Friday, 3 February 2012

These Attacks On People Are Merely A Sign Of Parliament’s Impotence

This article argues that the attacks on individuals such as Ed Lester, Stephen Hester and Fred Goodwin are not only questionable morally, but are a sign of a Parliament which lacks the ability or the intention to address the systemic problems of 'predator' capitalism.

I fear this will make many of you annoyed with me (hopefully not permanently), but I’m going to say it anyway.
I don’t agree with ANY of these Parliamentary attacks on Hester, Goodwin, Lester … even Murdoch

Go on Wikipedia and look up the Wonderful Parliament of 1386 and the Merciless Parliament of 1388. They were the Parliaments of Richard II which first blamed and later executed the king’s ministers for what was going wrong. The Long Parliament of Charles I did much the same to Archbishop Laud and Thomas Wentworth. Apparently, one way for a Parliament to 'get a name’ for itself is to turn on the rich and powerful.

Which is what we’ve seen in this Parliament. The Murdochs have been dragged before Tom Watson, pied and ridiculed as incompetent ‘mafia’. Newspaper editors have been hauled over the coals by Leveson. British MPs have been playing at Congressional Committees, just like the ones they learned about
at school when they studied the McCarthy era.
Ed Miliband has seized the moment and is now regarded as the king of accusers. ‘Off with their heads’ he cries, and the system crumbles before him. The Press and the Labour Party laud these forays as Ed ‘setting the agenda’.

I’m not so sure.

Ed Lester
Let’s take Ed Lester first. Nobody is suggesting that Lester has done anything illegal; he is ‘guilty’
only of tax avoidance (it is tax ‘evasion’ which is illegal).
To be honest, ‘guilty’ is an entirely inappropriate word – all Lester has done is to take advantage of existing and long-established tax regulations to reduce his tax.
Lots of people do it, and it is completely legal.
Instead of becoming an employee, employed by your employer, you set up a company. Instead of employing YOU, your employer employs your COMPANY – and that means you pay tax on your earnings, not as a PAYE employee at 50%, but as a company at 28%. You can also claim as expenses against tax things that ordinary employees cannot claim – such as mileage going to work.
Many people who work in high-status professions for agencies work in this way. Many of the professional bloggers who are writing for the newspaper blogs will be doing it too.
And to be honest, if you can persuade your employer to employ your company, not you, why not?
Lester is ‘guilty’ of nothing whatsoever – his payment arrangements seem to have been agreed as part of his contract – and if I were him I would be taking legal advice on whether I was able to claim constructive dismissal.

What would you say if HMRC suddenly returned your tax return telling you that, because they didn’t like you, they wanted you to revisit your absolutely legal tax return and rewrite it so that you paid more tax?

Stephen Hester
Hester, also, has justifiable reason to be aggrieved.
He took a job, and his pay protocols were agreed as part of that job.
Now I agree that the pay was humongously over-generous, and the bonus arrangements were ludicrous … but that was what the government of the time agreed.
If you want anybody to execute, go back and attaint the civil servants and the minister who signed off the deal.

But Hester is innocent. Like everybody else in the country, he merely negotiated the best pay deal he could when he took the job, and he was given a contract of employment, and I am of the opinion that contract should
now be honoured.

If we ever allow a situation to develop where the government reneges on contracts simply because it has come to regret them, then we open a can of worms which will destroy us.
Do you honestly think that ANY business will risk setting up office in Britain, or will ever make a deal with the British government, if we establish a reputation as a country which turns on you if we later FEEL that we don’t like this deal any more?
There is nothing wrong with driving a hard bargain; industry will respect that. But when you’ve made your bargain, you MUST keep it.
Any move to abandon this principle will rebound, eventually, upon our own heads.

When the government reduced the feed-in tariff on solar panels, it was exercising its legislative right … but when it tried to back-date that cut, it was breaching its contract, and got its fingers burned in the high court. And rightly so; it is not in OUR interests to have a government which can just change financial agreements it has made with its citizens.

But this is EXACTLY what it is trying to do, of course, over public sector pensions – to reduce the payout for people who
30 years ago joined a scheme with promised expectations – and the Unions are absolutely right to protest that. It is breach of contract. It is theft.

And so it was from Stephen Hester. We set up a system, and we should have honoured what we set up.

Fred Goodwin
To be fair, I would probably have removed Fred Goodwin’s knighthood if I had been the monarch. Goodwin was given an honour, after which he was found to have behaved extremely dishonourably – so it makes sense to remove the honour.

Whether I would have done it in such a public way, with a public and parliamentary campaign, however, I’m not so sure.
And not only because it demeans us, the petitioners…

If you have read any of my blogs other than this, you will probably be aware that, in my opinion, global capitalism has reached the position where nowadays it is more powerful than the state.
I am of the opinion that all these attacks on discredited individuals merely serve to emphasise that point.

We need to address the Systemic Problems
The reason the Long Parliament attacked the ministers of the Crown in 1640, rather than the Crown itself, was that it felt unable to directly confront the power of the king.
As time went on, of course, it became clear to Pym, Cromwell and Co. that the problem was NOT the king’s ministers, but the system of royal ‘Divine Right’ government itself. And THAT was the significance of the Grand Remonstrance in 1641, when they finally stopped pussy-footing round the edges and addressed the problem itself – the powers of the Crown.
(It led, mind you, to a Civil War.)

Today, it is perhaps true that all these attacks on ‘culpable’ individuals will satisfy the public need for vengeance. They might make it LOOK as though our government is doing something about the ‘unacceptable face of capitalism’.

But, as Ed Miliband pointed out quite correctly about Cameron on Wednesday: ‘he says that the class war against the bankers is going to be led by him and his cabinet of millionaires. I don't think it's going to wash.’
And it isn’t.
This government is either impotent, or incapable, or unwilling to take on the vested interests of capitalism.
And the fact that they are attacking the people not the problem merely proves it.

Ed Miliband is at least trying to move the debate onto principles and practices – his speech on Banking at the Thomson Reuters Building today tried to do just that.
But Cameron, as I think we all realised, either dare not or cannot take on business – his government will not even confront rapacious landlords at home (as MP Phil Wilson has been campaigning for years), never mind the REALLY powerful multinational corporations.

What is needed is not attacks on individuals – a ploy which serves only to blacken us as vindictive and unreliable – but a reworking of the System.
The problem is Systemic, and it needs government to sit down and renegotiate the terms of reference sensibly and meaningfully with big business … not this current personality-focussed witch hunt.

I wonder what ‘name’ historians will give to the present Parliament?
The ‘Vindictive Parliament’?
The ‘Tokenism Parliament’?

... perhaps you might care to add suggestions of your own!


  1. Robert Peston on the Hester/Goodwin issue:

    Nick de Bois said much the same thing, less forcefully:

    Is a later blog, I argued that - although I agreed with them that the personal attacks were harmful - that did not mean that we had to lie back an accept 'predatory capitalism':

  2. And again: