The Tory PCC election farce

The Tory plan to introduce United States style elected police commissioners was always going to be a disaster. The British public are a fairly apathetic bunch anyway and a huge proportion of those that do feel strongly about voting are vehemently opposed to the politicisation of the police. The turnout at the November 15th 2012 PCC elections was even lower than anyone expected, with a large percentage of voters only showing up to spoil their ballot papers with phrases like "no elected police" or "keep party politics out of the police".

Weeks before the actual election the excuses for low turnout were being practiced by the mainstream media and the political classes, mainly reliant upon the theories that elections in November have slightly lower turnouts than those in May and that stand-alone ballots always have lower turnouts than when multiple ballots are combined (e.g. local elections + European Parliament elections) . This leaves us with a couple of obvious questions. Why were these elections held in November, if political pollsters knew that higher turnouts can be achieved in May? And why were these elections run as an extremely expensive expensive single-ballot, rather than in conjunction with another ballot, lets say the next European elections or the next set of local elections?

The turnout was absolutely pathetic by any measure. The first elected police commissioner to be announced was Angus MacPherson in Wiltshire, where only 15.8% of the electorate bothered to vote. MacPherson collected 35,319 votes out of a constituency of 520,000 giving him an electoral mandate from just 6.79% of eligible voters in Wiltshire.

The indicators from the other 40 police areas are just as bad. On the day of the election Twitter was abuzz with descriptions of empty polling stations, astonishingly low turnouts and spoiled ballot papers and early turnout statistics point to sub 20% turnouts all across the country.
[More analysis to follow here when the full results are made public]

It is quite amazing to think that the Tory led government have spent £100 million on these elections, a sum sufficient to pay the salaries of 3,000 front line police for a full year. Given that these 41 elected police commissioners are going to be pulling in salaries of £80,000 - £100,000 each, that's an annual cost of £3.2 - £4.1 million in salaries, lets say £3.5 million, over the course of five years that's an additional £20.5 million. Over the course of a 5 year electoral cycle, these unwanted PCCs are going to cost around £120.5 million. Enough to pay the salaries of around 723 full time, front line police officers for the full five year period.

If the ballot had the option of voting for 723 front line police, instead of 41 politicians, I'm pretty sure that option would have won a massive landslide victory.

At a time when the Tory government are slashing the number of front line police all over the country (6,800 according to the Guardian) under the guise of "austerity", this ridiculous and expensive shambles is absolutely unforgivable. Instead of creating a tier of political interference in the police, the government could have used these vast sums to keep hundreds of police patrolling the streets. Given this spectacular waste of money at a time when police jobs are being lost all over the country, it is absolutely no surprise that the police have been protesting against this lunacy alongside the people they normally kettle and beat up on demonstrations.

Given the astonishingly low turnout, it is difficult to see how any of these commissioners will be able to claim a public mandate for what they do, especially given the words of the Tory MP Priti Patel in July 2012 when talking about the threat of strike action. She said:

"Any ballot in which fewer than half of those eligible to vote do so should be ruled invalid".

Well these police commissioner ballots resulted in fewer than a quarter of eligible voters casting their votes, can we expect to see these results "ruled invalid"? Of course we can't, because the Tory way is to impose one set of extremely stringent standards on the trade unions, the plebs, the proles, the oiks, etc. Yet maintain a much lower set of standards for themselves, their party donors and their establishment mates. Thus, in Tory minds the Trade Unions must motivate more than 50% of their members to vote in order to legitimise strike action, yet party political Police Commissioners get a mandate to interfere in the police no matter how low the turnout.

Take the Parliamentary expenses scandal as another example of this brazen double-standard. Had you or I embezzled tens, or hundreds of thousands of pounds from our employers, we'd expect to be sacked and then go to jail for it. Dozens and dozens of MPs embezzled vast sums from their employers (us, the taxpayer) with fraudulent expenses claims, yet they just apologised (my carefully calculated expenses fraud was "a mistake"), paid back a proportion of their ill gotten gains and even got to keep their jobs. There are several of them sitting in the most high profile positions in government and the commons (The speaker John Bercow was a house flipper, so was Ed Balls, the shadow chancellor, in government itself there are Michael Gove, Ken Clarke, Nick Clegg, Caroline Spelman and several other expenses scammers). Incredibly dozens of MPs didn't learn a thing from the expenses scandal and continue to milk the taxpayer for tens of thousands of pounds by renting out their London homes, in order to claim rent on properties elsewhere in London on their expenses, often on properties they are renting from their fellow MPs! Yet another example of this obvious one rule for us and another for them double-standard is the pleb-gate row.

The odious expenses scamming of so many politicians, the fact that they can get away with brazenly lying to the public without censure, the fact that all three political parties are riddled with vested corporate interests and the fact that all three establishment parties have told glaring manifesto lies, have led to the situation where politicians are even more despised than other hated professions such as bankers, estate agents and the police.

I heard one Tory apologist describe this farcical shambles as "an attempt to democratise the police". An attempt to party-politicise the police, more like it. British "democracy" is an absolute farce, an unelected upper house, an unelected head of state, regional assemblies for Scotland, Wales and Northern Ireland, but none for England, a totally unproportional and unrepresentative voting system that creates voter apathy in hundreds of constituencies,  three establishment parties that are almost identical in economic terms. The idea that allowing elements of this self-serving, money-grabbing, expenses-scamming, pseudo-democracy to leak into the police is a good thing, is simply delusional. From here on in, we can expect these party politicians (with the most pathetic mandates in electoral history) to begin using the police forces to score party political points and to benefit the corporate backers of their particular political parties, rather than to address criminal behaviour or to enforce the rule of law.

See also

A thought experiment for plebs
     

Even the police are protesting against this Tory lunacy
     

Damian Green: A brazen public liar
     

An entirely avoidable "Osbornomic" recession

Damian Green: A very public liar

I watched the BBC politics show Question Time on the 8th of November 2012 and was staggered by the pathetic standard of debate and absolutely appalled by the blatant lies told by the Tory party Minister for police and criminal justice, Damian Green.

