Europe

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Abandoning taxes to keep trucks moving is a profoundly costly error

Published by Anonymous (not verified) on Sun, 24/01/2021 - 8:32pm in

As The Independent has reported:

Taxes totalling £800m could go unpaid this year because of border checks on lorries being scaled back to avoid queues at ports after Brexit, MPs have been told.

HM Revenue and Customs accepts that money will be lost because of a decision to prioritise free flow of traffic over revenue protection, chief executive Jim Harra told the House of Commons Public Accounts Committee.

This is important for a number of reasons.

First, tax requires that the rule of law be consistently upheld. If the Revenue choose not to do that then so will others. Tax evasion will increase.

Second, there is deliberate economic distortion implicit in this policy. We all have heard stories of significant charges on parcels deliveries, whilst pallet load hauliers who service smaller business appear to have pretty much given up attempts to import or export, meaning that sector is now left isolated by Brexit, with markets being destroyed in the process. That means most of the trucks being waved through will now be carrying goods for big business. This creates significant risk if yet more concentration in the UK business sector is to be avoided.

And third, there is risk in this process that Brussels might suggest that the waiver of taxes is unfair state subsidy or the creation of an unlevel playing field, with retaliation being possible. I did not see anything in the Brexit agreement that said national unpreparedness was a reasonable excuse for such things to be created.

Add it up, and this could be a mightily costly and deeply resented blind eye being turned to hide the simple fact that Brexit has profoundly unfortunate consequences. The price will be paid eventually, but my fear is that it will be in lawlessness. And that is really worrying.

It’s time for the EU to get tough on Jersey and Guernsey

Published by Anonymous (not verified) on Sat, 23/01/2021 - 6:59pm in

I was pleased to note this report in the Guardian yesterday:

The European parliament is pushing for UK overseas territories including the British Virgin Islands, Guernsey and Jersey to be added to an EU tax havens blacklist after the conclusion of the Brexit deal.

Sending a signal that tougher action on tax avoidance was required in response to the coronavirus pandemic, MEPs voted overwhelmingly in favour of adding more nations and territories to the list of non-cooperative jurisdictions.

Their logic was absolutely sound:

The resolution, passed earlier this week by a vote of 587 to 50, included measures calling for the automatic inclusion on the blacklist of countries which use a 0% tax regime. Among these are the UK overseas territories, viewed by transparency campaigners as havens for tax avoidance.

I will ignore the BVI for now; when the UK had to announce that law and order had effectively broken down there this week their inclusion on this list was, I think, inevitable.

Instead I want to comment on old foes of mine, which Jersey and Guernsey are. It’s hard to recall now how much they featured on this blog at one time.

When these two (along with the Isle of Man, whose non-listing is hard to explain, barring the fact that they have the reputation of being more cooperative) persist in running a tax regime for companies that was deliberately designed to undermine the EU’s requirements in its Code of Conduct on Business Taxation it is hardly surprising that the EU has now moved against them given that their protector, in the form of the UK, has now exited the EU. I hope that they anticipated this; I certainly did.

The issue now is for the sanction to have real bite. Whilst the abuse persists the EU should require that tax withholding takes place on all payments to these places. Unfortunately, this need not be the case at present. Require that the withholding be at a sensible rate of, say, 20% and suddenly EU listing would impose a real sanction. Then, at long last the abuse of the UK’s Crown Dependencies as corporate boltholes would really begin to come to an end.

Central Bank Machinations with No Exit: ECB Leaks New Thingy, It’s Doing Yield Spread Control

Published by Anonymous (not verified) on Thu, 21/01/2021 - 1:55am in

Not your grandmother’s “yield curve control.” Only one thing that could force this ECB absurdity to end: a big bout of inflation.

Perhaps It’s Time to Start Worrying About Italy Again

Published by Anonymous (not verified) on Tue, 19/01/2021 - 10:31pm in

The causes for concern surrounding Italy are growing, even as the ECB keeps a tight lid on its bond yields, pushing its debt servicing costs lower as its debt explodes higher.

Brexit is failing and the two leading parties are determined to block consideration of any alternatives. So where does that leave us?

Published by Anonymous (not verified) on Tue, 19/01/2021 - 7:12pm in

I tweeted this last night:

I rather suspect that most politicians will not agree to such an idea, as yet.

But the reality is that Brexit, even with a trade deal, is proving to be at least as difficult as many forecast, me included. Far from helping Britain prosper its consequence is that we are already very obviously going to be a poorer and very divided kingdom, with Northern Ireland (at least) feeling more than ever a part of another country.

I am entirely realistic about the fact that there needs to be a learning curve whilst adaptation takes place, but the problems now arising appears systemic. Put simply, there are very real obstacles to trade now that will increase costs, deny choice, and make it very hard for previously viable businesses to operate. This should not be a surprise: that was always going to be the logical consequence of leaving.

Despite this there is now no party in England, apart from the Greens, saying that a return to the EU should be considered, and yet a substantial majority in the country would now seem to think Brexit was a mistake.

In that case there is a real issue to be addressed here. Not only do we know that Labour and the Tories operate a conspiracy to block the realistic prospect of any other party getting a chance in the UK electoral system, but they are also acting to deny choice in the rump of an electoral system that we have got.

