The political is personal: my speech to the People’s March for EU

[What follows is the text of my speech to the People’s March for EU earlier this afternoon.]

In 2008 we faced a crisis. Our financial system – grease to the structures that deliver us food and housing and employment – lay on the brink of collapse. But we rescued it and were saved a devastating depression.

And then we carried on.

And now we face another threat. And maybe we will and maybe we won’t leave the EU. But either way, in a decade’s time, there will be another crisis still.

A society in decline dies a thousand deaths.

And if you’ve travelled down from Liverpool this morning, if you live in Blackpool or in Sunderland, if you’ve come from Wales; if your infrastructure has been left to rot; as the South continues to thrive but your own wages fall; if you’ve waited longer to see your GP and longer for the bus to her surgery… society for you has died many deaths already.

2008 should have opened our eyes. But it didn’t and we fell back to complacency.

Brexit won’t arrest the decline. Brexit buys it a new suit, and a slap up dinner. Brexit introduces it to your cute cousin and gives it something for the weekend. Brexit won’t arrest the decline – Brexit accelerates it. Brexit won’t arrest the decline but Brexit isn’t the decline. Brexit is what the decline has delivered. And the decline is in the courage of our politicians.

We’ve seen what happens when we leave it them to fix the problems. Why pick up a can if you can kick it down the road? Why choose the public interest if you can pursue your own? Why face the problems of tomorrow if you can take refuge in the past?

So what do we do?

In the 60s and the 70s the personal became political. Women looked to collective action for lives of quality. But now we must apply that adage in reverse. We make the political personal again.

We must, you must, take responsibility.

And there’s no universal prescription for what that looks like. You must find one yourself. But if you’re a student, maybe volunteer in a care home. If you’re wealthy and a parent send your kids to a state school so they know the lives of others. If you’re an empty nester work with a refugee charity to help another human being live a decent life. Look out for one another. Look local.

From our politics something better may come. And I hope that it does. But you can’t rely on these politicians to fix our problems. They haven’t and they won’t.

Still, here we are. Well over a year on from the referendum. Tens of thousands of us. And we’re engaged. We’re not complacent. But whatever happens next – whether we leave or we stay or we muddle through – don’t forget how the last 18 months made you feel. Don’t repeat the mistakes of 2008.

Be Jean Monnet, an architect of the EU:

“I am not optimistic. I am not pessimistic. I am determined.”

I am determined.

What happens if the talks break down?

The starting point is Article 50. It states:

3. The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.

So, as a matter of EU law, we leave when a withdrawal agreement says we do or, if there is no withdrawal agreement, two years from the notification.

So walking out of negotiations before the two years are up does not, as a matter of EU law, terminate our EU membership.

What about as a matter of UK law?

Our membership of the EU flows from the European Communities Act 1972. As a matter of UK law we are in the EU so long as that Act says we are.

And what’s key here is who controls the status of that Act.

If the status of the 1972 Act is in Parliament’s hands then it will be for Parliament to choose, should our talks with the EU break down, how to respond. Parliament may choose to react by repealing the European Communities Act 1972 or it may choose some other action.

It is difficult to imagine how Parliament could demand that the PM restart negotiations. But leaving with no deal will have calamitous consequences and, in a world where Brexit had fallen so very far short of the promised cake-and-eat-it uplands, Parliament could well think it right for the electorate to decide whether to leave the EU without a deal or to Remain. And if a Referendum produced a Remain result before 29 March 2019, and the EU consented, we would Remain in the EU as a matter of both UK and EU law.

But the important thing is that the question ‘what action should we take if the talks break down?’ would be for Parliament to answer.

But what if the status of the 1972 Act was outside Parliament’s hands?

That’s a topical question because Parliament is just about to be asked to agree to repeal the 1972 Act in the European Union (Withdrawal) Bill.

The very first clause of that Bill says:

The European Communities Act 1972 is repealed on exit day.

And “exit day” is defined as “such day as a Minister of the Crown may by regulations appoint.”

Yep, that’s right. The government is proposing that a Minister gets to decide when our membership of the EU ends. And to make that decision without any Parliamentary control at all. None, zip, nada.

The consequence of Parliament agreeing to this clause is stark.