The show, which featured five orthodox neoliberal guests (two members of the neoliberal coalition government, a member of the neoliberal opposition party, a neoliberal banker-economist and a Murdoch cipher from the neoliberal rag called The S*n), started off terribly with universal condemnation from the panel for Philip Schofield of all people. He was criticised by all for daring to ask the Prime Minister the question that was on the nation's lips: "what are you going to do about the paedophilia scandal Dave?"

The next segment was even worse and the focus of this article. It occurred after a question about Quantitative Easing in which none of the panel pointed out that the Bank of England's own research demonstrates that QE and low interest rates are severely impacting savers and people with pension schemes in order to enrich the wealthy minority (a full analysis of that shocking story can be found here).

The economist David Blanchflower sung the praises of Quantitative Easing (hardly surprising since he sat on the Bank of England monetary policy committee that introduced the policy in the first place). Then followed up with a major criticism of Tory debt fearmongering (saying that fearmongering destroys the "animal spirits"/confidence of the market) and a massively understated criticism of George Osborne's utterly catastrophic fiscal austerity policies with an observation that the UK economy has actually shrunk over the course of the last year.

The Tory Damian Green reacted in an incredible way, he openly accused Blanchflower of being wrong and told the obvious lie that:

"Over the last year the economy has been growing"

Blanchflower's incredulous response to this accusation that he was wrong (or downright lying) about the economic evidence, was this:

"Just add the quarters together, it's minus 0.1"

Anyone with basic maths skills could tell you what was the absolutely astonishing thing about this response: It is an example of basic mathematical illiteracy from a guy that sat in one of the most powerful positions in the UK economy (member of the Bank of England Monetary Policy Committee). The glaring error is that you never add percentage changes together, you multiply them.

Here's a simple example +20%, -20%, +20%, -20%. You might instinctively believe that the answer is what you started with (100%) but you'd be wrong. You don't add and subtract, you multiply.

100% +20% =  100 x 1.2 = 120%
120% -20% =  120 x 0.8 = 96%
96% +20% =  96 x 1.2 = 115.2%
115.2% -20% =  115.2 x 0.8 = 92.16%

Quite a difference eh? Obviously when the changes are smaller the effect is smaller too, but it is still a recognisable deviation from the number achieved through addition and subtraction. Here's how the UK growth figures measure up between Q4 2011 and Q3 2012.

2011 Q4 - 100% - 0.4% =  100 x 0.996 = 99.6%
2012 Q1 - 99.6% - 0.3% = 99.6 x 0.997 = 99.3%
2012 Q2 - 99.3% - 0.4% = 99.3 x 0.996 = 98.9%
2012 Q3 - 98.9% + 1.0% = 98.9 x 1.01 = 99.893%

So Blanchflower was right about the UK economy shrinking but he had actually slightly underestimated the rate of shrinkage (which was actually minus 0.107) due to his basic mathematical illiteracy!

Damian Green's response to this counter-statistic was even more incredible, he said that "it's just not true". Not only was Green lying, he actually accused the guy that was (almost) correct of being the one that was lying.

Green's second lie was even more egregious, he claimed that when the Tories came to power, the UK had the largest debt of all the major developed economies. Here's his outright lie, word for word:

"The reason that the 'animal spirit' of the economy was destroyed was that we had the worst debt of any G20 country, because the previous government spent money like water and left us bankrupt"

Anyone that knows anything about the history of Quantitative Easing (the subject of the question) or the economy of Japan would have recognised this as the obvious fearmongering lie that it was. After all the UK public debt is still significantly less than half of Japan's is, even now. In fact, checking the 2009 figures reveals that five of the G20 nations had significantly higher debts that the UK as a proportion of GDP (see graph) In real terms, the UK national debt ($2.183 trillion) was also significantly smaller than the United States ($14.256 trillion), Japan ($5.068 trillion), China (4.909 trillion), Germany (3.352 trillion) and France (2.675 trillion).

Whichever way you look at it, Green's assertion was an outright lie. What is more, an outright lie that gives a lot of credence to Blanchflower's point about 'animal spirits' being too low. Of course market confidence has been lower than it should be, if government ministers regularly engage in spectacularly misleading debt fearmongering such as describing the UK economy as "bankrupt" in front of a live audience and a TV audience of millions.

I don't want to dwell too much on the tribalistic dig at Labour for "spending money like water", other than to say that that also is a pretty spectacular misrepresentation. Until the global economic crisis hit, the national debt under Labour had never exceeded the 41.9% GDP debt they inherited from their Tory predecessors. Even after the spectacular financial sector meltdown in 2007-08, the debt under Labour rose to 52.1% which is significantly lower than the average debt in either the 19th or the 20th Centuries (the average debt throughout the 20th Century was 89.5% of GDP).

This kind of lying and misleading can be seen as a classic example of Tory propaganda. Outrageous lies that become universally accepted through nothing more than constant repetition. This debt fearmongering strategy is part of the tactic I defined as the Great Neoliberal Lie.

After two egregious lies in the space of a minute Green then went on to draw a stunningly one sided picture of a flourishing UK economy with a ridiculous display of cherry-picked evidence. Here's what he said.

"The two big economic measures by which governments are judged are inflation and unemployment. Inflation is half the level it was a year ago and unemployment has been falling... So actually, on the big economic measures things are getting better."

