March 31, 2009

When you can’t cry, laugh

Posted in America, Economics, Politics, Society at 3:56 pm by Paul Sagar

It’s often remarked that satire became redundant the day Henry Kissinger was awarded a Nobel Peace Prize.

But in these Financial Times of Financial Crimes, satire can be a powerful antidote to depression. And as it turns out, some of the best was first published in 1961. And it is very much relevant today.

For those who never got passed the 150-page mark of Joseph Heller’s Catch 22 , I understand. It doesn’t really make any sense until after page 250. But I would urge you to try again, because I honestly think it’s a work of genius.

Furthermore, you’ll discover gems like the following extracts. For those who don’t know, Catch-22 is set around a US Air Force unit which is part of the Allied invasion of Italy towards the end of World War II. The first extract is  a discussion between the book’s protagonist Yossarian – who lost his sanity during a horrific event which his mind cannot quite confront, but which is the narrative if not chronological centre-point of the book - and Milo, the mess hall officer turned capitalist entrepreneur:

Yossarian was riding besides [Milo] in the co-pilot’s seat. ‘I don’t understand why you buy eggs for seven cents apiece in Malta and sell them for five cents’
‘I do it to makea profit’
‘But how can you make a profit? You lose two cents an egg.’
‘But I make a profit of three and a quarter cents an egg by selling them for four and a quarter cents an egg to the people in Malta I buy them for seven cents an egg. Of course, I don’t make a profit. The syndicate makes the profit. And everybody has a share.’
Yossarian felt he was beginning to understand. ‘And the people you well the eggs to at four and a quarter cents apiece make a profit of two and three quarter cents apiece when they sell them back to you at seven cents apiece. Is that right? Why don’t you sell the eggs directly to you to eliminate the people you buy them from?’
‘Because I’m the people I buy them from’, Milo explained. ‘I make a profit of three and a quarter cents apiece when I sell them to me and a profit of two and three quarter cents apiece when I buy them back from me. That’s a total profit of six cents an egg. I lose only two cents an egg when I sell them to the mess halls at five cents apiece, and that’s how I can make a profit buying eggs for seven cents apiece and selling them for five cents apiece. I pay only once cent apiece when I buy them at the hen in Sicily.”In Malta’, Yossarian corrected. ‘You buy your eggs in Malta, not Sicily.
Milo chortled proudly. ‘I don’t buy eggs in Malta,’ he confessed, with an air of slight and clandestine amusement that was the only departure from industriour sobriety Yossarian had ever seen him make. ‘I buy them in Sicily for one cent apiece and transfer them to Malta secretly at four and a half cents apiece in order to get the price of eggs up to seven cents apiece when people come to Malta looking for them.’
‘Why do people come to Malta for eggs when they’re so expensive there?’
‘Because they’ve always done it that way.’
‘Why don’t they look for eggs in Sicily?’
Because they’ve never done it that way.’
‘Now I really don’t understand. Why don’t you sell your mess halls the eggs for seven cents apiece instead of for five cents apiece?’
‘Because my mess halls would have no need for me then. Anyone can buy seven-cents-apiece eggs for seven cents apiece.’
‘Why don’t they bypass you and buy the eggs directly from you in Malta at four and a quarter cents apiece?’
‘Because I wouldn’t sell it to them.’
‘Why wouldn’t you sell it to them?’
‘Because then there woudn’t be as much room for profit. At least this way I can make a bit for myself as a middleman.’
‘Then you do make a profit for yourself,’ Yossarian declared.
Of course I do. But it all goes to the syndicate. And everybody has a share. Don’t you understand? It’s exactly what happens with those plumb tomatoes I sell to Colonel Cathcart.’
Buy,‘ Yossarian corrected him. ‘You don’t sell plumb tomatoes to Colonel Cathcart and Colonel Korn. You buy plumb tomatoes from them.’
‘No, sell,’ Milo corrected Yossarian. ‘I distributed my plumb tomatoes in markets all over Pianosa under an assumed name so that Colonel Cathcart and Colonel Korn can buy them up from me under their assumed names at four cents apiece and then sell them back to me the next day for the syndicate at five cents apiece. They make a profit of one cent apiece, I make a profit of three and a half cents apiece, and everybody comes out ahead.’
‘Everybody but the syndicate,’ said Yossarian with a snort. ‘The syndicate is paying five cents apiece for plumb tomatoes that cost you only half a cent apiece. How does the syndicate benefit?’
‘The syndicate benefits when I benefit’, Milo explained, ‘because everybody has a share. And the syndicate gets Colonel Cathcart’s and Colonel Korn’s support so that they’ll let me go out on trips like this one. You’ll see how much profit that can mean in about fifteen minutes when we land in Palermo.’
‘Malta,’ Yossarian correcte him. ‘We’re flying to Malta now, not Palermo.’
‘No, we’re flying to Palermo,’ Milo answered. ‘There’s an endive exporter in Palmero I have to see for a minute about a shipment of mushrooms to Bern that were damaged by mold.’
‘Milo, how do you do it?’ Yossarian inquired with laughing amazement and admiration. ‘You fill out a flight plane for one place and then you go to another. Don’t the people in the control towers ever raise hell?’
‘They all belong to the syndicate.’ Milo said. ‘And they know that what’s good for the syndicate is good for the country, because that’s what makes Sammy run. The men in the control towers have a share, too, and that’s why they always have to do whatever they can to help the syndicate.’
‘Do I have a share?’
‘Everybody has a share.’
‘Does Orr have a share?’
‘Everybody has a share.’
‘And Hungry Joe? He has a share, too?’
‘Everybody has a share.’
‘Well, I’ll be damned,’ mused Yossarian, deeply impressed with the idea of a share for the very first time.

