Changing Trains

In the grand scheme of things, the fiasco surrounding the award of the West Coast rail license to FirstGroup counts for little, but unfortunately it reminds us of what we already knew: ministers are responsible not for their departments, or to ordinary people. The only responsibility of a minister these days on which he or she will be evaluated by his or her prime minister is the fervour with which they hold the line.

Richard Branson & Virgin Trains said, over and over again, that FirstGroup could not possibly run the West Coast line on the terms upon which the contract had been awarded to them. Possibly that sounded like sour grapes from an incumbent who had been cheated of a lucrative contract but - if it were you or me - I think we might have just checked.

After all, the accusation from Virgin was not vague.

Time and time again, however, those tasked with defending the decision came out and said that everything was fine, no need to worry. Justine Greening, then Transport Secretary, is subject of an article in the Belfast telegraph from 28th August that is retrospectively damning. The article points out that the award to FirstGroup had been called into question by Virgin trains, The Labour Party and the Commons Transport Select Committee yet she still intended to sign the contract.

She was only prevented from signing the deal - and thereby committing taxpayers to a deal which would have cost them hundreds of millions of pounds - by legal action on the part of Virgin.

Moreover, her successor was hardly less staunch. Last month he told the Transport Select Committee: "I am satisfied that due diligence was done by the department and therefore the intention is to go ahead with the contract when we can. We are determined to press ahead with the award that we have made[.]"

When a Minister of the Crown tells MPs that he is satisfied with his department's due diligence, that satisfaction is supposed to predicated on something. Yet now the government is trying to shrug their failure on this question. We are told that "ministers could not be expected to delve into the minutiae of the [..] complex deals."

But of course, there was no need to delve into details. Virgin had already identified where the problem lay, and all it needed was for one of out Transport Secretaries to have the humility to think: "these guys are suing us ... maybe just check that out."

Had they done so, the scale of the blunder would have been immediately obvious, because FirstGroup was essentially placing a one-way bet against the UK taxpayer. A company worth £900 million was saying that if enormously optimistic forecasts of growth were achieved, then it would pay back £13.3 billion in cash by 2028. Repayment was staged in such a way that FirstGroup repaid comparatively little until almost nine years into the contract term.

In order to secure the considerable revenues of the West Coast line (£824 million last year) FirstGroup were only being asked to guarantee a sum of £190 million, which would have been what the taxpayer would have been able to recoup if FirstGroup went bust as the higher payments fell due.

You don't have to be a Dragon to reject this deal, yet at least two ministers backed it with extraordinary zeal, just as (one need hardly add) Jeremy Hunt backed the Sky deal before them. Presumably they, like FirstGroup, calculated that if a week is a long time in politics then 2021 was an eternity away.

The immediate loss to the taxpayer is being estimated at £300 million, which we can doubtless measure in terms of the firm cost-saving measures favoured by this government.

Gang Aft Aglay

The question posed by the Book of Job can now be recast. No longer do we wonder what it is that mankind has done to earn the wrath of God. Instead we can boil it down to a single person.

What has David Miliband done to have deserved being so cruelly smitten by The Lord?

Daviband (for lo, thus is he known in nutshells) has been awaiting the moment of his brother's downfall with the patience of Richard of Gloucester putting in the monthly order for barrels of Malmsey. His Acme 100-ton weight was already nicely hanging from the merest of canine whiskers above his brother, and - in the event that this failed - his denizens (betoga'd and fully equipped with the contents of a Sabatier display case) were ready to greet Ediband on the steps of any convenient government building.

Yet Ediband - and not through any great display of competence on his own part - seems about to saunter past every lethal trap with the slightly distracted air of one standing upon a precipice to admire butterflies.

Cameron (the swinish toff) had gone and messed it all up on the metaphorical eve of the May council elections, falling so precipitously in the public esteem that the only precedent is said to be the pride & joy of Old Mother Brown. Since becoming as unpopular as Gordon logically necessitates the occurrence of a miracle, we can be sure that The Creator Himself has His thumb in the scale.

Not since Pharoah hardened his heart has a human been blighted more pitilessly than Daviband. His Lamentations must indeed constitute a Jeremiad ... not least given the Culture Secretary's looming presence at the end of the list of plagues.

Why do bad things happen to such good people?

Only a vile Manichaeist, surely, would suggest that Daviband's ultimate goal of leading Labour to the Promised Land has been scotched not by the malevolence of God but by the actions of t'other fellow.

Yet ... take a look at that photo and tell me that horns and a tail wouldn't complete the picture.

Dining With The Tax-Collectors

One of the things that her Majesty's Government has recently been banging on about is what a terrible thing it is to avoid tax "aggressively".