There are so many problems with this statement it is difficult to know where to start. Firstly I'll question the assumption that the two most important measures of government success are inflation and unemployment. Up until the 1970s the size of the trade deficit/surplus was considered the best indicator of economic health, but ever since the British industrial sector decline began under the Thatcher administration, the Trade deficit has fallen out of fashion, simply because the figures have been so unrelentingly awful for the last three decades. In June 2012 the UK trade deficit reached an all time high of £4.4 billion and in August 2012 the second highest ever trade deficit of £4.2 billion was recorded, with a £9.8 billion deficit if only imports and exports of physical goods are included. These appalling trade figures show exactly what a desperate state the UK economy is actually in, as compared to other G20 nations such as the United States, China, Japan and Germany. These woeful figures demonstrate that the UK export market is struggling badly, leaving the economy more reliant upon imports than ever before. Other key economic indicators that Green conveniently discards as trivial include GDP growth (which has been negative for a whole year) and deficit spending (which has been intensified by the stagnant economic conditions caused by austerity).

We only have Green's assertion that we should only be judging the economy by the two measures he gives us, the ones that conveniently show the economy in a flattering light. But then, if we consider the indicators he cherry-picked in more detail we find that these are heavily distorted ways of presenting the data. I'll deal with these one at a time:

Firstly, Inflation. Green is correct that inflation has fallen from the absurd peaks of 2011, but inflation rates considered in isolation are pretty much meaningless. The best way to consider the effects of inflation is to compare the figures with other economic factors such as interest rates or wage rises. If the rates of inflation are compared with the Bank of England base rate we find that inflation has been massively outstripping interest rates. In 2011 inflation/interest ratio peaked above 1,000% on both inflationary measures (see graph).

What this means is that inflation is massively outstripping the interest earned on savings and pension schemes. Even though the headline inflation rate is much lower than the extremely high interest rates of the Thatcher years, the economic impact is much, much worse, because interest rates are not keeping pace with inflation.

Inflation peaked twice under the Thatcher administration, in May 1980 RPI inflation reached 21.9%, but the BoE base rate was 17% making a inflation/interest ratio of 128% and in October 1990 RPI inflation peaked at 10.9%, but the BoE base rate was even higher at 13.875% making an inflation/interest ratio of 79%, both significantly higher than the average throughout the Labour administration, but tiny in comparison to the incredible October 2011 inflation/ RPI interest peak of 1,080%.

Sources:
RPI & CPI inflation data
Bank of England base rates, historical data

Another way in which it can be seen that inflation is actually very high is the fact that inflation has been consistently higher than wage inflation ever since the Tories came to power. Average weekly pay rises in October (change in weekly pay over 12 months) account for only 56% of the value of RPI inflation and 67% of CPI inflation, meaning that wages are shrinking in real terms. When the purchasing power of wages declines in real terms, this creates a fall in aggregate demand. If people find that their wages are not stretching as far as they were last year, they have two choices, they can either cut back spending (reducing economic demand) or borrow more money to maintain their standard of living (not good in economic terms, and not easy given the difficulty of obtaining credit these days).

Even if we ignore comparative assessment of the headline inflation figure and work with the basic numbers there are more problems. Both measures of inflation are conservative, especially the CPI (which excludes housing costs, council tax, transport costs and fuel) but the RPI is also heavily distorted by the fact that it excludes millions of low income pensioners from the calculations and the ONS are even bidding to change the way that RPI is calculated to artificially bring the rate of inflation down.

Just think about inflation it in real terms. How much has your supermarket shopping bill been rising, even though you may have been making cutbacks? How much are the costs of public transport rising? How much has the cost of petrol/diesel gone up this year? How much have your electricity and gas bills risen by? How about your water rates? Green's misleading assertions about the government's low-inflation achievements fly in the face of the everyday experience of millions of people.

Secondly, I'll deal with Green's upbeat assessment of the unemployment situation: The headline unemployment figure may have been falling for several months, but the lack of economic growth leaves us with a paradox. How can employment be rising, yet economic activity be shrinking? You have to be careful with this (perfectly reasonable) question, the Tory employment minister Iain Duncan Smith accused the BBC economics correspondent Stephanie Flanders of "pissing all over British industry" for asking exactly that question and working through some potential answers.

Here are some potential answers:

• Unemployment is falling but the proportion of workers in part-time work is near an all time high (8.1 million), with over one in four workers doing part time hours.  Hence there is less money in the economy due to falling take-home salaries.
• Lots of reasonably well paid jobs (civil service, manufacturing, construction) have been lost, whilst a high proportion of new jobs are low-paid and minimum wage work, meaning that even though more people may be in work, a significantly greater proportion are earning poverty wages. 
• Many millions of workers have been on pay freezes for years, which has driven down their spending power.
• Another potential answer is that the calculation methods have been rigged for political reasons on so many occasions that the headline figure of 7.8% is virtually meaningless, given that the real level of general unemployment is closer to 20%.
• Another indicator of unemployment is the number of people claiming unemployment benefits, which rose by 10,100. Quite a remarkable rise, given the increased difficulty of making benefits claims under the the coalition government.
• Yet another indicator that the unemployment situation isn't as fabulously rosy as Green would have us believe is the fact that long-term unemployment is also on the rise, with the number of people out of work for over a year rising by 12,000 to 894,000.

Whatever the case, people in Britain are acutely aware that the unemployment situation is nowhere near as rosy as Green would have us believe. With the industrial and construction sectors in terrible decline and massive job losses (such as the Transit van closure) coming on a regular basis, you'd have to be a fool to accept the Tory narrative that everything is getting better.

Even though Green cherry-picked the two economic indicators that he could actually work with to weave an absurdly misleading narrative about how everything is getting better, closer examination reveals that both inflation and unemployment are significantly worse than the impression created if the headline figures are considered in isolation. General unemployment is closer to 20% than 7.8% and inflation, when considered in relation to interest rates or wages is far higher than anything experienced during the previous Labour administration, and in fact far worse even than the inflationary spikes during the Thatcher years.