And from later in the book:

“Milo had been earning many distinctions for himself. He had flown fearlessly into danger and criticism by selling petroleum and ball bearings to Germany at good prices in order to make a good profit and help maintain a balance of power between the contending forces. His nerve under fire was graceful and infinite. With a devotion to purpose above and beyond the line of duty, he had then raised the price of food in the mess halls so high that all officers and enlisted men had to turn over all their pay to him in order to eat. There alternative – there was an alternative, of course, since Milo detested coercion and was a vocal champion of freedom of choice – was to starve. When he encountered a wave of enemy resistance to this attack, he stuck to this position without regard for his safety or reputation and gallantly invoked the law of supply and demand. And when someone somewhere said no, Milo gave ground grudgingly, valiantly defending, even in retreat, the historic right of free men to pay as much as they had to for the things they needed in order to survive”

Quite.

March 30, 2009

Putting it better than I could Part II

Posted in Tax Justice at 11:50 am by Paul Sagar

To save me some bother, I’m going to link straight through to Richard Murphy’s five-part series on What is Wrong with Tax Havens.

You can read it as a direct reply to the Financial Times’ recent attempts to argue that secrecy jurisdications are actually really great. (We live in Financial Times, and they live on Financial Crimes, to paraphrase last week’s saying…)

Part 1

Part 2

Part 3

Part 4

Part 5

Putting it better than I could

Posted in Economics, Politics, Tax Justice at 10:22 am by Paul Sagar

As anybody who has been around me for the last week will attest, tax havens are my latest bugbear.

I’m really not a fan.

Over the weekend I heard some appalling arguments in favour of tax havens.

“Tax havens are OK because they support small economies in places which would otherwise have nothing.”

1. This is often untrue. Look at the average standard of living in places like the Cayman Islands. Perhaps the natives get some nice tips serving drinks on shiny white yachts, but the idea that tax havens produce vibrant developed economies supporting native populations in places like the Caribbean is ludicrous.

2. Even when it is true, it’s not the point. British tax havens like Jersey, Guernsey and the Isle of Man would be near-barren rocks if it weren’t for the fact they are tax havens. They just don’t have the resources to support developed world standards of living. So by operating as tax havens, their small number of inhabitants get to lead lives which would otherwise be impossible. Of course, those lives are being led at the expense of e.g. mainland British taxpayers, who are making up the shortfall in tax revenue which is being lost to these places.

Some readers may think it is fine for UK taxpayers to effectively be subsidising the living of people in territories which claim independence from the British Government when it suits them – e.g. by operating as centres for secret financial activities – but being happy to enjoy the perks of the existence of a British Government when it suits them – e.g. Isle of Man companies trading on the London Stock Exchange, and using the UK as a way of accessing the EU common market, of which the Isle of Man is not a member.

Personally, i’m not down with that.

The second really bad argument I heard went: “Tax havens are essential for the working of the global financial system.”

Presumably this is the same global financial system which has gone into meltdown, is requiring billions in taxpayer funds to bail-out un-cooperative banks and is leading to global unemployment shooting up at a virtually unprecedented rate.

Ahem.

But in case my replies aren’t doing the trick, hear it from a man who says it better than I ever could. Here’s Lord Matthew Oakeshott of Seagrove Bay, speaking last Thursday in the House of Lords:

My Lords, I declare my interest as a pension fund manager since I first joined Warburg’s in 1976; these days I manage British commercial property for pension funds, charities and investment trusts. When I buy a warehouse from Sainsbury’s, neither of us pretends that Tamworth is in the Cayman Islands to dodge stamp duty land tax. Tax havens are sunny places for shady people. No one sends their money to Monaco or the Cayman Islands because they are centres of excellence for fund management. I was going to add the British Virgin Islands, but in deference to the noble Baroness, Lady Hooper, I shall leave them out. From Antigua to Belize, you use a tax haven because you have something to hide, be it from the taxman, the authorities where you live or even your family. “Low tax and low disclosure” is the polite way in which the apologists for tax havens put it, but if you are Mobutu or Mugabe, Imelda Marcos or a Colombian with a big briefcase, a brass-plate company in an anonymous office block means that your millions leave no trace and tell no tales.

Gordon Brown is strutting the world’s stage as Mr Clean-up, the man to make tax havens and tax dodgers quake in their boots. Oh yeah? Why then did the Treasury say only yesterday that the asset protection scheme for banks to dump their bad debts on the taxpayer and the code of practice covering tax avoidance for the banking sector due next month are “separate issues”? That is the most unjoined-up government imaginable. Why has the budget of HMRC’s hard-pressed tax avoidance team, led by Mr Tailby, been cut by 5 per cent from 6 April? Barclays will be laughing all the way to the Cayman Islands. Our taxmen are like fat policemen running after a speeding Ferrari; they need all the help that they can get.

