

General Electric who paid no tax in 2010, made a $14.2 billion dollar profit. Barclay's had 181 subsidiaries (as of June 2012) registered in the Cayman Islands and paid little UK tax on its worldwide profits. News Corp managed to base 152 subsidiaries in tax havens across the planet (according to the US Government) and yet managed to pay no UK corporation tax between 1998 and 1999.

US President Obama was 100% right to suggest that the governments of the world should jointly tackle the issue of tax evasion and tax havens. By tackling the tax havens, the tax avoidance and the questionable dealings of the derivative traders, hedge funds and the off balance sheet trading then we might go so way towards dealing with the consequences of the worldwide financial crash. Yet that nice Mr Cameron and the other 18 millionaires in the cabinet have pretty much stalled when it comes to closing the tax loopholes.

The BVI has incorporated more than a million such offshore entities since it began marketing itself worldwide in the 1980s. Company owners' true identities are never revealed. Even the island's official financial regulators normally have no idea who is behind them. The British Foreign Office depends on the BVI's company licensing revenue to subsidise this residual outpost of empire, while lawyers and accountants in the City of London benefit from a lucrative trade as intermediaries, claiming that the tax-free offshore companies provide legitimate privacy.

A BITTER TASTE…

The Business Secretary Vince Cable’s assurances in the House of Commons to MPs this afternoon that the Westminster Government won’t let Pfizer make use the UK as a tax haven and will secure guarantees for British science jobs have a hollow ring to them. Public concerns have rightly been raised about the proposed hostile takeover of UK pharmaceutical giant AstraZeneca by its US rival Pfizer. We have been here before, whatever Vince says by way of comfortable assurances, MP’s would do well to remember Cadburys, which was taken over by Craft (aided and abetted by UK City banks). Cadbury’s Bristol factory was closure announcement came within a week of the takeover, regardless of any assurances from the company. It is worth noting that Pfizer has pledged that if the deal goes ahead, 20% of the combined company's R&D workforce would continue to be based in the UK. While this sounds good, the US firm has said that these commitments would be valid for five years, or unless circumstances changed significantly... 

A STORM IN A TEA MUG…

The news that the GMB union is to cut the affiliation funds it gives Labour from £1.2 million pounds to around £150,000 pounds in the wake of a row over reform would once have made eyes water at Transport House.  While the Labour Party may silently weep at the loss of the cash, the row has actually kicked off because of moves within the Labour Party to reform union funding so individual union members have to opt in to support the party, rather than being automatically affiliated.

Basically the GMB has thrown a wobbly because the Labour Party has introduced a measure of democracy and self determination with individual union members being able to choose to or not to donate to the labour party. Currently the GMB affiliates 420,000 of its members to Labour, at £3 per member per year the union has openly admitted that approximately 50,000 of the 650,000 GMB members might actually choose to affiliate with the Labour Party. This storm in tea mug, if it does nothing else, can be said to reveal the true nature of internal democracy in some of our trade union.

Now don’t get me wrong I have nothing against fully democratic and transparent Trade Unions working to protect their member’s interests within a democratic society. Our public sector workers are right to agitate in defence of their Pension rights, and are fully entitled to withdraw their labour in the event of dispute.  I am however entirely disillusioned with the Trade Unions because of their petty minded ‘political’ sectarianism and their pretty much pointless (funding related) relationship with the Labour Party.

I am a firm believer in Trade Union's but I equally firmly believe that the old historic relationship between the Trade Union movement and the Labour Party was always one sided and that it has now become pointless. The relationship has in recent decades always in reality revolved around finance – the Trade Unions had it and the Labour Party lacked it and wanted it.

The relationship between the Trade Unions and the Labour Party was once important and only occasionally frosty at least until Blair (and successors) opened up a whole new relationship between Labour and the City. Despite what the trade Union leaders may think, the Labour Party last seriously (and erroneously) listened to the Trade Unions in the late 1960’s when it bottled it when they watered down the ‘In Place of Strife’ White Paper in the late 1960’s.

In Place of Strife (1968)

The White Paper would have brought in secret ballots before every strike; a cooling off period of 28 days before big strikes; collective bargaining with legally binding results; a new Industrial Relations Court and penal sanctions to force unions to comply. If Barbara Castle and her colleagues pushed their proposed legislation through then a degree of rationality would have been brought to the world of industrial relations. This would have been years before Mr’s Thatcher ever appeared on the scene and the worst undemocratic excesses of the old Trade Union movement would have been curbed.

Ever since then and despite the spin put on it by the Trade Unions, the Labour Leadership has basically walked the walk, talked the talk, taken the money and delivered little if anything to the Trade Union movement and its leaders. The Blair years should have in all seriousness killed off any Trade Union interest or involvement in prolonging a dead relationship with the Labour Party.

The fact that this has not happened, is largely down to the permanent presence of Labour Party members (especially at higher levels) and activists within the Trade Union movement, than any realistic chance of extracting any benefits for their members. Where once the Labour Party was the political wing of the Trade Unions, the relationship has now been reversed and the Trade Unions have pretty much been taken over and are largely run for the benefit of the Labour Party rather than their own members.

Obviously this convenient arrangement works well for the Labour Party who when in government quietly started most of the plans (i.e. The Passport Office and the Forensic Science Service to name but two) to make cost savings (at the expense of jobs) with minimal resistance from their card carrying stooges within the Trade Unions. Yet when the cost saving measures came to fruition under the Con Dems the reaction from the Labour dominated Trade Union leadership was entirely different.