If we consider other key economic indicators, the picture is just as bad: Economic growth (minus 0.113% over the course of an entire year), deficit spending (debt increases as a percentage of GDP comparable to the scale of borrowing needed to fund the Great War and the World War), the trade deficit (2 all time highs in recent months), trade deficit in goods (£9.8billion in August), Exports (minus 1.2% in August) manufacturing output (minus 1.1% in August), construction (shockingly bad figures with an 11% overall decline between Q3 2011 and Q3 2012), Consumer Confidence (an October decline in consumer confidence, a continuation of the appallingly bad long-term low confidence trend under the Tory led government). Wherever you look there is plentiful evidence that the UK is in chaos, with just a tiny pocket of extremely wealthy people insulated from the devastating effects of Tory economic mismanagement and the Bank of England's stagflationary monetary policies.

Conclusion

I realise that this is a bloody long article to make the point that a particular politician is a liar and a manipulator. I mean the growing levels of cynicism about British politics mean that the majority of people seem to accept the idiom that the best way to tell if a politician is lying is by looking to see if his lips are moving. Damian Green however, is a particularly loathsome and  transparent liar, even by modern political standards.When he got caught in his first lie, he simply accused his opponent of lying about the facts. He used his second lie to counter accusations that Tory economic fearmongering had damaged market confidence, a lie that was a particularly egregious display of completely inaccurate Tory debt fearmongering, which completely reinforced the point that his opponent had made about market confidence being damaged by fearmongering. Chuck in a bit of inaccurate tribalistic political point scoring and he managed three stunningly obvious lies in the space of a minute.

He then followed up this blunderbuss of lies with an audaciously rosy assessment of the state of the UK economy, which relied upon cherry picked statistics and lame anecdotes. Anyone with half a brain in the audience could tell that things are not nearly as great as Green would have us believe.

The fact is, that this man feels completely at ease telling obvious lies to huge audiences, and that barely a word that comes out of his mouth is not some kind of lie or distortion. As long as flagrant liars like Damian Green are given the oxygen of publicity, public trust in the political classes will never come close to recovery.

In a government of liars and manipulators, Damian Green is such a bold and bad liar he stands out as particularly dishonest. I have attempted to show (using evidence and analysis) exactly how much of a transparent liar the man is. Hopefully, next time you see the man speak, you'll take whatever he says with a wheelbarrow full of salt.

See also

An entirely avoidable "Osbornomic" recession

How Quantitative Easing is bad for the economy

What is... Quantitative Easing?

What is... A Justification Narrative? 
  

What is... Confirmation Bias?
 

Tory policy: All narrative, no substance

 

UK nuclear weapons privatisation

  

  Number 1:  The UK "independent" nuclear deterrent

The first ever successful British nuclear test in 1953.

The UK nuclear weapons development programme was launched in 1940. After the United States joined the Second World War in 1941 the nuclear programmes of the Britain, Canada and the United States were amalgamated into the Manhattan Project which eventually led to the creation of the first nuclear weapons and atomic bombs that were dropped on Hiroshima and Nagasaki.

After the conclusion of the Second World War, the United Kingdom requested information on the Manhattan project, to which their scientists had contributed, however to their shock and amazement, the United States government refused to grant access to the information to which the British scientists had contributed. This refusal led to the re-establishment of the British nuclear programme, which became known as the Atomic Weapons Research Establishment in 1950. The first successful British nuclear test in 1952 involved the detonation of a nuclear device inside the hull of HMS Plym, a river-class frigate near Trimouille Island, in the Montobello Islands off the coast of Western Australia. In 1957 the AWRE successfully tested their first batch of Hydrogen (fusion) bombs in the Pacific islands between 1957 and 1959.

In the following decades the AWRE developed several nuclear deterrents and undertook 45 nuclear tests in the Pacific Islands and later at the US test facilities in Nevada. The last British nuclear test took place in 1991.

In 1987 the Conservative government renamed the AWRE as the Atomic Weapons Establishment AWE and in 1989 they announced plans to privatise the operation of Britain's nuclear weapons arsenal under a Government Owned - Contractor Operated (Go-Co) arrangement.

In 1993 the contract to run the UK nuclear deterrent was awarded to a consortium called Hunting-BRAEA, which was composed of the now defunct British company Hunting Engineering, a subsidiary of the American corporate behemoth Halliburton called Brown and Root and the privatised Atomic Energy Authority.

By 1998 all independently developed British nuclear weapons had been phased out, leaving only the Vanguard Submarine based Trident nuclear missiles (built by the American company Lockheed Martin). The British government made a big song and dance about the fact that the missiles may be American, but that the warheads were still British having been designed by AWE.

After several safety breeches including an incident where workers ended up inhaling plutonium, Hunting-BRAEA lost the contract to maintain Britain's nuclear weapons arsenal in 1999, which was transferred to a new consortium called AWE Management Ltd (AWE ML) in the form of a 25 year non-revokable contract. AWE is another tripartite consortium which originally consisted of the UK government owned publicly listed company BNFL, the American weapons giant Lockheed Martin and the UK based outsourcing giant Serco.

AWE ML assumed control of all of Britain's nuclear weapons establishments on April 1st 2000, however the government defended the process pointing out that the sites still belonged to the Ministry of Defence and that the MoD held a "golden share" in the operation (a golden share is a single share which can outvote all other shares in specific pre-determined circumstances).

A problem with the golden share "control" system arose in 2003 when the European Union declared the UK government's golden share in the privatised British Airports Authority illegal because it was deemed contradictory to the principle of free circulation of capital within the EU. The EU has since ruled many other golden share options illegal including Spanish government's golden shares in Telefonica, Repsol, Endesa and Tabacalera and the Portuguese government's golden share in Energias de Portugal. However the fact that golden shares seem to be illegal under EU competition law hasn't stopped the UK government and the MoD repeatedly "talking up" the importance of their golden share in AWE.

As part of the shutdown of BNFL the BNFL stake in AWE was sold to the American firm Jacobs Engineering Group in 2008, meaning that American companies controlled 67% of the operations of the UK nuclear deterrent and research facilities, including complete control of the Trident missiles themselves, guidance systems, components, warheads, research and development and testing.

