Darling Alistair's Scotland

Who said: "XXXXXXXX is in a unique position, by virtue of its size and financial strength, to provide support to XXXXXXXXX, and we regard it as both responsible and commercially beneficial to undertake this transaction."? You could be mistaken if you think you’ve heard it before but for me it’s another example of this government’s sheer stupidity (or is it cupidity?). A failed building society has been rescued with taxpayer’s money, albeit they’ve cleverly wrapped it up as “support” to a beneficial takeover.

I’m not talking here about LloydsTSB and its taking over of HBOS (that’s Halifax Bank of Scotland). Nope I’m remarking on the latest wheeze from the Scottish gang; that of the support given to Nationwide Building Society in the takeover (read rescue) of the Dunfermline Building Society, which apparently suddenly discovered it had losses of £24milion! I can see this must have been a surprise in a company that “even in good times” only cleared £6million profit in any one year. The quote was Graham Beale, the Chief Executive of Nationwide Building Society.

To be clear, I’m sure the good folk of Dunfirmline and its surrounding parts are genuinely shocked, worried and indeed horrified at the thought of losing their homes, and indeed it would be churlish, under normal circumstances to wish them ill. However let’s look at these rescue deals geographically shall we?

Royal Bank of Scotland, now, this has been taken over by the taxpayer after having made the biggest loss in British corporate history. Then we have that LloydsTSB (now Lloyds Group) takeover of HBOS, brokered by Gordo who broke his own fiscal policy in order to make this happen. The link here of course is that HBOS is an acronym for Halifax Bank of Scotland. You might have spotted that too. And now we have the Dunfermline (which is in Scotland) Building Society. Of course we had Northern Rock, which is based in the English part of the United Kingdom so its rescue package at least could be seen to balance the argument, until you see in whose constituency the head office is located. Yep Jim Cousins, a labour MP.

I know I may be running the risk of being a Murray Walker here but I can’t help thinking that if the failed businesses were called “Bank of Surrey” or “Mansions R Us (Hampshire) Building Society” then the rescue deals would have been less forthcoming. However Gordon the Clown and his team know which side their bread is buttered, thus I recommend that every financial institute or business in the UK changes its registered name so the words “of Scotland” appear somewhere, thereby guaranteeing that every taxpayer in the UK underwrites the business.

Horrified of Doha

The news that BA and other airlines will be reporting losses this year comes as no surprise. Indeed the recession/depression in world markets must surely impact tourism and therefore the travel plans of many people. Here in Doha I have noticed a slow-down in the new construction projects such as the Shangri La hotel and the Marriott Garden, both of which book end the City Centre shopping mall. Likewise I’m told things are progressing slowly at the Hilton which is close to my home. If evidence were needed that the travel industry is suffering, there it is.
However, many of us still need to travel and that means we need to get on a plane. Just such a circumstance arose over the weekend. Having had some issues in my racing car the previous weekend we decided to make a few changes and then get some track time in. This means testing on a non race day. Looking at the calendar it seems a good day would be 8th May at Silverstone so having confirmed it with the team I set about booking flights etc.

This is where I believe BA has targeted me in an effort to reduce those losses of which we spoke earlier! Apparently to travel from Doha to LHR on a Thursday evening and return on the following Saturday morning costs twice as much as the same flights but four days apart! Having looked around for alternatives it seems there’s no flights that meet the timing so either I book it or look at alternative dates.

Seems to this simple person that this kind of pricing is exactly why BA and others of that ilk are suffering. Time for a rethink perhaps?

Brawn displays brains.

Good to see that the revived Honda team is showing what its potential really was. With Button and Barrichello they have two good drivers and now a car that, based upon the limited testing, and yesterday’s qualifying, is equally good. Protests about the interpretation of the rear diffusers may have created a bit of intrigue but ultimately the three teams (including Williams and Toyota) have shown that by using their brains they’ve created a sea change in the Formula One Championship and let’s hope it lasts. Going back some years; it was 1977 when Colin Chapman produced his first “wing” car, the Lotus 78 which used airflow to suck the car down to the track surface, and it seems to me that these teams are reflecting that same spirit of ingenuous design approach.

