Sir Humphrey and the Energy Swindle

Those awfully nice Taxpayers’ Alliance people make it so easy nowadays to let your Member of Parliament know what you feel about crucially important political issues. Forget the Parker fountain pen and the green ink, the Olivetti typewriter and the carbon paper, the Word document and the laserjet printer. Just call up the TPA’s online template, complete your details, enter your postcode to locate your honourable member, hit Send, and your view has been expressed. All you need is a burning issue.

And what issue more burning than the Energy Swindle, when consumers’ bills are hitting the roof, security of supply is on a knife edge, and billions of pounds are being squandered on expensive and unreliable renewables, all because the political class is devoted to decarbonising, emissions targets, and fighting climate change?

There’s just one problem. Easy as it may now be to express a view, it is just as simple to bat one away via a standard form response combining platitudes, spin and downright lack of candour in a hideous amalgam of civilservicese. A few extracts from the one I have just received: -

Para 2: “I understand your concern about this issue which is why I welcomed the Prime Minister’s personal commitment to help get energy bills down. Helping households with the cost of living and their energy bills is a priority of this Government.” [Fancy that. I’d never have guessed.]

Para 3: “However, it is important to note that recent increases in energy bills have mainly been as a result of rising international prices for fossil fuels and not climate change policies…” [What about the dramatic fall in USA gas prices thanks to shale?] “…The calculations used in the ‘Stop the Energy Swindle’ campaign are incorrect and the Secretary of State, Ed Davey, has written to the Taxpayers’ Alliance setting this out.” [The TPA disagrees – link here.]

Para 5: “Policies which help decarbonise the UK’s energy supplies will reduce the vulnerability of UK energy prices to movements in fossil fuel prices. Were the UK not to act, the country’s energy supplies would become much more dependent on imports, more vulnerable to volatility in global fossil fuel prices, and there would be a far higher chance of disruptive blackouts.” [So how do you explain the plans to import French electricity through the Channel Tunnel? The need to back up wind turbines with conventional fossil fuel stations when the wind does not blow? The recently disclosed plans for the fleet of backup diesel generators – why decarbonise in the first place?]

Para 6: “The carbon price floor brings certainty and support for low-carbon investment…” [I’ve had enough. Whenever you see a politician using the I-word, just remember the proverbial “I invest. You subsidise. He squanders” and run for a mile.]

You may think it would be vicious, vindictive and cruel to name the MP who obtained this missive from Sir Humphrey’s word processor and top & tailed it in the name of constituency duty, even though there's a fair bet that this won't be the only instance. I agree entirely. So I will refer to the honourable member as G…. No, on second thoughts, I’ll just end up with a gratuitous reference to my political/legal suspense Sackcloth Ashes & Penance, set against the background of the UK 2010 General Election, and ask out loud whether the PM’s once stated determination to see ordinary people break the grip of the political class on Westminster has been borne out in practice, when we see an attitude like this to an issue as important as the astronomical cost of energy and the reasons for it.

Hatred Ridicule & Contempt - on Smashwords

I have now published my debut novel Hatred Ridicule & Contempt on Smashwords too. The link is here, and on the right hand sidebar too alongside the existing alternatives, and it coincides with a purchase price discount that Smashwords are running until the end of July.

I very much doubt that the specialist nature of the Kindle - a devoted e-book reader - is ever going to be threatened by the multifunctional approach of the iPad and iPhone. But it clearly makes sense to look for the best of both worlds.

Reforming the EU: Denning-Canute Syndrome

It seems increasingly fashionable for well meaning members of the political class to speak of reforming the European Union. There are a couple of examples here (Andrea Leadsom MP) and here (George Freeman MP). In marked contrast to those who have nailed their colours to the Better Off Out mast, the reformers appear to back an older Conservative mantra, namely “In Europe But Not Run By Europe”.