If talks do break down, it will be a Minister of the Crown – Boris Johnson, say – who has absolute unfettered discretion as to how to react. Parliament – our sovereign and democratically elected Parliament – will be completely sidelined from the most important decision our nation has made in recent times.

Giving unfettered power to a Minister, marginalising our Parliament, in respect of such an important decision is the very opposite of taking back control.

Parliament must vote against clause one.

Labour never has never got close to Stasi tactics… Whatever Danny says.

What follows is a guest post by Paul Unwin (@UnwinPaul), responding to yesterday’s piece in The Times: “True Socialism always ends with the Stasi” which you can read here.

***

I don’t dislike Danny Finkelstein but I certainly think his piece in the Times ‘True Socialism always end with the Stasi’ aches with cliché and a sense of hysteria. That it is the oldest argument in Conservative playbook doesn’t make it any less ridiculous. In the current atmosphere with the Conservatives demonstrating a stunning ability to tear up just about everything that one can hold dear about British politics – truthfulness, a sense of decency, the nation-over-Party-good – Mr Finkelstein is taking irony to a new level.

Look at the history of the “Labour=State Controlled Socialism=Stasi” because its revealing. I suspect a guy of Mr Finkelstein’s knowledge knows this, but perhaps his readers don’t, or if they did they have let themselves forget it (as so much about the current political climate).

The National Government that fought the Second World War had Churchill as Prime Minister and the Labour Leader Attlee as his deputy. Ernie Bevin, Hugh Dalton, Herbert Morrison, Ellen Wilkinson, Richard Stafford-Cripps all played significant roles. When after VE day in 1945 the Labour Party broke from the coalition and took Churchill up on his promise of a General Election two things happened: there was real consternation as the war was still being fought and no-one truly expected anything other than a stonking Churchill victory.

From early 1941, there had been discussion about what a post war Britain was going to look like. By VE day there was possibly too little understanding of just how devastating the struggle had been to the country and the Empire. It may not have been seen clearly but peace put Britain at a precipice.

What was certainly true is that Churchill and Attlee and their coalition had learnt to think boldly. They knew about national planning of industry, they understood how to manage large social issues – rationing, evacuation. They also had allowed out of the box thinking. Beveridge’s white paper on the Five Great Evils was a best seller.

It was during his reluctant – and exhausted – 1945 election campaign that Churchill famously said that Labour would need a Gestapo–like police service to carry through their plans to nationalise health, education (in part) coal, rail and steel. It was an ugly use of words that possibly history have made uglier. The true horrors of Nazism emerged gradually.

The Labour Government that was formed with a one hundred and sixty-four seat majority went forward and did, by any terms, extra-ordinary things without the slightest hint of Gestapo tactics. In fact, their achievements are all the more remarkable because they worked so hard to create consensus. Nye Bevan who had learnt his politics in the very tough industrial relations of the mining communities of South Wales was Attlee’s startling but inspired choice to takes over Health and Housing.

Far from the Stalinist bully the right-wing press wanted him to be Bevan coaxed, persuaded and encouraged the health industry that the NHS was the best and only way forward. Now, we all know it to one of the best parts of British social fabric and its creation by socialists demonstrates the complete reverse of Finkelstein’s Stasi nonsense. Bevan was assiduous – he respected the BMA’s voting against nationalisation but went back to finesse his argument and the Government’s position. He negotiated, he compromised – to a fault, he ended up feeling – but he didn’t threaten.

Of course, the fact that Attlee and his gang did not resort to Finkelstein’s dreaded Stasi is true not only that Government.  At no time did Wilson, Callaghan, Blair or Brown ever resort to anything approaching Mr Finklestein’s paranoid fantasy; and nor will Corbyn and modern Labour if they gain power.

Frustratingly for the Tories, Labour – despite their failings – have be democratic and reactive in a way that simply is not true of the Tories. Old enough to remember the miner’s strike, living now through the Brexit-wrecking ball it’s obviously not a leftist Stasi we need to fear but an ever more cavalier unaccountable right wing.

On reflection, again, Nye Bevan was right. Finally, certain that he and the Labour Government were going to deliver as least some of the things their election had promised he lost his guile and his good manners and described the Conservatives ‘vermin’ that he had fought all his life.

