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Richard Murphy on tax and economics
Updated: 18 min 6 sec ago

Green, UKIP and SNP tax: a tale of a mixed bunch

1 hour 29 min ago

The Greens, UKIP and SNP all presented tax proposals yesterday in the run up to the election.

The Greens suggested a wealth tax on those with assets of more than £3 million a year. Its targeted, tackles a real and growing issue of social concern in the form of wealth inequality that is doing so much harm to the UK, and for the first time, because of automatic information exchange with tax havens, is plausible.

They also proposed a financial transactions tax, which I would welcome. Eleven countries in Europe are now operating one and in the UK such a tax would help break our dangerous dependence on the City and would encourage innovation in the rest of the economy. That has to be a good thing.

UKIP suggested a tax on the turnover of large businesses. This is bizarre, and wholly unworkable. First, the problem is that Google, Apple, Microsoft and so on do not have UK turnover: they sell into the UK, and not in it. That means that straightaway this tax would miss its real target. And second, such a tax assumes that all companies make the same profit rate. This is not true. Apple makes 40%. A supermarket makes less than 5%. Apply the same tax rate to both and the economic problems are obvious, as is the fact that supermarkets would pass this straight on in a price increase as if this was VAT (which in effect it is). As an exercise in proving a lack of tax credibility this one takes some beating.

And the SNP announced plans for a tax rate 3% lower in Scotland than the rest of the UK. Which, of course, they can. Except this is firstly an issue for the Scottish parliament and not Westminster so what it has to do with this election is hard to work out.

Just as it it is hard to work out how Scotland will make good the resulting shortfall in the Barnet formula funding allocation to Scotland that will automatically follow from this, straightaway, when any increase in tax revenues resulting from this policy (and I stress the word any, because I suspect there will be none) will be a very long time in coming.

I’ll leave aside the disastrous consequences for tax competition inn the UK that this policy creates. Suffice for now to say that whilst the SNP proposal is considerably more credible in tax terms than UKIP’s offering it’s economic consequences for Scotland really do need to be spelt out so people understand them, because they are pretty ugly. Exercising the right to choose on this one comes at a considerable price that I would not wish to pay. I would instead be demanding other, more realistic tax powers be devolved to Scotland. And if you want a suggestion, I’d make it employer’s NIC. That has a real chance of pricing Scotland into work, and if something that could be demanded from Westminster after 7 May.

Apple, Google, Microsoft and Cisco: massive funders of the USA, at a price

1 hour 51 min ago

The Bureau of Investigative Journalism reported this in March last year:

The US government makes vast interest payments to technology giants including Apple and Microsoft on the billions of dollars they shelter from tax offshore.

A trawl of Securities & Exchange Commission (SEC) disclosures shows that Apple, Microsoft, Google and Cisco Systems hold $163 billion in US government debt, earning these companies substantial sums in interest.

This means American taxpayers in effect pay interest to tech giants on their offshore cash which is held there for tax reduction purposes.

There is, of course, nothing unlawful about what these companies are doing. But it is offensive. At exactly the same time as these companies are doing their utmost to avoid paying tax to governments they are quite willing to lend those governments the money needed to make good the shortfall in revenues to which they are contributing, in exchange for a fee. And all that is because they are clueless as to what to do with the cash piles they have sitting offshore which they refuse to share with their shareholders who might out it to better use, but who can’t because of the tax paying phobia of these companies that means they will not pay that cash into the US, which is necessary if it is to be passed on to shareholders, because that would trigger a tax bill before the payment could be made.

You could not imagine a more screwed up world than this. It’s one where tax is very clearly driving behaviour in a way that is just about detrimental to everyone but the executives of the corporations involved, with whom all the power lies.

Welcome to the world where tax is the excuse for the use of corporations in pursuit of personal gain by a very few at cost to the vast majority.

