Wednesday, 29 September 2010

How To Answer.........Taxing Questions!



Hullo ma wee blog,

I'm not a particularly political animal. My political leanings would probably lie more on the socialist side than elsewhere I suppose but I don't in any way hold an extreme view on politics. I'm not a member of a political party; I wouldn't go out on the streets and canvas for a politician. Sure, I've been on a few protest walks over the years, written a few letters of complaint about issues that affect me directly or more often, involve the local community. I've signed the odd petition too, but that's about it. Politics itself, or more accurately politicians, while they don't occupy my mind too often, do still interest me enough to cast an eye on news and current affairs programmes on TV or articles in newspapers and online etc. When they do attract my attention it's usually about something that's intrigued or annoyed me, that's rankled me enough to grab the lap-top and put a rant on the blog. What's most important to me is integrity. I can put up with someone who tries their hardest but occasionally gets it wrong. I would appreciate someone who could hold their hands up and say "Sorry! that shouldn't have happened and won't happen again. Here's what went wrong and what we'll do to fix it"

The old joke about politician is:

'How do you know when a politician is lying?'

'His lips are moving......'


But that is just a joke - right?


I think politicians are an odd breed. They say they want to improve society, make our country a better place or whatever inane reasons they come up with, but at the core of it all often seems to be a personal desire, a need,  to be at the center, and to be seen to be at the heart of the decision making progress. Some, if not most, no doubt are genuine in their aspirations but power is an important aspect, as is status and respect from others and so on. Of course kudos is in there, the wish to be influential, recognition, ambition and many other human traits. But I freely admit this is a simplistic view.  People are complicated after all and politics too is a complicated situation.

Politicians always seem to know what should be done, even if they never seem to be able to actually do it. They always seem to know why not doing something they promised isn't a failure or why recognising that a pre-election promise couldn't be done or shouldn't be done after election doesn't mean they are incompetent or incapable of running a country. They are great at avoiding responsibility or worse at admitting culpability. Review and investigations often find no evidence of wrongdoing even if they come up with huge amounts of 'improvements' that are needed to a situation.

Earlier this year it was expenses: a situation where huge numbers of MP's had significantly and sometimes unreasonably over claimed - not because they were complacent or deliberately trying to manipulate the system to their own personal advantage you understand, but the system was too complicated, too ineffective and too poorly controlled to pick up errors etc.
  
I thought it was strange as this was an expenses system designed by MP's,  approved by MP's,  implemented by MP's and policed by MP's.  But, hey - what do I know? I mean if they can't organise a simple and effective process to control their expenses, why would I be concerned about their ability to govern an economy............

I was looking forward on Monday night to a Panorama story about Tory 'Lord Ashcroft's Millions'. Billionaire Lord Ashcroft is one of the Tory party's biggest benefactors, one reason why he was made a Lord several years ago. There was quite a rumpus at the time because while he was donating to the Tory party he was a non domicile - registered as living abroad and therefore not a UK taxpayer - which was against the rules at the time I seem to remember. Then leader of the party William Hague - now foreign secretary - stood in the Commons and stated that he had discussed the situation with Lord Ashcroft who had agreed to register as domiciled in the UK which would result in the exchequer benefiting by 'tens of millions of {tax} pounds a year' from this change which was of course the right thing to do.

Ordinary folk make political donations out of income already taxed in the UK. But Bearwood - his UK based company which ostensibly made the donations - did not have sufficient income to cover political donations. Most of the cash donated to the Conservative party has therefore come from Lord Ashcroft's operations in Belize. He enjoys lucrative tax breaks by basing his business empire in this Commonwealth member in Central America.

In March this year, ahead of a freedom of information statement by the Cabinet Office, Lord Ashcroft acknowledged that he is still non-domiciled in the UK for tax purposes despite what Wm Hague advised Parliament { with Lord Ashcroft's blessing I assume or, if Hague was stating incorrect information, why would Lord Ashcroft not have corrected his mistake}. That means that he paid income tax on his personal income and gains arising in the UK, or foreign income and gains remitted to the UK only, not gains held abroad. Unlike most other citizens, the law permits him to arrange his personal affairs in such a way that his worldwide income, subject to double taxation relief, is not taxed in the UK. Despite this, the Conservative party secured a life peerage for him, which therefore gave him a role as a legislator in the Houses of Parliament. In that capacity, he can speak and vote in the House of Lords on all legislative matters, including taxation, yet as an unelected appointee he cannot be removed, no matter how dissatisfied people may be with him.

Lord Ashcroft's recent statement sets out the March 2000 undertakings he gave to William Hague MP, the then leader of the Conservative party, that he would "take up permanent residence in the UK again" by the end of that year. Now, some ten years later, he says that this meant as "a long-term resident" and not as a tax payer. This appears to be at odds with what Hague believed had been agreed or he would not have made such a statement to the House of Commons. One of them - at least - is lying about this. Recently pressed on whether he had confirmed with Lord Ashcroft that the agreed changes had been made Mr Hague repeatedly failed to answer the question, which smacks of yet another disingenuous lack of integrity. Although he fails to answer a direct question it's clear that he believes the arrangement was for Ashcroft to assume full tax liability. Like Paxman I'm amazed that the simple 'Have you?' question has apparently never been asked or perhaps answered. Perhaps it's not the kind of thing you should need to ask a gentleman who has given his word?



