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A Tale of Two Countries

Thankfully things seem to be resolving themselves in Ukraine and I hope that matters progress to a good outcome for the people.
In Scotland meanwhile there were some pretty strong arguments at the weekend in places like Auchterarder amongst old ladies who each insisted on paying for the scones and tea.

From the official EU website  European Union External Action

“The EU is seeking an increasingly close relationship with Ukraine that goes beyond mere bilateral cooperation, encompassing gradual progress towards political association and economic integration.

Ukraine is a priority partner country within the European Neighbourhood Policy (ENP) and the Eastern Partnership (EaP). The Partnership and Cooperation Agreement (PCA) which entered into force in 1998 provides a comprehensive framework for cooperation between the EU and Ukraine in all key areas of reform.”

It goes on

“The EU takes note of the unprecedented public support in Ukraine for political association and economic integration with the EU and remains ready to sign the Association Agreement on the basis of determined action and tangible progress on the EU’s benchmarks. To this end, important progress has already been achieved.”

By way of comparison, the official EU line regarding cooperation and membership with an independent Scotland, a country which would meet all membership criteria and which geographical area has been a member of the EU for 40 years, after the referendum can be summed up by the following statement (apologies for paraphrasing slightly):

“How about naw?”

Quote of the Day

“Any vote to separate an area from a member state then has the consequence of that area leaving the EU”

Herman Van Rompuy yesterday in a joint press conference with the Spanish Prime Minister who declared the proposed Catalonian Referendum unconstitutional

And so it begins…

Yesterday’s intervention in the Independence debate by the Spanish Prime Minister was trailed in the media as ‘spontaneous’. If you believe that you’ll believe anything. His comments were akin to the first violin of the orchestra tuning up. If there is one institution more opposed to Scottish independence than the UK it is the EU and within that Spain and Belgium.

Expect well co-ordinated, arranged and choreographed spontaneity from the various sections of the orchestra, particularly the ‘brass’ section, to build up gradually to a crescendo in the coming weeks and months.

Also I see that Sir John Major, the man who presided over the Tory wipe out in Scotland has been pitching in his tuppence worth.

There’s more than ten months of this stuff to come.

Crisis? What Crisis?

I notice that this report from the Australian Broadcasting Corporation has mis-spelled millstone.

FireShot Screen Capture #101 - 'Celebrations as Croatia becomes the 28th country to join the EU - ABC News (Australian Broadcasting Corporation)' - www_abc_net_au_news_2013-07-01_celebrations-as-croa

Bear Doesn’t Shit In the Woods!


“After crisis?”

after crisis after crisis after crisis……….(repeat and fade)

Referendum latest

No, not the Scottish independence one, I’m talking about the UK/EU/In out shake it all about one.

I see more than 100 idiots who are terrified of losing their seat to UKIP Tory backbenchers defied the government on the vote last night.

I notice that they weren’t alone though because eleven Labour members, a Liberal and George Galloway voted with the rebels too.

Cameron says he wants to renegotiate the UK’s membership i.e. ‘We’ll have the good bits but not the bad ones’. Good luck with that Dave – it won’t work.

Anyway, at the moment a referendum on the issue in 2017, for several reasons, looks about as likely as Tarby staging a comeback.

Lawson’s Dice

Nigel Lawson I’m talking about. He’s looking to throw a ‘one’ and vote for the UK to come out of the EU.

Over the years this blog has had some pretty critical things to say about the EU, perhaps exceeded in lack of compliment only by its critique on UKIP and other right wing politicians.

My locus has never been a political one but rather a matter of pragmatism. I see the EU as clumsy, unworkable and interminably bureaucratic. On a basic level, quite how societies and cultures as diverse as Sweden and Greece, or Denmark and Portugal were supposed to live under the same laws and regulations as one another, remains an affront to common sense. Add the UK and France into that mix if you like. Chalk and cheese could have been coined for the two nations.

And don’t start me again on the Euro…..

So uneasy as I am about quoting Nigel Lawson, I’m going to anyway.

“Over the past decade, UK exports to the EU have risen in cash terms by some 40%. Over the same period, exports to the EU from those outside it have risen by 75%.

He calls the EU a ‘bureaucratic monstrosity’

“Not only do our interests increasingly differ from those of the eurozone members but, while never “at the heart of Europe” (as our political leaders have from time to time foolishly claimed), we are now becoming increasingly marginalised as we are doomed to being consistently outvoted by the eurozone bloc.”

Of course Lawson is making his pitch because of recent gains by UKIP in the English council elections and much of the right wing rhetoric is down to the welter of regulation being placed on the City of London by Europe. He is also acutely aware of the Tories’ promise to hold a referendum on EU membership should they gain a majority next time round.

However, the groundswell of anti European sentiment currently abroad (sic) in England but also in other parts of the UK doesn’t look like abating any time soon.

I’m wondering what effect this will have on the referendum that definitely is taking place here next September? The EU, its institutions and leading lights have been very frigid indeed to the idea of Scottish Independence.

Scotland’s trade with the rest of the UK is over £40 billion. Its trade with EU countries outwith the UK is less than £10 billion (Scottish government figures).

Alex Salmond has nailed his colours firmly to Sterling as a post independence currency – despite the current unwillingness of the coalition government of the UK to entertain that notion.

I wonder though if Salmond is playing the long game here? A yes vote to the UK or the remaining UK leaving the EU would look more likely at this stage than a yes vote for Scottish independence.

It is inconceivable that a post independence Scotland using Sterling could remain as part of the EU (even if it were able to negotiate its way in in the first place)

That’s why I think that Eck and co will be studying the pronouncements and rhetoric from London on the EU very closely in the coming months.