Unfortunately I’m at work so cannot watch the race but I sincerely hope the result reflects qualifying because if ever a team deserved a debut win its one that has shown such fighting spirit.

How much longer do we have to put up with this?

Can we just take a few minutes to reflect on what is happening here? I refer to the foot stamping tantrums of the ruling classes, by which I mean Gordo the Clown and his chums, Alistair and Hazza. What I’m worried about and indeed it would appear I’m not alone in this, is the thinking behind this outpouring of anger over the Fred Goodwin pension. It isn’t going away and I guess I’m not helping here but the point is that if you make a deal, just because you subsequently don’t like it, doesn’t mean you should change it.

There are wider, much wider and scarier implications here. We all make a deal with our government no matter which country, which generally involves an agreement to abide by the laws of the land, pay whatever taxes are imposed and behave in a responsible manner when taking advantage of the facilities offered by the country. It is a two way bargain, because having signed up for it, the Government of the day, must maintain a consistency in its approach to matters of public importance, law and trade etc. What is scary here is that this government appears to think that just because it doesn’t like the laws which affect the bargain it made with Fred Goodwin; it can just change those laws in order to get its own back. A touch of the playground bully there; and of course as with all playground bullies, they are scary not because they are tough, but because they are unpredictable. With a playground bully you never know if you’ll keep your dinner money because it’s been stolen from your mate or today it will be filched from your pocket as protection money.

If, as this government has demonstrated on previous occasions, it does push through a law in this case in order to obtain Sir Fred’s pension then presumably that law will apply to anyone, simply because you can’t make laws personal, they apply to the land. Therefore anyone who is currently saving for their future (although here I’m unsure as to what the efficacy of such action may be at this time) is fair game to have it stolen from them by Gordo the Clown and his previously mentioned mates.

Then there’s taxation. Some people live in regimes where taxation is applied to funds that are earned in the home country and not to funds earned in overseas locations. It is a source of constant envy for folks who can’t live/move abroad, that those who can are benefitting from what is assumed to be a “tax free” existence. Time to clarify a few things here before I come to the point: First if you are a Brit working abroad and you are registered as overseas then you can’t go home for longer than 90 days per year, if you do, you pay the tax on all of the earnings you accrued that year. Second if you wish to return at some point you continue your social security (we call it National Insurance) contributions, whilst overseas, but because you aren’t actually using the facilities, you get to pay a reduced sum. Third if you own a home in the UK you pay all the taxes and levies applicable to that home and in this case it is unchanged, whether you are at home or not.

I realise that this may not apply to other countries, in particular the USA but it is the current status in the UK. However, and this is another scary thing, it appears that Gordo has a further terrific wheeze. He’s apparently suggested to the other EU members that it would be good to grab the taxes on those expat funds because they deserve to be fleeced even though as above they’ve worked hard and suffered in return an inability to enjoy life at home. I’m sure many will not sympathise with the last point but the former is real and thus deserves some consideration.

However in his greed he ignores the financial boost the economy gets from expats who generally return their income to their home shores. Offshore accounts are OK but they are restrictive. These funds in turn help the institutions by way of investment and therefore are an unseen but very significant contribution to the economy. But if they are subject to taxation, there is no need to send them home, better to place them in the offshore accounts where the offshore country benefits instead. Good isn’t it?

But what about that taxation thing? It is clear that when the dust settles there will need to be a reckoning and there can be no doubt that the burden of that reckoning will fall upon those who are working, therefore earning wages and thus paying taxes. Indeed, as is the norm, anyone who is working in a higher paid position will be taxed at a higher level. The problem comes with what the higher level means. Is it the factory worker who is paid a minimum wage but then gets more money because of the effort he/she has put in? If so then where is the incentive for that worker to improve? Or is it the executive who is earning because he/she is bringing business and therefore trade to the country? I suspect the targets will be the latter and the former will be forgotten in the rush to villify those who are perceived to be better off. Sadly the worker who has made such an effort and is making a similar contribution to the country’s purse will be disheartened and the country will lose. The executive will probably just up sticks and move abroad in a repeat of the 1960’s “brain drain”.

Soooooooooo, bearing all of the above in mind, I wonder what the requirements are for Antartic Citizenship?