It has been estimated that the MoD pays over £600 million a year to AWE, and that if the government do decide to renew Trident, these private companies will soak up the vast majority of the estimated £76 billion development cost. In 2011 the MoD agreed to plough another £750 million into AWE for them to renew the Project Pegasus uranium enrichment plant, that is on top of £500 million on Project Mensa warhead assembly plant at AWE Burghfield and another £120 million completely wasted on development of the cancelled Project Hydrus hydrodynamics research facility at AWE Aldermaston. In 2012 the MoD announced another £700 million in spending on the development of the "successor submarines" to replace Trident.

That the British so-called independent nuclear deterrent now relies upon American missiles (built by Lockheed Martin) and is administered by a private consortium which is two thirds controlled by American companies (Lockheed Martin and Jacobs Engineering) to the cost of over £600 million a year to the British taxpayer, (plus vast cash injections for nuclear infrastructure and design programmes) is nothing short of a scandal. How on Earth can it be considered an independent nuclear deterrent when the delivery system is an entirely American off-the-shelf missile system and the private company that is responsible for every aspect of the British nuclear programme, including the design of the warheads themselves is two thirds American?

 Another Angry Voice  is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.

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The White Poppy

The poem that inspired the red poppy symbol

In early November the red poppy of remembrance becomes an almost ubiquitous sight on British lapels. These paper and plastic symbols are sold by the Royal British Legion and the Haig Fund. It is estimated that the Poppy appeal sells around 35 million red poppy symbols a year and raises £75 million for people who have carried out armed service and for their dependants.

In Britain, all politicians, all TV presenters and all professional sports players are expected to wear the poppy or endure a tide of criticism from bitter reactionaries. In 2009 the Guardian journalist Marina Hyde pointed out that an impressive 15 of the 20 Premier League football clubs had had the red poppy symbol especially emblazoned on their shirts during Remembrance Week, yet the Daily Mail worked themselves up into a frothing fit of rage over the five that hadn't.

The Channel 4 news presenter John Snow described this tide of criticism aimed at any remotely public figure or organisation that doesn't display the red poppy symbol during the week preceding Remembrance Sunday as "poppy fascism". A striking term, given that so many of the fallen that we are supposed to be remembering died fighting the fascists of Europe during World War Two to secure the right for British people to express themselves freely.

The idea that the absence of a plastic and paper poppy on your lapel represents some kind of insult to the country's war dead is actually a disgusting cheapening of the whole occasion. The idea of Remembrance Sunday is to remember the war dead and to consider the tragic consequences of war, not to bicker over symbolism and deride those that decline overt displays of symbolism as disrespectful or unpatriotic. In fact, those that would cheapen the occasion by whining and complaining that another person isn't wearing a poppy are showing infinitely more disrespect to the idea of remembrance than those that they criticise.

This WWI war bonds poster is an example of the 
 red poppy symbol being used as war propaganda .

One of the ironic things about the right-wing reactionary types that tends to engage in 'poppy fascism' is that they don't even seem to realise that what they are doing, is in effect, is enforcing their own brand of political correctness. They are essentially saying that it is politically incorrect to not wear a poppy, however when it comes to other forms of political correctness (lets say gay rights or criticism of overtly racist language) these very same people are more than likely to start chuntering on about how "political correctness has gone mad".

An even more provocative gesture than the not-wearing-of-a-poppy, is the wearing of a white poppy. The white poppy is a pacifist symbol to remind us that not only military personnel suffer and die in conflicts. The colour white was chosen both because white is the traditional colour of peace and because during the First World War, conscientious objectors were presented with white feathers of 'cowardice' by women. Many conscientious objectors such as Quakers and members of the other Peace Churches were imprisoned and abused at Richmond castle in North Yorkshire during the First World War. These included 'the Richmond 16' who were taken to France from the castle, charged under Field Regulations and then sentenced to death for their refusal to fight. The death sentences were later commuted to ten years hard labour. The act of conscientiously refusing to fight even under the threat of death, must be considered an outstanding act of bravery. The white poppy appeal is tiny in comparison to the red poppy appeal, only selling around 50,000 a year (0.14% of poppies sold during remembrance week).

The organisers of the Red Poppy Appeal, the Royal British Legion have stated that "it is a matter of choice, the Legion doesn't have a problem whether you wear a red one or a white one, both or none at all". However the right-wing reactionary types ignore this message of respectful remembrance and freedom of choice. Margaret Thatcher was a vociferous opponent of the white poppy symbol, a fact that massively popularised the white poppy appeal in the 1980s. The right-wing tabloid press sided with Thatcher and ran witch-hunt articles against the organisers of the white poppy appeal, many of whom were elderly pacifist ladies. Politicising Remembrance Sunday by turning it into a demonisation campaign against elderly pacifists was not just distasteful, it was an affront to the whole idea of remembrance. The same can be said of the modern day reactionary 'poppy fascist' brigade.

In 2006 the white poppy did find an unexpected supporter, a man called Jonathan Bartley, the head of the religious think-tank, Ekklesia, and former advisor to John Major (Margaret Thatcher's successor as Tory Prime Minister) who suggested that it may actually be more Christian to wear the pacifist white poppy rather than the red one, an understandable stance given Christ's message of peace and love. Bartley also claimed that the red poppy had become a symbol of political correctness with public figures forced to wear one as an "article of faith". This is the idea that the red poppy has become more of a badge of political correctness and conformity, rather than a symbol of remembrance. Many people find themselves wearing the poppy simply because it is expected of them, not because they have any intention of remembrance. The enforced ubiquitousness of the red poppy has diminished it's meaning.