The UK’s never been able to borrow more cheaply – so that’s what it should do

2 hours 56 sec ago

The UK government’s long term borrowing rates fell to an all time record low yesterday. The price of ten year bonds fell to 1.396% whilst 30-year gilt yields also dropped, to a new low of 2.102%.

Three comments seem to be appropriate.

The first is to recall that in 2010 George Osborne said that unless the deficit was eliminated during this parliament we were heading for a Greek style debt crisis. It has not been eliminated, and instead of having a crisis borrowing is cheaper than it has ever been. Some (but not many) of us said he was wrong in 2010. Some of us have been proved right.

Second, this situation is going to persist. The threat of deflation in the short term makes that likely, as does the Euro QE programme which is going to make UK gilts one of the most attractive investments, even at these rates, in the world for the next couple of years.

So, thirdly, and most importantly,  now is the time to borrow. In fact, it would be a scandal not to borrow to invest and deliver the infrastructure the UK needs right now. If ever there was a time when political parties should commit to what I call the Green New Deal this is it.

But I bet they won’t.

Which is bizarre.

And recklessly irresponsible of all those who fail to do so. In the future we will curse their failure to do so. These rates, if not exploited, will be an opportunity lost, especially with millions of people in this country unemployed and underemployed or engaged on wholly unjust contractual terms.

Low interest rates indicate money is in need of a use. If business cannot and will not use it government should. When will politicians learn?

The Fair Tax Mark in The Times

Thu, 01/29/2015 - 08:59

The Fair Tax Mark is featured in The Times this morning but I don’t pay to read it so I can only feature the headline:

The corporate tax system is open to abuse but measures are afoot to plug loopholes

What I can confirm is they come out firmly in favour of the transparency we propose.

Mr. Murdoch, please take note.

Companies have forgotten how to make money

Thu, 01/29/2015 - 07:32

The last of the ‘pullover’ videos deals mainly with issues relating to tax competition:

If you want me to suggest a company that has no clue what to do with its money start with Apple. It’s cash pile exceeds $100 billion.

The moral economy of the tax avoidance industry

Thu, 01/29/2015 - 07:25

I was asked to write some observations on the subject of accountants and morality yesterday as part of research being undertaken for a forthcoming bool. I am sure I am one of a number of commentators asked the same questions, and no doubt the book will be a while in coming so I thought I would share my answers here to fuel debate in the meantime. 

1.     Do tax
professionals feel an obligation to serve pubic interest when advising their
clients?  If so, how do they define public interest?


According to the combined tax professional
bodies’ statement on the conduct of tax practitioners[i]
there are five principles to which such persons should adhere. Four relate
solely to their relationship with their client and the fifth, and last, says:


[A member
must] comply with relevant laws and regulations and avoid any action that
discredits the profession


The clarifying notes add remarkably little to
understanding except to make clear that this means a tax adviser should have
nothing to do with illegal acts i.e. tax evasion or to abuse charitable purpose
for tax reasons.


This guidance may be considered the optimal
standard to which professional accountants might aspire. In it the public
interest is not defined, or is seen as coinciding with that of the
practitioner, their professional body and their fee-paying client. Adam Smith’s
maxim of self-interest happening, by fortunate coincidence, to maximise general
well being would appear to have been adopted by these bodies as the guiding
principle of the public interest, which these bodies seem to think might only
be over-ridden when required by statute in the form of anti-money laundering
regulations (para 2.18).


It is reasonable to assume as a result that
most accountants have an under-formed or absent sense of what the pubic
interest may be.


2.     Do the
relevant professional associations provide useful guidelines to their members
on how to balance their duty to the public against their duty to their clients?


The only guidance ion this issue is that
noted above by the joint professional tax institutes and bodies that represent
tax practitioners. This mentions the public interest just three times, all in
the context of anti-money laundering regulation, about which they say:


While this
is a mandatory regime, it also gives a structure for the assessment of the
public interest in a tax context, including which of the following should take
precedence, in a particular set of circumstances:


• The public
interest in reporting knowledge or suspicions of criminal activity to the
authorities; or

• The public
interest in clients receiving advice in confidence.


