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Gordon Prentice - Talking Politics

My occasional blog on politics. Going where the fancy takes me.

 
Time to get rid of non dom status PDF Print E-mail
Written by Gordon Prentice   
Thursday, 26 February 2015 00:00

I am keeping my fingers crossed that the Labour leadership will have the courage to include in the forthcoming Labour Manifesto a clear commitment to abolish non-dom status.

In 2008, under the Blair Government, the rules were tweaked allowing non-doms to continue to enjoy special tax advantages if they paid £30,000 every year to HMRC.

We now learn that HSBC Chief Executive, Stuart Gulliver, is a non-dom despite living in the UK for years. He has a house in Hong Kong and says he is going to retire there. As if! (The MPs on the Treasury Select Committee who grilled him were terrific.)

Seems to me all British Citizens should pay UK tax on their world-wide income. We could follow the example of the United States who taxes her citizens wherever they are. And here in Canada – where I pay tax – I am obliged to declare my worldwide income, such as it is, to the Canada Revenue Agency. Double taxation treaties prevent people being taxed twice.

With special tax treatment under their belt, buttressed by tax secrecy, non-doms have been laughing in our faces for years.

Ashcroft mocks us all

Yesterday, 25 February, the notorious tax cheat and former non-dom, Michael Ashcroft, in a Lords written question, smugly asked the Government to explain:

 “what they consider the difference between tax avoidance and aggressive tax avoidance.”

The Minister, Lord Deighton, explained:

 “Her Majesty’s Revenue and Customs (HMRC) distinguish between tax avoidance and tax planning. Tax avoidance is bending the rules of the tax system to gain a tax advantage that Parliament never intended. It often involves contrived, artificial transactions that serve little or no purpose other than to produce a tax advantage. It involves operating within the letter – but not the spirit – of the law."

"Tax avoidance is not the same as tax planning. Tax planning involves using tax reliefs for the purpose for which they were intended. For example, claiming tax relief on capital investment, saving in a tax-exempt ISA or saving for retirement by making contributions to a pension scheme are all legitimate forms of tax planning. While such actions may reduce the total amount of tax paid, they are not tax avoidance, because they involve using tax reliefs in the way that Parliament intended when it passed the relevant legislation.”

Ashcroft "a proud tax avoider"

In September 2013, Ashcroft told a bunch of turnip heads at a Labour Party conference fringe event that he was “a proud tax avoider”. He reportedly received a “polite round of applause”. The self-confessed “notorious tax avoider” only gave up his non-dom status in 2010 because my successful FoI request forced him to. He still thinks tax is something you pay when you absolutely can’t avoid it.

Indeed, Ashcroft and his fellow peer, Lord Fink, have at least two things in common. They were both Treasurers of the Conservative Party and they believe tax avoidance is OK.

Fink says he doesn’t object to Miliband accusing him of tax avoidance. “Because you are right: tax avoidance, everyone does it.”

In October 2010, not long after Ashcroft had come out as a non-dom, he used a written question in the Lords to ask, tongue in cheek, whether the Coalition Government expected citizens “to organise their tax affairs in order to maximise tax payable”.

He was told by the Commercial Secretary to the Treasury, Lord Sassoon:

The Government expect citizens to pay tax that is due by law. The Government will take action against tax avoidance schemes that claim to produce results completely at odds with the intentions of Parliament.”

Ashcroft, who conned his way into the House of Lords 15 years ago when he promised to bring his tax affairs on shore, asked Sassoon in December 2012:

“whether (the Government) apply any principles of acceptability to legal tax avoidance practices; and, if so, what are those principles.”

Sassoon, playing it with a straight bat, replied:

“The vast majority of individuals and businesses in the UK pay the tax that is due and on time. The small minority that try to bend the rules to achieve a tax result, which Parliament did not intend, put a greater burden on the majority. That is why the Government are taking action to tackle tax avoidance by, for example, changing the law to close loopholes and by introducing a general anti-abuse rule to target artificial and abusive tax avoidance schemes.”

Corruption in the Caribbean

Michael Ashcroft – a citizen of Belize, a British citizen and a belonger of the Turks and Caicos Islands - clearly believes he is home and dry with all his dodgy tax dealings now far behind him, ancient history. The BBC's Panorama looked for evidence and there are lots of loose ends waiting to be tied up.

Elsewhere… The trial of Ashcroft’s old friend, former Premier, Michael Misick, on corruption charges will take place in the Turks and Caicos Islands later this year. The Judicial Committee of the Privy Council in London is considering whether the trial can proceed without a jury. (Every second person in the islands has the surname "Misick". I exaggerate for effect but only slightly.)