Lord Ashcroft has allegedly continued to avoid millions of pounds of tax despite promising to become a full UK taxpayer, something the BBC has been investigating. The Conservative peer was also alleged to have transferred ownership of his main UK company, the Impellam Group, to a trust for the benefit of his children.  Lord Ashcroft, who has also resigned as deputy chairman of the Conservative Party, transferred his £17m stake in Impellam on 5 April.  The next day, on 6 April, a new law forced people sitting in the House of Lords to pay tax on their worldwide income and assets.

Tax lawyer Richard Frimston told Panorama that Lord Ashcroft would have faced a hefty inheritance tax bill under the new legislation if he had made the change one day later.  "If that had been done on the following day, assets worth say £17m going into trust would have been subject to tax at 20%, which would have created an immediate inheritance tax charge of something in the region of £3.4m. "So that was avoided by doing it on 5 April as opposed to waiting until 6 April."  A month before the new law took effect, Lord Ashcroft had said in a statement that he agreed with the new tax rules for the House of Lords. And in a televised interview on election night, he confirmed that he was becoming a full UK taxpayer.  The billionaire businessman may not have broken any rules by using the family trust, but his actions appear to conflict directly with the coalition government's stance on tax avoidance.

On Monday night the BBC current affairs programme 'Panorama' was due to broadcast the result of an investigation onto the situation. Lord Ashcroft had been asked to respond to some questions by Friday afternoon prior to broacast and had not. Then suddenly on Monday afternoon his lawyers reponded with information which has now resulted in the programme being withdrawn and placed under review.

Sources close to the peer claimed the programme was pulled because journalists had misinterpreted a company document released by Impellam on 6 April 2010.  Lawyers for Ashcroft have been engaged in a year-long battle with the BBC over the investigation into the Tory peer.  The Impellam document said the company "had been notified that, following a transfer of an indirect interest in the company, Lord Ashcroft no longer has a beneficial interest in 25,745,349 ordinary shares of 1p each in the company. These shares represented the whole of his beneficial interest in the company".  The BBC's investigators interpreted this to mean that Ashcroft had controlled the shares and subsequently moved them into a trust to benefit his children, according to a Conservative source. Ashcroft's lawyers, however, argued that the use of the phrase "indirect interest" showed that he did not own the shares.

A BBC spokesman last night confirmed that the programme had been delayed. "We put a number of questions to Lord Ashcroft two weeks ago, including one relating to a share interest transfer. We asked for a response by Friday 24 September. A response was received this afternoon. We have been given information that sheds new light on that issue and we will therefore review the programme."

 With what appears to be a calculated strategy by Lord Ashcroft, the BBC have been left with egg on it's face and a source close Tory party stated " the peer had been "saddened" and alleged there had been by a "demise of journalistic standards" at the BBC.  "There has been enormous waste of public money chasing this story – from flights to the Caribbean, to expensive legal fees," he said. "How the BBC could get itself into such a mess over such an easily checkable fact is laughable."

Aye, right...........That'll be why he waited until Monday afternoon to respond

To me it seems there is a lot more to be revealed about this story and yet another potentially cynical use of power and influence to hide a deception on what many people saw to be a clear and open statement of intent - to conform to the highest standard of behaviour in public office by someone who should have a vested interest in behaving in a completely scrupulous manner.

I won't hold my breath though........

See you later

Listening to Puchini 'La Boheme'

5 comments:

Morning's Minion said...

You've stated the case so well. The names and faces, a few of the details change--but there is no such thing as an "honest politician!"
One can't believe in personal integrity in the breed--it seems to be 99% about showmanship and power.

Big Swifty said...

I have a less jaded view of politicians. I think most have a genuine desire to serve their community. BUT there's a fundamental problem. Who do we vote for? I've considered becoming a local politician, but if I was honest with the electorate I wouldn't get elected. A good principle in all walks of life is "under-promise and over-deliver", but politicians do the opposite. Imagine I put round a leaflet saying, "vote for me, I'm a good guy but it won't make much difference, as I'm powerless and I would have to obey the government's rules anyway" Don't think I'd be first past the post!!!!!
But yes Al, I agree with your views on Ashcroft and the greedy MPs.

Alistair said...

MM - Thanks as always...

Swifty - you're right. My jade cup runneth over.......

The Scudder said...

I too am with you on this one Al,, and I'm afraid after a lifetime listening & watching I also share MM's views ,, very, very few are what I'd call Honest these days !

Rebecca S. said...

This all sounds pretty familiar, which goes to show that it's a pretty international problem. Our provincial premier, Gordon Campbell was charged with drinking and driving a few years back, apologized, and against public opinion, did not resign. Before and since, any public personage charged with a similar crime has had to resign, even within Campbell's own government. I think some of these fellows believe they are above the law, and with a skilled lawyer, they indeed succeed in being so. Why someone, especially a politician, with billions of dollars would work so hard not to part with a few million in taxes that will benefit his country, is beyond me. It's almost like a game of keep-a-way.

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