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Friday, December 03, 2021

Government incompetence lost billions of pounds in public money again

As if it were not bad enough that the government wasted billions of pounds of public money on buying useless PPE and giving contracts to a dodgy VIP list, the Guardian reveals that this may just be the tip of a large iceberg in which administrative incompetence saw fraudsters cream off even more cash.

The paper quotes a National Audit Office report which has identified that the government failed to guard properly against fraud in its £47bn Covid emergency lending programme for small businesses, opening itself up to billions of pounds of losses. The NAO says that the bounce-back loan scheme launched in May 2020 did not include credit checks or fully verify the identity of small businesses applying for loans:

“Government prioritised getting bounce-back loans to small businesses quickly but failed to put adequate fraud prevention measures in place,” said Gareth Davies, the NAO’s comptroller and auditor general. “One impact of these decisions is apparent in the high levels of estimated fraud.”

The government launched the scheme at the start of the pandemic to stop the collapse of small businesses.

Firms could borrow up to £50,000 or or a maximum of 25% of annual turnover from accredited banks. About a quarter of UK businesses applied to the scheme, and 1.5m bounce-back loans – which were 100% guaranteed by the government – worth £47bn were made.

In March, Britain’s business ministry, which ran the programme via the British Business Bank, a state lender, estimated that 37% of the loans would not be repaid and that 11% came from fraudulent applications.

A subsequent investigation by the accountancy firm PwC in October revised the fraud rate down to 7.5%, although the NAO said it had not had time to check this estimate itself.

Other countries are also investigating the misuse of emergency loans issued during the pandemic.

The government is now focusing on recovering money from organised crime, yet many of the smaller-scale fraudsters will have slipped through its fingers.

Thursday, December 02, 2021

Government acused of misconduct over pandemic response

The UK Government may think that delayng its own inquiry into the handling of the covid panedemic until next spring will get it off the hook, but it seems that others are not prepared to wait, nor are they wiling to let Ministers forget how badly they have handled this crisis.

The Independent reports that the People’s Covid Inquiry, chaired by Michael Mansfield QC, accused the Government of “misconduct in public office” and gross negligence over the way it dealt with the virus.

They say that the inquiry, which heard evidence from February this year until the summer, concluded that there had been “serious governance failures” at Westminster that contributed to tens of thousands of avoidable deaths. It said the Government had failed to act to protect key populations at increased risk, and recommendations from previous pandemic planning exercises had been ignored.

The inquiry added that consideration should be given to bringing charges of misconduct in public office, given the available evidence of failures and the “serious consequences” for the public:

The Keep Our NHS Public campaign group organised the inquiry in the absence of a formal investigation.

The Government has said it has committed to holding a full public inquiry next spring as there are lessons to be learned.

Accusing the Government of “serious governance failures” in a report published on Wednesday, the People’s Covid Inquiry said: “These contributed to tens of thousands of avoidable deaths and suffering, and they amount to misconduct in public office.”

Its chairman, Michael Mansfield QC, said there had been “dismal failure in the face of manifestly obvious risks”.

He said the probe had identified a “theme of behaviour amounting to gross negligence by the Government, whether examined singularly or collectively”.

He continued: “There were lives lost and lives devastated, which was foreseeable and preventable.

“From lack of preparation and coherent policy, unconscionable delay, through to preferred and wasteful procurement, to ministers themselves breaking the rules, the misconduct is earth-shattering.”

The inquiry heard evidence from a range of witnesses and organisations, including academics, frontline workers and bereaved families.

Other findings include:

- The Government treated bereaved families with disrespect and ignored their questions

- It failed to address the seriousness of the pandemic before the March 2020 lockdown

- Deep social inequality contributed to a more vulnerable population

- Financial support for people needing to isolate was not sufficient to effectively reduce infection spread

- The Government’s delay in issuing advice to healthcare professionals, and advice to the public to rely on NHS 111, contributed to the coronavirus death toll

- There was, and is, a “misplaced over-reliance on vaccines alone”

- Government public health messages were often confused and contradictory

Mr Mansfield said there had been no accountability, and this could not be offset by the success of the vaccine rollout.

