Labour’s John McDonnell on Google and tax avoidance

I wrote this post yesterday about the recent news about a tax deal reached between HMRC and Google. In the comments a reader alerted me to an interview on Channel 4 News with Labour’s Shadow Chancellor John McDonnell. He’s almost very good in it. As seems usual these days, no Government Minister was willing to be interviewed about Google (no empty chair though again), so Cathy Newman stepped in. She tried her best to trivialise the issue, but McDonnell didn’t do too badly under her line of questioning. He did a reasonable job of linking the issue of tax avoidance with the concept of ‘fairness’. This is the correct way to address the issue in my view, but he went about it the wrong way in one sense, and dropped a clanger in another.

A couple of times he implores companies to “pay your taxes”. The trouble is though, they are paying their taxes according to the law. What he should actually be doing is targeting the anger at George Osborne to “change the tax system”, preferably with a few concrete ideas about how to do that. By focusing on the companies themselves, he lets the Government off in a big way and makes it purely an administrative issue on the part of HMRC, saying they are not doing their job right or are underfunded.

McDonnell’s clanger came when he talked about taxes paying for things he thinks should be funded. By doing this, he sets himself up to fail later on because whenever he suggests a policy, the Tories will either say there is a funding black hole or that taxes will have to go up on ‘hardworking families’ to pay for it. A smarter play would have been to just hype the fairness aspect. Every individual and SME can relate to having to pay a more ‘standard’ rate of tax, so the unfairness of tax avoidance should be an easy sell.

Here’s the video. See what you think.

The blind alley that is tax avoidance

In the last few days, HMRC reached a deal with Google who agreed to pay £130m in corporation tax to cover the last 10 years. George Osborne called announced this on Twitter, saying:

Many people think Google has been unfairly avoiding tax and so are less than happy with George Osborne’s celebratory tone. There have been questions in Parliament today about this deal. Labour have been making a lot of noise about it, and the story could run for a bit longer. The thing is though, this payment from Google is actually an over-payment. They paid all their taxes due under the law. I don’t think anyone is saying Google have broken the law, but they have gone to the limits of what the law allows. Criticisms of this deal focus both on Google and on HMRC’s treatment of Google, but I think both are unfounded. Google is paying all the tax it is required to (or even more) and HMRC is trying to maximise the revenue it collects within the law. If it has extracted this voluntary payment from Google, it’s actually not done too bad.

So is tax avoidance OK then? No it’s not OK. It’s not fair that ordinary people and businesses have to pay more than those who can afford to pay accountants to minimise their tax bills in inventive ways. We need to be clear though. If Google paid £2 billion extra in tax rather than £130m, what would this mean for public services? Could the government then afford to spend more? No, absolutely not. The government can afford to provide public services at any level (within the constraints of inflation) whether it receives tax payments from Google or not.

Should people be able to feel the tax system is fair though? Yes, I think that is a reasonable wish. The best way to achieve this though would be to change the tax laws though, not to try to shame amoral companies into paying more voluntarily. This is why I think the issue is a blind alley for Labour (as it was in the last Parliament). It can generate some headlines, but to make a difference, you need to come up with specific changes to the tax system that would make a real difference.

This is not about how much tax is received in total, it’s about who pays that which is collected and whether that distribution is perceived to be fair. While you link cuts to tax avoidance, you will always be on the wrong side of the argument, because if you accept the link between taxation and spending you are exposed to the retort “how are you going to pay for it?” if you suggest any new spending initiative. It’s not a good strategy.

Compare and contrast

People say Jeremy Corbyn is a weak leader, but which shows stronger leadership?

This?

Or this?

I know which I prefer.

On going viral and BBC bias

On Thursday I clicked on a link on Reddit which was supposedly a blog about how the BBC had arranged for Shadow Foreign Office minister Stephen Doughty to resign live on its Daily Politics programme just before Prime Minister’s Questions (or to be completely accurate, 4 minutes after he had resigned by email). I got a 404 error, so found a cached version via Google. I thought the contents of the blog were interesting enough to share on my blog, which I did here. Being honest, I did think a lot of people would be annoyed by the story as I was, but I never expected the reaction it got. Pretty quickly, people starting retweeting the blog and in 24 hours, this blog got more page views than it got in the whole of last year. The story was reported on the websites of most of the newspapers and it has now ultimately resulted in the Labour Party putting into a complaint to the BBC about the way it reported Doughty’s resignation.