In some parts of our country the Trade Unions are blatantly politically sectarian with leadership positions at certain levels being almost entirely dominated by Labour members. These Union officers are quite happy prevent hard working Plaid AM's from addressing rallies against job and pension cuts in Swansea and elsewhere.

It's time for Trade Unions to wise up and de-Labourise their senior officers, cease any financial contributions to the Labour Party and to concentrate on fighting for the interests of their members. I think that elected and salaried Trade Union officials should not be card carrying members of any political parties. I am still a Trade Unionist and still think that Trade Unions are important in the workplace, but, firmly believe that the links with the Labour Party need to be severed.

THE ISLE OF THE BLESSED TAX EVADERS

Luxembourg has agreed to reduce the secrecy surrounding its banks, saying that it will implement rules on the automatic exchange of bank account information with its European Union partners from 2015. The country with a population of only 500,000 people, has banks and other financial institutions with assets worth more than 20 times the country's economic output. The Prime Minister of Luxembourg, Jean-Claude Juncker, plans to introduce the reforms in two years, in line with the EU Savings Directive. The rules of the Directive aim  to create greater transparency and minimise tax evasion. 

Since the financial crash Calls for a crackdown on bank secrecy have been increasing, as governments are increasingly desperate to raise more taxes to support their finances. Luxembourg will now move to strengthen co-operation with foreign tax authorities. Germany signed a tax evasion treaty with Switzerland - another European banking centre known for its secrecy – earlier in the month. The treaty aims to give the German tax authorities the ability to claw back taxes from their citizens who may be hiding money in Swiss banks. Austria, the only EU hold out against banking transparency, has attacked the UK as an “island of the blessed for tax evasion and money laundering". 

Austria’s finance minister, Maria Fekter, has been under intense pressure to put an end to Austria's long-held tradition of allowing foreigners to bank secretly. She has attempted to deflect attention towards the UK. Fekter, a member of Austria's governing coalition, says the European Union cannot force Austria to reform its controversial banking secrecy laws without also forcing the UK to crack down on tax havens in its jurisdiction. Across the pond, the US Government is trying to crack down on its citizens hiding money offshore and is due to start talks with Austria soon. These recent developments leave David Cameron and George Osborne, staunch defenders of the City of London and Crown Dependency Tax Havens, which coincidently happen to be centres of worldwide money laundering operations. 

LESSONS IN ICELANDIC

There are plenty of lessons to be learned from the way that Iceland has dealt with the consequences of the worldwide financial collapse. Iceland has worked to reduce (or cut) its dependence on the banking and finance sector of its economy, recognising that this sector is essentially unproductive, essentially short term in outlook and draws talented people away from more productive parts of the economy.

Iceland faced with the collapse of its major banks (in 2008) something that threatened to drag the state’s public finances down. The Icelandic Krona fell 50% against all major currencies, as unemployment roared up to 10% (not forgetting that this in a country where it had previously been negligible) and money flew out of the country at a truly scary rate.

The financial storm was weathered with capital controls (something the European Union Single Market prohibits) to stop the disappearance of cash. Around 100 new taxes were brought in and public spending slashed to the bone. Iceland borrowed money from its Scandinavian neighbours and the International Monetary Fund.

The one big difference was that Iceland let its privately owned banks, which were directly responsible for the crisis in the first place, die. Despite years of bullish talk from the City of London at the first sign of real trouble most (but not all) of the big boys went whining to Westminster for a bailout (which they got). In my opinion we would have been better off if Westminster had said no, you want to life by the market then you can die by it too! In Iceland’s case this meant that investors lost everything it crucially meant that taxpayers were not burdened with their banking debt.

Oddly enough in the darkest depths of the economic crash, following the collapse of the financial sector Icelandic businesses found that they had few problems when it came to recruiting highly skilled graduates. Iceland's businesses had previously struggled to recruit skilled graduates as they were being attracted to the bonus-paying banks, with the demise or reduction of that essentially unproductive sector they found the scientists, IT graduates and engineers that they required.

Any nation’s primary resource should be its people, this is something that Iceland, but not every state has recognised. Iceland is also blessed by a handy supply of cheap clean energy – something that reduces the country’s dependence on imported oil and gas. Around 99% of the Iceland’s energy needs are supplied from hydroelectric sources or hot thermal springs.

There are even proposals to export this renewable power via cables under the sea to Denmark or even Britain. This abundant cheap energy has brought financially important industries (and jobs) such as aluminium smelting, which uses significant quantities of electricity to convert bauxite (shipped in from Australia) into aluminium products in the country.

The Icelandic people have still paid a hard price for the financial collapse with renewed emigration and austerity, but, the country has just gone through the seventh straight quarter of economic growth (averaging at 2.5%) this is something most European governments would give their hind teeth for. Additionally Icelandic unemployment has dropped to slightly just under 5% something that suggests that a degree of economic confidence has returned – can we say the same here?

One significant difference between Iceland and the rest of the world is the fact that some of the bankers and the politicians responsible for the economic disaster ended up being charged for it (and in some case duly convicted). In the immediate aftermath of the crash, as the country's unemployment rate and inflation in Iceland sky-rocketed all hell broke loose on the political front. There was a huge wave of angry public protests and the then Prime Minister Geir Haarde’s government fell in 2009 and the former PM was duly charged with negligence and got his day in court.