We all rejoice at the sinner who repenteth, but this is the same Gordon Brown who as Chancellor cuddled up to the bankers so hard that it hurt and who showed no interest in taxing or regulating hedge funds registered in the Cayman Islands and run by non-doms in Mayfair, or the private equity millionaires with their absurdly generous special tax breaks.

Why will the Prime Minister and the Treasury not use their power over the banks to stamp out tax abuse right under their nose in London? You do not have to take a Caribbean cruise; all you have to do is get on a boat down the Thames to Canary Wharf. The superb tax gap series in the Guardian shows how big British businesses, both publicly quoted and private, twist and turn to dodge tax in this country. Their glossy corporate governance reports say nothing about paying your fair share of tax to meet your obligations to the society where you operate. Being a good corporate citizen must mean more than putting on green lipstick and ticking the boxes on diversity.

Nearly nationalised RBS claims to have closed down its tax avoidance operations at head office but still actively promotes its operations in offshore tax havens and its private bank in Switzerland. Barclays has developed tax avoidance into a massive profit centre in its own right, with vast sums of the bank’s money touring tax havens on what in one case amounts almost to a three-day super saver return ticket from Canary Wharf, saving Barclays, not the taxpayer, mountains of tax.

Documents leaked to the Liberal Democrats, which appear to detail systematic tax avoidance on a grand scale by Barclays, were injuncted last week. The Sunday Times and the Guardian had already made them front-page news and these documents are widely available on the internet from sites such as Twitter, wikileaks.org, docstoc.com and gabbr.com. Yet the Guardian had to remove them from its website and cannot tell its readers where to find them. These documents describe deals worth billions of pounds set up by the bank in order to make money out of depriving the UK and foreign exchequers of revenue. Barclays would not last for one minute without the British taxpayer standing behind it, yet it is holding out one hand for taxpayers’ money while it picks taxpayers’ pockets with tax avoidance activities on the other.

Unlike Barclays, HMRC cannot match the best tax and legal brains that money can buy and unpick these deals. It is a sad day for democracy if a judge sitting in secret can stifle this essential public debate. Louis Blom-Cooper and three distinguished colleagues wrote to the Guardian:

“Barclays may properly be regarded as an operator in the private sector, but its corporate status, carrying with it all the advantages that incorporation confers on the bank, and performing a function so vital to the country’s economy, was such that Mr Justice Blake should have concluded that Barclays Bank was akin to that of a public authority and susceptible to the precepts of public sector activity. Perhaps the Court of Appeal will exhibit rather more boldness in supporting the Guardian’s valuable crusade against tax avoidance”.

Vince Cable has done his duty and sent all these documents to HMRC and the Financial Services Authority. I believe that it is mine today to tell—as I just have—Parliament about Barclays’ tax avoidance machine with its aggressive exploitation of tax havens and to tell the public, in their interest, where they can get chapter and verse and judge for themselves.

Barclays has a whole department, the structured capital markets division, inside Barclays Capital, dedicated to dodging the taxman, and has been reported as paying Mr Roger Jenkins, who runs it, £40 million a year. Vince Cable and I are now being told of more, even murkier, deals. About a third of a billion pounds has been added to Barclays Bank’s bottom line by the following six “projects”, from what we can see. Barclays’ Project Knight, set up in 2007, with capital of more than $16 billion, involved making loans to American banks which now need federal funding: Wachovia, WaMu, Bank of America and BB&T. This allowed Barclays to benefit from “double-dip” tax credits, as they are called, and made the bank £100 million or more.

Project Faber, also in 2007, involved capital of £1.5 billion and made Barclays £29 million in tax profits. That involved using tax havens in the Isle of Man and the Caymans for subsidiaries to channel loans to Luxembourg banks. Project Brontos in 2007 was a scheme between Barclays and Italian banks to save Italian tax; it made Barclays £15 million in profits at a conservative estimate. Project Valiha, with capital of nearly £400 million, involved an elaborate trade with interest rate swaps that could be transferred to an American counterparty, alleged to be AIG, which gained Barclays £69 million in tax-free profits. Project Brazil, set up in 2005-06, made Barclays £30 million in tax profits from currency trades and, in Project Berry, a Barclays subsidiary buys index-linked gilts and lends them back to Barclays so that it can collect tax reliefs worth £134 million. How many more of those morbid mutants are on the books of Barclays’ structured capital markets group? Before the Treasury takes on any of the toxic assets of Barclays, we must know how much tax it has avoided, how and with whom, and what has passed through or is still hidden in tax havens.

The international jet-setters at the top of Barclays, grasping their multimillion pound bonuses, will not know what I am on about at all in what I shall talk about now. My noble friend Lord Wallace, however, rightly pointed to Barclays’ international roots. It is high time that the bank remembered its Quaker founders in East Anglia. They did not gamble or dodge tax; they saw themselves as stewards of people’s savings, which they lent prudently for productive purposes so that their fellow citizens could work and prosper. The Quaker motto is “Live simply”. Tax havens are a moral as well as an economic affront to Britain and to the whole civilised world—the unacceptable underside of capitalism. Our Prime Minister is a moral man, but he must now turn his words into deeds.

March 27, 2009

Spoof FT

Posted in Media at 3:35 pm by Paul Sagar

Seen this?

I will give good money to anyone who can get me a paper copy.

