Last week, the Bank of England stepped in with rescue measures to prevent a crisis in UK pension funds. For most people who expect to depend on a pension fund for their financial well-being – either now or in the future – news of the crisis came at the same time as news of the rescue, so we were reassured even before we knew that we needed to panic. But the rescue arrangements end on 14 October. Pension fund managers, and those who oversee them, have just 10 days to get things sorted if the problem isn’t to start up again.
Pretty much everyone seems to think the Chancellor’s wife got it wrong. But why?
When companies generate income around the world but are found to pay little tax in the UK, there is frequently an outcry that tax should be paid in the countries where the profits are generated, not the country where the company has its home. But when an individual does the same thing – the wife of the Chancellor of the Exchequer, Akshata Murty, for example, taking advantage of the so-called “non-domicile” status – there is an outcry for the opposite to happen.
Today brings news that the Labour Party plans to raise £1.6bn pa in VAT from Britain’s private schools. Labour say the funds would help to pay for state education. But I’m not convinced they have they got their maths and their economics right.
I keep reading that the government is planning to increase National Insurance contributions “to fund social care reform”. I really don’t think that’s correct. I don’t doubt that the government is planning to increase NI contributions. And that it is also planning to improve social care. But I question the idea that the one can really be said to be paying for the other.
A few weeks ago, I spoke at an international conference on regulation. One of my fellow panellists told me, as we took our seats, that he was against regulation. I rubbed my hands with glee in anticipation that sparks would soon begin to fly. Sadly, the only sparks were the evidence of us getting on like a house on fire. He wasn’t against regulation; it was just bad regulation that he couldn’t tolerate. Me too.Read more
When the Thatcher government privatised British Telecom in the 1980s, they created a regulator to cap prices. They did the same with the privatisation of water, electricity and gas. No one suggested then that Thatcher’s policy was Marxist or State intervention. So is there any justification for such accusations now that Theresa May is proposing that the energy regulator should reintroduce a cap?Read more
In the early days of my career, I occasionally dreamed that I had failed my professional exams and was being summoned back for a re-sit. Since I never actually practised in the discipline in which I qualified, I’m not sure what game my subconscious was playing with me. But last week I dreamed I was back at university… only to wake up and find that I was.Read more
Regular readers of this blog must be sick to death by now of me repeating how much damage accounting standards are doing to pension schemes (here, here, here and, even on video, here). So I’ll be brief this time – very, very brief. There is finally light at the end of the accounting tunnel.Read more
Tax avoidance has become a hot topic. The Times newspaper has recently unmasked a scheme in which income tax is avoided by the ludicrously simple means of saying the salary is only a loan which might have to be repaid (but never actually is). One of the newspaper’s columnists, David Aaronovitch, has been writing about the immorality of tax avoidance (both links behind a paywall).
I used to think it was easy to spot the moral dividing line when it came to tax avoidance. If our government had created the exemption, that meant they positively wanted us to take advantage of it. Anything else was almost certainly a loophole and morally objectionable, even if it was legal. But does that distinction still apply?Read more