When I was in TCI in December 2014 I saw for myself the impact developers have had on the island. Beautiful pristine beaches in Crown Land sold off to shady characters with off-shore bank accounts. I also spoke to local politicians and checked out Michael Misick’s mansion, now up for sale, reportedly built with a little help from his friends.

Last Updated on Friday, 27 February 2015 18:25
 
HSBC, the Treasury Select Committee, Lord Green and the tax cheat Michael Ashcroft PDF Print E-mail
Written by Gordon Prentice   
Sunday, 22 February 2015 21:58

Next Wednesday (25 February 2015) the Treasury Select Committee will try get to the bottom of the shocking tax scandal at HSBC.

The one man who could shed some light of things, Lord Green, the Bank’s Chief Executive from 2003-06 and Chairman from 2006-10, is not in front of the committee and reports suggest he may not be called before it.

Green was recently doorstepped by BBC Panorama, but refuses point-blank to discuss his role.

The FT quotes a spokesman for Andrew Tyrie, the Committee chair, saying the committee will not be calling Green as it doesn’t want to “drag up the past”.

I read that my former colleague, John Mann, is unhappy about this – and well he might be. He should press the Select Committee to summon Green before them.

This is not as easy or as straightforward as it sounds.

Five years ago, my Freedom of Information request on the undertakings Michael Ashcroft gave to secure his peerage, was finally published. It forced Ashcroft to admit that he was a non-dom and had been ever since he cheated his way to a peerage.

He also misled his friend William Hague, then Leader of the Opposition, who wrote to the Prime Minister, Tony Blair, on 23 May 1999:

“Mr Ashcroft is indeed non-resident for tax purposes and has been for some years, during which time his principal business interests have been abroad. He is, however, committed to becoming resident by the next financial year in order properly to fulfil his responsibilities in the House of Lords. This decision will cost him (and benefit the Treasury) tens of millions a year in tax yet he considers it worthwhile.”

The Public Administration Select Committee embarked on an inquiry into Michael Ashcroft’s peerage but we knew we had to move quickly. Then, as now, a general Election was in prospect.

The Committee asked Lord Ashcroft and William Hague to give oral evidence. They declined. I recall being told at the time that there was a Parliamentary convention preventing select committees summoning members of the Commons or Lords.

In any event, the Chair of PASC, Tony Wright, received a letter from the then Conservative Shadow Leader of the House, Sir George Young, dated Wednesday 17 March 2010 informing us they weren’t going to appear before us. Sir George accused the Committee of being partisan before bluntly stating:

“In the days immediately preceding the dissolution of this Parliament, this inquiry inevitably risks being seen as partisan. I am writing to let you know that my Parliamentary colleagues who have been invited to attend are not inclined to do so.”

He went on:

“I think it best if these sorts of issues are explored in the round, and on a genuine cross-party basis, in the next Parliament.”

The whole truth of the Ashcroft deception, with all the twisting lies and distortions, would have been exposed if PASC had insisted on bringing Ashcroft and Hague before it. The convention should have been tested to destruction with the Committee reporting to the House that two key witnesses were refusing to co-operate. But we were right up against the wire with the election a month or two away. (The Committee had to make do with Hayden Phillips, the mandarin who waved the peerage through.)

I was hugely frustrated by this stonewalling and I recall Tony Wright telling me we had done as much as we could and to let it rest.

But history may be in danger of repeating itself. The scandal of HSBC should not be swept under the carpet until the next Parliament – which may mean never.

The Treasury Select Committee needs to assert itself and insist that Lord Green comes before it - and give evidence under oath.

Postscript on Ashcroft: Cabinet papers released to PASC in 2010 detail the extent of Ashcroft's deception.


Last Updated on Sunday, 22 February 2015 22:44
 
An independent Scotland needs its own currency PDF Print E-mail
Written by Gordon Prentice   
Tuesday, 09 September 2014 15:56

The Governor of the Bank of England, Mark Carney, tells the TUC today that a currency union between England and an independent Scotland would be “incompatible with sovereignty”.

Carney, a former Governor of the Bank of Canada, should know.

During the Quebec Provincial election in March this year, Pauline Marois, the then leader of the Parti Quebecois, startled Canadians by claiming an independent Quebec would still use the Canadian dollar (the loonie). And she wanted a seat at the Bank of Canada.

The idea was widely regarded as fanciful and the Bloc went down to a crushing defeat on 7 April.