In the same way socialists in Britain haven’t used wire taps, or the horrors of the Hohenschonhausen in Berlin, we remain democratic, and responsive; so unlike Mr Finklestein’s appalling and feckless party.

 

Labour, Brexit and a transitional period

The tensions are stark.

Jeremy Corbyn has previously argued forcefully in favour of the Party’s policy positions being set by members:

It’s about being open to the people we seek to represent; giving them a voice through our organisation and policy-making, and drawing members into political action.

Why not give members the chance to take part in indicative online ballots on policy in between annual conferences – and give our grassroots members and supporters a real say?

And we know that 87% of Labour’s membership wants the UK to remain in the single market and over 78% want a vote on the final deal (link).

But Jeremy Corbyn’s voting record on the EU before he became leader and his actions since becoming leader have led to a sense amongst many that Brexit will be an exception to his vision of direct democracy.

And this poses a major political headache for Labour.

Labour outperformed expectations in the 2017 General Election. But data from the British Election Study shows that Brexit was the defining issue of the General Election and that Labour’s relative – after all, it received 55 seats fewer than the Conservatives – success was attributable to it gathering votes from those who perceived it as the party of Soft, or No, Brexit.

If that perception is disappointed then, all other things being equal, Labour will suffer badly at the next general election: those voters will have no or a diminished reason to vote Labour. It may be worse: some or many may feel a vigorous antipathy towards a Party that betrayed what they believed they were promised.

How, then, should the leadership reconcile its pro-Brexit leanings with its desire to retain those votes? The obvious candidate strategy is to signal soft Brexit positions but fail to take Parliamentary action to deliver them – and then seek to blame the Government.

And this has been the Party’s strategy to date.

The best evidence of this can be seen from the events of the Queen’s Speech. Labour’s Manifesto promised:

Capture

And a number of shadow ministers supported an amendment that respected that promise:

Capture

Whilst the official one did not:

Capture

Nevertheless, those voting in Parliament to deliver Labour’s Manifesto pledge were sacked.

So what are we to make of Sir Keir Starmer’s promise that Labour will back single market and customs union membership, albeit only during a transitional period? Is Labour listening to its members – is it fighting in a politically astute way for what they want? – or is it cynically trying to retain Remain votes at the same time as indulging the pro-Brexit inclination of the Party’s leadership?

We will soon find out.

The most obvious way for Parliament to control the type of transitional agreement the country has is for it to retain power to extend the period of operation of the European Communities Act 1972. That is the Act which means we are part of the European Union and which could provide for us to be governed by a transitional agreement.

In September, Parliament will be invited to agree to a repeal of that Act. The very first clause of the European Union (Withdrawal) Bill – the so-called Repeal Bill – says:

The European Communities Act 1972 is repealed on exit day.

But the “exit day” is defined as “such day as a Minister of the Crown may by regulations appoint.”

Now. When important stuff gets done by regulations the government usually recognises that parliament should have control over those regulations. And, sometimes, the European Union (Withdrawal) Bill does. For example, if, in planning our departure from the EU we forget about some dusty bit of legislation that once made reference to an EU institution, and a Minister of the Crown wanted to put that right with a regulation, she would have to put a copy of her regulation before both Houses of Parliament and both Houses would have to approve it.

But not all the time. Because, when it comes to determining the date of our departure from the EU, the government proposes that there be no parliamentary control at all. And if Labour agrees to this clause it will be handing over to a Minister control over the date and form of our departure from the EU. Sir Keir’s promise will be revealed to be no more than empty virtue signalling to its Remain support.

Moreover, if that wasn’t clear enough, Labour will also, by agreeing to that clause, be ignoring that same Manifesto pledge:

Capture

If control over the repeal of the European Communities Act 1972 is given over to a Government Minister, and with no Parliamentary supervision, Labour’s promise will be emptied of all content.

Crunch time for Labour is near. Are its promises this morning and in its Manifesto cynical virtue signalling? Or are they a genuine attempt to deliver what the Party’s membership – and many of its voters – want?

Is Labour’s promise real? Or is it yet more cake and eat it?