Reaction to the story was quite mixed. Again, being honest, it was mostly divided along the lines of whether or not you support Jeremy Corbyn or not. If you don’t support Corbyn, you probably didn’t see what all the fuss was about.

One observation I would make is that political journalists in particular thought this was a total non-story. Their basic reation was “So what? That’s just good journalism”. I think the main reason for that is that they have inside knowledge about how journalism works, particularly in politics. Those of us who aren’t journalists, although we may suspect this is how things are done, don’t know for sure, and so this episode was a certain drawing back of the curtain, and what we saw, we didn’t like.

I think my settled view on this now is that if any other news organisation had reported Doughty’s resignation in this way, I would be annoyed, but accept that they had the right to report it in that way and concede it was a good scoop. In general, I think the closeness between political journalists and politicians is too close. They seem to feed off each other and it often seems to result in reporters collaborating with politicians to make the news rather than just reporting it. Perhaps this is the way it has to be, but I don’t like it. In this instance though, it was the BBC who engineered the ‘scoop’ and I – and it seems many others – believe the BBC should be held to a higher standard than other media who have no duty of impartiality. For this reason, I think it was a mistake for them to collude with Doughty over the timing of his resignation.

But does this episode demonstrate the BBC has a pro-Tory, or right wing bias? A lot of people point out that the BBC’s leading political staff are sympathetic to the Conservative Party, but I’m not sure that’s enough to demonstrate bias to one party. To me it seems to have a pro-establishment bias, backing a very narrow set of agreed ‘moderate’ ideas and policies, and being unable to cover anything outside of that very narrow range objectively. Ultimately, this seems to mean they cover whoever is in government more favourably – at least when New Labour was up against the Conservative Party.

The problem now though is that Jeremy Corbyn falls outside of the narrow range considered ‘moderate’ (as do UKIP, the SNP and Eurosceptic Tories), and so we see the BBC taking a clear line of giving so called ‘moderates’ within the Labour Party plenty of opportunity to say uncomplimentary things about their leader. In the same way, their coverage favoured the ‘No’ campaign during the Indy Referendum and when the EU referendum gets under way, the BBC will put its weight fully behind the ‘remain’ campaign. That’s just what the BBC is, and while Labour’s recent complaint may have an impact on the BBC’s output, it will never give Corbyn a fair hearing.

That’s the last I’m planning to say on this subject here. Normal service will resume shortly both in terms of content, and, I strongly suspect, in terms of page views!

Squeeze change lyrics of song on Andrew Marr Show to criticise David Cameron

I caught the end of the Andrew Marr show this morning in which David Cameron was interviewed about the EU referendum. Closing the show were the band Squeeze, who performed a version of their song Cradle to Grave. I confess I did not notice at the time, but here is the video of their performance. While Cameron looked on they changed the lyrics of the last verse to:

“I grew up in council houses,

“They’re part of what made Britain great,

“There are some here who are hell-bent,

“On destruction of the welfare state.”

I’m not sure if Cameron noticed either judging by his enthusiastic applause at the end.

Some more thoughts on the Stephen Doughty resignation

I put a post up yesterday about the BBC’s role in the resignation of Labour front-bencher Stephen Doughty. It’s the first instance of something I’ve written ‘going viral’. The post was based on another blog post written by someone who works on the Daily Politics show, which was then quickly removed from the BBC website. When I read it, I thought it was an interesting story worth highlighting. I had my own initial thoughts about how I felt about it, but was interested in finding out what other people thought. Now I’ve had a bit more time to think about it and seen other people’s reactions, I thought I’d write this as a kind of update to the original post.

It’s not too much of an over-reaction to say that opinion was split into two groups, on one side journalists, and people who used to be more influential in the Labour Party who thought it was barely worth mentioning and just an example of good journalism, and everyone else on the other side quite angry about the tactics used. As social media leans heavily towards Jeremy Corbyn’s Labour, this is perhaps not surprising.