The advice provided is that “Treasury
approved guidance” is followed. In other words, an entirely legalistic approach
is adopted and the possibility that any other issue, such as ethical
concern,  needs to be taken into account
when deciding on an appropriate course of action is not referred to at any


It can be reasonably concluded that the tax
profession’s approach is wholly commercial: that which is within the law may be
undertaken by a tax practitioner without ethical concerns being considered so
long as ‘that will not bring him or his professional body into disrepute’ i.e.
if confidentiality can be maintained no other issue need be considered beyond
bare legality.


This means that in effect professional
associations provide no useful guidelines to their members on how to balance
their duty to the public against their duty to their clients.  
3.  Has the general anti-avoidance rule
provided a useful guide to tax professionals?

I have a conflict of interests on this issue.
As an author of the General Anti-Abuse Rule as a consequence of being a member of the committee that drafted it, as well as being one of the fiercest
critics of that committee’s work, I may not be wholly objective on the GAAR.


In my opinion the GAAR does not provide
useful guidance to tax professionals on the boundaries of the activities that
they should undertake. This is because the GAAR relies upon what is called a
“double reasonableness” test to determine what may, or may not be acceptable


This “double reasonableness” test requires
HMRC to be able to show that the arrangements entered into ‘cannot reasonably
be regarded as a reasonable course of action’. However, as a supposed taxpayer
safeguard a panel of experts drawn from the tax profession is required to
advise HMRC as to whether this this test has been passed or not, and it was
deliberately stated by the GAAR’s principle author, Graham Aaronson QC, that
this was intended to be a ‘high hurdle’. So far it has been an insurmountable
one: to date the General Anti-Abuse Rule does not appear to have been used. This
is hardly surprising since the standard of reasonable conduct that must be met
is that of a tax profession that defines reasonable conduct as anything that is
not illegal, and by definition, any tax avoidance meets that criterion.


In other words, the General Anti-Abuse Rule
the UK currently has was designed to permit the tax avoidance that we currently
suffer, whilst providing a veneer of action that supposedly tackles it, without
there ever being risk that the action could achieve this supposed objective.


This is an open secret amongst the tax
profession, in which case the General Anti-Abuse Rule is wholly
ineffective as a useful guide to conduct for tax professionals.


Tax Research LLP




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So much for the “plan” – it’s delivered the slowest recovery in economic history

Thu, 01/29/2015 - 07:18

To those who do not read the Touchstone blog from the TUC I warmly recommend it. This fascinating insight was on there yesterday, written by Geoff Tily, an outstanding Keynsian economist who is now head of economics at the TUC:

A second look at historic GDP data shows the current ‘recovery’ is the slowest on record (which extend back to 1830), rather than the slowest recovery in modern history, as we reported yesterday. This chart shows index numbers of recoveries in GDP from the bottom of each recession to five years later. The current ‘recovery’ is in black: it falls short of all historic recoveries by a very long margin.

Recoveries from recessions from the 1830s to today

The figures are based on the Bank of England’s historic database (up to and including the recovery from 1947); ONS National Accounts are used for the rest, with data for the latest ‘recovery’ now extending to 2014 for the first time, following yesterday’s GDP release. (To keep it tidy, I have defined a recession as two consecutive annual falls in GDP.)

These figures show growth of 8.8% over the five years since 2009, the low point of the latest recession. The average growth over the five years for all other recessions was 16.1%, nearly double today’s effort. On this basis we are even underperforming the disastrous economic age that followed the First World War and the Geddes Axe spending cuts.

So much for “we have a plan and we’re sticking to it”. That would seem like an act of considerable folly in the light of the evidence.

Disclosure: I do work for the TUC on occasions, and right now is one such occasion.