Why is the SNP’s insistence on keeping the pound after a YES vote not similarly laughed out of court? It is to me  a complete mystery.

The rest of the UK (rUK) is not going to underwrite an independent Scotland. The voters in rUK would never tolerate such a lopsided arrangement.

If not the pound then what about the Euro? (Now we can laugh out loud.)

Paul Krugman writing in the New York Times. is the latest in a very long line of economists to rule that one out.

So what are we left with?

Ian McGugan in today’s Globe and Mail (see below) says an independent Scotland should have its own currency. He suggests they call it the Thistle on the grounds it will be very hard to hold.


Ian McGugan writes: The world has embraced the loonie. But would it do the same for the Scottie?

As Scotland heads toward its Sept. 18 referendum with the pro-independence side edging into a narrow lead in the polls, a new currency becomes a distinct possibility.

Granted, the last thing a time-starved world needs is the distraction of yet another form of money, especially one backed by a tiny nation with only slightly more people than British Columbia. But, given the alternatives, a new national currency could emerge as the best path forward for Scotland Inc. The other obvious choices – continuing to use the British pound or switching to the euro – are riddled with problems.

MORE RELATED TO THIS STORY

The euro option, for instance, faces the immediate complication that Scotland has no guaranteed ticket to membership in the European Union. Among other obstacles, there’s Spain, which is struggling to placate its own independence movement in Catalonia, and doesn’t want to encourage its home-grown separatists by embracing a newly independent Scotland.

Even if Scotland’s path to EU membership proceeds without a hitch, the euro option would force it into the same one-size-fits-all monetary straitjacket as the rest of the euro zone – an approach that has had dismal results in recent years. If North Sea oil prices were to plummet, oil-dependent Scotland would have no way to offset the shock with looser interest rates.

That’s a problem. But the pound option is also looking less than, um, sterling.

While the Scottish National Party (SNP) has long insisted that an independent Scotland would continue to use the British currency, the power brokers in London have rushed to reject the notion.

All a bluff, sniffs the SNP. It says the English will come to their senses after the referendum, especially since the SNP insists it will repudiate its part of the national debt unless Scotland keeps the pound.

But that raises the question of whether keeping the pound makes sense for Scotland. There are two ways to do so – by simply adopting the currency (a process that goes by the unlovely term “sterlingization”) or by striking a formal currency union with the remainder of the United Kingdom.

The problem with sterlingization (other than its name) is that it leaves Scotland without any voice at the Bank of England and without any backstop from the central bank if crisis strikes. It also gives Scotland no way to adjust monetary policy to suit its own economy.

A formal currency union seems equally awkward. As the smaller partner in the union, Scotland would have to agree to keep its budget deficit within bounds set by the rest of the U.K. so that there would be no danger of it shifting risk onto its larger partner through runaway spending. For similar reasons, Edinburgh would also have to cede control of banking regulation to the folks in London.

At that point, not much would be left of Scotland’s new independence. “It is weird to tell the English you are desperate to be rid of them and, in the same breath, say you trust them so much that you wish to share a core activity of the state you are leaving,” writes Martin Wolf in the Financial Times.

All things considered, the best move for an independent Scotland would be a currency of its own. That would allow the new state to adjust its monetary policy to suit its own needs.

The problem, says Ronald MacDonald, an economist at the University of Glasgow, is that setting up a new currency involves a painful period of winning markets’ trust and building up foreign-exchange reserves. But in the long run it would seem to be the only policy that would make sense if Scotland does vote for independence.

The question that remains is what to call the currency. The Scottie? The Braveheart? I suggest the Thistle, since it’s likely to be painful to hold, especially as North Sea oil revenues dwindle.

Follow  on Twitter: @IanMcGugan


Last Updated on Thursday, 11 September 2014 18:02
 
Scotland's future decided by non-Scots PDF Print E-mail
Written by Gordon Prentice   
Friday, 05 September 2014 20:04

Canada’s Conservative Primer Minister, Stephen Harper, tells us that Scottish independence is "ultimately a question for the Scots"

It is not quite so simple. As opinion polls narrow (53% now say no and 47% yes) it is quite conceivable the result could be decided by foreign nationals.

An estimated 253,000 foreign nationals are living in Scotland and many of them will have a vote. Under the UK’s bizarrely anachronistic voting laws, citizens of 53 Commonwealth countries, including Canada, as well as the Republic of Ireland are allowed to vote in the independence referendum.