I’ll also give good time to any worthwhile organisation willing to give me work on Thursdays and Fridays. Working part time is boring.

Re-print

Posted in Media, Tax Justice at 3:27 pm by Paul Sagar

The article below has been reproduced over at Liberal Conspiracy.

The comments thread is, erm, interesting…

March 26, 2009

They Just Don’t Get It, This Bunch of Bankers

Posted in Economics, Politics, Society, Tax Justice at 4:55 pm by Paul Sagar

Yesterday morning I attended the Liberal Democrat treasury team meeting in my capacity as a parliamentary researcher. Paying a visit were some representatives from the banking sector, who were there to give high-profile members of the Liberal Democrats – the party currently at the forefront of attempts to close down tax havens, or secrecy jurisdictions as they are better termed – a bank’s eye view.

In the course of discussions, the issue of Tesco avoiding/evading £billions in stamp duty arose. At this point, one of the bank representatives launched into a lecture which went roughly like this:

“Ever since stamp duty has existed, companies and individuals have tried to avoid paying it. After all, if registering in one place means you incur 4.5% stamp duty, and registering in another place means you incur 0.5% stamp duty, well companies will register in the latter. It’s just the way it works.”

I’m pleased to say that a high-profile member of the Lib Dem treasury team interrupted at this point, quite angrily, and replied:

“Don’t you get it? 99.9% of people on this planet can see that a company the size of Tesco using elaborate means to avoid paying taxes in the UK is just wrong. It’s wrong. Can you not see that?”

The bankers stared back, confused. No, they just couldn’t see it.

This incident is instructive, for reasons I will get to shortly.

Last night I happened to attend a meeting entitled Tax Justice Not Tax Havens, hosted by the Tax Justice Network, War on Want and The Public Services and Communications Union. The meeting covered both domestic and international tax issues, with contributions from Richard Brooks, Dave Bean, John McDonnell MP, Richard Murphy, Ruth Tanner, and Hugh Lanning.

It was a very productive evening for many reasons, and actually left me feeling very positive about the potential to tackle tax havens, and in turn influence public discourse on domestic taxation.

Of particular interest was the issue raised by Richard Murphy (one raised frequently on his blog), namely that many people in positions of power are “trying to put humpty dumpty back on the wall”. In other words, they think the world can go back to how it was c. August 2007. They think that if the banking system can just get the right bailouts and start lending again, then the world won’t need drastic economic and financial overhaul in order to emerge from what will be the worst recession in living memory.

In particular, Number 10 still see this crisis as a banking crisis. As a consequence, Brown is surrounding himself with bankers and banking experts. This has already been much criticised by Simon Jenkins (and here)

By being enthralled by bankers, Brown is surrounding himself with people who not only have a vested interest in the continuity of secrecy jurisdictions (cf Barclays gagging The Guardian last week to prevent them revealing the extent to which the bank has avoided tax), but people who just don’t see what the problem is. 

These people just don’t see what is wrong with a world in which developing nations lose £250 billion every year – money which could meet the UN’s Millennium Development Goals several times over, and dwarfs the total aid budget from developed to developing world each year. They just don’t see what is wrong with the UK losing £100million a year through tax dodging – and why it is wrong for little people like us to make up the shortfall.

Gordon Brown is currently jetting around the world demanding that secrecy jurisdictions (tax havens) enter into “information exchanges” with Governments and by implication the little people (like you and me) who pay taxes. Upon closer inspection, this is virtually meaningless.

Firstly, “information exchanges” between tax havens and governments don’t by themselves achieve anything. To quote Richard Murphy last night, in the past 8 years Jersey and the USA, who operate an information exchange have succeeded in exchanging…5 pieces of information.

Secondly, even if “information exchanges” led to a wealth of knowledge about what tax havens are up to – that’s not the point! The point is to stop them from doing what they are doing. Namely, facilitating tax avoidance and evasion, defrauding tax payers in developed countries, defrauding developing nation governments and thus preventing proper development, facilitating capital flight from developing nations which keeps the world’s most vulnerable people in abject poverty, providing safe money-stashes for drug dealers, people traffickers and international criminal gangs, and providing the finance structures for terrorist organisations.

99.9% of people can see this is just wrong.

And the worst thing of all is that the situation could so easily be improved. By the UK. Acting alone. (We are, in case you didn’t know, one of the absolute worse offenders when it comes to secrecy jurisdictions).

As Richard Murphy writes, Gordon Brown should do the following:

  1. The UK should admit that the Crown Dependencies and Overseas Territories are ours – as the current crisis in The Turks & Caicos have proven in the last week, and that we can therefore reform them;
  2. Publish the terms of reference for the Foot Commission into UK tax havens so we know that reform is going to happen;
  3. Announce that the forthcoming banking code will compulsorily ban banks from undertaking structured tax avoidance;
  4. Announce that this ban will be extended to all UK companies through a general anti-avoidance provision being enacted in the UK;
  5. Support the call for country by country reporting which will make all companies go on record about their use of tax havens;
  6. Announce an end to HMRC redundancies so the resources are available to deal with automatic information exchange which we so badly need;
  7. Announce unconditional support for the amended EU Savings Tax Directive which would shatter the use of offshore structures in many places – and that we will impose this on our own tax havens, as we can.

All of that is possible.

None require international support.

All would offer clear indication of leadership that would set an example to all at the G20, and all those watching it.