I am a supporter of Jeremy Corbyn myself, so disliked the idea of a journalist apparently colluding with one of his front-benchers to inflict maximum damage upon Corbyn. But did the BBC actually do anything wrong here? It was certainly a good scoop, and isn’t that a journalist’s job?

To answer this I am going to take the words of the Daily Politics team member at face value. This may not be fair if his blog post was taken down because it was not an accurate description of what happened. So I’m just writing on the assumption that it is accurate.

In the original blog post, the author wrote:

Just before 9am we learned from Laura Kuenssberg, who comes on the programme every Wednesday ahead of PMQs, that she was speaking to one junior shadow minister who was considering resigning.

So at 9am that morning, it seems Stephen Doughty had not made up his mind about resigning. He is not someone who anyone has heard of so he may have thought his resignation would not achieve what he wanted. The blog then goes on to say:

Within the hour we heard that Laura had sealed the deal: the shadow foreign minister Stephen Doughty would resign live in the studio.

This suggests that there was some influencing going on to encourage Doughty not only to resign, but to do so on air. It did not take long though seemingly, which could suggest Doughty didn’t take much convincing. The next line is:

Although he himself would probably acknowledge he isn’t a household name, we knew his resignation just before PMQs would be a dramatic moment with big political impact.

They were under no illusions about what they were doing then. In the event, the resignation announcement went out 5 minutes before Prime Minister’s Questions, which probably meant Jeremy Corbyn was unaware of it until David Cameron brought it up in the Commons Chamber. Some people wondered how David Cameron knew, but the answer to that is that he has a very savvy team and he is very good at crow-barring in breaking news. Someone passed him a note basically.

So that’s what seems to have happened. Did the BBC do anything wrong? I think there is a distinction between print and other broadcast media and the BBC here. If the Guardian or the Telegraph had encouraged Doughty to resign and give the exclusive to them, I wouldn’t particularly like it, but would accept they had got a good story and were doing what a journalist does. Because this happened on BBC TV though, it becomes more problematic.

With its duty to be impartial, and the full knowledge of the impact their actions could have, is it appropriate for a BBC political editor to act in this way? I think it comes fairly close to making the news rather than just breaking the news. Without Laura Kuenssberg’s intervention, would Doughty have resigned? He is not a household name, so if he’d given an exclusive to print media, or simply issued a press release, it almost certainly would not have received the coverage it subsequently did. I really don’t think the BBC should be getting involved in internal party machinations.

Those who didn’t see a problem with the reporting said it would only be an issue of impartiality if they would not run the story if it was a Tory Minister thinking of resigning. There doesn’t seem to be any precedent for this though, so it’s impossible to say if they would or not. They certainly don’t seem to have made much of Cameron’s decision to allow his Cabinet members to campaign freely to leave the EU, which is arguably a much bigger story than a minor Labour reshuffle. If they did ever allow a Tory government minister to resign on air in this manner, the reaction would be similar to the Twitter reaction to this, but the people complaining would be much higher up in terms of influence than those complaining about this.

The BBC released a brief statement in response to this story, saying:

Good enough?

The BBC admits it co-ordinated in advance the on-air resignation of Stephen Doughty

Yesterday, three Labour front-benchers resigned in protest at Jeremy Corbyn’s minor reshuffle. One of them – the previously unheard of Stephen Doughty – did so live on the Daily Politics just 5 minutes before the start of Prime Minister’s Questions, giving David Cameron the opportunity to bring it up in the chamber.

Today, the ‘output editor’ for the Daily Politics, wrote a – now taken down – blog on the BBC website’s ‘Academy’ section*, explaining how it all came about. You can read a cached version of the blog here.

Apparently, the BBC’s political editor Laura Kuenssberg set it all up. From the blog post:

Just before 9am we learned from Laura Kuenssberg, who comes on the programme every Wednesday ahead of PMQs, that she was speaking to one junior shadow minister who was considering resigning. I wonder, mused our presenter Andrew Neil, if they would consider doing it live on the show?