Nationals from the 28 member states of the European Union, if living in Scotland, can also vote in the referendum because the right to vote is linked to the franchise for the devolved Scottish Parliament, not Westminster. This means that while they cannot vote in an election for a Westminster MP they can, perversely, vote in the referendum.

How can it be right to allow the UK’s centuries old constitutional settlement to be changed irreversibly by non-UK citizens?

Simply posing the question illustrates the absurdity of it all.

In the 1995 Quebec referendum on secession from Canada (in which it hardly needs saying only Canadian citizens could vote) the Noes had the support of 69% of Quebeckers at the beginning of the campaign. This shrank alarmingly and on referendum day the Noes won by a hair’s breadth.

It is a cautionary tale.

Time for the Noes to speak out, loud and clear.


Last Updated on Friday, 05 September 2014 20:50
 
Michael Misick trial date pushed back PDF Print E-mail
Written by Gordon Prentice   
Wednesday, 11 June 2014 19:59

The trial of Michael Misick, the former Premier of the Turks and Caicos Islands, on corruption charges has been pushed back to 6 October 2014.

A ruling is expected on 23 June on whether the trial will be with or without a jury.

Misick is – or was - a friend of tax dodger Michael Ashcroft who cheated his way into the House of Lords in 2000.

Last Updated on Wednesday, 11 June 2014 20:05
 
Michael Misick Corruption Trial Looms. PDF Print E-mail
Written by Gordon Prentice   
Tuesday, 06 May 2014 00:00

The trial of Michael Misick, the former Premier of the Turks and Caicos Islands, on charges of corruption is scheduled to start on 7 July. But this date could slip if his new UK based lawyer, Courtney Griffiths QC, successfully persuades Mr Justice Paul Harrison that he needs more time to prepare the case.

The Turks and Caicos Weekly News reports that, at a hearing on 27 May 2014, Griffiths “will argue against the Special Investigation and Prosecution Team’s (SIPT) application for a trial without a jury”.

Here the Turks and Caicos Sun TV interviews Griffiths about the upcoming trial and his previous experience with high profile cases.

In 2012, BBC Panorama broadcast an investigation into Lord Ashcroft’s business activities in the TCI.

Michael Misick counted Ashcroft as one of his friends.

Michael Ashcroft, who cheated his way into the House of Lords in 2000 will, no doubt, be following Misick’s trial closely.

Last Updated on Tuesday, 06 May 2014 21:13
 
Toronto Centre By Election PDF Print E-mail
Written by Gordon Prentice   
Tuesday, 19 November 2013 00:00

Next Monday (25 November) voters go to the polls to elect a new Federal MP for Toronto Centre, the constituency previously held by the former Liberal Leader, Bob Rae who has now retired from the House of Commons.

Rae was the (NDP) premier of Ontario, before swapping parties and going into Federal politics as a Liberal. This cross-dressing is much more common in Canada than in the UK.

He has accused the NDP’s by election candidate, journalist Linda McQuaig, of “class warfare”. Ooooh!

She says she is simply drawing attention to the huge gulf between the richest and poorest in the centre of Canada’s biggest city.

Her main opponent, the Liberal candidate, Chrystia Freeland, is also a journalist who has written extensively on the super rich in the United States.

She hasn’t lived in Canada for over a decade.

Astonishing really.


Rob Ford: the story that refuses to die

Type in the name “Rob Ford” in the Toronto Star search engine and it will return 5,614 results – and counting.

Even though Ford has now been stripped of most of his powers and is reduced to a figurehead, he will continue to fascinate.

Canadian municipal politics which, until now, never rated a mention in the UK media, is now grabbing the headlines.

The whole world now knows that a boastful, lying crack-head with an explosive temper is (or rather was) in charge of Canada’s biggest city.

He has become a figure of fun.

Ford shrugs it all off, ignoring the mockery.

He says he has fessed up and come clean. There is nothing left hidden in the closet (except perhaps, he says, the odd coat-hanger).

And yet he still refuses to address a long list of hugely damaging allegations made against him that are detailed in a partly redacted detailed police dossier.

We can only speculate what is behind the blacked out text. We shall all know in due course.

Here the sober, not-for-profit, no ads, political channel CPAC takes us inside Toronto City Council Chamber for yesterday’s unprecedented events where methodically, step by step, motion by motion, Mayor Ford’s powers are taken from him.

Anyone else would be crushed by such a public humiliation.

Not Ford. He gets strength from his notoriety and he revels in his celebrity status.

Like many others, I feel sorry for him.

He still doesn’t realise how much trouble he is in.