Icelandic democracy remained vibrant despite the economic crash, in the March 2010, Icelandic voters rejected overwhelmingly via a referendum the proposal to pay the UK and the Netherlands 4 billion euros (£3.4 billion) they lost when the Icesave bank collapsed. In December 2010, Iceland the UK and the Netherlands agreed a new repayment deal. The country's parliament (in February 2011) voted yes to a new plan to repay the UK and the Netherlands for reimbursing 400,000 citizens who lost their savings in the collapse of Icesave's parent bank, Landsbanki.

Iceland's president, Olafur Grimsson, duly put the deal to a public vote. Back in April 2011, the voters of Iceland once again rejected the repayment deal in a referendum.  The Icelandic citizen’s view was that they should not be made to pay so much for their banks' bad decisions. Now this is a feeling that I suspect is shared by most of us, save for our elite who are busy making the rest of us pay off their mistakes and the mistakes of their friends in the City.

What are the real lessons from Iceland for Wales or anywhere else for that matter? Don’t let your economy get driven by a voracious and grossly irresponsible financial sector might be the first. Invest in the skills of your workers might be another lesson. Don’t be dependent upon imported energy suppliers and develop and retain control of your own sustainable renewable energy resources, we may not have hydrothermal power resources but we do have significant potential for developing renewable energy (onshore and off shore) which could provide us with a good reliable base for a sustainable economic future.

NOT ON GEORGE’S RADAR...

Across the other side of the pond tax evasion remains an important issue, on this side of the pond you get the impression that the Conservative part of the Con Dem Westminster government just hopes it will quietly go away. As a direct result of the US government’s pursuit if tax evaders Switzerland's oldest bank is to close permanently after pleading guilty in a New York court to helping US citizens evade paying their taxes. The Swiss bank, Wegelin (established in 1741) will pay $57.8 million dollars (£36 million pounds or 44 million euros) in fines to US authorities.

Once the fine has been paid then Wegelin will cease to operate as a bank. The bank had accepted that it had allowed more than 100 American citizens to hide something close to $1.2 billion dollars from the Internal Revenue Service for nearly 10 years. Wegelin, based in the small Swiss town of St Gallen, was started 35 years prior to the US declaration of independence. It is the first foreign bank to plead guilty to tax evasion charges in the USA. In recent year other Swiss banks have taken steps to prevent US citizens from opening offshore accounts to avoid paying tax.

US President Obama was 100% right to suggest that the governments of the world should jointly tackle the issue of tax evasion and tax havens. The problem is that successive Westminster Governments are involved in tax evasion and indirectly support tax evaders, as a significant proportion of tax evasive activities revolve around the UK Crown Dependent territories. By tackling the tax havens, the tax avoidance and the questionable dealings of the derivative traders, hedge funds and the off balance sheet trading then we might go so way towards dealing with the consequences of the worldwide financial crash.

I am shocked to discover that there is tax evasion here?

However, I suspect that nice Mr Cameron and the other 18 millionaires in the cabinet will do nothing to close the tax loopholes – so much for all of us being in it together? Perhaps it's just that we are ordinary taxpaying citizens just expect too much from government.

As the UK Government continues to be heavily involved in aiding and abetting tax evasion worldwide via British Overseas territories (including the Cayman Islands) and will actively fight in Europe to prevent open and transparent accountability and regulation for the City of London but won't chase up tax evaders.

Expecting the Tories or the party formerly known as New Labour to seriously tackle tax evasion is perhaps a little naive as they are part of the problem. The Lib Dems might deliver on electoral reform or any of the three Westminster parities to have an honest debate about Party funding before tax evasion is dealt with. Westminster helps to hide some £ 1.6 trillion pounds from various nations’ tax authorities, and some of the city banks are hand in wallet with drug dealers, dictators and terrorists when it comes to money laundering. Hmmm...Over to you then George...

THE CONTENTS OF GEORGE’S IN-TRAY?

Tax evasion! Surely not!

One way or another, tax evasion and tax avoidance is rarely out of the headlines especially as many heavily indebted governments are increasingly keen to hunt down every tax dollar / euro or pound that is owed. Considering that the Conservative elements of the Con Dem coalition government continues to looks slightly uneasy whenever tax avoidance and tax evasion comes up I cannot help wondering whether or not the National Audit Office report on tax evasion will make it out of George Osborne’s in tray.

A National Audit Office report has revealed that of HM Revenue and Customs (HMRC) is struggling to curb aggressive tax avoidance schemes is costing the UK billions of pounds in lost tax.  HMRC is faced with a backlog of 41,000 cases with potentially up to £10.2 billion pounds worth of evaded tax at stake. The National Audit Office (NAO) said tackling tax avoidance was difficult but HMRC had to do better. In the last two years HMRC has successfully challenged 40 tax avoidance schemes.

The NAO revealed that between 2004 and 2011 some 2,300 avoidance schemes were disclosed to the tax authorities, but as around 100 new schemes have emerge every each year. It has been estimated that there are potentially some 30,000 users of what are known as employment intermediary schemes and partnership loss schemes - where partnerships that make record a loss to shelter their other income from tax. The loss is artificially inflated via "circular loans" (or deferred expenditure) which are never actually incurred to exceed the amount actually invested in the partnership.

HMRC has tried to tackle the practice with enforcement action in a few “lead" cases, but investigations can take years to resolve and any rulings cannot always be applied successfully elsewhere.  Despite this since April 2010, HMRC has been started 110 avoidance cases and despite being successful in the vast majority of cases where judgements have been reached the NAO suggested that there was no evidence that litigation was proving an effective deterrent to tax evasion and avoidance.