***

Postscript:

It is worth noting that what the Government proposes in the European Union (Withdrawal) Bill  also breaks a promise given by the Prime Minister in her Lancaster House speech:

I can confirm today that the government will put the final deal that is agreed between the UK and the EU to a vote in both Houses of Parliament, before it comes into force.

And by her Minister of State, David Jones:

we intend that the vote will cover… the withdrawal arrangements.

And if Conservative MPs want to guarantee that this promise to parliament and the electorate is honoured, they too should vote to amend clause 1 of the Bill.

 

 

What is a new Party for: taxation

Ignore the platitudes of Labour and the Tories: getting the tax system right is harder than rhetorical flourishes about stopping avoidance and evasion. And it’s harder than fiddling about with rates or thresholds. Sharpening the wrong tools won’t get the job done.

On corporation tax, to ignore that capital is mobile and that the tax systems of different countries tax systems dovetail together poorly is wishful thinking. Steep rises in corporation tax rates without addressing these structural difficulties won’t end well.

The best solution is international co-operation – where states club together to tax corporations and then share the fruits. Plug the leaks between tax systems and avoidance becomes much more difficult. And if capital has fewer places to flee, higher rates translate more readily into higher receipts. The EU is embarked on exactly such a project: a “common consolidated corporate tax base”. Who knows whether this – and other EU led anti-tax avoidance measures – contributed to the enthusiasm with which tax dodgers funded  the Leave campaign?

But if we choose to absent ourselves from the best systemic solution we will need to become more imaginative. 

A very substantial source of avoidance – practised by the usual suspects, Google, Facebook, Airbnb and others – involves selling into the UK from foreign tax havens. We should tackle this with a Foreign Sales Levy on large companies who engage in that practice. Base yourself here and you can pay corporation tax – but if you choose to game the system by selling to UK customers from tax havens you will pay a substitute for the corporation tax you are dodging.

Higher taxes on income are – by and large – another triumph of rhetoric over reality. The evidence that raising rates will produce meaningful additional receipts is slim to non-existent. In any event, it is simply wrong to punish hard working strivers but ignore the asset rich. The trend should be to cut taxes on income – and especially on National Insurance Contributions which are regressive, privilege unearned over earned income, and punish responsible employers – and increase taxes on wealth.

We do have a wealth tax – when income is passed between generations – but state sponsored loopholes for particular classes of assets render it insignificant as a revenue earner. Instead it acts to create false markets in those asset classes – their value is inflated by their use as tokens to pass wealth tax free between generations.

We must be radical.

We should halve the rate of inheritance tax – the current 40% rate is confiscatory – but reduce the threshold so it is paid by the top half of estates and applies to substantially all transfers of capital above £100,000. And we should remove the exemptions for special asset classes and special trusts. These measures will be hugely cash generative – and fairer by far than the current system.

We must also commit to a proper annual wealth tax. An inevitable consequence of the march of  technology will be greater concentrations of wealth. We must have fewer and lower taxes on income; more, higher and better taxes on wealth.

We spend well over £100bn a year on tax reliefs that go overwhelmingly to the wealthy. We spend over £28bn per annum – £540m a week that could be spent on the NHS – exempting homeowners from capital gains tax on increases in house prices. Over £26bn more – £400 a year for every man, woman and child in the country – is spent subsidising savers. We do this without any analysis of whether this is the best way to spend this money. A new Party should conduct a rigorous review of all of the major tax reliefs and ensure that this massive expenditure generates benefits for all of us. Where it does not, we should not be afraid to tackle the vested interests of land-bankers, buy-to-let landlords and the financial services sector.

And we should reform Council Tax. For the lowest earning 10% of households, Council Tax (after Council Tax support) consumes a staggering 7% of household income (including benefits). For the highest earning 10% of households, the equivalent figure is 1.5%. We must extend Council Tax bands so the owners of expensive properties make a fair contribution. And use some of the proceeds to reintroduce a Council Tax Benefit that reduces the effect on poorer low earners.

This is not the place for a full review of all of the weaknesses of our tax system. But it is clear that there is far more to be done than the thin gruel of the Labour and the Conservative Manifestos of 2017 admit.

[This is the first of a series on how the sepia-tinged 1970s socialism of Labour and the Victoriana of the Tories leaves plenty of room for those who believe today’s problems won’t be solved with the ideology of yesterday.]

