Polly, Polly….

Aye, it’s a cracker today, she’s in vintage form:

With an estimated wealth of £200m, he can afford the very best
consultants. The committee, on the other hand, has just one economic
researcher on any given report, but needs the sharpest armoury of fact
and argument. These under-resourced Commons committees tackling great
issues and multibillion-pound interests urgently need strengthened
power and capacity in Gordon Brown’s constitutional review.

On the one side we have a man with £200 million of his own money. On the other the massed power of the State with £550 billion a year of other peoples’. If Poll thinks that this is an uneven match then perhaps we ought to be thinking about what they’re doing with that £550 billion?

But the committee may have one advantage: City caesars are not used to
challenge or contradiction. Up in their glass towers, rulers of both
public and private companies are surrounded by obsequious courtiers in
a world far removed from the rough and tumble of politics.

Err, sorry? You are realy claiming that businessmen are more isolated from reality than politicians? You mean those people who, when they make a bad decision, can see the money flowing out of their bank account, are less in touch with the world than those who when they make a bad decision race full steam ahead with the proceeds of other peoples’ bank accounts?

It is to laugh.

They will threaten darkly that if they have to pay a fair tax, they
will all flee London, though only some 40 of private equity’s top 200
earners are domiciled or resident in the UK for tax purposes. And
plenty of serious City voices (including Ferguson) say few would
actually go: they prefer London to Dubai, Dublin or Geneva as a
well-regulated place to do business. (Little people’s taxes make it so.)

?? So all this is about 40 people then? Why all the fuss? Further, you’re really rather confusing "doing business" in a place with "domicile or residence" in a place aren’t you? By your very own figures 160 of them, (that’s 80% of them) do the former without doing the latter. So raise the tax rates and have 100% of them do business without paying the taxes, why don’t you?

The public suffers but can do nothing, and the Treasury suffers
whenever once profitable companies offset debt against profit instead
of paying tax.Angela Eagle, one of the Treasury committee’s
toughest interrogators, points out that now Boots has been bought for
£10bn on a £7bn debt, it can offset £500m of debt charges and pay the
exchequer zero – instead of paying tax on the £480m profit it made in
2005. We are all losers every time this happens.

Err, interest paid to someone else is taxed when it reaches the other person. Where’s the net loss?

There is no longer a level playing field. He wants to level down, but it’s time to make private equity level up.

Wondrous: most of the limitations on public companies are there to protect the widely dispersed shareholders. So let’s have the same protections on companies that don’t have those widely dispersed shareholders.

It is to laugh.  

8 responses

  1. Tim: A direct question. Some reports present scenarios whereby a company is bought with debt with the result that that company ends up with the debt that was used to buy itself. Is this correct or misrepresentation?
    Tim adds: Using the assets of a company as security for the debt burden? Sure, happens all the time.
    Doesn’t change the fact that the people receiving the interest then pay tax on it.

  2. Mark Wadsworth Avatar
    Mark Wadsworth

    From PT’s article “Peter Montagnon, head of the ABI – the voice of shareholder interest … says a level playing field means you can’t have stamp duty paid on public, but not private, share transactions”.
    What a complete and utter fuckwit, it is true that many people don’t bother paying stamp duty on private share transactions, but the actual law is the same for both.
    *No doubt Kay Tie will be along in a minute to point out some loophole or other*

  3. MARK T Avatar
    MARK T

    This is all a smoke screen. It’s not that PE should pay more, or non doms, or anyone in fact. We should all pay less. This all comes out the same day we hear the govt spends £2bn a year on management consultants. Wat Tyler needs to get onto Op-Ed pages!

  4. Tim: yes, silly me – conversion of one liabilty (shares) into another (debt).
    I totally agree about your point re: the interest payments. Of course, Sociofacists don’t care about double taxation when they have an axe that desperately needs grinding. Even that numbnut Peter Hain was blithering on about it earlier – he of the inane request for city hot-shots to pay even more tax on their bonuses – as if 40% was not enough already!
    I’d ask Polly to put the kettle on, but with her we’d end up in the “there’s a hole in my bucket” routine such is her lack of critical reasoning and common sense.

  5. The House of Commons select committees often have academic advisers who are generally no slouches on their areas of research interest and the House of Commons’ library provides a flow of excellent research papers on issues of topical and perennial concern to MPs. Try:
    http://www.parliament.uk/parliamentary_publications_and_archives/research_papers.cfm
    I’m surprised that Polly is unaware of this.

  6. Here is a more-or-less arbitrary personal selection of notable research papers on potentially highly controversial subjects from the House of Commons Library:
    Parliament and religious disabilities:
    “Historically, non-Anglicans were prevented from holding public office (including that of Member of Parliament) by the Test Act of 1672, which provided that all office-holders should take the oaths of allegiance and supremacy, declare against transubstantiation, and receive the sacrament of the Lord’s Supper (duly certified by Minister and Churchwarden) according to the usage of the Church of England.1 Within this framework, Roman Catholics were specifically prevented from sitting in either House of Parliament by the terms of the Second Test Act of 16782. While this Act did not specifically prevent the candidature of Catholics, nor actually prevent their sitting in Parliament, their exclusion was its clearly declared purpose, as stated in its preamble. It achieved its purpose by requiring that all Peers
    and Members of the House of Commons should, as often as the House required, not only take the oaths of supremacy and allegiance, but also make a declaration abjuring transubstantiation, worship of the Virgin Mary and the celebration of mass. Obviously, no Catholic would take such an oath. Members who refused to take it would automatically lose
    their seats. . . ”
    http://www.parliament.uk/commons/lib/research/notes/snpc-01493.pdf
    The UK’s Nuclear Deterrent
    “The UK’s strategic nuclear deterrent will reach the end of its service life in approximately 2024. In summer 2006 the Government announced that a White Paper on the future of the British nuclear deterrent would be published before the end of the year and that the issue would be debated and put to a vote in Parliament.
    “This paper sets out a number of issues that may inform that debate, including assessments of the future security environment; the UK’s international treaty obligations; the potential cost of procuring a successor system; and the implications of dispensing with the deterrent. It also examines public opinion and the options available to the Government. . . ”
    http://www.parliament.uk/commons/lib/research/rp2006/rp06-053.pdf
    “This paper presents a summary of social and economic trends of the twentieth century. . . ”
    http://www.parliament.uk/commons/lib/research/rp99/rp99-111.pdf
    The Burden of Taxation 2005
    http://www.parliament.uk/commons/lib/research/rp2005/rp05-068.pdf

  7. dearieme Avatar
    dearieme

    “Historically, non-Anglicans were prevented from holding public office (including that of Member of Parliament) by the Test Act of 1672”: well, that bit obviously can’t have lasted longer than 1707, can it? I trust that the report pointed that out?

  8. Hey Tim, I may be blowing my own trumpet here but if you’d like a laugh, have a look at the comments under Polly’s article today, around 20 down you’ll find her own cross little response…

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