Tax evasion is only part of the problem, as Tax Research UK estimated that the Exchequer loses out to the tune of £64 billion pounds per year through shadow economic activity, which is 16 times larger than the estimated £ 4 billion pounds that the UK Government misses out on due to tax evasion. That works out at roughly about £1 pound out of every £8 in the economy.

Despite this the Con Dem Government continues to pursue a reckless slash and burn (cut) approach to the public sector. They have reduced the number of staff in Revenue and Customs from around 100,000 to 65,000 and there are further plans to reduce the numbers to around 50,000 by 2015.

To expect the Tories or New Labour for that matter to seriously tackle tax evasion is perhaps a little naive as they are part of the problem. It would be a bit like expecting the Lib Dems to deliver on electoral reform or any of the three Westminster parities to have an honest debate about Party funding.

Perhaps the ordinary tax paying citizens just expect too much, I mean the UK Government continues to be heavily involved in aiding and abetting tax evasion worldwide via British Overseas territories (including the Cayman Islands). They help to hide some £ 1.6 trillion pounds from various nations’ tax authorities, and some of the city banks remain hand in glove with drug dealers, dictators and terrorists when it comes to money laundering. So clearly we are not all in it together.

NOT ABOVE THE LAW?

No one should above the law, be they politicians, bankers or the rest of us. The latest blatant illegality on the part of the banks should result in a criminal investigation into affairs at Barclays (the bank was fined £290m for manipulating LIBOR interest rates between 2005 and 2009). This latest criminal act is a direct result of the financial crisis and its lack of legal consequences, the banks (and the bankers) have got away with it in recent years. Where guilt and criminal intent can be established then those responsible should be charged for their crimes.

The banking sector has developed a culture of entitlement, with its something for nothing operating culture. The Financial Services Authority (FSA) has now established that there was systematic abuse and manipulation of interest rates in Barclays’ favour. Any individuals who illegally claim benefit or try to manipulate the system to their benefit run the risk of criminal convictions and prison terms – so why not the bankers who have rigged the market to the tune of billions of pounds? Since when has it been acceptable for a to be fined £290m and the only sanction is to offer to give up your bonus.

It is no more acceptable for the rich people to scam money than anyone else. Such behaviour might be acceptable under a New Labour or a Conservative Government but it is not acceptable to the rest of us. It is worth remembering that much of the illegality took place under the last Labour government, when Ed Balls and Ed Miliband and the rest of them were ‘relaxed’ about people becoming filthy rich.

There is little difference between New Labour and the Conservatives when it comes to their fawning attitude towards the mega-rich in the finance sector and it was their ‘light-touch’ (near nonexistent) regulation which helped City money men rake it in at our expense. The scandals over MPs expenses, newspaper phone hacking and the economic collapse all broke when New Labour were running the shop.

The Con –Dems and New Labour have been happy to stand up for the mega-rich and have cared little for the ordinary citizen. Resignations (and no doubt ‘golden parachutes’) are not acceptable; there have to be some real lasting consequences. So enough off the court of public opinion it’s time for some appearances in the law courts!

CAMERON'S CASABLANCA MOMENT...

PM David Cameron

I'm shocked, shocked to find that tax evasion is going on in here!

News that Barclays Bank has been ordered by the Treasury to pay half-a-billion pounds in tax it tried to avoid paying will be welcomed by many of us. The bank was accused by HM Revenue and Customs of designing and using two schemes that were intended to avoid substantial amounts of tax. The Con Dem Government has taken the unusual step of rapidly introducing retrospective legislation to end such "aggressive tax avoidance" by financial institutions. Apparently the authorities were alerted to the loopholes in the law by Barclays itself. The bank, which has not been named officially by the government, but named by the Daily Telegraph and the BBC) is the target of HMRC's crackdown. The Con Dem Government has closed the schemes to retrieve £500m of lost tax and safeguard payments of billions of more tax in the future. The Daily Telegraph understands that other major banks also tried to use the same schemes to avoid paying a total of £500m in tax. While its makes a pleasant change, I don’t think that this is an attempt to ensure that we are all in it together, merely a consequence of some pretty blatant and in your face tax evasion that even the Con Dems could not ignore it...

WINNERS AND LOSERS

News that one of the 'Big Six' is due to announce a raise in profits at a time when many people are trying to avoid or to live with fuel poverty is never going to go down well with hard presser domestic energy customers. On Thursday Centrica (who own British Gas)are expected to reveal a group operating profit of £2.5 billion pounds, up four percent on 2010.

This unfortunately timed announcement comes against a backdrop of growing fuel poverty, which affects around 5.5 million households in the UK. Fuel poverty is defined as being when a household spends more than ten percent of their disposable income on gas and electricity. Fuel poverty is one of those things that the previous (and former) New Labour Government and the current Con Dem Government have done nothing about.

Nothing has been done or will be done to curb or regulate excessive profits from the energy companies via windfall tax. The talk about customers benefiting from dual fuel bills, etc, is mere distraction. What we have here is a dual political failure that speaks volumes as to how far both the former New Labour Government and the Conservatives (and their Lib Dem coat holders) have gone to drop even the pretence of standing up for the interests of ordinary people in favour of courting the City.

For growing numbers of ordinary people this winter it has come down to a choice of heat or eat, literally choosing between putting food on the table and heating their home. The only winners here are HM Government (with extra tax)and the big six energy companies (with fat profits) all of us as customers are losing hand over fist as the energy cartel ramps up its profits - I have not doubt over coming months that the rest of them perhaps slightly shamefaced (or perhaps not) will ever so quietly announce their profits as well.

A CASE OF UNISON NO MORE...