Scotland has seemingly overcome this, by uniting around a single issue. That does not mean Scotland does not face issues if its own. It clearly does, but many of them are the result of a conspiracy by Labour and the Tories to block the choice Scots want to be able to take. So, the issue there comes back to much the same thing that the rest of us face.

The reality is that not only do we have a rotten electoral system in first past the post, but we also have an electoral conspiracy between the two major parties that we do have, whatever their leaderships might be, to block real choice on many issues, come what may.

So the question is, what do we do about this? How do we break this hegemony that is so very obviously bad for the UK as a whole?

For once I admit that I do not have an answer. I wish I had.

The Double Irony of the New UK-EU Trade Relationship

Published by Anonymous (not verified) on Sun, 17/01/2021 - 10:45pm in

Tags 

Europe, Politics, UK

The Trade and Cooperation Agreement signed between the European Union and the United Kingdom goes against six decades of UK efforts to avoid being economically disadvantaged in Europe.

Brexit: Wheels Coming Off

Published by Anonymous (not verified) on Fri, 15/01/2021 - 10:54pm in

Brexit pains are becoming more and more evident.

Will the Senate Confirm Coup Plotter Victoria Nuland?

Published by Anonymous (not verified) on Fri, 15/01/2021 - 8:02pm in

Showing his true uber-hawkish colors, Biden wants to put Victoria Nuland in a position where she can do even more damage.

Tory employment plans disguise the fact that the real target is the minimum wage

Published by Anonymous (not verified) on Fri, 15/01/2021 - 6:42pm in

As the FT has noted this morning:

Worker protections enshrined in EU law — including the 48-hour week — would be ripped up under plans being drawn up by the government as part of a post-Brexit overhaul of UK labour markets.

They noted:

The package of deregulatory measures is being put together by the UK’s business department with the approval of Downing Street, according to people familiar with the matter. It has not yet been agreed by ministers — or put to the cabinet — but select business leaders have been sounded out on the plan.

And they could not resist this:

The proposed shake-up of regulations from the “working time directive” will delight many Tory MPs but is likely to spark outrage among Britain’s trade union leaders.

But it’s the detail that matters:

The main areas of focus are on ending the 48-hour working week, tweaking the rules around rest breaks at work and not including overtime pay when calculating some holiday pay entitlements, said people familiar with the plans.

But, trust me, that reference to holiday pay is a complete red herring, although the FT report gives no hint that anyone seems to have noticed this as yet. The real agenda is hidden in this paragraph:

The government also wants to remove the requirement of businesses to log the detailed, daily reporting of working hours, saving an estimated £1bn.

The idea that £1 billion will be saved for this reason is, of course, completely ludicrous. Time recording dies not happen in most businesses. When it does it is required for other purposes, and will not end with any change of regulation. So that is not the reason for this change.

Instead the reason for the change is to gut minimum wage rules. Once hours do not officially have to be recorded the means to check whether the minimum wage is being paid, or not, disappears. And so this proposed change is a deliberate way to reopen the path to low paid employee exploitation.

Tory philosophy has always been to promote wealth on the back of exploitation, most of it apparent and in plain sight. That is what is being facilitated here. The tiger never changed its stripes. It just hated the fact that the EU made it hide them for a while. Now it wants its old ways revived.

As I expected, Brexit is bad news for everyone but the very wealthy in the UK.

We are facing wholly unnecessary economic risks and the only people to blame are the government

Published by Anonymous (not verified) on Sun, 10/01/2021 - 10:04pm in

I have to admit serious Brexit chaos has arrived sooner than I expected.

Empty super market shelves are happening.

Exporters quite literally cannot export.

Delivery companies have cut services into and out of the UK because legal compliance is too hard, and too expensive to deliver.

It seems that multiple load hauliers, carrying pallets from a number of sources are being especially hard hit.

Now there is suggestion that UK and French customs systems are incompatible and we have only found out now as we did not complete ours in time to trial it.

Northern Ireland is especially hard hit, and in potential real trouble.

And amidst all that, it is now clear musicians lost their right to tour on a single visa because the government chose not to ask for it.

What is apparent is that those who thought that the problems we would face would be at the ports are wrong. The simple fact is that systems are so bad that the ports are simply ceasing to function. Trade is not failing to get through, by and large. It’s simply not happening.

Nor is this a problem that it can be suggested has been created by small companies. If John Lewis and M&S can’t see a way to viably export now there is a systemic cause to this.

It’s easy to say Brexit is that systemic cause. And at one level that is, of course, right.

But Brexit need not have been like this. We could have stayed in the single market. We could have concluded a deal very much earlier and actually trialled how it might work. We could have agreed a deal on Northern Ireland and worked through the consequences.

We could have done Brexit and still had a functioning economy. But we chose to prevaricate and delay. And chaos is the result.

Will it get better? Of course it will. But not without large numbers of business failures, and lost jobs on the way. Business is already facing a Covid crisis. Now some companies face this as well. And cash flows will not survive the double whammy, which is something no one in government seems to understand.

I have accepted the inevitability of Brexit for now. But nothing requires the degree of incompetence that requires failure on the scale now being witnessed. We are facing wholly unnecessary economic risks and the only people to blame are the government.

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