(I'm not sure how much aggression goes into that, to be honest: most individuals with high net worth would delegate the job of cutting tax payments to their accountants, who are not typically of the attack-dog demeanour. Perhaps Mr. Osborne should be more worried about people avoiding tax ploddingly.)

Be that as it may, the cry of the Coalition has gone out that evading tax is morally wrong.

But are they right?

The usual citation from Revealed Theology on this one is Christ's admonition - when asked if the Jews should continue to pay tax to their Roman occupiers - to "render unto Caesar what is Caesar's". The point of this story is that His political adversaries were trying to whip up some trouble and had set this question as a trap, which He nimbly sidestepped. The answer, then, was really a nice piece of verbal sleight-of-hand.

In any case, very few people today look to revelation for their moral attitudes (what with all the stoning and eye-putting-out 'n' all) so the more usual question is whether there is a rational reason for thinking that evading tax is ethically a bad thing.

If one considers tax to be a form of charity or wealth distribution (a way to fund healthcare and social security for those less fortunate than those with taxable income) then I suppose one can argue that taxation serves a socially benign purpose. There is no logical reason, however, why someone who dodges taxation may not contribute to charity at least as much money as they withhold through avoiding tax. Charity may have a definite moral character that paying tax does not, since it is voluntary.

Moreover, not all taxation has a socially beneficial function. There is the Offence Defence Budget for a start. And before you complain that were everyone to withhold tax revenue then we could not nationally benefit all citizens such as the military, police and fire services: the responsibility for funding these services has an equal benefit to all, yet all citizens capable of paying for them do not contribute equally. The redistributive function of taxation and the social contract element should not be confused.

People who avoid taxation tend to top-slice their payments: they still pay at least as much as is required for essential services and often tens of thousands of pounds more.

Tax avoidance is generally intended to mitigate disadvantageously high tax regimes, and the people best placed to use it are the ones who have such wealth that they can pretty much afford to switch tax regime at will. Try sheltering your assets when you have no assets to shelter. The ultimate sanction of those wishing to avoid tax is therefore to emigrate, at which point we lose not only income tax, but also the many other sources of taxation to which the rich, and the rest of us, are usually subject. Such as V.A.T. on purchases.

The wealthy live under no moral or ethical obligation to pay tax. The politicians and media who - with increasing frequency - treat as wrongdoers those who take practical steps to husband their resources are, on the other hand, venturing onto very perilous moral & practical grounds.

From Eton To Cheatin'?

Had Sordel started cracking this particular nutshell little over a week ago then its kernel might well have been the resilience and avuncular charm of David Cameron. Obviously one distrusts anyone who rises far in British Politics, since one cannot be a Snake Charmer without (at the very least) having more access to venomous serpents than is decent or proper in any human being. Nevertheless, Cameron has an air of broad decency that is difficult to gainsay.

If Cameron has a type, it is surely that of the young housemaster: unfailingly smooth with parents and boys, capable of the winning joke but also with just enough steel to suggest that one wouldn't want to be carpeted by him for smoking in the dorm. He gives the impression of being utterly fair-minded, though his dealings with Miliband Minor also have the sort of cheerful brutality that might send a fat boy on an impromptu cross-country run.

Quite how the nickname "Flashman" has attached itself to Cameron is hard to say, since he is very much more the type to have handed Flashman his prefect's badge.

Except that now he faces the dual accusation of swiping Granny's gin-money and pocketing a sizeable series of donations to the Conservative Party in return for an invitation for to dinner.

Where did it all go so wrong?

Part of the problem, of course, is that Cameron (being fair-minded himself) doesn't expect others to be such colossal bounders. Such is his innocence that he honestly believes that decreasing the highest taxation rate from 50% to 45% will encourage those previously evading tax to pay it. It would never occur to him that this is akin to a shop's offering reduced prices in an effort to appease shoplifters.

Another thing that Cameron's straight bat will not block is the politician who wants to spin a broadly neutral tax measure as a swinging tax increase for the elderly and infirm. Only the Conservative Party at its most ingenuous can believe that it would be given the benefit of the doubt when cutting pensioners' tax allowances, but ingenuousness is Cameron's stock in trade. One might call it his Achilles' Heel were he not so clearly more of the Hector stamp.

And finally, it would never occur to Cameron that there was anything in the least improper about opening up pot luck chez David & Samantha to wealthy business interests. These are just the sort of fellows that he's been dining with all his life, after all, and what greater evidence of personal integrity than kicking in a couple of hundred thousand to the club funds?

The problem is not so much that he might be cheating himself, then, as that he might be cheerfully oblivious to the illicit still in the prefects' common room.

A gentlemanly bearing is all very well & good ... so long as one is only required to deal with gentlemen. But when, as a politician, can you count on doing that?