The UK economy contracted by 0.2% between July and September, this is an improvement on the original ONS figures of a 0.3% contraction.
Proving once again that ONS figures are unreliable, out of date and worthless.
Tuesday, December 22, 2009
Sunday, December 20, 2009
Friday, December 11, 2009
The Pre Budget Report III
As predicted, Brown's and Darling's plans for a bankers' bonus tax (levied to divert attention from the 1% rise in National Insurance) is rapidly falling apart.
Both HMRC and the Treasury have been forced to admit that that the draft legislation on bank bonuses is poorly written, and will have to be revised in the New Year.
It seems, as ever with Labour's shoddy legislative drafting, that the net for this tax could be drawn very wide indeed (eg more than just "bankers").
HMRC are stressing that asset management firms (including those owned by banks), hedge funds, investment advisers, private equity and family offices would not be hit by the tax.
However, no one believes them!
Both HMRC and the Treasury have been forced to admit that that the draft legislation on bank bonuses is poorly written, and will have to be revised in the New Year.
It seems, as ever with Labour's shoddy legislative drafting, that the net for this tax could be drawn very wide indeed (eg more than just "bankers").
HMRC are stressing that asset management firms (including those owned by banks), hedge funds, investment advisers, private equity and family offices would not be hit by the tax.
However, no one believes them!
Thursday, December 10, 2009
The Pre Budget Report II
Alistair Darling has been more than a wee bit canny, wrt his tax on banks paying bankers' bonuses.
Whilst it may or may not raise £500M, it has created such a media stir that the real pain of the tax rises (another 0.5% on National Insurance - over and above the 0.5% rise already coming in) has been "forgotten". This tax will raise several billion.
The fact is that taxes have been pushed up, and we are all going to be paying far more to this government.
Darling's bankers' bonus tax is merely a bit of window dressing to distract the voters' attention.
Whilst it may or may not raise £500M, it has created such a media stir that the real pain of the tax rises (another 0.5% on National Insurance - over and above the 0.5% rise already coming in) has been "forgotten". This tax will raise several billion.
The fact is that taxes have been pushed up, and we are all going to be paying far more to this government.
Darling's bankers' bonus tax is merely a bit of window dressing to distract the voters' attention.
Wednesday, December 09, 2009
The Pre Budget Report
As Alistair Darling steps up to deliver his "Pre Budget Report", and probably implement an unworkable "bankers' bonus tax" (see below an article from today's HMRC Is Shite), the Office of National Statistics (ONS) reports that Britain's goods trade deficit worsened unexpectedly in October from £6.9BN to £7.1BN (the largest gap since January).
This fall raises uncomfortable questions over the UK's ability to pull itself up out of recession in Q4 this year.
To add to the pressure on Darling, Moody's warned that unless he acts swiftly to reduce the debt the UK's AAA rating will be reduced.
Article from HMRC Is Shite
Good luck to HMRC in trying to levy a "bankers' bonus tax", in the event that Darling implements one in his "Pre Budget Report" today.
Disregarding the fact that taxing one specific "class" of worker is contrary to the concept of taxes being non discriminatory, the tax will be unworkable:
1 There will be a wholesale exodus of banks, other financial institutions and individuals from the UK.
2 What is the definition of a "banker"? Those who currently fall into Darling's definition of "banker" will simply have their employment status/title changed, to eg "admin clerk".
3 Pay rises will be backdated to mop up the bonus pool.
The tax will be shot to pieces, and HMRC will be forced to waste valuable time and resources trying to "pin a tail on the donkey" of the bankers.
This fall raises uncomfortable questions over the UK's ability to pull itself up out of recession in Q4 this year.
To add to the pressure on Darling, Moody's warned that unless he acts swiftly to reduce the debt the UK's AAA rating will be reduced.
Article from HMRC Is Shite
Good luck to HMRC in trying to levy a "bankers' bonus tax", in the event that Darling implements one in his "Pre Budget Report" today.
Disregarding the fact that taxing one specific "class" of worker is contrary to the concept of taxes being non discriminatory, the tax will be unworkable:
1 There will be a wholesale exodus of banks, other financial institutions and individuals from the UK.
2 What is the definition of a "banker"? Those who currently fall into Darling's definition of "banker" will simply have their employment status/title changed, to eg "admin clerk".