But Brown won’t do it. Why? Because he is trying to put humpty dumpty back on the wall, surrounding himself with that 0.1% of people who not only have a vested interest in the continuation of a financial world with secrecy jurisdictions at its heart, but people who just don’t get what us little people are complaining about.

Victory

Posted in Uncategorized at 3:11 pm by Paul Sagar

Last January I urged readers to make a complaint to the Advertising Standards Agency regarding a series of adverts by Maximuscle Protein on the London Underground. I know from checking the “links clicked” function that a fair number of people did.

Well, today I received a letter from the ASA saying:

“As we advised, we contacted Maximuscle Ltd to request substantiation for the claims made in their posters. Maximuscle responded by acknowledging the potential problem presented by the posters in their present form. They advised us that the posters would be removed by their media provider. They also signalled their willingness to follow our advice on how future posters could be amended to avoid the impression that the use of their products and two gym sessions a week could achieve the results implied by the gneral message of the ad.

We have obtained their written assurance that they will make more prominent the other factors, such as diet, involved in achieving the results. We have also asked them to clarify the length of time taken for the results to become apparent as this is clearly a relevant qualification to claims highlighting the benefits of their products. We shall keep a copy of their assurance on file and close the investigation on that basis.”

Which has cheered me up no end. I do suspect Maximuscle’s ad run had already finished by the time they “agreed” to remove the posters, but the point is that if they try it again, the ASA are watching them.

Thanks to everyone who helped.

Jack Straw Continues War Against 350 Years of British Liberalism

Posted in Civil Liberties, Politics, Society at 12:01 am by Paul Sagar

Last Monday Jack Straw introduced a green paper to the House of Commons for a proposed “Bill of Rights and Responsibilities.”

In doing so Straw continued his war on 350 years of hard-fought, hard-won British liberal rights.

Below I will go through Straw’s speech to the Commons. I aim to highlight key areas of concern for anyone who believes that British citizens should have unconditional rights which are constraints upon what the State may do to them. The alternative – Straw’s alternative – is for rights to be removable privileges which are gifted by the Government, conditional upon good behaviour (as defined by those in power).

To understand where I am coming from, you first need to read this. It’s a piece by my former Balliol tutor Bob Hargrave. It’s also the best single on-line resource for thinking about rights and understanding what New Labour has been doing to yours.

The Hargrave piece will be controversial for political philosophers, who may prefer to follow an interest theory of rights. Put aside those controversies for now, and focus on the core message of how to think about rights in the British liberal tradition: Rights are not privileges of citizenship gifted by the State. They are pre-requirements of meaningful citizenship which impose constraints and obligations upon the State, and thereby facilitate a free society.

This has important ramifications. For the British liberal tradition, there are certain choices, activities, expressions, associations and disseminations which are so important to human life that being able to undertake them is a pre-requisite of meaningful citizenship. In a free society people are  able to talk with, associate with, publicise with whoever and whatever they want, without first needing permission from the Government. If, in the act of talking, associating or publicising, a person should break the law, the State may retroactively correct for this through the legal system, (or use legal means which observe people’s right to prevent crime). The State should not de-bar essential aspects of life in free human society by dictating that until individuals have demonstrated their “responsibility” to the State (and as defined by the State) they are not granted “rights” to behave as free agents.

An upshot of this approach is that some citizens will sometimes use their freedom - protected and enabled by their rights - to associate with unpleasant or even dangerous groups, disseminate unpleasant or even dangerous ideas, or say unpleasant or even dangerous things. When those unpleasant citizens carry their unpleasantness to the point of breaking the law, the state acts to punish or correct them in accordance with the law. Until then, everyone is free to act until they break the law (though the State may act to prevent law-breaking, if it can prove within a legal system which observes people’s rights that the law would have been broken beyond reasonable doubt).

This is because people have rights, as citizens. Their rights are not dependent upon them being “responsible” citizens to Government. This approach ensures that people’s actions are free, and that society is free in turn. The alternative is for people’s actions to be conditional upon the whim of the State, whether or not they have yet broken any law.

And yes, sometimes that means terrorists, violent dissidents and other nasty groups will exploit the freedom of a free society to attack that society. But that is the price we pay for freedom.

Given the historical rarity of such a commodity as social, political and economic freed, did you really expect it to come cheap?

Let’s now turn to Straw’s speech, taken from Hansard.

“With permission, Mr. Speaker, I should like to make a statement on the Green Paper “Rights and Responsibilities: developing our constitutional framework”, which was laid before Parliament today. It is the next stage in what has been described as a quiet revolution in our constitutional arrangements, which, since 1997, has included: independence for the Bank of England; devolution for Scotland, Wales and Northern Ireland; independence for National Statistics; the Human Rights Act 1998; the Freedom of Information Act 2000 and the Data Protection Act 1998; and reforms to the House of Lords and of party funding.”

Just focusing on Straw’s reference to the Human Rights Act, let’s not forget that he gave credence to the view that this piece of legislation is “a villains’ charter” just last year. That helps give a good indication of what he thinks about legislation which invests citizens with core rights not dependent upon the good will and whim of governments.