Tax, Apple, Gillian Tett and me on Channel 4 News

Thu, 01/29/2015 - 06:47

I was on Channel 4 News last night talking tax and Apple:

Apple, profits, tax and power

Wed, 01/28/2015 - 21:17

Apple has proved its brilliance and it has been rewarded with enormous financial power. The trouble is that Apple does not appear to have realised that great power carries great responsibility, including a responsibility to pay taxes to the governments of the countries that have provided the company with the opportunity to make that profit.

If Apple wants to prove itself a leader in every way, and not just in technology, it should now lead the pack of tech companies into constructive negotiations with the OECD in Paris to develop a tax system that truly, and fairly, ensures it pays the taxes it owes in the countries were it earns them. Better still, it should account for doing so on a country-by-country reporting basis. Then it would earn our trust, and not just our respect.


Why debt is an excuse in the case of Greece: Guest post

Wed, 01/28/2015 - 09:48

The following was posted as a comment  n the blog by Ivan Horrocks, a regular commentator here. I thought it worth sharing more widely, with minor editorial changes and an addition because it expresses a sentiment with which I entirely concur:

There’s a massive outcry about Greek debt and how and why it must be repaid otherwise the world as we know it will collapse. This, however, has very little to do with any form of rational argument. It is, quite simply, a device to wreck the Syriza government as quickly as possible, and to make sure that what happens can be laid at the feet of that government, and not blamed on the ECB, IMF, EC, or any other EU country, or – and this is most important – global capital (by which I primarily mean multi-national corporations, the 1% and their agents and supporters).

And why is that necessary? Because the full significance of the recent events in Greece are far, far broader and deeper than simply whether Greece repays its debts or not. For the first time in Europe for a very long time a progressive political party that is not either beholding to and/or implicitly supportive of the neoliberal project has got into power. Not only have they got into power, but they’ve done so with a clear mandate for pursuit of an entirely un-neoliberal agenda.

Now think of what happens if having won power Syriza goes on to deliver even half of the policies that they’ve promised to pursue (and I understand some of these will be passed through the Greek parliament as early as Wednesday). Where does that leave the likes of our own government, that of Germany, almost every newspaper and media owner in the world, the big four, almost every politician in a so called “left” or social democratic party (e.g.. Ed Miliband), every organisation that makes its money from lobbying in support on big business or providing any other service that promotes or delivers any aspect of the neoliberal project, the rich, The City, the EC, and so on and on. Any and all of these have spent years telling us there is no alternative.

In short, Syriza represent a direct challenge to those who have spent decades designing and imposing neoliberalism on Europe and the world. They are equivalent to the Allende government in Chile in the 1970s – and many of us are old enough to remember where that threat to the “world order” – as so many so called democrats saw it at the time – ended.

For me then – and for the sake of Syriza and the Greek people – the debate needs to move away from debt as fast as it can, because that’s just a smokescreen to hide the true nature of the forces that are about to be deployed to undermine the potential success of this movement. From a neoliberal perspective there’s a need for haste in destroying Syriza, before any success they might otherwise  have emboldens Podemos in Spain, and  then a general reawakening of non-neoliberal movements across southern Europe. I’ve no doubt that would then spread to France, and then who knows. Consequently, over the next three months Syriza will be subjected to the most concerted (and often secret) attacks any government in Europe has known for decades – probably since the birth of labour movements in the inter-war period.  We must hope and assume (given their backgrounds) that those involved in the Syriza government are fully aware of this.

The agents of neoliberalism have spent 40 years establishing the hegemony of their project and they are not going to allow that to be challenged now and anything and everything will done to ensure that remains so.

Tech’s still up to its usual tricks

Wed, 01/28/2015 - 07:57

From an FT email this morning:

Tax free tech is still up to all its usual tricks and making handsomely from it.

No wonder they are now investing so much in opposing the OECD’s Base Erosion and Profit Shifting  process.

The CBI is proposing an economic rule for the UK that no government’s followed since 1692

Wed, 01/28/2015 - 07:45

Some time ago I was invited to write on tax for the CBI’s Great Business Debate and the resulting blog was published yesterday. I stress, it did take a very long time to come out: I wrote the blog sometime in November and I can only presume it took until late January for a sufficient response to be written, which seemed to be a pre-condition of its publication.