In November 2012 The UK Prime Minister David Cameron took the wearing of the red poppy whilst completely disregarding it's meaning to a whole new level. He undertook a tour of the middle east with a group of leading British arms manufacturers, with the express purpose of selling weaponry to despotic regimes, all the time with a red poppy of remembrance on his lapel. Even worse than that, he even proposed that Britain attempt to bypass the EU arms embargo on Syria in order that British firms could escalate the bloody civil war by flooding the country with weapons, again with the red poppy on his chest.

David Cameron wearing the red poppy symbol whilst on a mission
to hawk military hardware to middle eastern despots.

To wear the red poppy whilst brazenly hawking weapons to despots and speaking of busting arms embargoes to provide British weapons to one side of a bloody civil war, surely diminishes the red poppy symbol to utter meaninglessness. The same kind of meaninglessness achieved by the Nobel committee when they awarded  the 1973 Nobel Peace Prize to the warmonger and chief architect of the Operation Menu war crimes in Cambodia and Laos, Henry Kissinger.

Although I am a pacifist, I am very sympathetic to the suffering of military personnel, after all several of my paternal relatives fought and died in the Second World War. My maternal grandfather on the other hand was a Quaker conscientious objector, who didn't fight in the war, but did serve in the merchant navy during the conflict. A war contribution every bit as dangerous and deadly as active service. I'm sympathetic towards both poppy appeals, although I have a preference for the white poppy because it doesn't have the baggage of having been used as overt war propaganda like the red one has.

Look at the image above, the one of Cameron and the middle eastern despots he is trying to sell British weapons too. The presence of the poppy symbol is a double insult to the concept of remembrance. Not only is Cameron there to sell weapons, whilst wearing a symbol of remembrance, the people he is attempting to sell them to are a bunch of despotic dictators. All of those brave men that fought and died during the Second World War that Cameron is supposedly 'remembering' (my relatives included), did so on the pretext of fighting against dictatorship and oppression for the causes of freedom and democracy. The people that red poppy wearing Cameron is pictured with are dictators and opprossors who would use their British weapons to continue their fight against the very concepts of freedom and democracy.

I was already inclined to wear the white poppy in remembrance of the many thousands of merchant seamen that were killed during the course of the Second World War. However now I'm certain of one thing, now that David Cameron has utterly besmirched the red poppy symbol by wearing it whilst demanding that British arms companies should be allowed to profit by providing weapons to Islamist militants in Syria (the same militias that just the week before were committing grotesque war crimes in Saraqeb), I won't be wearing a red poppy, I'll buy one of the 0.14% of poppies that are white, if I can find one.

The economic case against tax dodging

The case against tax-dodging is more often made by those on the left than it is by those on the right, hence the tendency for tax-dodger apologists to deride the fair tax movement as a bunch of 'loonie lefties'. In this article I will attempt to explain that tax-dodging should be considered a major problem by economically literate people on either side of the political spectrum. The best way to make this point is to describe what tax-dodging actually is, and to explain the effects in economic terms. I'll try to provide explanatory links whenever I use complex sounding economic terms.

I'll start off with a brief explanation of my political position so that you know exactly who is explaining this stuff to you. To crudely oversimplify my stance, I'm a liberal social democrat. This means that I try to occupy the genuine middle ground. I try to see the value in diverse political and economic theories and pick the best aspects. I am sympathetic to elements of socialist theory, but I'm not a socialist. I'm sympathetic to elements of libertarian theory but I'm not a libertarian. I am however, a liberal and I oppose totalitarianism wherever I see it. I also believe that the best way to make a political argument is to base it on research and critical analysis and to back it up with evidence, something that makes me rather old fashioned since the current trend is to make political arguments based on Thinktank conclusions and the results of opinion polls and to back them up with simplistic justification narratives.

Right then, on with the article:

Tax-dodging can be split into two distinct types, tax evasion which is an illegal avoidance of due taxation and tax avoidance, which is a method of avoiding due taxation through the creation and use of elaborate tax-loopholes. They are distinct in that one is punishable by law and the other isn't, but they are basically the same thing, because they result in the same economic outcomes, in fact there is a case to be made that legalised tax avoidance via offshore tax havens is actually significantly more damaging at the national scale than tax evasion (but I'll have to cover that at a later date, this article is plenty long enough already).

The primary concern with tax-dodging is that the practice denies revenue to the government, which leaves the government with three options. They must either borrow more in order to meet their obligations (increase the deficit), they must cut back on spending and investment (by closing hospitals, by sacking police officers, by cancelling infrastructure investment, by releasing prisoners early, by cancelling flood defence schemes, by slashing legal aid...) or they must raise taxes on everyone else to make up the shortfall. In reality the modern state usually uses a combination of the three to cover the cost of tax-dodging.

The UK Prime Minister David Cameron is extremely unlikely to
 do anything  meaningful to reduce tax-dodging, given that the
Tory party accept political donations from tax-dodgers and
Cameron's own father was a tax-dodging Tory party donor.

The scale of tax-dodging in the UK is absolutely enormous. It is difficult to put a precise figure on the amount of tax that is dodged each year because of the inherently secretive nature of tax avoidance and evasion schemes. The total tax gap between what is owed and what is collected has been estimated by Richard Murphy of Tax Research UK at £120bn a year, which would be more than enough to wipe out the entire UK budget deficit. 

Another indicator of the scale of tax-dodging is research that has concluded that 98 of the 100 companies listed on the FTSE100 have subsidiary companies based in tax havens. The current Conservative led government have a very relaxed attitude towards tax-dodging, which is hardly surprising given that a number of their biggest donors are tax-dodgers, and because the Prime Minister David Cameron's family fortune was built upon his father's tax-dodging empire. The last Labour government were not much better, in fact they even signed off on a ludicrous deal to privatise the HMRC property portfolio (mainly tax collection offices) into the ownership of a company based in a tax-haven!

