Tuesday, 10 July 2007

Here Kitty, Kitty

Lets check out the New Minister for the City, Kitty Ussher, in her speech yesterday at Merrills. Peter Bottomley's niece, yes really, had this to say. Following on from Ed Balls, it appears its now necessary for Labour Treasury Ministers to try and rewrite history, as well as trying to spin the present.
After telling the City all about itself (did she used to work as a Management Consultant?) Kitty went onto describe Britain in 1997
First she mentioned Independence of the Bank of England. Lets just hope she acknowledges how much better the Bank of England is run when Labour's cats keep their paws out.
"the financial sector's regulatory framework was fragmented and burdensome"
Nothing like it is now Kitty, when Financial Sector increasingly seeks to remove itself from the goldplating FSA and instead goes for the lighter and more commercial touches found elsewhere in Europe. And don't try and pass of the European introduction of Basel II as a Labour party invention, please....
"Thirdly, we were seeing chronic underinvestment. We addressed that by reducing Capital Gains Tax, but also by focusing on the investment chain - the series of relationships that link savers, borrowers and investment."
Hang on Pussy. Would that be the reduction in CGT (which itself replaced the abolition of many exemptions that benefitted enterpreneurs) that Labour MPs are bitching about in connection with Private Equity? Was the investment chain helped by abolishing the Pension Tax Credit? Has the UK's tax regime become more competitive? Because no-one else believes that
Her analysis doesn't get any better:
"But I believe that London is strengthened as a global financial centre by Britain's EU membership."
Like to provide details on how Switzerland and Hong Kong became major financial centres whilst staying outside the EU?
"And we're seeing key European banks like Deutsche Bank, Société Générale and BNP Paribas locating substantial parts of their wholesale operations in London"
They've been here for years dear. Check out Dublin and see how many of their ops are their now compared to 1997
"So as I said, consider me the City's ambassador within Europe"
Kitty has Europhile form. Later readers,
"Thirdly, we have to realise the importance of the UK having the right skills in place. London already has a hugely talented workforce. That's the result of both the UK's high quality education and training, and of our openness to inward migration -demonstrated by one quarter of London's senior managers in financial and business services coming from abroad"
Granted that immigration of talent into the City is a great benefit. But, I think you might like to check out the UK's education system, UK graduates now suffer problems spelling, let alone punctuating.
The TaxCutter's research will revert to Kitty's EU History in due course. She's got form and the TaxCutter won't forget it.

Tuesday, 3 July 2007

Dave realigns his frontline

No wonder its called a reshuffle,now there's almost 52 cards in the Shadow Cabinet. There are some curious moves, not least Dave appointing his own National Security Advisor when his Home Secretary is his best performer. The TaxCutter wondered a few weeks ago where the stories about Basher's "unhappy" team where coming from when some intern got tossed out of DD's office and started crying because she might need to go and get a real job. Maybe from those Tories who'd like DD out of the Shadow Cabinet?

Also, Theresa Villiers to Transport, Caroline Spelman as ChairBird, the Asian Girl to the House of Lords, Theresa May kept in? Just because the A list got scrapped for possible PPCs there's no need to recreate it within the FrontBench team.

There's some good news. Nick Herbert is quality, a fact confirmed to me when John Glen, when in CCHQ stated that "he'd done his best" to try and stop Nick getting selected for Arundel. All the signs are that Gove will score heavily in Education, an area where the party has really failed to show up Labour incompetence. And I don't see Bully Boy Blinky's oh-so-hard tactics going down any better in Education than they did for Ruth Kelly.

But maybe most interesting is the move to Chris Grayling to Pensions, and Philip Hammond from Pensions back to Shadow Chief Secretary. Appointing Grayling is fine, but Hammond was scoring hits in a quietly effective manner in Pensions. So why effectively move him to one of the lower jobs.

The TaxCutter worked with Philip when he was Shadow Chief Sec before. He's like an MP, but with brains. My best guess is that George is struggling a bit as Shadow Chancellor with the technical issues, so there's no better support than one of the biggest intellects in the parliamentary party, and one with business experience. And with George focussing more on electoral strategy, the need for a quality No.2, with complimentary skills, in the Treasury is key. Maybe DC is more clued up than I gave him credit for, and realises that "Its the Economy, stupid" and its a time for proper tax policy if he's serious about winning an election. What looks like a demotion might actually be a very wise move, and hey, maybe Dave's just having a little think about who would be Chancellor if he won......

Tuesday, 26 June 2007

There will be Blue Skies over

Unsurprisingly, given the big hits his CPS papers have landed on the Labour government's record, Brett Charles Elphicke (on the right, of course) has been chosen to recover the seat of Dover for the cause. Charlie won't be put off by the 5,000 Labour majority, as he can expect a few campaign visits from the TaxCutter to dig out key votes from my fellow Men of Kent. Especially, given Charlie's stated desire to pull the UK out of the EU

Lets just hope that the party gets behind Charlie and the others in Kent trying to dislodge Labour MPs and please does not make the normal party mistake of wasting efforts in safe seats! The TaxCutter also recommends to Charlie to have a weekly eMail emphasising his work on local issues, to get on good terms with the KM and KentonSunday, to build up your Constituency Association, to avoid being long-winded but most of all work bloody hard.

When the new PM murmurs "And so I say honestly: I am a conviction politician."

.... then just dig into the Big Red Book to check how honest a guy Gordon is
The TaxCutter hopes you enjoy his contributions

Now that Quentin Davies has left the Tory Party

The TaxCutter wonders if David Cameron will ask him to stand as the Conservative candidate for Mayor of London?

Wednesday, 20 June 2007

Some sense into the Private Equity Debate

Not since the last time I watched Platoon have the letters "VC" been so disliked. There's been a lot of fuss about the 10% rate, so lets inject some sense into proceedings:

  • PE Houses make money, in general, by buying groups and selling them between 2 and 5 years later. They look to get a higher price than they initially paid, generally by more innovative financing but superincentivising management and staff. The "Slash and Burn" story is something of a myth, they only slash what needs it, there's no logic in destroying value in something you want to sell to an educated buyer
  • Most PE money comes from the US, and often tax exempts. So most of the gains aren't even taxed in the UK
  • The debt financing for PE funds is already subject to anti-avoidance legislation to prevent overgearing
  • The underlying investments on which the gains arise have already been subject to corporation tax anyway
  • Tax the VC managers too much and they will respond with 1 of 2 answers - either they move offshore, or they don't invest in the UK in the first place
  • Many staff and ordinary workers in successful PE deals have got large bonuses / rewards on such exits. Many management who did superwell, and certainly the ones the TaxCutter has met worked 24/7 . Why tax success just because someone had the innovation and bottle most of us lack. Lets face it, business is only successful when it gives the consumer, something the consumer wants
  • Too many big groups are over-bureaucratic and political. PE owned groups tend to be smaller and more business and customer focussed

Just remind me - who invented the 10% Business Asset Taper Relief rate? And who removed the tax credit on dividends so PE investment gives a higher post-tax return than investing in bog standard UK plcs? Lets see ... all these changes happened since 1997 .......

But as the "Private Equity funds taxed less than cleaners" quote says - shouldn't the real questions be why are low paid workers now caught up in Labour's income tax net - and what logic is there for taxing capital gains in the first place?

Tuesday, 19 June 2007

Missing Report: Approach with care

If anyone has seen the proposed Consultation Document on the Taxation of Overseas Profits can they please return it to Mr G Brown, at HM Treasury, Whitehall.
The reward if found maybe the removal of the tax rules introduced by the owner which have harmed UK competitiveness over the last decade