And I won’t be surprised if it shapes their thinking more than a little.

And the least surprising news of the day is…….


Happy Birthday VAT

Indeed, Happy 40th Birthday to our very first present from the then Common Market, the imposition of which was a condition of Britain joining.

Designed by French tax expert Maurice Lauré in the postwar years and first levied in the UK on April Fools’ Day 1973, VAT is now the government’s third largest source of revenue after income tax and national insurance.

But what started out as a simple, easy to collect tax – a low, flat rate imposed on most goods and services – has become increasingly complex, with exemptions for everything from children’s clothes to Jaffa Cakes.

“The initial idealistic hope that it would be a simple tax, easy to apply, has constantly been eroded because there are always special lobbies,” said Deloitte tax expert Daniel Lyons. “Politics and economics got in the way of simplicity.”

In the far off halcyon days of 1973, chancellor Anthony Barber introduced a flat rate tax of 10%

Paid by the buyer but collected by the seller, it is still one of the cheapest taxes for HM Revenue & Customs to administer because it requires businesses to act as tax collector.

It even had its own, user-friendly tribunal, where business owners could represent themselves when pleading their case.

But just one year in, Labour chancellor Denis Healey began to muddy the waters. He reduced the standard rate to 8%, but introduced a higher rate of 12.5% for petrol and some luxury goods, doubling the upper rate later that year to 25% before lowering it in 1976.

In 1979, the higher rate was abolished and the standard rate increased to 15%, where it remained until Conservative chancellor Norman Lamont increased it to 17.5% in 1991. Lamont also imposed an 8% rate on domestic fuel and power, which had previously been zero-rated.

The 1997 general election swept Labour to power and with it came a new series of tweaks and exemptions. Gordon Brown brought domestic fuel and power down to 5%, and knocked money off the rate for home insulation materials. He applied his own moral stamp, with VAT reductions on nicotine gum and other stop-smoking products, along with contraceptives, tampons and children’s car seats.

The recent banking crisis brought further changes, when Labour chancellor Alistair Darling cut the rate to 15% from December 2008 in an attempt to boost consumer spending. The discount was short-lived; a year later the rate was returned to 17.5%.

On 4 January 2011, the current chancellor, George Osborne,  introduced a 20% rate – a centrepiece of the coalition’s austerity drive – meaning in 40 years the tax rate on goods and services sold in the UK has doubled.

VAT appeals have become expensive and complex, too. Bringing a case can cost £100,000, says Lyons at Deloitte, with most businesses choosing to hire accountants, lawyers and senior barristers instead of representing themselves.

I have been an unpaid collector of VAT in since 1985. You’d think that in a pet store applying VAT would be simple yes? After all pets are luxuries and VAT is payable on all luxuries……..

Pictured: Contributor and freeloader

Pictured: Contributor and freeloader

But……but……Guinea pig food has VAT on it, rabbit food doesn’t (although some pre-packed rabbit food does). Bird seed has VAT on it………unless it is for wild birds or pigeons in which case it doesn’t. Dog food? well surely dog food has VAT on it? Well yes, unless it is labelled as working dog food when it doesn’t.

Striped sunflower seed. Source of revenue.

Striped sunflower seed. Source of revenue.

Black sunflower seed. The VAT man say no.

Black sunflower seed. The VAT man say no.

Then there’s ferret food. Ferret food doesn’t have VAT on it.  Rat food and hamster food do. What about books? They don’t have VAT on them. Black sunflower seed doesn’t have VAT, but stay away from those 20% rated striped ones. Peanuts? nae VAT. Pine nuts? VAT. Frozen dog and cat food? no VAT. Frozen mice and rats to feed snakes? What do you reckon?…………No VAT.

Almost human. No VAT on his food either.

Almost human. No VAT on his food either.

Woe betide any VAT registered business who is late in paying their VAT. I remember once, about six years ago, I was one day late with my payment. At that time electronic payments weren’t made on bank holidays and I had scheduled my payment for a day that unknown to me, was an English, but not a Scottish, bank holiday.

When the notice came in to inform me that my payment had been late and that any repetition within 18 months would mean penalties, I appealed. I pointed out that this was the first time my payment had been late in 22 years and that I had no knowledge of the English bank holiday. I asked that in these circumstances the appeal should be upheld.

The reply was (and I may paraphrase here slightly) Dear sir, Please go and take a long run and f*ck to yourself.

Anyway, happy birthday VAT, the EU in microchosm. Complicated to administer, unfair, non progressive and resented.

Unless you spend all your time reading your ferrets bedtime stories.

Thanks to The Guardian

Further reading here
here and here

Eu’re Not a Euro Any More

When is a Euro not a Euro?

When it’s in Cyprus.

From the Financial Times:

The most important characteristic of a monetary union is the ability to move money – without any restrictions – from one bank to another in the currency area. With capital restrictions, the value of a euro in Cyprus is no longer worth the same as a euro held by any other bank in the eurozone. A euro in Nicosia cannot be used to buy goods in Frankfurt without limits. Effectively, it means that a Cypriot euro is not a euro any more.

Jeroen Dijsselbloem, the head of the region’s finance ministers, seemed to suggest to Reuters on Monday that the island country’s rescue ( a hybrid between a dog’s dinner and a pigs’ breakfast) could serve as a template for future deals, by taxing depositors.

Here’s how that news was received in Italy:


“Only two things are infinite, the universe and human stupidity, and I’m not sure about the former.”
Albert Einstein