Jo Goodman, co-founder of Covid-19 Bereaved Families for Justice group, which contributed to the inquiry, said: “It’s vital that bereaved families are at the heart of the forthcoming inquiry, and listened to at every turn, and this report evidences exactly why.

“The loss of our loved ones should be used to learn lessons and save lives - something the Government should be entirely focused on and dedicated to.”

It will be interested to compaure thesw conclusions with the outcome of the government's official inquiry.

Wednesday, December 01, 2021

One rule for them..

The sense of entitlement emanating from 10 Downing Street and the Tory hierarchy is just overwhelming. It appears that they think they can carry on doing their own thing regardless of the rules and the law and, if the polls are to be believed, are encouraged in that view by a weak opposition and ane electorate who continue to give them the benefit of the doubt.

The latest episode of 'one rule for us, another for the rest of you', is revealed in today's Mirror, who report that Boris Johnson and his Downing Street staff have been accused of breaking Covid rules by attending parties at Number 10 in the run-up to last Christmas.

The paper says that the Prime Minister gave a speech at a packed leaving do for a top aide last November when the country was in the grip of its second lockdown, then just days before Christmas, with London in tier 3 restrictions, members of his top team held their own festive bash in Downing Street:

Officials knocked back glasses of wine during a Christmas quiz and a Secret Santa while the rest of the country was forced to stay at home.

Around “40 or 50” people were said to have been crammed “cheek by jowl” into a medium-sized room in Number 10 for each of the two events.

“It was a Covid nightmare,” one source claimed.

The revelations come after top health chief Dr Jenny Harries warned that people should cut down on socialising this Christmas to curb future Covid surges.

But Mr Johnson rejected the idea today that festive parties should be scrapped, adding: “We don’t want people to cancel such events.”

In explosive revelations, one source told the Mirror there were “many social gatherings” in Downing Street last year while the public faced restrictions.

They even suggested there were “always parties” in the flat Mr Johnson shares with wife, adding: “Carrie’s addicted to them”.

There were also claims of a third, smaller gathering on November 13, the night Dominic Cummings walked out of No 10, "where they were all getting totally plastered".

The PM had his own close brush with death when he was hospitalised with Covid in April 2020 - but it didn’t appear to change his attitude.

Another source claimed: “While senior civil servants were urging caution and there was one message to the public, Prime Minister gave the impression that it could be very relaxed in No 10.

“He would either turn a blind eye or on some occasions attend himself while everyone else was in lockdown”.

The Mirror lists a series of events when leading Tories have breached Covid regulations, including Robert Jenrick, then Communities Secretary, travelling 40 miles to see his parents in the first lockdown: and No10 aide Dominic Cummings breaking lockdown rules in April 2020 to drive 260 miles to County Durham while suffering Covid symptoms. He then took a 60-mile round trip to Barnard Castle for a day out with his family. The Prime Minister stood by him.

Then there is Health Secretary Matt Hancock quitting after he was pictured in a clinch with Gina Coladangelo in June 2021: and Nimco Ali, a close friend of PM’s wife Carrie Johnson, staying overnight with her and Mr Johnson during the peak of the coronavirus lockdown last Christmas.

It is little wonder that Johnson and his cronies are seen as having little moral authority left to impose important health-related restrctions, nor that many people feel that they can flout the regulations, just as these people do.

Tuesday, November 30, 2021

Ireland by-passes the UK

It was inevitable really, that the UK leaving the EU and the associated red tape around imports and exports linked to that decision, would change trade patterns around the Irish Sea, and so it has proved.

The Guardian reports on official data showing that the volume of goods shipped directly from Ireland to the EU on new Brexit-busting ferry routes have rocketed by 50% in the past six months as exporters seek to avoid travelling across land through Great Britain>


The paper says that figures published by the Irish Maritime Development Office (IMDO) show significant traffic diverted away from the traditional routes between Dublin and Britain to some of 32 new ferry services direct to ports such as Le Havre, Cherbourg and Dunkirk in France and Zeebrugge in Belgium.