I don't want to base my criticism of tax-dodging on the moral case, because I know that appealing to the 'unfairness' argument simply doesn't wash with a lot of right-wing people, however it would be remiss of me not to even mention it. Many people, myself included, believe that it is simply immoral for one company or individual to dodge their social responsibilities and create the situation where others must pay more through increases in their tax burden or cuts to their services.

I want to focus my criticism on the economic case against tax dodging, but first I must address a right-wing concern that is often used as part of the tax-dodging justification narrative; the concern that the state is 'too big'. This is the idea that by dodging their taxes, people are actually 'helping' the country by incentivising the state to shrink. 

Well, even the most right-wing libertarians still perceive a role for the state, admittedly there isn't much for the 'libertarian state' to do but to protect property rights, but this would still necessitate taxation of some kind. Another form of state spending that very few right-wing people would argue for the abolition of, simply in order to reduce their own tax burden, is military spending. Whatever economic system is envisaged (other than anarchism, proto-economic barter systems or nihilist dystopias) there will always be a necessity for taxation. 

If one company or individual dodges their tax contribution, they either transfer the burden of taxation to others, they cause the elimination of state services or they cause an increase in the national debt. Given that the state can only ever be 'rolled back' so far, there will always be some kind of tax expectation, and because the kind of right-wing people that believe in the 'small-state' (minarchists), are the kind of people currently engaged in the sovereign debt fear-mongering campaign, this means that borrowing more is simply out of the question. The only remaining option for the economically literate right-winger is to transfer the tax burden to others, which, under libertarian theory is an infringement of other people's economic freedoms and an act aggression.

Even though many tax-dodgers employ the simplistic justification narrative that they don't use the NHS or receive any welfare benefits from the state, the fact is, that if they are engaged in any kind of economic activity within the state they are beneficiaries of government spending. By refusing to pay their share, they are expecting others to subsidise them through the direct and indirect economic benefits of state spending. I'll list just a few examples:

If the tax-dodger is a corporation or an employer, it is almost certain that some of their employees benefited from a taxpayer funded education (93% of Brits attended state funded schools), and continue to benefit from access to taxpayer funded universal healthcare (only a minority of jobs come with private health insurance). Without these provisions, the tax-dodger would have to select their employees from amongst the diseased and illiterate, or invest fortunes in educating their employees and providing private health insurance. By dodging tax, these employers are demonstrating that they are happy for others to keep their workers healthy and reasonably educated, but they won't contribute themselves.

If the tax-dodger runs a business, their customers benefit from taxpayer funded infrastructure (public roads and footpaths, the taxpayer subsidised rail network, the London Underground) to even get there, or for the services to be delivered to them. By dodging tax, these enterprises are demonstrating that they are happy for others to fund the infrastructure that contributes to their profit margins, but they won't contribute themselves.

Whenever a crime is committed and a tax-dodger calls the taxpayer funded police or makes recourse to the publicly funded courts, the tax-dodger is demonstrating that they are happy to benefit from the taxpayer funded justice system, whilst expecting others to fund it for them.

Now we begin to get to the crux of the economic argument against tax-dodging, which is based on this transference of the burden of taxation. In business, the most prolific tax-dodgers are the multinational corporations. They have the financial means to employ expensive tax lawyers and to establish subsidiaries in tax havens for the express purpose of avoiding taxation. The majority of small and medium enterprises in the UK do not have the financial means to hire tax lawyers, to establish complex tax loopholes or to set up subsidiary shell companies in tax havens, so they are left carrying the greater burden of taxation. We'll call this difference taxation asymmetry. 

One of the strongest and most regularly cited arguments in favour of the capitalist system is that 'the market' creates efficiency through competition. Used as a general rule of thumb, this argument is OK, however there are plenty of examples of state systems outperforming the market (the "socialised" universal healthcare systems of Europe vastly outperform the private sector dominated US healthcare system, both in terms of lower economic burdens and superior health outcomes) and also plenty of examples of grotesque inefficiency in the private sector (the G4S Olympic shambles, where the company had months to prepare and train security staff for the London 2012 Olympics, but ended up failing badly, leaving the state sector to efficiently pick up the pieces at extremely short notice through the deployment of thousands of police and military personnel). These counterexamples clearly demonstrate that private sector efficiency is more of a rule of thumb than a hard and fast economic law. I'll modify the private sector efficiency premise with the word 'potentially', so as to account for counterexamples of the aforementioned type. Leaving us with the (more-or-less acceptable to everyone) capitalist theory that through competition the capitalist market can potentially create greater efficiency than bureaucratic central state planning.

This brings us to the subject of what 'competition' actually is. It is a generally accepted economic principle that in order for competition to actually work, there needs to be a 'level playing field'. There are many clearly defined examples of anti-competitive practices that are used to create unfair market advantages, which include; monopoly formation, corruption, information asymmetry, cartel formation, price fixing, financial doping, dumping, tying, fraud, refusing to deal, political patronage and dividing territories. 

Taxation asymmetry is another form of anti-competitive practice, which is related to political patronage. It is easy to see how taxation asymmetry leads to unfair competition. If a government allows a large corporation to use explicit tax avoidance vehicles, whilst smaller competitors are left paying the standard tax rates because the establishment of tax avoidance schemes is beyond their means, this is essentially a form of political patronage to allow large corporations to develop a large cost advantage over their smaller, tax paying competitors.

If the ruling establishment allow taxation asymmetry to continue over the course of decades (as is the case in the UK), many of the smaller tax-paying competitors are driven out of business, leaving the large tax-avoiders to hoover up greater shares of the market for themselves. As the smaller competitors are eliminated or bought out, the large tax-dodgers begin to form oligopolies and monopolies, which reduce the need for efficiency. They can simply raise their prices to cover any inefficiency costs because they can get away with it in a market denuded of competition.