And what a response it is. Written by the CBI’s chief economist, Rain Newton-Smith, most is pure PR waffle confirming the good news that the CBI believes in motherhood and apple pie. I am sure many people will be relieved.

What the CBI also does do is confirm its commitment to its  tax principles, which suggest that companies explain their tax charges which sounds great until you realise they are opposed to public country-by-country reporting and the Fair Tax Mark, both of which seek to achieve this goal. So candidly, those principles can be dismissed as nonsense.

As can two more things be so dismissed, the first of which is the CBI’s ‘golden rule’ for economic management. They raised this issue because I argued in my piece that:

Tax is about raising money. But let’s be clear: this exercise is reclamation of what the government has already spent into the economy through its commitment to fulfill a democratic mandate. Spending always comes first and tax comes second.

There are three points of explanation to note on this last issue. First, governments can, and always have, spent before they have tax revenues precisely because they can create new money. Second, that spending is not predicated on having tax revenues available. The quantitative easing programme, and the effective cancellation of government debt that it has given rise to proves that: deficit spending can be met without taxation. And third, this makes clear that there is a fundamental relationship between tax and monetary policy as well as tax and fiscal policy. In that case to treat tax as an administrative, technical or micro-economic issue, as the CBI very largely seems to do, is to fundamentally misunderstand its nature and significance. This is bound to lead to the promotion of policies that are politically and economically implausible, at best, which is why some of the CBI’s contributions to tax debate are not only bound to be ignored but have to be ignored.

In response to this the CBI says:

The government does have a role to stabilise the economy through tax and public spending, particular when other levers to stabilise the economy, such as lowering interest rates, have already been pulled as far as they can go. However, sustainable public services are only possible through the government balancing its budget over the economic cycle.

Our ‘sustainable fiscal rule’, as set out in our report Our Future Public Services – A Challenge for Us All, is consistent with this – that, once the Government has balanced the books, public spending should not exceed tax revenues over the economic cycle. This allows tax and spending to play a role in times of economic difficulty, so long as the Government support is then paid for once the economy recovers. The alternative is ever higher public debt and ever higher debt interest payments which leave less space in the government budget for spending on much more productive things like science, education and health.

Let me just consider that claim, because it is economically quite incredible. What the CBI are saying is that if there is government borrowing at any time then it is the duty of the government that incurred it, or any subsequent one, to  then not only restore a balanced budget but actually run a surplus until such time as all the debt incurred has been repaid.

The logic is, of course, that of microeconomics and the corner shop in which situation if an overdraft has been incurred then it must, of course, be repaid. But there is an obvious problem with this logic, because whilst the corner shop cannot print its own money any government with a central bank can. The UK has been in that position since 1692.

The following graph shows the pattern of  government borrowing as a proportion of GDP from 1692 until the present day:

You may note one curious fact about that graph and it is that not once, not ever, has the debt disappeared. Governments have, over a period of 323 years, never followed the CBI’s advice. They have never felt the need to repay the sums they have borrowed, and there is good reason for that: they have not needed to do so.

One reason for that is that there has always been a strong demand for UK government debt (which is hardly surprising: it’s one of the safest things anyone can invest in).

The second is that having realised it could always sell its debt no government has ever seen the reason why it should punish an economy by unnecessarily withdrawing government spending on the supply of goods and services that the government, and their varied electorates, have considered necessary, and affordable, partly, at least because of that ongoing demand for government debt that they were more than happy to meet.