Last Updated on Wednesday, 20 November 2013 01:28
 
The Ford Scandal PDF Print E-mail
Written by Gordon Prentice   
Thursday, 14 November 2013 20:11

The Toronto Star proclaims today that it has 16 pages on the Rob Ford scandal.

Toronto is consumed by the story of the fall from grace of His Worship the Mayor.

A disbelieving Canada, looks on. Transfixed.

The Star’s editorial and the Globe and Mail’s are running out of adjectives to describe a  man they both consider to be a loathsome duplicitous liar and someone wholly unfitted to be Mayor of North America’s fourth largest city.

It is hard to disagree.

Another day, another headline. This time, amazingly, about oral sex.

Tomorrow at City Hall, Councillor John Filion will move a motion stripping the Mayor of important powers.

I shall be there.

Last Updated on Friday, 15 November 2013 03:49
 
Rob Ford PDF Print E-mail
Written by Gordon Prentice   
Wednesday, 13 November 2013 02:48

Toronto’s right wing populist Mayor, Rob “did you just call me a fat fuck?” Ford, faces insurrection tomorrow (Wednesday 13 November) when his colleagues on Toronto City Council will urge him to take a leave of absence to deal with his personal issues.

Ford admits he drinks too much. He gets "hammered". And has smoked crack cocaine.

The police want to talk to him but he is not co-operating. 

In an act of braggadocio, Ford has moved the motion which is critical of him to the top of the Council Agenda - first business - and will take questions.

Despite all the bluster and his talk of getting on with the job, the cracks are showing in Ford Nation – the loyal band of followers who would walk over shards of glass to defend their (millionaire) tax cutting Mayor. 

Even Don Cherry, the flamboyant ice hockey pundit who lauded Ford on his election as Mayor, feels let down.

The man is an embarrassment, who knows no shame.

He is a disgrace.

This editorial from the Toronto Star neatly sums up the case against him.

Canada’s broadcaster, the CBC, has investigated the criminal bahaviour of Toronto’s “chief magistrate” and still Ford clings to office, determined to serve out the rest of his term which has a year to go.

That, I think, will take a miracle.

Canada’s municipal politics rarely makes the news in the UK but, thanks to the foul-mouthed, pea-brained Rob Ford, that’s changing.

Here Channel 4 News door-steps him in Toronto and gets the full Ford treatment. 


Last Updated on Friday, 15 November 2013 03:49
 
Bob Wilkinson PDF Print E-mail
Written by Gordon Prentice   
Sunday, 11 August 2013 20:11

The news this week that my friend Bob Wilkinson has died of cancer comes as a huge shock.

Bob was my agent in the 1997 General Election and masterminded a brilliant campaign that gave

Labour a colossal majority of over 10,000. We had over 53% of the total vote.

alt

As it happens, I last saw Bob a couple of years ago when I bumped into him quite by chance in the

Rising Sun in Blacko as I was having a quiet pint with John Pope and Andy Stringer. Bob, a keen

supporter of the Campaign for Real Ale, was his usual convivial self. He enjoyed the company of others.

A teacher by profession, Bob could be quite self effacing, playing down his own role in our stunning

victory in Pendle.

In his report to the GC after the May 1997 General Election he admitted that we had a lot going for us.

“A bankrupt Government, a good national campaign by Labour and Tony Greaves as the Liberal candidate!” 

The campaign was certainly memorable for the terrific show of posters. There has been nothing comparable since.

They were absolutely everywhere with Bob directing the stakeboarding teams to get them up first and ask permission later!

He told the GC afterwards:

“The experience of acting as agent was exhilarating and almost addictive but I would warn anyone

thinking of taking the job for the next election that it can turn the mildest of individuals into a dictator

overnight. So much for democracy!”

Back in 1997, no one was very sure how the Blair Government would shape up but there were straws in the wind.

We went into that election promising no increase in the top rate of income tax. And that we would stick to planned

public spending for the first two years. Bob was uncomfortable with all this but was hoping for the best.

These were also the days when there were debates within the Party on whether the UK should join the Euro.

I recall long conversations with him on the merits or otherwise of the Single Currency. I was hostile. Bob less so.

I am told that Bob left the Labour Party after Iraq.  If so, this decision wouldn’t have surprised me. He would have

quickly sussed out that the reasons for the war were entirely bogus.

Bob had two boys, Alan and Ian, with his first wife, Ruth, who worked in my office in Carr Road for many years.

I feel a deep sadness that Bob is no longer with us.

Last Updated on Sunday, 11 August 2013 21:16
 
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