“This Green Paper deals with some of the most fundamental questions we face as individuals and as a society: how we live together; what rights and freedoms we enjoy, and from whom; and what duties and obligations we owe, and to whom. Those issues are not abstractions, removed from the practical politics of jobs and housing, health care, education, crime and disorder, because these constitutional arrangements determine how power is distributed, and therefore the conditions in which every other question in our public life will be answered.”

OK.

It is because of the centrality of these issues that my right hon. Friend the Prime Minister chose to make his first major policy statement, within days of taking office, on exactly this matter of constitutional change. He told this House that it was right to involve the public

“in a sustained debate about whether there is a case for the United Kingdom developing a full British Bill of Rights and duties”.—[ Official Report, 3 July 2007; Vol. 462, c. 819.]

Will the involvement of the public be along the lines of the public involvement in e.g. the signing of European treaties? That is, adopting the tested New Labour model of telling the public what is going to happen and labelling it a “debate” before ignoring any and all opposition.

“This was to be as a step towards a written constitution. The Green Paper presents the arguments for such a Bill. It does not reach final conclusions—that is for the end of the process of national discussion—rather, it sets the framework for this debate. Indeed, if by the end of the process the Bill is perceived to provide protection to rights and freedoms, it will become effective in defining common values so that people in Britain of different backgrounds may feel ownership of it.”

OK so that’s mostly just jargon. Again there is a vague gesture about “national discussion”. More importantly, this green paper is supposed to “set the framework for this debate”. So what Straw tells us here, and what the Government dictates will be in the Green Paper, is “setting the framework”. So we should pay attention.

“From the Magna Carta and the declaration of Arbroath, the 1689 Bill of Rights and the Scottish Claim of Rights, to the great Reform Acts of last two centuries, our history illustrates the proud traditions of liberty on which our nation is built. Though the profound changes that those great texts initiated were the subject of intense struggle at the time, the United Kingdom’s experience of constitutional development has been unlike that of almost any other democracy in the world.”

1. Observe that the New Labour “Rights dependent upon Responsibilities” model is directly opposed to the “Rights generate responsibilities from the State” model of British liberal tradition.

2. It is true that the UK’s constitutional development has been somewhat unique. But from that alone nothing follows.

“The constitutional arrangements of most other nations have emerged from rebellion, revolution, civil war, occupation or oppression. The United States, France, India, South Africa and nations across Europe and the world, have had to set down their arrangements in a single text—a constitution, underpinned by declarations of rights. Whether legally enforceable or not, they have become abiding points of reference as to how their citizens should relate to each other and to the state, and help to define the kind of nation they wish to be. This Green Paper sets out the case for how a Bill could become a similar unifying force for the United Kingdom, not least because our own society is much more diverse, in race, religion and ethnicity than at any point in our history.”

Straw is here implying that the UK’s history is so radically different from the rest of the world that we simply haven’t needed a bill of rights before, whereas those other unfortunate countries suffering revolution or occupation needed to establish constitutional safe-guards of citizen rights due to the desperation of their situation. Things to notice about this:

1. Straw is apparently implying that the UK needs a bill of rights (and “responsibilities”) because we are suffering some sort of comparable emergency to occupation or revolution. Given his reference to diversity of “race, religion and ethnicity”, are we to take it that Straw believes the influx of immigrants to the UK over the past 60 years threatens our social stability to the extent that we need written constitutional safeguards analagous to those following State revolution or invasion? Cynics may see a reccuring pattern in New Labour thinking here: will the Bill of Rights and Responsibilities include “British Jobs for British Workers”?

2. The documents to which Straw refers, in particular the constitutions of France and the United States, are documents most definitely written in the British Liberal tradition. The American Constitution and Bill of Rights are explicitly Lockean [i.e. based upon the thought and work of great British liberal philosopher John Locke, most notably his Second Treatise of Government]. They are  constructions imposing limits on the actions of the State and guaranteeing citizen rights to life and property against the encroachment of the state. The French Constitution was explicitly written with the American one in mind. The South African constitution was written with apartheid very much in view, hence safeguarding individuals from the prying eyes, hands and sterilisation programmes of the State. The main point for present purposes is that these written bills of rights that Straw sights were written in a tradition which is expressly opposed to his “Rights and Responsibilities” approach.

3. Straw is implying that Britain’s history has been smooth and peaceful, with our never needing any sort of constitutional safeguards or concept of rights. Perhaps he means to imply that not until the terrorist attacks of 7/7 did peaceful Britain need constitutional safeguards. This only serves to illustrate New Labour’s continuing ignorance of basic history. Britain experienced a violent and protracted series of Civil Wars from 1642 to sometime in the1650s (historians dispute when the Third Civil War ended or whether it was really a Civil War). As well as a king being beheaded, families and towns going to war against each other, and a republic being established for 11 years, there emerged groups such as the diggers and levellers. These proto-communists and socialists held radical political ideas…which in most cases were squashed under the heel of Oliver Cromwell, who was keen to safeguard the established class order.

As cited in the Hargrave peace above, a noteable leveller was Thomas Rainsborough, who gave us perhaps the classic statement of rights in the British liberal tradition, utterly antithetical to Straw et al:

“…for really I think that the poorest he that is in England hath a life to live, as the greatest he; and therefore truly, Sir, I think it’s clear, that every man that is to live under a government ought first by his own consent to put himself under that government; and I do think that the poorest man in England is not bound in a strict sense to that government that he hath not had a voice to put himself under.”