But now the CBI says all that is of no consequence: 323 years of experience that balancing the books at the end of each economic cycle is not necessary should be ignored, they say,  and we must do it in future. It’s faintly ludicrous that they say that, but let me explain why. It’s because, as is glaringly obvious, we have never had a debt crisis as a result of not doing so, and despite the fact that debt as a proportion of GDP  has been vastly higher than it is now and that interest has formed a far larger part of the UK budget than it does at present as a consequence  we have also not, again, ever had a government funding crisis as a result. To put it another way, the CBI’s claim that failure to comply with its rule will lead to all sorts of problems is simply untrue; it has never happened, and candidly, won’t happen. Which means the CBI is wrong.

As they are also fundamentally wrong on the issue of what I call green quantitative easing. The CBI is apparently relaxed about £375 billion of funding being issued by the government to support banks. But it says of QE funding being used to create jobs, to create real investment and to boost the well being of its members who actually undertake useful economic activity:

Claims that the Bank of England’s ‘quantitative easing’ programme (printing money to buy Government bonds) provides a get-out-of-jail for unfunded public spending are misguided and risks ducking the tough but necessary decisions to reduce the deficit. 

This is just misleading: such action is not ducking the tough decisions needed to reduce the deficit. It does instead create the necessary liquidity within the economy to create the economic activity that does in fact provide the only hope that the books might ever be balanced. In macroeconomics you can never cut your way to a balanced budget simply because putting people out of work does not mean you do not need to feed them anymore in the macro economy, but you do now have to feed them despite the fact you are asking them to do nothing in exchange. This is the simple error of logic that the CBI, fixated as it is with micro economics that assumes that people once sacked disappear from view, makes.

Or does it? Can the CBI really be so uninformed on economics, and so lacking in intellectual capacity that it really cannot see that its arguments make no sense at all? Or is it simply promoting nonsense to support its view that the state must be shrunk for purely dogmatic reasons that, I am sure they believe will increase the power of capital? I regret to say that I think the second of these two options is likely to be in play here, and that’s worrying, to ay the least.

A little empathy is required

Wed, 01/28/2015 - 07:23

I have always presumed that most people are empathic and as a result capable of imagining themselves walking in another shoes. More than that, I presume that when necessary people do actually do just that: that is people do, when reflecting on an issue consider the interests of others as well as themselves.

It has been disappointing then to find so many people have over the last few days posted comments on this site, particularly in the context of what is happening in Greece, that have, to say the least, not only placed self interest at the heart of the commentator’s concern, but have shown remarkably little consideration for the interests of others, including those Greek people who could have had no involvement in creating the dilemma their economy now faces.

Despite all the rumours put about by right wing libertarians I try to post as many of the comments presented for publication on this site as possible. Some commentators are blocked as a matter of course: their apparently mild initial comments almost invariably lead to aggressive or inappropriate comments as follow ups. Others are obvious fakes, or are straightforwardly abusive and they get deleted straight away.

But those that take time, and make my heart sink, are submitted by those who seem to know at least something about tax or accounting, and yet show a remarkable lack of consideration for others, particularly if they are less well off, for whatever reason.

I try to be tolerant but when on average day I read between 50 and 100 comments and on occasion I  show my irritation. I do not apologise for that: if this blog is about anything it is about speaking truth to power, and sometimes that requires a certain bluntness.

If those receiving such a retort persist in making such comments thereafter I do delete their comments, with a heavy heart but without hesitation, whilst trying to make a quiet plea to those who are deleted to think a little more about the interests of others.

Those on question have been warned.

And for the record, before the inevitable comments are made, I do frequently consider the needs of the well off, but they already seem more than capable of looking after themselves at expense to everyone else so sympathy is not required.

The need for green quantitative easing: video commentary

Wed, 01/28/2015 - 07:11

This is another video from an interview I did on Monday, this time published by European CEO

Again, apologies for the image quality (and my office pullover). And I can assure you I am not really that red.

Poverty in the Cayman Islands

Wed, 01/28/2015 - 07:09

I received this email last night under the heading:

Help feed children of Grand Cayman today!

Quite what the per capita GDP of the Cayman Islands is is open to doubt: the UN think it the tenth highest in the world, but all data from Cayman is circumspect. What is known is that its population is about 55,000.