What is a new Party for?

Let me go over; that the men of Gilead said unto him, Art thou an Ephraimite? If he said, Nay; Then said they unto him, Say now Shibboleth: and he said Sibboleth: for he could not frame to pronounce it right. Then they took him, and slew him at the passages of Jordan.

(Judges, Chapter 12)

A shibboleth is a splendid way of identifying your enemies. But it has little to recommend it as a way of conducting first-past-the-post-politics. Why single out and alienate those not of your tribe?

I ask because it has become a practice of many Grand Men of the Left. The frequent epithets: “Blairites,” “neoliberals”. They are so protean, so bereft of content, as to shrink to little thing more than a desire to articulate a loathing of some other.

It’s foolish politics. Bad enough to hate Conservatives who, like it or not, form a large part of the voting public. But also, deliberately, to alienate those who are not your political enemies? When last did Left Labour harvest so rich a bounty of votes that it could afford to leave some lying on the ground?

The latest iteration – the spat slur “centrist” – illustrates the point well. What might cause you to highlight your extremism and call it virtue? To choose to forego a broad appeal for a narrow one is, for a political party, to take a silk purse and fashion a sow’s ear.

Ultimately these are questions for those in the habit. For the rest of us, it’s enough to remember that we can succeed only by avoiding the trap ourselves.

Nick Clegg’s disastrous pitch “We will bring a heart to a Conservative government and a brain to a Labour one” ended the LibDems as a political force. A new Party must be more than ‘not them’. It is only when we say who we are and what we are for that the electorate can ask itself: ‘are they for me,’ ‘am I for this’?

Brexit is not enough. Brexit will not be the last crisis the United Kingdom faces. An ageing population, the forces of globalisation, the concentration of wealth, intergenerational fairness, the evaporation of trust in politicians, a capitalism that does not serve the people, climate change: unless a Party can speak of these issues, it will not win, and it will not deserve, the trust of the electorate. But win trust on them and perhaps you will be heard on Brexit too.

Over the coming days and weeks I will offer some thoughts on what a new Party should offer, and be. I hope others will too – here, or elsewhere.

Let those who want to, with their shibboleths, divide. A new Party must with ideas unite.

 

 

A short note on tax law for Rangers and Celtic fans

I write to explain a point of law that has occupied much of my twitter feed for the last couple of days. It may help to say that I am a Queen’s Counsel specialising in tax law. And I have no commercial or personal connection to Rangers (I use that name in a vernaculous rather than a legal sense) or its successor entities or (as far as I am aware) anyone connected with the club or those entities.

I have said that it is not accurate to describe Rangers’ use of EBTs as “illegal” or “unlawful”. And here is why.

You might think about the purpose of tax law as being to draw lines in the sand: fall on one side of the line and your liability will be (lower) x; fall on the other side and it will be (higher) y. Rangers entered into certain transactions which they hoped and (I understand) expected would attract liability x but which the Supreme Court decided attracted liability y. It is not “illegal” or “unlawful” to attract a higher liability than you want. And nor is it illegal or unlawful to transact to try and attract liability x but to fail and, nevertheless, to attract liability y.

We self-assess our liability to tax. Putting it another way, HMRC ask us questions in a self-assessment form, we answer them, and those answers have as their consequence that we owe a particular sum in tax. We also promise HMRC that we believe the answers are right.

If we give HMRC answers that lead to the conclusion that we owe x in tax and a court later says that our answers were wrong and we owe y in tax that does not establish, on its own, that we have behaved unlawfully or illegally. It is not unlawful or illegal to make an honest mistake.

If, in completing the self-assessment form, we gave answers that we did not believe to be right, we would have behaved unlawfully or illegally. But I am not aware of any evidence that Rangers gave answers in its self-assessment form that it did not believe to be right. And nor, so far as I am aware, is this an allegation that HMRC has advanced.

What about a situation where Rangers gave misleading answers to HMRC outside the self-assessment form? Certainly it would be very poor behaviour. And I can imagine circumstances in which this might be unlawful. But, on its own, this fact – if fact it is – does not enable the conclusion to be drawn that Rangers has broken any law.