Britain has had a turbulent socio-political history. Witness the Rye House Plot of the late 17th Century, which John Locke was involved with. Witness British liberal John Locke spending chunks of his life in Holland because the things he was writing (anonymously, mostly) made him a man marked by the Crown for death. Skipping to the 20th Century, from the late 1960s until the 1990s mainland Britain and especially Northern Ireland suffered repeated, brutal and sometimes highly devastating terrorist attacks by the IRA. To imply that Britain has been a blessed island of serenity, flukishly exempt from social upheaval and danger until New Labour came along, is farcical.

But then, New Labour have never been very good on history. Remember Tony Blair at the 1996 party conference speech declaring that the Party had “a thousand days to prepare for a thousand years“?

“We are, self-evidently, launching this Green Paper at a time of great uncertainty and anxiety. Tackling the global recession must be our immediate priority. But acting, at the same time, to strengthen communities’ and individuals’ sense of a stake in society— by better articulating the responsibilities we owe and the rights we have—is not an alternative to decisive measures on the economic front but an essential complement to them.”

At first this looks like a sop to the mandatory mention-the-recession requirement. Some news agencies have interpreted this as Straw shelving the Bill of Rights and Responsibilities because of economic constrains. I’m not so sure. I think this is New Labour double-speak to say “the recession is going to hit people hard, we can use the fact people are financially on their knees to impose things that would otherwise meet with increased social resistance.”

“One of the most significant constitutional changes in the past dozen years is the Human Rights Act 1998. I worked hard as sponsoring Minister to achieve a consensus behind it: and I commend the official Opposition for the support that they gave the Act in its final form.”

The same Human Rights Act that’s a villains’ charter, presumably?

“Prior to that Act, accessing convention rights via the Strasbourg court was a time-consuming, expensive and difficult process, and, as such, prohibitive for many. Now, those rights can be accessed in UK courts, with cases heard by UK judges.”

Indeed. And people like me welcome the adoption of a document which serves to safeguard citizens rights and doesn’t make them dependent upon the whim of the power-wielders. It’s worth remembering, of course, that under Human Rights law the European Court ruled that it was illegal for the UK Government and police to hold DNA records of innocent members of the public. Which throws a spanner into the works of Straw’s long-term pet project of compulsory I.D. cards. Which also makes one wonder to what extent the Bill of Rights and Responsibilities is meant as a way of sidelining EU legislation to facilitate the I.D. card agenda.

“The Act better protects the family. It has benefited all sections of society; from the elderly couple wanting to live in the same care home, to the loftiest of newspaper magnates. In providing a more practical mechanism to access rights, as well as a positive obligation on the state to protect them, countless thousands of people have benefited from the law, without necessarily having to resort to the law.”

But it’s still a villains’ charter, right?

“Despite that, the Act has its detractors…”

Really? Like who?

“…primarily because the atrocities of 11 September 2001 occurred less than a year after the Act came into force. Had those tragic events not occurred, I suggest that the HRA would have slipped comfortably into the fabric of our lives without controversy. As it was, those terrible events threw into acute relief the tensions between liberty and security. We recognise these tensions but the Government are proud of the Human Rights Act. We will neither resile from it, nor repeal it.”

I’ll ignore the counterfactual claim (if 9/11 hadn’t happened…) and concentrate on the “tensions between liberty and security”. In the British liberal tradition, that tension is faced down head-on. We accept that guaranteeing a free society means that some will exploit the freedom we guarantee to inflict harm. But we accept that as the price that must be paid for freedom. We do not believe freedom should be relinquished to the State under the guise of protecting us from the forces of darkness. We believe freedom is more important than that. “As for our common defense, we reject as false the choice between our safety and our ideals”, said a man with more in common with the British liberal tradition than Straw has ever had.

“The principles and rights set down in the European convention—now in the HRA—are timeless. They are the mark and measure of any civilised society at any time. But in the intervening 60 years since the convention was drawn up, the rights in it have been added to by a great extension of social and economic rights—of health care, dignity in old age, education, housing and social security. But as our rights have become so much wider and stronger, one question is whether their claim is balanced properly by an equally strong sense of the responsibilities we each owe. We believe that there is a case for drawing out more clearly and explicitly the responsibilities that go with rights.”

And here it is. Smuggled in to the speech under the guise of continuity with a long liberal tradition, Straw let’s spill that he thinks people shouldn’t have rights unless they have proved to the Government that they are “responsible” enough to be trusted with them.

Now let’s be clear. Followers of the British liberal tradition do not believe (necessarily) in individualistic atomism; that we should all go around caring only about ourselves and never helping or having regard for others. In most cases, anything but. The British Liberal tradition simply holds that these things are a separate category of political concerns alongside the provision of rights for citizens. Citizens have rights as pre-requirements of citizenship, and these rights impose responsibilities upon the Government (i.e. not to infringe the rights of citizens). There may be other social responsibilities, but these are not pre-requirements for having rights, as Straw would have it.

Straw thinks that we should only get rights when we have demonstrated to the State that we are responsible, on its terms.I find that a terrifying prospect, which hollows out the worth of even having rights. After all, what good are rights that are gifted by the very people you need them as protection from?