Taxation asymmetry is obviously bad for the small and medium sized enterprises that find themselves at a competitive cost disadvantage, but it is also bad for the economy as a whole. There are several reasons, including the fact that the aforementioned small and medium enterprises (SMEs) are the real drivers of innovation, demand and economic growth and because as the tax-dodgers hoover up ever greater proportion of the market, tax revenues will obviously fall. The elimination of SME demand and falling tax revenues drive the state back to the choice of deficit spending, destruction of services and investment or loading the tax paying elements of the economy with an even greater tax burden, thus further intensifying the downward spiral of taxation asymmetry.

In the current economic climate, it is absolutely clear that the act of dodging taxes is both against the national interest and an infringement on the economic freedoms of others, the ones that must make up the shortfall. The basis of the argument against tax-dodging is that in order to have a free market, you must first have a fair market because without a fair market, the driving forces of capitalist efficiency are diminished, and that taxation asymmetry is clearly anti-competitive and incompatible with the fair market.

I believe I have clearly established that if you believe in the competitive free market, you must see taxation asymmetry as a barrier to competitivity and efficiency. Whether you believe in a low-tax economy or a high-tax economy, you have to accept that the burden of taxation must fall equitably, otherwise unfair and inefficient market conditions are created.

If taxation asymmetry is as anti-competitive and economically damaging as I have described, the question must be asked; what should we do about it? Here are two proposals to reduce taxation asymmetry

1. A Ban on taxpayer funding of tax avoiding companies. There is absolutely no justification for allowing taxpayer generated funds to be provided to tax-dodging companies (in the form of subsidies, outsourcing contracts, R&D loans, procurement contracts, health contracts, IT contracts, training schemes, PFI deals...). If an enterprise won't demonstrate that they are a British based company (or registered subsidiary) that pay their fair share of taxes, they mustn't get a penny from the government. They should also have to demonstrate that all employees are paid in a tax transparent way, with no personal service companies, offshore dividends and the like.

2. A blanket ban on all tax avoidance schemes. After the government spending regulations have been brought into effect, a simple change to the tax code should be made to legislate that if a scheme is designed for the explicit purpose of avoiding tax, then it is by definition a criminal activity.

These relatively simple rules should be acceptable to left-wing and right-wing thinkers alike. After all, they would establish both a fairer and a simpler tax system. The creation of a simpler tax system is basically a form of deregulation, to be applauded by the right-wing. These policies should also be popular across the political spectrum because they would help to reduce the deficit, which could significantly reduce the scale of service and investment cuts (popular with the left) and reduce the deficit without resorting to tax rises (popular with the right).

Under the current economic circumstances, a clampdown on tax-dodging is the best possible approach to closing the budget deficit. Increased taxation at a time of economic stagnation would only worsen the economic situation by reducing demand, the extremely right-wing IMF announced in October that austerity is a self-defeating policy because "in today’s environment of substantial economic slack, monetary policy constrained by the zero lower bound, and synchronized fiscal adjustment across numerous economies" government spending creates much higher returns than previously expected, meaning that government cuts end up destroying much more economic activity than previously estimated. This leaves a clampdown on tax-dodging as the only viable option.

The right-wing really have to decide whether they are more interested in protecting the UK economy and reducing the fiscal deficit by attempting to reduce taxation asymmetry, or whether they are more interested in serving the interests of tax-dodgers and the wealthy elite.

The revelations about Starbucks tax-dodging exploits and the
boycott Starbucks campaign have seriously
damaged their brand reputation.

You may have noticed that the two proposals I mentioned are both political proposals. You may be thinking "but what can I, as an individual, do about it?" The answer is firstly to put pressure on your MP or your political party to implement 'fair tax' reforms, but you can also take direct action against tax-dodging companies.

Direct action works, you only need to look at the spectacular success of the Olympic Tax Dodge campaign, or at the rapidly declining Starbucks brand identity reputation after their scandalous tax-dodging activities were exposed by Reuters, to see that direct action like boycotts and social media campaigns can work.

The problem with direct action is that there is actually no way to boycott certain tax-dodging enterprises. Imagine that every single provider in a market is engaged in tax-dodging (not difficult to imagine given that 98% of FTSE100 companies are tax-dodgers). If you require a service or commodity in that market, you have no choice but to deal with tax-dodgers. 

Another example can be seen in government services: If the government are buying products or services from tax-dodgers on your behalf, you have no direct capacity to intervene. Take the tax-dodging Mapeley Steps deal on HMRC properties as an example. You can hardly boycott HMRC. I mean you can't boycott paying your taxes, especially if your boycott is inspired by your opposition to tax-dodging!

These problems with direct action bring us back to my 'fair tax' proposals. Our political parties must be implored to end taxation asymmetry and create a fair, 'level playing field' so that the capitalist market can function efficiently. If the government refuses to do this, it is essentially an admission that they are simply abusing libertarian free-market theories as empty rhetoric to justify the corporatisation of the state and the serving of wealthy establishment interests.

In conclusion: The only people that could continue making excuses for tax-dodgers are the tax-dodgers themselves or the half-witted Ayn Rand inspired anarcho-capitalist neoliberal pseudo-economic brigade; the kind of people that are so economically illiterate that they believe that stable economic systems can be built upon the foundations of a bunch of simplistic and loosely related adages like "private good, public bad", "all regulation hinders productivity" and "taxation is theft".

If you believe that the capitalist system creates prosperity through competition and efficiency, you must accept the case that taxation asymmetry is a barrier to competition as much as any "red tape" regulation, and that the tax code must be dramatically simplified and reformed to criminalise explicit tax avoidance schemes, and that the government must introduce a fair tax requirement to prevent taxpayers' money being used to boost the profitability of companies and the personal wealth of individuals, that refuse to pay their fair share of tax.

See Also

Tory tax scandals

Jimmy Carr vs David Cameron in the Tax Hypocrisy Stakes
  

A letter to George Osborne
  

The Minimum Alcohol Pricing farce

What is... a justification narrative?
  

George Osborne's Philanthropy Tax
 
 Why we should boycott Starbucks