3 Pay rises will be backdated to mop up the bonus pool.
The tax will be shot to pieces, and HMRC will be forced to waste valuable time and resources trying to "pin a tail on the donkey" of the bankers.
Tuesday, December 08, 2009
Northern Rock Shareholders To Receive Nothing
Andrew Caldwell, the BDO valuations partner, has issued a consultaiton document outlining his provisional views on the Northern Rock valuation, and on the amount of any compensation that may be payable to former shareholders.
Former shareholders, seemingly, can expect to receive nothing.
Shareholders have, since the inception of the valuation exercise, argued that treating Northern Rock as if it were not a going concern (before the government rescue) would quite clearly result in a zero valuation on their shares.
Whilst their anger may be understandable, if Northern Rock were a going concern at that time why did it need government help and would it have survived without it?
Former shareholders, seemingly, can expect to receive nothing.
Shareholders have, since the inception of the valuation exercise, argued that treating Northern Rock as if it were not a going concern (before the government rescue) would quite clearly result in a zero valuation on their shares.
Whilst their anger may be understandable, if Northern Rock were a going concern at that time why did it need government help and would it have survived without it?
Monday, December 07, 2009
Windfall Tax
Governments, much like ravenous dogs, always become very overexcited at the smell of someone else's money. When they find out that there are large sums being paid out, they want a cut of the action as well.
Therefore, it should come as no surprise at all to learn that Alistair Darling is considering imposing a special windfall tax on bankers' bonuses next year.
Taxing the banks themselves would be counterproductive, as it would be taking money back that has only just been pumped in to prop them up.
Will a windfall tax on bonuses achieve very much, in a tangible sense?
That depends on the nature of the tax, and as to whether the recipients of the bonuses find a way to avoid it.
Whilst, as has become the norm with Brown, this may well play "nicely" to the gallery of envy, in the long run it will achieve very little. It will not come close to balancing the books, and will drive away high earners from the UK to other less taxing environs.
Meanwhile the Centre for Economics and Business Research has warned that in a decade, the UK could drop from being number 4, in terms of the economy, in the world to being number 11 by 2015.
heavy taxes and stifling bureaucracy will bring that possibility ever closer.
Therefore, it should come as no surprise at all to learn that Alistair Darling is considering imposing a special windfall tax on bankers' bonuses next year.
Taxing the banks themselves would be counterproductive, as it would be taking money back that has only just been pumped in to prop them up.
Will a windfall tax on bonuses achieve very much, in a tangible sense?
That depends on the nature of the tax, and as to whether the recipients of the bonuses find a way to avoid it.
Whilst, as has become the norm with Brown, this may well play "nicely" to the gallery of envy, in the long run it will achieve very little. It will not come close to balancing the books, and will drive away high earners from the UK to other less taxing environs.
Meanwhile the Centre for Economics and Business Research has warned that in a decade, the UK could drop from being number 4, in terms of the economy, in the world to being number 11 by 2015.
heavy taxes and stifling bureaucracy will bring that possibility ever closer.
Friday, December 04, 2009
£850BN Justified
The National Audit Office (NAO) report that the cost of bailing out the banks has so far cost us £850BN. However, the final true cost will not be known for many years.
The NAO state that the bailout was "justified", as there have been no "disorderly failures". However, the NAO then goes on to qualify the report by noting that:
"There is no single measure of success, but a range of indicators have since stabilised and improved."
So that's alright then!
Meanwhile, kudos to Barclays Capital for showing how ridiculous any government cap on bonuses will be. Barclays Capital intend to award certain staff a backdated payrise of up to 150%, thus mopping up the bonus pool.
Labour governments never seem to learn how powerless and impotent they are, when it comes to trying to impose pay policies.
The NAO state that the bailout was "justified", as there have been no "disorderly failures". However, the NAO then goes on to qualify the report by noting that:
"There is no single measure of success, but a range of indicators have since stabilised and improved."
So that's alright then!
Meanwhile, kudos to Barclays Capital for showing how ridiculous any government cap on bonuses will be. Barclays Capital intend to award certain staff a backdated payrise of up to 150%, thus mopping up the bonus pool.