This leads me to the eminent English judge Lord Denning, whose 38 year career on the bench was noted above all for his 20 years as Master of the Rolls (in common parlance, head of the Court of Appeal). European law first caught his attention in 1974 in Bulmer v Bollinger, a case about the legitimacy of the “Champagne Perry” label. He noted: -

“But when we come to matters with a European element, the treaty is like an incoming tide. It flows into the estuaries and up the rivers. It cannot be held back. Parliament has decreed that the treaty is henceforward to be part of our law. It is equal in force to any statute…”

Interestingly, this sentence in the judgment was preceded by four of equal note: -

“The first and fundamental point is that the Treaty concerns only those matters which have a European element, that is to say, matters which affect people or property in the nine countries of the Common Market besides ourselves. The Treaty does not touch any of the matters which concern solely the mainland of England and the people in it. These are still governed by English law. They are not affected by the Treaty.”

Well, that might have been the position in 1974, when the public at large could hardly have foreseen where the UK’s decision to join the then six strong European Economic Community might lead. So let's head onward to 1990. In a preface to a Bruges Group publication, with 16 more years’ worth of EEC/EC membership served, Denning went further: -

“No longer is European law an incoming tide flowing up the estuaries of England. It is now like a tidal wave bringing down our sea walls and flowing inland over our fields and houses - to the dismay of all."

Great wisdom and perception for a 91 year old. Here and now, had he still been alive at the age of 113, he might have said: -

“To describe EU law today as a tidal wave inundating the UK would be wrong. It would be a gross understatement. The tidal wave has been supplanted by a burning oil slick. It destroys everything it touches. It engulfs our majestic rivers and unleashes toxic smoke across our green fields. And it feeds upon itself thanks to the malign efforts of the pyromaniacs of Brussels.”

So are the aspiring luminaries of our political class sending for a modern day Red Adair? Well, no. They appear to be ostentatiously placing their thrones on the shore and commanding the fiery waves to advance no further. I am going to coin a description for this, namely “Denning-Canute syndrome”.

We can only hope that before it is too late, Adair’s successor is called upon by the UK to put out the fire, and that works are then set in hand with all due alacrity to erect an impenetrable flood barrier and then drain and reclaim the inundated land.

Better Off Out.

Tax: avoidance vs evasion, bad luck vs reprehensible conduct

I find it hard to work up any sense of displeasure at the reports of multinational companies doing their utmost to avoid tax liability in the UK. The likes of Apple, Google, Amazon and Starbucks bring employment opportunities for the British and sell products that we wish to buy. Their primary duty is to maximise their shareholders’ dividends and capital gains. They would all be missed if they closed down their UK operations and left as a result of the tax regime becoming more hostile.

And that’s before we get started on the myriad ways in which our beloved government still squanders revenue receipts. To say nothing of the fact that tax avoidance is openly and legitimately promoted to the public at large via products such as ISAs, assuming of course we had any money to save after our net earnings have been bled dry by council tax and astronomical fuel and energy bills.

 

But I digress. Not long ago, in a professional setting, I encountered a telling illustration of the difference between tax avoidance (lawful) and tax evasion (unlawful) that clearly transgressed mere bad luck or poor judgment.

 

Let’s set the scene further. Suppose that a small company has just received its six monthly tax bill. The business is struggling. The boss takes a chance that he won’t be brought to book for not paying it on time, and “borrows” from the tax reserve to buy in new stocks in the hope of trading through the short term difficulties. Alternatively, as is all too often the case, he looks in turn at his overdrawn bank account and his list of overdue debtors, sees nothing there to pay the taxman, and again decides to carry on trading in the hope of better times ahead. In either case, he works every hour God sends and draws only a pittance for himself and his family, or nothing at all. If the company then goes bust, and HM Revenue & Customs is a major creditor, it may be correct to conclude that although tax has been evaded, prosecution of the boss would be unduly harsh.

 

Now go to a scenario where the insolvent corporate failure is well into six figures. Where the percentage owed to the taxman is far in excess of anything owed to trade creditors. And where the outflow from the substantial turnover in the last year’s trading evidently shows a deliberate decision not to pay tax when it had fallen due, but instead to favour trade creditors and the sole director himself, in his case involving sums equivalent to a Supreme Court judge’s gross salary (and way in excess of a Prime Minister’s). Reprehensible conduct.

You and I, the ordinary taxpayers of the UK, have to make up this shortfall – it’s not as if the government is going to squander a little less because tax evasion has had unforeseen impact on anticipated receipts. Would it be fair in this scenario to let the tax evader off with a mere disqualification, rather than prosecution? One would sincerely hope not.