While I have no problem with the public sector workers recent strike action in defence of their Pension rights, and fully support the right to withdraw ones labour in the event of dispute, I have become entirely disillusioned with Unison. Part of the problems is that Unison is so monolithic that is straddles far too many diverse sections of the world of work, and part of the problem is Unison's pointless relationship with the Labour Party.

Now don’t get me wrong, I firmly believe in Trade Union's but equally firmly believe that the old historic relationship between the Trade Union movement and the Labour Party was always one sided but is now pretty pointless. The relationship always in reality revolved around finance – the Trade Unions had it and the Labour Party lacked it and wanted it.

The relationship between the Trade Unions and the Labour Party was important but occasionally frosty at least until Blair (and successors) opened up a whole new relationship between Labour and the City. The Labour Party last seriously (and erroneously) listened to the Trade Unions in the late 1960’s when it bottled it when they watered down the ‘In Place of Strife’ White Paper in the late 1960’s.

This White Paper would have brought in secret ballots before every strike; a cooling off period of 28 days before big strikes; collective bargaining with legally binding results; a new Industrial Relations Court and penal sanctions to force unions to comply. Had Barbara Castle and her colleagues pushed their proposed legislation through then some rationality would have been brought to the world of industrial relations. And this years before Mr’s Thatcher ever appeared on the scene and the worst undemocratic excesses of the old Trade Union movement would have been curbed.

Ever since then and despite the spin put on it by the Trade Unions, the Labour Leadership has basically walked the walk, talked the talk, taken the money and delivered little if anything to the Trade Union movement and its leaders. The Blair years should have in all seriousness killed off any Trade Union interest or involvement in prolonging a dead relationship with the Labour Party.

The fact that this has not happened, is largely down to the permanent presence of Labour Party members (especially at higher levels) and activists within the Trade Union movement, than any realistic chance of extracting any benefits for their members. Whereas once the Labour Party was the political wing of the Trade Unions, the relationship has now been reversed and the Trade Unions have been taken over and are largely run for the benefit of the Labour Party rather than their own members.

Obviously this convenient arrangement works well for the Labour Party who when in government quietly started most of the plans (i.e. The Passport Office and the Forensic Science Service to name but two) to make cost savings (at the expense of jobs) with minimal resistance from their card carrying stooges within the Trade Unions. Yet when the cost saving measures came to fruition under the Con Dems the reaction from the Labour dominated Trade Union leadership was entirely different.

In some parts of Wales the Trade Unions are blatantly sectarian with leadership positions at certain levels being almost entirely dominated by Labour members. These Union officers are quite happy prevent hard working Plaid AM's from addressing rallies against job and pension cuts in Swansea and elsewhere.

It's time for Trade Unions to wise up and de-Labourise their senior officers, cease any financial contributions to the Labour Party and to concentrate on fighting for the interests of their members. I think that elected and salaried Trade Union officials should not be card carrying members of any political parties.

On personal basis I have reached and passed the point of no return when it comes to Unison. Just before Christmas I finally severed that bond (along with a few work colleagues) once and for all. I am still a Trade Unionist and still think that Trade Unions are important in the workplace, but, firmly believe that the links with the Labour Party need to be severed.

A TEST OF CHARACTER?

One judge of character is how you behave when called to make a stand for your friends when they are in trouble. I mention this because oddly enough the Bureau of Investigative Journalism has done some digging that may shed a slightly different perspective on David Cameron's decision to stand up for the City of London, rather than the rest of us. Now it turns out that some of the city of London's biggest banks happen to be involved (or at least behind) some large scale tax avoidance top slicing European countries of some hundreds of millions of Euro's a year. This investigative journalism may go some way to shedding some fresh light on David Cameron's decision to wield Britain's EU veto to protect the Square Mile (and no doubt some of his mates).

SONS OF BANKERS!

Sometimes you may wonder why people get involved in political life - motivators can not doubt be wide and varied, from righting an obvious wrong, a particular issue (or issues) that need sorting out or fixing, a passion for the environment, social justice, even a somewhat selfish desire to better themselves - while the later is less palatable, it is the case in certain circumstances. For the life of me I can find no obvious reason for getting involved in politics for David Cameron, George Osbourne, Boris Johnson, Nick Clegg, and their ilk - other than a need perhaps to have something to do everyday.

Now, we have been repeatedly told that we are all in it together, sounds nice,but, its not quite true, most of us are very much more in it than some are. The Guardian (05.02.2011) revealed that a number of Con Dem ministers set up blind trusts so that they can continue to profit from financial interests which could present a conflict with their government responsibilities.

Ironically there was a threefold increase in this sort of thing under the Conservative / Liberal Democrat coalition government by way of comparison with the previous sleaze tainted New Labour government. The Guardian noted that 16 ministers, including the energy secretary, Chris Huhne, the justice secretary, Ken Clarke, and the cabinet office minister, Francis Maude, put blind trusts in place, as recorded by the official register of ministerial interests.

Do you remember this...

"It is wholly untenable to have millions of people making sacrifices in their living standards only to see the banks getting away scot-free."

Nick Clegg, Deputy Prime Minister, 17 December 2010

and also this...

"Bankers have to realise that the British public helped to bail out the banks and it is very galling when they see bankers pay themselves unjustified bonuses."

David Cameron, Prime Minister, 17 December 2010

The previous New Labour government made much of its light financial regulatory touch, at least until the wheels came spectacularly off the wagon, will the Con Dem's make much of their effective refusal to take any action over banking regulation. Before they were in government and before the last Westminster election Vince Cable (now the Business Secretary) and George Osbourne (now the Chancellor) were at it hammer and tongs as to who was going to be toughest when it came to regulating and controlling the worst excesses of the banks. And since they went into government?