Labour governments never seem to learn how powerless and impotent they are, when it comes to trying to impose pay policies.
Thursday, December 03, 2009
The RBS Bonus Row
The row over the proposed bonus payments for RBS executives and management doesn't look like it's going to go away anytime soon.
RBS, the taxpayer owned (70%) wreck of a once fine bank, wants to pay its senior staff £1.5BN in bonuses this year (they are expecting to make £6BN in profits this year).
The government, playing to the gallery, has insisted that it has a say in how much should be paid and have threatened to veto it. The board, not unreasonably, point out that it is for them to make that judgement and have threatened to resign.
As ever with Brown and his lackeys, whatever they touch simply turns to shit. However, this is not the end of this farce.
Lord Mandelson, the Business Secretary, has come out on the side of the board.
He is quoted in The Times:
"I understand the point of view that RBS directors are expressing. They have to remain competitive in the market in recruiting senior executives.
That is why it's important that all the banks are equally restrained and RBS is not singled out, but nobody is suggesting that that will happen."
In other words, don't shoot yourself in the foot just to play to the gallery.
The trouble is, Brown loves to play to the gallery.
RBS, the taxpayer owned (70%) wreck of a once fine bank, wants to pay its senior staff £1.5BN in bonuses this year (they are expecting to make £6BN in profits this year).
The government, playing to the gallery, has insisted that it has a say in how much should be paid and have threatened to veto it. The board, not unreasonably, point out that it is for them to make that judgement and have threatened to resign.
As ever with Brown and his lackeys, whatever they touch simply turns to shit. However, this is not the end of this farce.
Lord Mandelson, the Business Secretary, has come out on the side of the board.
He is quoted in The Times:
"I understand the point of view that RBS directors are expressing. They have to remain competitive in the market in recruiting senior executives.
That is why it's important that all the banks are equally restrained and RBS is not singled out, but nobody is suggesting that that will happen."
In other words, don't shoot yourself in the foot just to play to the gallery.
The trouble is, Brown loves to play to the gallery.
Wednesday, December 02, 2009
The Yorkshire Chelsea Merger
Those members of Chelsea and Yorkshire building societies (due to merge by next April) who had hoped that they may received a windfall, should keep their champagne on ice for another day.
There will be no windfall for members, but there will be job losses for the 3,200 staff working at the 178 branches.
The merged behemoth, to be named Yorkshire Building Society, will have combined assets of £35BN, and 2.7M members.
In reality this is not a merger but a takeover of Chelsea, which has lost £44M from the Icelandic banking scandal and £41M due to buy to let mortgage fraud.
Given the "in vogue" political hysteria against banking behemoths, it is surprising that this deal is going ahead and is being trumpeted so vocally.
Perhaps, in this instance, the politicians and regulators are relieved that another "Northern Wreck" has been deftly avoided?
There will be no windfall for members, but there will be job losses for the 3,200 staff working at the 178 branches.
The merged behemoth, to be named Yorkshire Building Society, will have combined assets of £35BN, and 2.7M members.
In reality this is not a merger but a takeover of Chelsea, which has lost £44M from the Icelandic banking scandal and £41M due to buy to let mortgage fraud.
Given the "in vogue" political hysteria against banking behemoths, it is surprising that this deal is going ahead and is being trumpeted so vocally.
Perhaps, in this instance, the politicians and regulators are relieved that another "Northern Wreck" has been deftly avoided?
Tuesday, December 01, 2009
House Price Rise Slows
Unsurprisingly the brief and modest rise in house prices, that has been latched on to by the housing industry and the politicians as signs of a recovery, is beginning to slow.
Nationwide Building Society report that the cost of a home rose by 0.5% in November. However, the rolling three-month index dropped to 2.8% from 3.5% in October, and 3.8% in September.
This fall is hardly surprising, much of the "rise" was due to a shortage of property available for sale in the market. Additionally, the number of job losses continues to mount.
Nationwide Building Society report that the cost of a home rose by 0.5% in November. However, the rolling three-month index dropped to 2.8% from 3.5% in October, and 3.8% in September.
This fall is hardly surprising, much of the "rise" was due to a shortage of property available for sale in the market. Additionally, the number of job losses continues to mount.
Subscribe to:
Posts (Atom)