Triple Lock: Westminster

Calais, Corbyn and cocaine: Westminster is caught in a triple lock.

Calais

In Calais  there are between 1,000-5,000 refugees waiting for a chance to cross the Channel while living in conditions that would have looked good in the Dark Ages. This is a humanitarian question linked to the humanitarian question faced on both sides of the Mediterranean where refugees from Syria and the Daesh wars are getting to anarchic Libya and then risking their lives to reach Italy. 

Calais is just 20 miles from England. It is not some far away place with a difficult to pronounce name. It would be easy, terribly easy, for Westminster to help out. Basic humanitarian aid would suffice - latrines, clean water, blankets, simple housing. Irrespective of whether or not you think it is "right" that more than a thousand men, women and children are camping out in Calais, you could help, Osbameron. But you don't.

Why not? Because you are locked into a debate about migration with the right wing of your party and with UKIP, scared stiff that if you are seen to help the Calais migrants the voters in those precious marginals will slip across the border to UKIP.

Corbyn

The debate over - shock, horror - Jeremy Corbyn's anti-austerity manifesto is the key to the second of Westminster's triple locks. Westminster is locked into the belief that the only treatment for the economy - for any economy, Greek, German or English - is austerity. Cut and cut and cut until the State is bled of all its powers of intervention and the free market can have its head. Don't consider who suffers - it is always the poor - but focus on the numbers, the magical £12 billion that Osbameron believe to be our overspend. Do not, above all, do what Mr Corbyn suggests and tax the rich because then they will all jump ship, possibly moving to a shack in Calais to evade an increase in income tax.

Why are the mainstream parties in Westminster locked into austerity? It is hard to explain, but it is beginning to feel like a 594-person mass hysteria (yes, that's 650 MPs less our lovely #SNP56).

Cocaine

The Summer Silly Season story of stories is called Sewel. A Lord of the Realm caught snorting cocaine...whilst hanging around naked with prostitutes. You could not make it up. But along with the knighting of Lord Better Together it has shone a useful light on Westminster's third lock - the House of Lords. 


The House of Lords is an anachronism, a spit in the face of democracy. It is ridiculous verging on weird that the future of the people of Scotland should be decided by a bunch of charlatans in ermine selected for their safe, on-side views by Blairaq and Osbameron.

But the Commons and the Lords are padlocked locked together in Westminster. And not just for the sexy bondage sensation it seems to give them. The Lords hold the key to the safe, ensuring that whatever we commoners decide can be nudged and tweaked and adjusted so that it fits with the capital needs of the great British empire.


Westminster is truly trapped in its triple lock. People in England, just like people in Scotland, Wales and Ireland suffer as a result.

 
Time for an independent Scotland to release the people of Britain from the gargantuan padlock that is Westminster.

Northern Lights

More maths for the summer. 

Building on last week's post about progressive taxation, the economics team at Late but in Earnest (me) have been trying out the Swedish taxation system on Britain.

Sweden is reported to have the highest rates of tax in the world. Which completely undoes the argument put forward by the Tories that "if you tax people heavily they will leave the country." Have you seen evidence of mass emigration from Sweden? No.

Our team of economists (me, again, with a slide rule and a strong coffee) have simplified the tax system in Sweden by taking the key middle rate - 51% - on all income over 629,200 Swedish Krona (approximately £46,100.) Apply that rate to the UK's wealthiest 10% of households and you raise an additional £9,506 million (£9.5 billion). This would pay for three quarters of the £12bn "funding gap" that Osbameron claim to be able to see.

You could go one further.

Most of the top decile live in London and the South East of England. The poorest people in the British Isles live in the North, in Scotland, in Wales, in Ireland. So you are transferring wealth from Mr and Mrs Top Decile of Kensington to Ms Poor of Easterhouse.

This is what happens between Catalonia and the rest of Spain. Catalonia, which generates a surplus, pays out to eleven other "autonomous regions" across the Iberian Peninsula, starting with Extremadura.  This has been going on since Franco died (1975.) Catalans have been paying Extremadura, Andalucia and the other poor autonomous regions for more than 35 years. As Patrícia Gabancho points out in L’autonomia Que Ens Cal és La de Portugal ("The Autonomy we should have is that of Portugal"): Despite this, the poor regions have stayed poor.

In the British Isles wealthy regions have been contributing (modestly, considering their income) through their tax to support social services for poorer regions. Again, despite years of tax transfers, London is richer than ever while Easterhouse and so many other areas of Scotland remain poor.