“Duties and responsibilities are to be found in the convention, in statute, in common law and woven deeply into our social and moral fabric. We have a latent understanding and acceptance of our duties to one another and to the state. That said, responsibilities have been a poor cousin to rights. The Green Paper proposes that responsibilities are given greater prominence in our constitutional arrangements, better to articulate what we owe, as much as what we expect. That is how we can move away from a “rights culture” to a “rights and responsibilities culture”.”

When Straw says that “responsibilities have been a poor cousin to rights”, he does not mean that the Government has been poor at upholding its responsibility not to trample on the rights of citizens. He means that citizens have been bad boys and girls and have not earned their rights – so from now on the State won’t be giving them out until boys and girls have proved they can be trusted to do what the State wants. If the Green Paper proposes that responsibilities are given greater prominence in our constitutional arrangements to better articulate what we owe – well what more can I say? That summarises what i’ve been trying to draw attention to. New Labour want you to have rights when they have decided when and if you can have them. Ask yourself: are those the kinds of rights people possess in a free society?

“Some responsibilities are obvious, such as obeying the law, paying taxes and undertaking jury service. Others are less obviously recalled at the moment they should be exercised, such as a responsibility towards future generations to live within environmental limits, the duty we have to protect the well-being of children in our care, a civic duty to vote, responsibilities towards our neighbours, respect for those public sector workers who care for us and a responsibility towards the taxpayer—for example, not claiming benefits if one is able to work.”

Here Straw conflates all sorts of “responsibilities” which don’t really belong in a discussion of rights. But he really does seems to be saying that if you fail in your responsibilities to vote, then you don’t qualify for rights. How delightfully, amazingly, unbelievably Kafka-esque.

Also, note the mandatory New Labour sop to the Daily Mail: “not claiming benefits if one is able to work”, etc.

“If we are to fulfil our responsibilities, we must have a clear understanding of what they are. As the Green Paper sets out, an accessible Bill of rights and responsibilities could be emblematic of the fair society in which we want to live, where awareness of our rights is matched with a greater understanding of our responsibilities to each other. Most of the social and economic rights to which I have referred are already embedded in law, but they are scattered across myriad legal texts. The Government believe that we should encapsulate those rights in a single document, bringing together the “new” post-war rights of social justice and the welfare state, victims’ rights, rights of equality and good administration.”

Wow. It’s worth reading that again. Straw is apparently proposing to lay out, in a single document, the things each of us must do in order to qualify for having rights, gifted from the State, under New Labour.

Blimey.

“A key question set out in the Green Paper is whether any Bill should have, directly or indirectly, the force of law. Bills of Rights from around the world are a combination of symbolism, aspiration and law across a spectrum of legal effect. There need not be a binary choice between the justiciable and the declaratory. As the Green Paper points out, the Government do not necessarily consider a model of directly legally enforceable rights or responsibilities to be the most appropriate.”

From what I can tell, this is simply Straw gesturing at the pretence that this Government listens to anyone about anything it hasn’t already decided upon.

“But even without full legal enforcement, words can have great power. The universal declaration of human rights contained no legally enforceable rights, but was rather the global expression of a shared commitment and a recognition of humanity’s common dignity—what Eleanor Roosevelt described as the Magna Carta for all mankind. A Bill of rights and responsibilities for the United Kingdom could be such a declaration and could set down the values we cherish.”

Straw’s audacity is staggering. His idea of Rights dependent upon Responsibilities is antithetical to the UN declaration of Human Rights. Which only heightens the audacity of claiming that his new bill is on a par with the UN declaration.

“I have had the rare privilege of taking through this House many of the constitutional changes of the past 12 years. Throughout that time I have looked to secure the broadest political consensus behind those changes, as reform of such importance to our democracy requires nothing less.”

This, from the Government which is widely accepted to have by-passed Parliament – and the will of the electorate-  more often and more egregiously than any in British history. The bare-faced audacity is simply astounding.

“Constitutional change should take place only on the basis of full and proper deliberation. The Green Paper has been through such a process within Government and now it is time to take the debate out to the people whom we all serve. The deliberation must not be rushed and so the Green Paper will not precede any legislation this side of a general election. We are dealing with the fundamental building blocks of our democracy, and as the Prime Minister made clear:

“Constitutional change will not be the work of just one Bill or one year or one Parliament”.—[ Official Report, 3 July 2007; Vol. 462, c. 815.]“

I’d laugh, except that I’m busy crying.

“A Bill of rights and responsibilities could form the next natural and necessary step in a process that began 60 years ago with the universal declaration. It is an opportunity to bring together existing rights and responsibilities in one statute and better to define the relationship between citizen and state in a new and unifying constitutional document for this century. I commend the statement to the House.”

Paul Sagar was unable to finish this post because he shot himself through the head rather than continue to partake in this cruel joke of an existence.

Further Reading:

Henry Porter

Chris Huhne

Francesca Klug

Of course, I don’t necessarily agree with everything I link to.

March 24, 2009

Dissemination

Posted in Media, Politics, Society, Tax Justice at 11:16 am by Paul Sagar

The nice people at Liberal Conspiracy have reproduced my piece on inheritence tax.

Click the link and give them some traffic.

March 23, 2009

Read this

Posted in Media, Politics, Society at 10:31 pm by Paul Sagar

The always excellent Johann Hari, over at The Independent.

OK, he goes a little beyond the call of duty to defend Goody, but the overall piece is excellent.

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