May 2007 Archives

The Government is becoming increasingly desperate to rake in every last penny of tax revenue. One quick solution to plug the looming budget deficit would be to take an axe to wasteful spending, but of course they want none of that.

Instead, they are trying everything possible to get their hands on as much money as they can. For example, we saw the amnesty-that-dare-not-speak-its-name, whereby UK residents with sources of income which have not been disclosed to the taxman, are now being invited to come forward and confess, pay the tax and interest, and only 10 per cent (as opposed to 100 per cent) of the penalty.

In addition, according to the Times, a crackdown is being planned on buy-to-let property landlords.

And the Home Office has just published proposals to introduce the qui tam concept (see pdf). Qui tam derives from the Latin expression 'qui tam pro domino rege quam pro sic ipso in hoc parte sequitur', meaning 'who as well for the king as for himself sues in this matter.' Under the qui tam principle, a citizen may take action against another who has defrauded the Government in some way (eg a tax dodger), and claim for himself some of the money recovered. This principle operates in the United States under the False Claims Act, from where the Home Office has drawn its inspiration.

Whether qui tam will work in the United Kingdom, remains to be seen. Something tells the Fisherman that it may not be quite as successful as the taxman hopes. The British are notoriously reserved about their financial affairs, so perhaps the only people who may be in a position to take action would be employees privy to tax dodging secrets of their employers. Or maybe a disgruntled ex-girlfriend of a dodgy white van man. But then again, how many benefit cheats or hosepipe users have ever been 'shopped' to the authorities, despite repeated encouragement to the public to do so? Perhaps the taxman hopes that the money incentive behind the qui tam principle will swing it in this case. The Fisherman is doubtful.

The Education Secretary, Alan Johnson, is indulging in some old-fashioned class war. He's standing for the deputy leadership of the Labour party, and what better way to appeal to the core Labour vote than to make a few attacks on private sector education?

He has announced that private schools should do more to 'earn their charitable status'. In particular, he wants them to share their equipment with their state school counterparts. Many of them do so already. He also wants them to share their teachers. Never mind the morale-sapping effect of such a measure on the overworked, harassed teachers in the state sector.

What Mr Johnson did not say, but what was implicit in his mention of 'charitable status', was that, if he had his way, private schools should be stripped of charitable status if they failed to comply with these new conditions .

What benefit does charitable status bring? Tax breaks, for one thing. A charity is not liable to tax in respect of its charitable activities. The charitable status of private schools is commonly estimated to be worth around £100 million per year. It is this benefit that Alan Johnson is threatening to withdraw, by blackmailing such schools into intervening in the public sector, and, in effect, doing the Government's work for them.

(As an aside, the Independent Schools Council has published figures showing that bursaries and scholarships awarded by independent schools in 2007 exceeded £300m, far greater than the amount of tax breaks afforded to the schools.)

The Conservatives also have ideas of their own along the same lines. The key difference is that they are not attempting to threaten anybody. Rather they are hoping to lure private schools into helping out a bit more in the state sector. They want to relax the stringent conditions applying to organisations that want to run city academies. They hope that this will make such a project more attractive to the private education sector, resulting in some private schools helping to run these academies.

A much better idea than the blackmailing threats of an ignorant class warrior representing a Government lacking in ideas.

The draft Bill that will pave the way for national road pricing was today published for public consultation and Parliamentary scrutiny. Here is a link to the Local Transport Bill (pdf).

The Bill proposes amendments to existing legislation, so that local authorities that wish to introduce local road pricing schemes in their area may do so without much ado.

The Fisherman is reading through the Bill and will keep you informed.

Public consultation closes on 7 September. One must wonder, though, why they are even making a pretense of wanting the public's views. The public made clear what they thought of this proposal by signing a petition on the Downing Street website against road pricing. Despite that petition receiving almost two million signatures, ministers have pressed ahead with the project. How on earth they think they can now deceive us into thinking our views matter, one wonders.

And as for 'parliamentary scrutiny', don't hold your breath. If this Bill really does get properly scrutinised, becoming a workable Act without so much as a trace of sloppy drafting, then it will be an exceptional achievement under this most incompetent of Governments.

So Uncle Gordon has finally realised his biggest dream. Barring divine intervention, he will become Prime Minister on 27 June 2007.

The Fisherman wonders what things will be like under Brown, without Tony Blair to stop him hammering Middle England with tax rises.

Expect to see an increase in emigration.

Since their introduction in 2003, working tax credits and child tax credits have been overpaid by up to £6bn.

That is the discovery by the Public Accounts select committee of MPs.

And what is Gordon Brown saying about this?

Nothing. He is too busy on the campaign trail. The man has no shame. A financial officer of a company who presided over an error of this magnitude would be held to account, and rightly so. Not so in politics. The man whose complicated regulations have led to mistakes on such a grand scale - £6bn is no laughing matter - is instead being allowed a free run at the leadership of his party, and consequently, of the country.

We have seen Labour politicians lining up to praise him, declaring him to be the only candidate for the job of Prime Minister. If he is the best that their party can produce, then this country is in big trouble.

Back to the tax credits. Of the £6bn overpaid, around £500m has had to be written off, and there is not much hope of recovering another £1.4bn. But no matter, it is, after all, only taxpayers' money. If Gordon Brown wants some more money to plug the hole in his spending spree caused by this overpayment, he can simply put up taxes. That has always been his way, after all. Why on earth would anyone expect him to change now?