The question was put to Laura, who thought it was a great idea. Considering it a long shot we carried on the usual work of building the show, and continued speaking to Labour MPs who were confirming reports of a string of shadow ministers considering their positions.

Within the hour we heard that Laura had sealed the deal: the shadow foreign minister Stephen Doughty would resign live in the studio.

Although he himself would probably acknowledge he isn’t a household name, we knew his resignation just before PMQs would be a dramatic moment with big political impact. We took the presenters aside to brief them on the interview while our colleagues on the news desk arranged for a camera crew to film him and Laura arriving in the studio for the TV news packages.

I think this this is quite interesting because, while it could be argued that a live on air resignation is a great coup, I’m not sure it’s the job of the BBC’s political editor to actively assist disgruntled shadow cabinet members attempt to inflict maximum damage upon their party leader. I imagine if she had assisted a junior government minister do the same, there’d be a fearful row about BBC impartiality. What do you think?

*I found this via a posting on Reddit.

For the hard of thinking

Labour lost another giant from its front bench today after shadow Europe minister Pat McFadden was sacked by Jeremy Corbyn. If you followed the news today, you’d be forgiven for thinking he was sacked for his views on terrorism and security. That’s certainly what his pal Chris Leslie pretended he thought anyway:

Can this possibly be true? Some background first. Following the terrorist attacks in Paris in November, Corbyn was interviewed by the BBC’s Laura Kuenssberg and answered a question about shoot to kill policy in a way which was spun into him saying he wouldn’t want police to shoot-to-kill terrorists about to murder people on the streets of London. The very next day, David Cameron gave a statement in the House of Commons about the Paris attacks.

One after another, Labour MPs used this as an excuse to either distance themselves from Corbyn by praising Cameron, or to make thinly veiled attacks both directly on Corbyn (without naming him) and by proxy, on the Stop the War Coalition. The aforementioned Chris Leslie went first:

“The Prime Minister is right that the police and the security services need our full support at this time. Should it not be immediately obvious to everyone—to everyone—that the police need the full and necessary powers, including the proportionate use of lethal force if needs be, to keep our communities safe?”

Next up, Emma Reynolds:

“Does the Prime Minister agree that full responsibility for the attacks in Paris lies solely with the terrorists and that any attempt by any organisation to somehow blame the west or France’s military intervention in Syria is not only wrong and disgraceful, but should be condemned?”

Quickly followed up by now sacked Pat McFadden:

“May I ask the Prime Minister to reject the view that sees terrorist acts as always being a response or a reaction to what we in the west do? Does he agree that such an approach risks infantilising the terrorists and treating them like children, when the truth is that they are adults who are entirely responsible for what they do? No one forces them to kill innocent people in Paris or Beirut. Unless we are clear about that, we will fail even to understand the threat we face, let alone confront it and ultimately overcome it.”

Here’s Mike Gapes:

“The content and tone of the Prime Minister’s statement spoke not just for the Government, but for the country.”

Finally Ian Austin:

“I agree with everything the Prime Minister said about Syria and terrorism. Does he agree with me that those who say that Paris is reaping the whirlwind of western policy or that Britain’s foreign policy has increased, not diminished, the threats to our national security not only absolve the terrorists of responsibility, but risk fuelling the sense of grievance and resentment that can develop into extremism and terrorism?”

Most of these comments are rather uncontroversial taken at face value. They are phrased in the style of an obsequious back bencher’s softball opening question at PMQs – a nice easy lob for Cameron to smash back into the open court. Cameron actually answered with a straight bat to these questions, but he was obviously in his element. Why would opposition MPs want to ask softball questions to the opposition phrased in a way to cause embarrassment to the party leader? Obviously to undermine Corbyn who they never accepted as leader. These are questions that go without saying. Except perhaps Austin’s dumb question, everybody agrees with them, Corbyn included, but by asking them, they strongly imply otherwise.

All but one of the questioners above though were back benchers, free to speak as they wish. The one who wasn’t though, was Pat McFadden. Which other leader would have taken that and not sacked the person in question?

Pat McFadden took his seat on the back benches this morning. Who was he sitting with for support?