Inevitably, this is going to have a detrimental impact on Welsh and Engliosh ports, with IMDO report showing freight volumes from Dublin port to Liverpool and Holyhead in Anglesey down 19% in the first three-quarters of 2021 compared with 2020 and down by 30% on the two routes from Rosslare in south-east Ireland to the Welsh ports of Pembroke and Fishguard:

“It is clear that the new trading arrangements between Ireland and the UK have had a significant and negative effect upon ro-ro [roll-on roll-off lorry haulage] freight traffic between the two countries,” the IMDO report said. “Underpinning all of these trends are the new customs and trading arrangements between Ireland and the UK that came into force on 1 January 2021,” it added.

“One-third of all ro-ro in the Republic of Ireland now operates on direct routes to ports in the European Union, up from a 16% share in 2019,” the IMDO said.

Traffic for the second and third quarters of this year show Irish Republic to EU traffic is already up by 52% compared with the entirety of 2019, it added.

The decline in demand for the ferry services to Wales and Liverpool has also seen Northern Irish ports receiving a Brexit dividend, with freight volumes hitting “unprecedented highs in 2021”.

Yet another area of the UK economy where the Brexit divident has proven to be a negative.

Monday, November 29, 2021

Johnson on a bridge to nowhere

What is it about Boris Johnson and bridges? More to the point, what does the Prime Minister find so fascinating about massively expensive, huge public sector projects like bridges and airports?

His proposal to put a new London Airport on an island in the Thames estuary didn't take off, so he switched to a more exclusive project, the abortive London Garden Bridge

The idea was to build a bridge covered with trees and flowers over the River Thames in central London. A total of £53m of public money was spent on this pipedream, before it was officially abandoned in August 2107, after a review recommended it be scrapped.

And then there was the even more bonkers proposal to build a bridge or tunnel to Northern Ireland. A project conceived no doubt during a brain-storming session on how to strengthen the union, while giving the finger to the European Union.

The Independent reports that this bridge has also been jettisoned at the drawing board stage, after a government review found that it would cost an estimated £335bn, while a tunnel would be about £209bn.

A significant obstacle to this plan was highlighted by the Guardian back in February 2020, when they reported on warnings by bomb-disposal experts that it would be too dangerous to build the bridge because the most direct route for the 28-mile span would involve crossing Beaufort’s Dyke, a trench that contains more than one million tonnes of unexploded munitions, plus chemical weapons and radioactive waste.

Beaufort’s Dyke is about 31 miles (50km) long and up to 300 metres (1,000ft) deep, and lies directly on the most direct route for a link between Portpatrick in Scotland and Larne in Northern Ireland. The paper said that the dump site is not regularly monitored by the British government, although the construction of a British Gas pipeline two decades ago resulted in thousands of second world war incendiary bombs being washed ashore, some of which exploded when they dried out.

They added that a four-year-old boy suffered burns in Campbeltown, Argyll and Bute, after picking up a device containing phosphorus. The episode led to the last major survey of the maritime site, with dredging for the gas pipeline thought to have been the cause.

A million tonnes of explosive and a £335 billion cost seem to be pretty decisive reason to abandon this idea.

Sunday, November 28, 2021

Debunking Priti Patel

I can't get this video to load up, so please click on this link to see the real facts behind the so-called 'migrant crisis in the channel'


Saturday, November 27, 2021

Is our tax system run by gamekeepers turned poachers?

I suppose that if you are responsible for upholding the laws of the land, in whatever capacity, then you should be beyond reproach, like Caesar's wife. How then do we explain this story, which details an arrangement where the HMRC have struck a deal to relocate tax officials into a new office complex in Newcastle owned by major Conservative party donors through an offshore company based in a tax haven.

The Guardian says that the department’s planned new home in the north-east of England is part of a regeneration scheme developed by a British Virgin Islands (BVI) entity controlled by the billionaire property tycoons David and Simon Reuben:

The deal will see officials at the government department responsible for preventing tax avoidance working from a site owned by a subsidiary of a company based in a secretive offshore tax jurisdiction.