The Con Dem UK Government missed an opportunity to break up and 'privatise' the larger 'publicly owned' financial institutions, they should have sold the shares on the open market with specific quotas on how many shares any one institution can own. From where many people are sat these bloated overgrown banking organisations appear to be a serious block on the ‘free market’ and too busy lining their own pockets.

George Osborne and the Tories appear to have reluctantly gone along with the much publicly stated need to regulate the more unsavoury aspects of the banking sector, but, whether they will actually and eventually do anything is open to question. Perhaps they ought to declare an interest regulating the banks in the City may impinge on the acquisition of future lucrative directorships in City banks unless they have them already that is?

One question that may also remain unanswered is whether or not they will do anything about tax evasion, tax avoidance and the regulation tax havens? It's odd really because the Con Dem's have displayed such zeal in their efforts to chase people on benefits. Sadly I suspect the answer will be no (in relation to tax evasion at least) as any such move would ruffle more than a few feathers in the City and no doubt more than a few awkward questions at dinner party's?

MEASURING PROGRESS?

President Obama

A few years down the line and we are all still paying (and are going to carry on for some time) though the nose for the banking fiasco (crisis is too dignified a word for it) that was overseen by New Labour and is being paid for by the rest of us. Post election (back in June 2010) George Osbourne and the Tories reluctantly paid lib service to the publicly stated need to regulate the more unsavoury aspects of the banking sector. Nominally at least they signed up to President Obama's publicly stated aim to regulate tax havens.

Just in case you forget, it was back in January (2009) when President Obama announced two more than reasonable measures to curb the banks, the first aimed to stop banks from engaging in proprietary trading, private equity, or any other activity for their own profit unrelated to serving customers. The second measure aimed to take further steps to limit the balance sheet size of banks so that they cannot in future acquire “too big to fail” status.

Theodore Roosevelt

President Obama was absolutely right to characterise his proposals as a victory for common sense and while we may have some way to g before the banks are forced to act responsibly, the first steps have been taken. David Cameron and the Tories (despite everything that has happened in an almost unregulated, greed driven finance sector over the last few years) are still far to enamoured with their friends, the dodgy money men in the City of London.

There are times when you can find yourself wondering just exactly how far we have progressed in the last hundred years of so? In the later years of the nineteenth century and the early years of the twentieth century US Presidents, Presidential candidates and politicians including Theodore Roosevelt (a Republican) and William Jennings Bryan (a Democratic Presidential candidate) were opposed to the power of big business and fought against the dangers of monopoly capitalism (as personified by ‘Standard Oil’ and ‘the Trusts’ in Teddy’s case).

William Jennings Bryan

In 1896, William Jennings Bryan, a future Democratic presidential nominee, warning against the power of finance, said: “You shall not crucify mankind upon a cross of gold.” President Roosevelt and William Jennings Bryan had and in my opinion still has a pretty valid point - if you believe in the ‘free market’ and the City money men claim to, then no organisation can be too big to be allowed not to fail.

While Westminster bailed out the banks with massive public subsidies, which effectively made some of the banks 'publicly owned’, they are still run by bankers, who are so thick skinned that they carry on regardless with the awarding of bonuses. The Con Dem UK Government should have seriously consider breaking up and ‘privatising’, perhaps selling the shares on the open market (with specific quotas on how many shares any one institution can own) – because from where many people are sat these bloated banking organisations appear to be a serious block on the ‘free market’.

There is still a pressing need for similar rules for financial institutions across the globe, off shore must become a matter of historical record – there must be no where the financial institutions can hide and no more endless threats of taking their “ball” (businesses operations) elsewhere and relocating because they have lost their so called special status. It's important to remember, that no one, not even bankers or MPs are above the law and no one is above financial regulation, scrutiny, free from responsibility and consequences for ones actions.

The OCED has estimated that some $10 trillion dollars worth of private wealth is concealed in Paradis Fscaux (tax havens). These financial dead letter drops tend to be used by banks, multi-national companies, corporations, the super (and not so super) rich, drug dealers, dictators, terrorists, fraudsters and other criminals who use them to hide and launder their wealth. One side effect of Paradis Fiscau is that they enable people and organisations to avoid paying their fair dues to the society in which they live, unlike the rest of us mere mortals.

To put things in perspective - that $10 trillion dollar figure produced by the OCED means that the lost taxation normally accrued would be more than double the entire planet's global aid budget. President Obama, President Sarlozy and Chancellor Merkel are on record saying that off-shore capital needs to be properly regulated - Gordon Brown (remember him?) waffled, the Con Dems are pretty quiet or are they merely in the pockets of the money men in the City.

In relation to the banking crisis and the vast debts that us mere mortals are having to repay, perhaps is best to paraphrase Winston Churchill, 'Never have so many had to pay so much on behalf of so few!'. And we are going to carry on paying...and the money men continue to escape regulation... so much for progress...

VALUE FOR MONEY?

There is an old rule that you pay for what you get, and it looks like the Conservative half of the Com Dem Government is working hard to make sure that it's paymasters are kept sweet and get plenty of VFM (Value For Money). The Daily Telegraph, has revealed that William Hague (the Foreign Secretary) has actively lobbied for oil companies that make donations / payments to the Conservative Party. Documents obtained by the Daily Telegraph suggest that William Hague personally intervened in a dispute involving two oil companies headed by Conservative Party donors who were refusing to pay tax to one of the world's poorest countries.