In an independent Scotland the better-off burgers of Kilmacolm and Auchterarder would contribute through their income tax to the poorer regions of our new nation state. The danger is that they would pay tax but that the poor regions would stay poor.

So how would you persuade Mr and Mrs Auchterarder that their money is actually making a difference? Is there not a danger that Auctherarder would declare itself independent, to break away from the taxes imposed by Holyrood?

We could - to steal an idea that is becoming common in the charity and philanthropy field - focus on impact. We could use that money to build productive wealth (better schools, new factories, workshops, business start-ups...) in our poorest regions. Productive wealth that would create jobs, salaries and thus more income tax receipts.

Westminster has completely failed to grasp this simple idea; tax wealth and use the money to build a better educated population, jobs, and productivity. Do that and you get a fairer society (like Sweden) and a wealthier, happier society.

Scotland can tax better than Westminster. Catalonia can tax better than Madrid. 

But only when we are independent.





Reference
Gabancho, Patrícia. L’autonomia Que Ens Cal és La de Portugal. 1. ed. Palestra. Barcelona: Editorial La Mansarda, 2012. www.lamansardaeditorial.com.

The details:
Taxation in Sweden (see https://en.wikipedia.org/wiki/Taxation_in_Sweden and https://www.nordisketax.net/main.asp?url=files/sve/eng/i07.asp) combines county and municipality taxes. Rates for 2015 were:

• 0% from 0 SEK to 18,800 SEK (£0-£1,377)
• Circa 31% (ca. 7% county and 24% municipality tax): from 18,800 SEK to 443,300 SEK (£1,377-£32,479)
• 51% (31% + 20%) from 433,900 SEK to 629,200 SEK (£32,479-£46,100)
• 56% (31% + 25%) above 615,700 SEK (£46,100)

Suffer the Children

You wake up this morning as Chancellor of the Exchequer. Your dream - to "balance the books" by filling a £12 billion gap between Government spend and Government income.

You have a choice, Chancellor.

Take £12 billion out of welfare? The impact assessment by your civil servants says that will hit 330,000 children from low income families.

Or put £12 billion onto taxes?

If you decide, Chancellor, to use progressive taxation to fill the £12 billion gap, you might start by boosting the taxes of high income households. There are 2.7m households in the UK in the top decile for household income - with average annual earnings per household of £102,366. With two taxpayers per household, that is £51,183 per person. These folk pay the higher tax rate, 40%, on all income over £31,786.

That 40% tax on those households currently raises £41.4 billion (see "Maths" below).

Raise that tax to 52% (on all income over £31,786) and you raise £12.4 billion, and balance your books.

There is your choice, Chancellor.

Suffer the children? Or ask the wealthiest 10% to pay a wee bit more in tax?

That is the choice Scotland will face at the next Holyrood election. If we want better welfare provision, we're going to have to pay for it. 

I'd vote for a Scotland that stopped the suffering of children, and started taxing for a fairer society.

The Maths:

Calculation  Top Decile  Households in the top decile by income                              2,670,000 Average household income  £                             102,366 Number of tax payers per household 2 Average income, per person  £                               51,183 Pay 40% on income over  £                               31,786 Pay 40% on  £                               19,397 Which is, per person  £                                  7,759 Totalling, all taxpayers  £               41,431,992,000 Funding Gap  £               12,000,000,000 So percentage increase in tax taken, to meet £12bn funding gap: 29.0% That % increase on 40% 11.6% So, raise the 40% rate to: 51.6% Let's call that 52%, which is payable on  £                               19,397 Which is  £                               10,086 Totalling, all taxpayers  £               53,861,589,600 Which raises an extra  £               12,429,597,600
In practice, of course, the 40% rate applies to many more people. It would also apply to most of the people - another 2.6m households - in the ninth decile, so the £12 billion would be shared amongst more people. A tax rise from 40% to 47.5% would probably do it.

Sterling job, Mr Osborne

Dear Mr Osborne

Today's Financial Times, reporting that sterling is falling against the US$, says:

"A particular concern for currency investors would be the UK’s persistent current account deficit, if this were no longer offset by North Sea oil revenues."

In plain English, Mr Osborne:

1 You have said that there will be no currency union if Scotland votes Yes.

2 You are Chancellor of the Exchequer, in a country with a £1,377 billion (£1,377,000,000,000) public debt

3  That public debt is OK, because it's backed with billions in future oil revenue. 

4  Investors have worked out that without the backing of Scottish oil the pound is worth less, maybe a lot less, than it was.

What will you do tomorrow, when the pound falls further?

And the next day, when it falls further still?

Still not want a currency union, Mr Osborne?




 The People of Scotland