The Reuben brothers, their family members and businesses have donated a combined £1.9m to the Tories. Earlier this week, the brothers are reported to have shared a table with Boris Johnson at an exclusive Tory party fundraising dinner.

On Tuesday, officials including the Cabinet Office minister Steve Barclay announced HMRC had agreed the 25-year lease with one of the Reuben brothers’ companies.

The brothers are the second richest family in the UK, according to the Sunday Times’s rich list. David Reuben’s son, Jamie, is a close ally of the prime minister and has served as a Tory party treasurer. He has donated more than £750,000 to the party since Johnson entered Downing Street.

The Reuben family has built a significant presence in Newcastle in recent years and is part of the controversial Saudi Arabia-led consortium that acquired Newcastle United football club in October.

Company filings show the family has frequently used BVI companies to hold its UK business interests, which include a luxury London property portfolio and a string of racecourses.

A spokesperson for HMRC said the office complex in Newcastle is owned and will be developed by a UK company, Reuben Brothers (Newcastle) Limited. However, Companies House filings show the company’s sole shareholder when it was incorporated earlier this year was Taras Properties Limited in the BVI.

Taras Properties first acquired the site in 2013 and transferred ownership of the land to the UK company in June this year for £10m, according to Land Registry records. The BVI company owns multiple large plots of land in central Newcastle in the area surrounding HMRC’s planned offices.

A spokesperson for the Reuben brothers confirmed the UK company is held by Taras Properties, but insisted the subsidiary “operates and pays taxes as a UK company”.

HMRC’s spokesperson insisted the Reuben brothers’ company would be subject to normal UK tax regulation. “The lease payments and any gains on the sale are subject to UK tax,” they said. “HMRC is satisfied the deal represents the best value for money for the taxpayer.”

There is no suggestion of any wrongdoing by the Reuben brothers and owning UK property through offshore companies is perfectly legal.

The paper adds that combatting offshore tax evasion and avoidance is described as one of HMRC’s priorities, and yet the government has still not honoured a commitment to introduce a register of overseas companies owning UK properties, which would help to crack down on the use of offshore companies to obscure owners’ identities and their source of funds.

Friday, November 26, 2021

Johnson abdicates control of our borders - to the EU

Boris Johnson doesn't do irony, or at least that is the impression he gives, otherwise why would he be trying to blame other countries for his government's failure to properly manage our borders?

It may well be that he doesn't understand what managing borders involves. It does not, for example, mean that we pull up the drawbridge, build a big wall and repel all those we don't like, though Priti Patel and he certainly give that impression.

Management in this context is putting in place and taking responsibility for proper and humane controls, the swift and efficient evaluation of entrees, especially asylum seekers, and tailoring entry requirements to the country's needs. It helps too, if we don't alienate other countries, whose co-operation is needed to deliver a better regulated border regime.

What happens when the UK government gets this wrong, starts to pander to popular sentiment, and politicises the deaths of men, women and children fleeing oppression, war or starvation, is illustrated in this article in the Guardian. We alienate our allies, lose control of our own agenda, and are left blustering at ourselves in a diplomatic corner, while others deplore our breaking of international conventions on refugees and our ignoring of international law.

Petty as Macron's actions are, it is little wonder that talks with the home secretary, Priti Patel, about the Channel boats crisis have been cancelled by France’s interior minister after Boris Johnson called on France to take back people who crossed the Channel to the UK in small boats:

In an escalation of the political crisis after the deaths of 27 people in the Channel, Patel’s counterpart, Gérald Darmanin, said France was disappointed by the demand.

“Making it public made it even worse,” he said.

Johnson had set out five steps in his letter to President Emmanuel Macron to avoid a repeat of Wednesday’s tragedy. In a message seen by the AFP news agency, Darmanin told Patel the letter from Johnson to Macron, suggesting France take back people who cross the Channel, was a “disappointment”.

Referring to Johnson’s posting of the letter on social media, he added: “Making it public made it even worse. I therefore need to cancel our meeting in Calais on Sunday.”