 

So farewell Michael Dugher, the People’s Shadow Culture Secretary

Michael Dugher was sacked by Jeremy Corbyn today.

Michael Dugher, they liked him, they loved him, they regarded him as one of the people. He was the People’s Shadow Culture Secretary and that is how he will stay, how he will remain in our hearts and our memories for ever.

That’s every bit as sincere as Tony Blair’s original version. Despite being an avid politics-watcher, I confess my knowledge of Dugher up until now went no further than recognising the name, but it turns out he was the driving force behind Andy Burnham’s leadership campaign in which he achieved an impressive second place result behind Jeremy Corbyn. He’s also apparently someone who understands “the North”. He is certainly well thought of by his former shadow cabinet colleagues who lined up – totally spontaneously – to eulogise this great man:

So there you have it, obviously a man of great stature. A shame then that he rather spoilt things with his rather petulant reaction to his sacking. If you read some of the (on-the-record) comments about Corbyn and people associated with Corbyn, it explains why Corbyn didn’t have much option but to sack him. No leader would tolerate that level of disloyalty.

At the time of writing, no other changes have been announced on what is normally a fairly routine process – the reshuffle. It’s being treated as anything but routine by the media and it’s driving them mad. No leaks and no news and yet for two days there have numerous live blogs, and scores of journalists filling empty space with rumour, speculation and outright bullshit. It’s actually quite sad.

Could Donald Trump become the next US President?

Betteridge’s law of headlines says that any headline that ends with a question mark can be answered with the word ‘no’. This law nearly always holds, but in this case, I think we have to consider the possibility that the answer might be yes.

A lot of people still react with incredulity to this suggestion, particularly after some of the very public statements he has made. There was the time he branded Mexican immigrants rapists. Or the time he said John McCain wasn’t a war hero because he got captured by the North Vietnamese. Then there was his apparent mocking of a journalist’s disability. And then the biggy, when he recently called for a temporary ban on Muslims travelling to the US.

If most people running for office had said or done just one of these things, their campaign would be over, but Trump has actually been improving in the polls and his lead over his Republican rivals is now in double digits. Has the world gone mad? What is going on?

Conventional wisdom to now has been that Trump is not serious about running, he will drop out early, or that the latest controversy will finish him off. None of these predictions has so far been borne out. One person has consistently been making correct predictions about the Trump campaign, and his reasons for making these predictions are rather interesting. That person is the creator of the Dilbert cartoon strip, Scott Adams. He has written a series of blogs arguing that rather that committing heinous blunders, everything Donald Trump is doing is pre-planned. Trump, Adams argues is using ‘persusion’ skills to convince the American electorate that he is the only candidate that has answers to America’s great problems (Trump often uses the word problem), and that he’s actually just saying what everyone’s already thinking. It does seem to be working.

This video is quite a good explanation of how Trump communicates when answering a question:

A recent study looked at the campaign speeches of all the candidates for President and compared them against reading ages. While you needed a high school level of English to understand the speeches of Democratic candidate Bernie Sanders, Trump’s speeches could be comprehended by anyone with a reading age of above grade 4 (when kids are around 9 years old). This makes him accessible to nearly all US citizens. Being able to communicate your ideas at that level might seem over-simplified, but if you want to reach the widest possible audience, it can be a really smart move.

Trump also has an uncanny knack of swatting away rivals with a simple put-down that seems to stick. Jeb Bush was the front-runner 6 months ago, but is now polling less than 5%. Trump had labelled him “low energy”, and he hasn’t seemed able to shake that off. Trump seems to be setting his sights on Hilary Clinton next. He has also said she lacks stamina and recently said “women don’t like Hilary”. We’ll see if any of that sticks.

At the moment then, I’m quite taken with Scott Adams’ hypothesis about what Trump’s strategy may be, but being a Brit, and not really plugged in to what’s going on in the States, I can’t be sure if he’s right. He is certainly bullish about Trump’s chances, predicting a landslide victory.

What do you think? From this side of the Atlantic, it seems unbelievable that Trump could get anywhere near the Presidency, but there are signs it may not be as fanciful as many think.