These fresh disclosures will continue to shine an unwelcome light come on just how the Conservatives are backed financially. On Wednesday, it was revealed that alleged that Mr Cameron now receives more than half of his donations from City financiers and follows revelations earlier in the year that that ministers had intervened in other disputes involving Party donors. Once political parties start selling their virtues and principles for financial favours, they do tend to lose all credibility with the voters...

TOO LITTLE, TOO LATE?

News that the government says it will increase the levy on banks to £2.5 billion this year which will bring in an extra £800 million in tax, may well be a case of too little, too late. Chancellor George Osborne made much of this yesterday stating that the tax was being brought forward before banks announced their bonus payments.

Very nice, save for the fact that for the big ‘5’ banks 800 million is about one weeks profits. Oddly enough, according to the Bureau of Investigative Journalism, more than half of donations to the Conservative Party last year came from the City of London. The report noted that firms and individuals donated £11.4m in 2010; this brought the total of City based donations since David Cameron became leader to more than £42m.

The Bureau of Investigative Journalism, which is a not-for-profit organisation, examined records of donations held by the Electoral Commission and Companies House. It concluded that last year, City donations totalled 50.8% of all money given - up from around 25% in 2005, the year in which Mr Cameron became Tory leader.

The bureau said that 57 individuals from the finance sector gave more than £50,000 last year, entitling them to membership of the Conservative Leader's Club. Naturally the government has rejected suggestions that donors were influencing policy, unless of course you happen to be Lord Ashcroft.

Of course New (and Old) Labour leaders and Labour prime ministers have quite happily taken millions of pounds of funding on behalf of their party from trade unions, and they (the Trade Unionists) have also had any influence on Government policy (yet they keep on paying), just like the rest of us will keep on paying to bail out the banks.

ALL IN IT TOGETHER...

We keep being told that we are all in it together, the revelation in The Guardian (05.02.2011) that the number of ministers setting up blind trusts so that they can continue to profit from financial interests that might present a conflict with their government responsibilities has increased threefold under the coalition (as revealed by official documents) may well suggest that many of us are significantly more in it, than some in the Con Dem Cabinet. The Guardian notes that 16 ministers, including the energy secretary, Chris Huhne, the justice secretary, Ken Clarke, and the cabinet office minister, Francis Maude, have blind trusts in place, as recorded by the official register of ministerial interests.

The Independent on Sunday (06.02.2011) notes that Britain's four biggest banks – Barclays, Royal Bank of Scotland, HSBC and Lloyds Bank – are expected to pay out a total bonus pool of about £5 billion over the next few weeks to their high-performing bankers and traders. RBS's chief executive, Stephen Hester, is due for a bonus of £2 million; the recently departed boss of Lloyds, Eric Daniels, will take home a £2 million bonus while Stuart Gulliver, the new chief executive of HSBC, is set to be paid a Diamond-style bonus of about £8 million.

Remember this...

"It is wholly untenable to have millions of people making sacrifices in their living standards only to see the banks getting away scot-free."

Nick Clegg, Deputy Prime Minister, 17 December 2010

and

"Bankers have to realise that the British public helped to bail out the banks and it is very galling when they see bankers pay themselves unjustified bonuses."

David Cameron, Prime Minister, 17 December 2010

So much for curbing the bank's bonus culture...

PARADIS FISCAUX

In relation to the banking crisis and the vast debts that us mere mortals are having to repay, perhaps is best to paraphrase Winston Churchill, 'Never have so many had to pay so much on behalf of so few!'. George Osborne and the Tories have reluctantly gone along with the much publicly stated need to regulate the more unsavoury aspects of the banking sector. The question is will they sign up to President Obama's stated aim to regulate tax havens?

Just in case you forget, back in January (2009) President Obama announced two measures to curb the banks, the first aimed to stop banks from engaging in proprietary trading, private equity, or any other activity for their own profit unrelated to serving customers. The second measure aimed to take further steps to limit the balance sheet size of banks so that they cannot in future acquire “too big to fail” status.

President Obama is right to characterise his proposals as a victory for common sense and while we may have some way to go before the banks are forced to act responsibly, the first steps have been taken. I wonder if David Cameron will follow suit sooner or later – or are the Tories (despite everything that has happened in an almost unregulated, greed driven finance sector over the last few years) still far to enamoured with their friends, the dodgy money men in the City of London.

On occasion you may find yourself wondering exactly how far we have progressed in the last hundred years of so? In the later years of the nineteenth century and the early years of the twentieth century US Presidents, Presidential candidates and politicians including Theodore Roosevelt (a Republican) and William Jennings Bryan a Democratic Presidential candidate) were opposed to the power of big business and fought against the dangers of monopoly capitalism (as personified by ‘Standard Oil’ and 'the Trusts’ in Teddy’s case). In 1896, William Jennings Bryan, a future Democratic presidential nominee, warning against the power of finance, said: “You shall not crucify mankind upon a cross of gold.”

President Roosevelt and William Jennings Bryan had (and in my opinion has) a valid point - if you believe in the ‘free market’ (and the City money men claim to) then no organisation can be too big to be allowed not to fail. The massive public subsidies effectively made some of the banks 'publicly owned’, yet they are still largely run by bankers who are so thick skinned or self interested that they carried on regardless when it came to the awarding of bonuses - would that they had been more generous when it come to advancing loans to small to medium sized and larger businesses in their hour of need.