And despite enormous wealth being apparently shared between so few there are children who need to rely on charity for a proper school meal that may be their main meal of the day.

That’s what happens when a government is run in the interests of finance and not people.

That’s what happens when corporations capture a state to make sure they do not pay tax.

This is what corruption of the state looks like.

This is the world of the tax haven.

But let’s be clear: we should feel sorry for those children, because their perception of inequality must be staggeringly hard for them to understand. With luck when they grasp the issue they face they may demand change. We have to hope.

A Greek default will cost a lot less than bank penalties and fines. So what’s the fuss about?

Tue, 01/27/2015 - 13:58

This is the size of Greek debt:


The latest data I have on Greek GDP is €182.4 bn in 2013. So debt was 175% of GDP.

Today I have had comments on the blog like this:

If and when they default, massive losses will be felt all over Europe, whose taxpayers will be forced to take much of the pain.

We need to contextualise that pain. This comes from the Telegraph in November 2014:

[P]enalties for foreign exchange manipulation, Libor-rigging and mis-selling could take the total fines levied on the banking industry above $300bn (£190bn), analysts have predicted.

Now, no one is saying that Greece will default on all debt. I can hardly see it happening, and no one expects that. So, even allowing for the fact that the Euro is not the dollar (€1 = ¢1.13 right now) the total amount by which Greece could possibly default is much loss than the cost to banks of their crimes and mis-selling.

Oddly, no commentator from the right wing is saying banks must be forced out of business because of what they did, even though without exception they are only in business because of state aid.

And none are saying the massive cost banks have imposed is a crisis for pensions or anyone else.

And no commentator who is castigating Greece is saying bankers must bear the burden of their errors.

But they are queuing up to say the Greeks must bear the burden of what 99% of them did not known about and could not have been responsible for.

Why is that?

Could it be that bankers are favoured in this equation and Greece is not?

Surely not?

Can Greece wave goodbye to debt? Video reaction

Tue, 01/27/2015 - 13:32

I recorded this for World Finance yesterday:

If I’d remembered I was going to record this on video I might have been a little smarter!

Oxfam was founded to relieve poverty in Greece. Surely it won’t have to do it again?

Tue, 01/27/2015 - 11:54

A commentator on this blog this morning asked the question asked the practical question of how we might help Greece.

It reminded me of the intimate relationship between Greece and the history of Oxfam:


One third of Greeks now live in poverty as a result of an economic blockade of their country.

If the ECB does not lift the blockade that it’s now enforcing what will we need to do to relieve poverty in that country?

You couldn’t make this up

Tue, 01/27/2015 - 10:12

From City AM today:

So asking people to pay the right amount of tax in the right place at the right time is an injustice according to the Institute for Economic Affairs, otherwise known as Margaret Thatcher’s favourite think tank?

You really could not make this stuff from the right wing of British politics up.

The Green New Deal in the FT

Tue, 01/27/2015 - 09:41

The following letter from my friend and Green New Deal colleague Colin Hines is in the FT this morning:

Sir, You are correct to say (“No need for hostilities in the phoney currency war”, editorial, January 24) that the eurozone’s problem is weak domestic demand, but wrong to claim that the usual form of QE could solve this. The experience of the UK’s £375bn programme was that it didn’t tackle the demand problem by generating economic activity in the real economy, but instead benefited the banks and the asset-rich.

It is time for a debate about what kind of QE can actually turn round the continent’s flagging economy. The Green New Deal group’s paper “Europe’s Choice — How Green QE and Fairer Taxes Can Replace Austerity” suggests the introduction of “green infrastructure QE”.

This would fund investment in the continent’s renewable energy supplies, ensure all buildings are energy efficient and revitalise local and regional public transport links. In short, the kind of demand that can boost the economy Europe-wide, but with the added advantage of helping to tackle climate change.

Colin Hines

East Twickenham, Middx, UK

Convenor, Green New Deal Group