The French government’s official spokesman, Gabriel Attal, added to Darmanin’s criticism of Johnson’s letter on French television calling it “mediocre in terms of the content, and wholly inappropriate as regards the form”.

Attal told BFM TV the letter was “medicore because it does not respect all the work that has been done by our coastguards, police, gendarmes and lifeboat crews … It basically proposes a ‘relocation’ agreement, which is clearly not what’s needed to solve this problem.

“We’re sick and tired of this double talk and outsourcing of problems.”

France was planning to host ministers from all states with Channel coasts, including Patel, for a meeting on the refugee crisis in Calais on Sunday.

A source close to Darmanin told AFP and French media the meeting would be going ahead with the ministers from other European countries but said Patel was no longer invited after Johnson’s “unacceptable” letter.


The irony of course, is that the UK, which literally left the EU to "take back control of our borders", believes that it has no responsibility for the numbers of refugees arriving/ drowning in the Channel. In the Prime Minister's eyes, it is apparently all the fault of people smugglers and France for not keeping control of our borders.

Thursday, November 25, 2021

Turkeys vote for Christmas, after all.

With the news this morning dominated by fears of an alcohol shortage over the Christmas period (it really is a good time to be teetotal), Ministers are at least breathing a sigh of relief that a anticipated dearth of turkey carcasses might be avoided.

The Independent reports that the chancellor of the duchy of Lancaster, Steve Barclay, has had assurances from the British Poultry Council that there would “definitely” be enough turkeys for Christmas:

After months of pressure, the government relaxed immigration rules in September, making 5,500 visas available for foreign workers as a temporary measure to help the meat-processing industry prepare for the holiday season.

In a presentation to the cabinet on the challenge of dealing with the continuing Covid pandemic and its effects on supply chains on top of managing regular winter pressures, Mr Barclay said that government action had “alleviated concerns over potential turkey shortages in the run up to Christmas”, a No 10 spokesperson said.

Asked whether that meant that British families’ Christmases would not be disrupted by supply-chain problems, the spokesperson said: “Yes, certainly on that specific point with regards to the food supply, that is the view that we have. The action we’ve taken on things like temporary visas has helped alleviate some of the pressures we have seen.

“We know it will be challenging for a number of different sectors and we’re working with them closely.”

Of course there are plenty of other Brexit-related problems to deal with, including the continuing shortage of HGV drivers and the imminent imposition of red tape on exports and imports from January. No wonder we get the impression that Ministers are not so much in control, as fire fighting one crisis after another.

Wednesday, November 24, 2021

How should we reform council tax?

With the Plaid Cymru Labour Coalition announcing that they are planning to reform Council Tax, what exactly are they proposing to do? I have reproduced below an article I wrote for the IWA in 2014 discussing proposals put forward by Professor Gerry Holtham, that I suspect may form the blueprint for the Government's reform:

In his excellent paper on Taxation in Wales, Gerry Holtham describes council tax as the ‘misbegotten offspring of political misjudgement and political cowardice’.

As a Councillor in the late 1980s and the early 1990s I know what he means. Driven by the belief that everybody should pay the same amount for local services, Margaret Thatcher’s Government introduced the poll tax with disastrous consequences for their own popularity and for local councils.

Nothing would ever be the same again, least of all the previously excellent collection rates for property rates, which plummeted as people withheld payment on principle or simply because they could not afford the new poll tax.

The poll tax proved to be a highly regressive measure that hit large families in low wage areas particularly hard, whilst single people and couples in high property value areas suddenly found themselves making huge savings on previously high monthly payments to their local council.

In many ways today’s arguments about a mansion tax still hark back to those days. Those in favour of such a levy are seeking to reverse the failure to properly tax wealth as opposed to income, the parts that council tax still does not properly reach.

When Michael Heseltine oversaw the abolition of the community charge he missed an opportunity to introduce an alternative that properly related to people’s ability to pay. That was certainly the campaigning focus of the Liberal Democrats throughout their opposition to the Poll Tax.