The new Con Dem UK Government should seriously consider breaking up and 'privatising' the larger 'publicly owned' financial institutions, and selling shares on the open market (with specific quotas on how many shares any one institution can own) – because from where many people are sat these bloated overgrown banking organisations appear to be a serious block on the ‘free market’.

We also need to a degree of similar rules for financial institutions across the globe, off shore must become a matter of historical record – there must be no where the financial institutions can hide and no more endless threats of taking their “ball” (businesses operations) elsewhere and relocating because they have lost their so called special status. it is important to remember, that no one, not even bankers (or MPs) are above the law and no one is above financial regulation and scrutiny.

The OCED estimated that some $10 trillion dollars worth of private wealth is concealed in Paradis Fiscaux (tax havens). These financial dead letter drops tend to be used by banks, multi-national companies, corporations, the super (and not so super) rich, drug dealers, dictators, terrorists, fraudsters and other criminals who use them to hide and launder their wealth. One significant side effect of Paradis Fiscaux is that they enable people and organisations to avoid paying their fair dues to the society in which they live, unlike the rest of us mere mortals.

To put things in perspective - the $10 trillion dollar figure produced by the OCED means that the lost taxation normally accused would be more than double the entire planet's global aid budget. President Obama, President Sarkozy and Chancellor Merkel are on record saying that off-shore capital needs to be properly regulated - Gordon Brown (remember him?) waffled, will the Con Dems sign up or are they in the pockets of the money men in the City or under the influence of Lord Ashcroft - who's
heart may be in Belize with his wallet?

THE TOOLS TO DO THE JOB

The Plaid driven one Wales Government is doing its best with limited powers, but, it still has one hand effectively tied behind its back by London based Government which appears, even after the greed induced stupidity fed banking crisis still appears to value the City and the Square mile above of all else. If we want to make things better then we need to fundamentally review economic policy and help to develop the local workforce’s skills which will help create the economic climate where local firms can develop, grow and prosper develop long-term sustainable economic prosperity and long-term employment in our communities and to do this Wales need more control of economic decision making.

There is a profound need to target economic policy on a regional basis across Wales, so that everyone benefits, not only those living immediately alongside the M4 corridor. The Plaid driven one Wales Government needs to help grow our small to medium enterprise (SME) sector, side by side with supporting the re-skilling of the workforce, if we do this then we can secure sustainable, long term economic growth and employment, if we don’t then we may slip back to boom and bust.

We are still facing a major economic challenge as large production companies see Eastern Europe (and beyond) as a cheaper location. Our rural industries, as well as those inside the traditional industrial heartland are especially vulnerable, as their economic viability is brought into question by a variety of reasons, including the astronomical rise in fuel and energy costs, the economic power of the supermarkets, European regulations on waste disposal, and the issues surrounding food imports as many companies are operating on somewhat slender profit margins.

One of the lessons that can be learned from Ireland is that a workforce’s skills are still fundamental to the success of a country’s economy and to economic development. Ireland was able to use use a third of its European funding to educate its workforce with new skills, as long as we are unable to do this here in Wales then our small businesses and our workforce will be disadvantaged. In Ireland the lower corporation tax was key component in attracting international investment.

Between 1972 and 2002 the Irish economy grew, on average, by 5% a year whilst the growth of the Welsh economy was less than 2% a year. In planning our economic future, we need hands on rather than hands off; it is vital that we look to our own resources and specifically to developing the SME sized businesses. Our local businesses, rather than multi national firms are much less likely to pack up and leave Wales for the cheaper labour markets of Eastern Europe and Asia.

CHANGE IS COMING?

US President Barack Obama’s announcement about two key measures to curb the banks, should be welcomed, the first aims to stop banks from engaging in proprietary trading, private equity, or any other activity for their own profit unrelated to serving customers. The second measure aims to take further steps to limit the balance sheet size of banks so that they cannot in future acquire “too big to fail” status.

President Obama is right to characterise his proposals as a victory for common sense and while we may have some way to g before the banks are forced to act responsibly, the first steps have been taken. I wonder if Gordon Brown (and David Cameron) will have the guts to follow suit sooner or later – or are they and their respective parties still far to enamoured with the dodgy money men in the City of London.

Occasionally you really wonder far we have progressed in the last hundred years of so? In the later years of the nineteenth century and the early years of the twentieth century US Presidents, Presidential candidates and politicians including Theodore Roosevelt (a Republican) and William Jennings Bryan (a Democratic Presidential candidate) were opposed to the power of big business and fought against the dangers of monopoly capitalism (as personified by ‘Standard Oil’ and ‘the Trusts’ in Teddy’s case). In 1896, William Jennings Bryan, a future Democratic presidential nominee, warning against the power of finance, said: “You shall not crucify mankind upon a cross of gold.”

President Roosevelt and William Jennings Bryan had (and has) a valid point - if you believe in the ‘free market’ (and the City money men claim to) then no organisation can be too big to be allowed not to fail. With what amount to massive public subsidies and effectively ‘publicly owned’ banks, run by bankers who are so thick skinned that they carry on regardless with the awarding of bonuses; then perhaps the UK Government should seriously consider breaking up and ‘privatising’, and sell shares on the open market (with quotas on how many shares any one institution can own) – because from where many people are sat these bloated banking organisations appear to be a block on the ‘free market’.

We also need to a degree of similar rules for financial institutions across the globe, off shore must become a matter of historical record – there must be no where the financial institutions can hide and no more endless threats of taking their “ball” (businesses operations) elsewhere and relocating because they have lost their so called special status. it is important to remember, that no one, not even bankers (or MPs) are above the law and no one is above financial regulation and scrutiny.