In fact, right up to Charles Kennedy’s bleary-eyed press conference during the 2005 General Election when he failed to satisfactorily deal with difficult questions on the implementation of the policy, the Liberal Democrats remained committed to introducing a local income tax as the best way to pay for local government.

That remains their policy today, but it is one less trumpeted and desperately in need of updating or even replacing with a more sustainable and electorally acceptable tax.

Whilst the poll tax was in place, it may have been possible to sell a local income tax as a suitable alternative to a sceptical electorate. The differences in outcomes would not have been as stark as they subsequently proved to be in comparison with council tax.

The wealthy would have paid more under a local income tax than they would have done under the poll tax, whilst others would have seen a reduction in their bills. It would have been perceived as fairer. Moving from a more graduated council tax to one based on income has proved far more problematic.

It is for this reason that I welcome Gerry Holtham’s paper. For all its advantages, as the paper illustrates, council tax is still essentially regressive, though nowhere near as much as its predecessor. Because it is a property tax it is hard to avoid, it does not distort economic activity and it is easily understood.

Its disadvantage is that it requires regular revaluations to remain relevant, something that only happened once in Wales and never in England due to the political fall-out.

As Gerry Holtham explains, property values, as assessed for these purposes are increasing at a much slower rate than house prices, so that the average council tax on the lowest band, whose properties are worth up to £44,000 amounts to nearly 1.9% of the value of the property. For properties worth over £424,000, the tax is just over 0.5% of capital value.

The solution proposed by the paper is not to throw out the tax altogether but to reform it so as to ‘smooth out the indexation’ and to consider introducing additional tax bands. Gerry Holtham argues that this would lead to gradual change and do away with the need for revaluation.

He argues that a fairer way to levy the tax would be to make it a flat rate plus a proportion of the value of the property, less a property allowance. That would yield similar revenue to the current tax where everybody would end up paying a fraction over 1% of the band value. In other words the tax would be rebalanced so that those in the most expensive properties would pay more.

He says that taxpayers in band D would pay a little more than a pound a week more, whilst those in band A would see their bills fall dramatically. This would lead to a fall in the cost of Council Tax benefit from £242m to just over £190m.

Gerry Holtham suggests that the increase in taxation for those in the higher bands could be ameliorated by other measures. These include removing the single occupant discount and increasing the tax on second homes, a measure already being proposed in the housing bill. In Gwynedd, 10% of the housing stock consists of second homes.

The joy of this paper for me though is that it does not stop with discussion of council tax, though this is the most significant of the taxes being devolved to Wales, bringing in £1.2 billion a year. It also looks at the other taxes scheduled to be devolved to Wales and makes some interesting suggestions as to how they might be dealt with.

It suggests that Wales could follow the example of Scotland and reform stamp duty so as to make it more proportional, smoothing out the transition between thresholds which would be paid for by small changes to council tax.

Gerry Holtham suggests that a logical reform would be pass the collection and administration of smaller taxes such as landfill and stamp duty to local councils. He says that both are easy to collect and that it would make sense for them to be treated like business rates, collected by the local authority finance department, pooled centrally and then redistributed according to a Welsh government formula.

This would be balanced by a reduction in central government grant, delivering the additional benefit of lessening the gearing effect on council tax as more spending would be financed by locally-collected revenue. It would also reduce the cost of administering these taxes.

This sort of reform is very much in line with Liberal Democrats thinking, empowering local councils and giving them additional sources of revenue locally without increasing people’s tax burden.

I would argue that in addition there is scope to allow local councils to retain more of the business rates they collect locally along the lines of that pioneered in English cities. In England some councils can borrow against future business rate income from new businesses in regeneration areas, which capital they then use to regenerate those districts in the first place. This is known as tax increment financing.

Gerry Holtham’s paper has given us real food for thought as to how we can use the new tax powers being passed to us in a progressive and effective way, to both revitalise local democracy and deliver fairer outcomes. It deserves very serious consideration as we start to construct the treasury functions needed as a result of Silk and the Government of Wales Bill.

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