Say yes to the New Chesterton Foot and Cycle Bridge

The distinctly anonymous ‘Friends of Ditton Meadows’ http://www.friendsofdittonmeadows.org.uk/ has been setup to ‘To protect Ditton Meadows from the current threat of development, namely the proposed cycle and foot bridge across the meadow.’ They have other objectives like ‘To oppose the talked about guided bus-way across the meadows’ and ‘To oppose any development on the meadows in the future.’ But as nobody is planning a busway or other development, it’s fair to say their main aim is opposition to a new cycle/footbridge across the common.

So what is planned? Fingers crossed, a new station will open in Chesterton in 2016. A new cycle and footbridge next to the existing railway bridge is being planned to link the common with the new station. The County Council has been and continues to consult residents on this project.

What impact will this have on the common? There are lots of pretty pictures of Ditton Meadows on their website - but not a single view pictured will change as a result of the proposed new bridge. That’s because it will occupy a tiny proportion of the common, and will only ever be visible with the backdrop of a not particularly picturesque railway bridge. I’m struggling to see how anyone can seriously oppose this on the grounds of its impacts to the commons as these are negligible.

However, not building the new bridge will be really BAD NEWS for lots of reasons. It will stop lots of residents of Abbey Ward and Fen Ditton from easily accessing the new station by foot and cycle (or at all!) – losing them much of the economic benefits. Some will drive, further clogging up Newmarket Road and Chesterton. Others will take the approx 1 mile detour over the Green Dragon bridge – like it isn’t already busy enough at peak hours. Fellow Chesterton residents will also miss out on a more convenient new route to Abbey, Fen Ditton and ultimately to the Mill Road area, Station and Addenbrookes, when the Chisholm Trail is built.

I hope our elected representatives will be supportive of the new bridge, but it would be a disaster if a few vocal opponents were able to block a vital part of the sustainable transport infrastructure needed in a growing Cambridge. Please don’t just rely on them to make the right decision – write to them today (you can use the website www.writetothem.com to find and contact your local Councillors) and urge them to make sure this bridge happens.

Its Time to Abolish the TV Licence

Its time for a proper campaign for the abolition of the TV licence. There are lots of websites opposing the licence (e.g. http://www.tvlicenceresistance.info, http://licencefree.co.uk/, http://tv-licensing.blogspot.co.uk etc), and various MPs are now getting in on the act, but nothing that could be called an organised campaign - that is, one that sets out with the sole aim of the abolition of the TV licence fee in its current form, brings together all its opponents and raises the funds necessary to bring the campaign to fruition.

Why would anyone want to support this campaign? I'm pretty agnostic about the merits of the BBC. They make some quite good programs (that I don't watch many of...). They are also reasonably authoritative and fair in reporting many issues (which makes it all the more annoying that they use this perceived neutrality to push their biases). The BBC in its current form may also be at risk without the TV licence funding it - but there are many alternatives, subscriptions, advertising, direct government grants - and what should replace the TV licence isn't a relevant consideration if the current funding mechanism is so unacceptable.

So what makes the tv licence so unacceptable:

1) It is unfair.
As a flat tax, levied across most of the population, its costs are disproportionately hard to bear for those on low incomes. As a result, many thousands of low income households have been fined or people even imprisoned for not paying it.

2) The methods essential to enforce the tv licence are unacceptable in a free, modern society.
Evidence of whether or not a licensable activity is being undertaken by an individual can only be determined by gross intrusions into personal privacy, and even then only if there is almost 100% takeup of the licence, such that anyone without a licence can be bullied, threatened and harassed as if they were breaking the law. With modern methods of watching broadcast TV, it is pretty much impossible to determine if the law is being complied with unless you give those responsible for enforcement the power to enter any unlicensed property unannounced and to have a snoop around. Such a power is never going to be acceptable in a free society, so the only other tactic available for enforcement is one of bullying and harassment - personal visits and threatening letters (often designed to deceive about the requirements of licensing or the powers of those enforcing it) targeted at all unlicensed premises. The aim is to scare people into being licensed, or for people to inadvertently incriminate themselves. With so much consumer protection around misleading claims from suppliers, and criminal sanctions available against most types of harassment, it is unclear how TV licensing gets away with its tactics.

As technology moves on and fewer people need or want to watch live broadcast TV, those legally licence free can only increase, and with it the anger at the tactics of tv licensing. It is time for the TV licence to be abolished, and funding for the BBC to be moved to a more sustainable long term arrangement. So who's up for making it happen?

(Memo to self - must work out the difference between licence and license.)
(Memo to others - I currently have a TV licence as I watch live TV.)

A14 Tolls

Good news and all credit to (Conservative) MPs in the region for getting tolls on the new A14 upgrade dropped - I have no doubt it is lobbying by MPs from across the region that has caused tolling to be abandoned. 

But Cambridgeshire residents have seen this all before with plans for congestion charging in Cambridge - we were told cash for transport improvements would only be available if a congestion charge was introduced, much time and cash was wasted before it became clear the plans were never going to be acceptable. How often are we going to have to put up with governments looking at this region and thinking, great, cash cow, lets have another go at making them a guinea pig for road charging schemes. 

Civil servants love it - you get to monitor people all the time as they travel around, and control their behaviour. The consultants that make these road schemes so exorbitantly expensive in the first place love it as they will make a fortune implementing the tolling, and take a large part of the revenue. But really, this region already makes a massive net contribution to the exchequer, so to single it out for additional road charges after fuel duty, car tax and parking charges when nowhere else in the country has a toll of this type, particularly for a desperately over-capacity strategic route was completely outrageous in the first place. 

How much did it cost them to look at tolling? How much damage has been done to the local economy not upgrading the road already? How much damage is being done by the Government constantly coming up with these harebrained schemes? If they want to maximise the benefit to the country from the Cambridge sub-region, they should be making it easier to do business here, by investing in all types of transport: roads, public transport and cycling - if they need to pay for it, engineer down the scandalous £1,5000,000,000 estimated cost of the A14 upgrade.

Singling this region out for special new taxes is a great way to kill the golden goose. Now any bets on how long it will be before congestion charging/demand management/tolls appears on the local agenda again, coupled with the usual carrot of more investment and nonsense about never being able to get transport investment again without the stick - all politicians in the region need to tell the civil servants in no uncertain terms where to stick it and shelve these plans permanently.

Ken's Tax Affairs

After some really unpleasant campaigning in the London mayoral elections, the main contenders have published details of their tax affairs. Boris's tax affairs are pretty straight forward - he earned a relatively large amount of money, all of his income was subject to income tax, resulting in what is an outrageously high marginal tax rate.

Ken Livingstone's declarations on the other hand show that his tax affairs appear to be a model of tax avoidance. In summary, he earns his income through a limited company (Silveta ltd - which appears to be mostly 'Ken Livingstone the company'), and then 'Ken Livingston the person' earns a small salary and dividends from the company. By doing this, he can reduce his effective tax rates, reduce his national insurance bill, manage the timing of when he pays tax to reduce tax, and can split his income with his partner to further avoid tax. His presentation of this arrangement however is extremely slippery. He claims the figures have been checked by an accountant, but if Ken had asked me for advice on what to publish to support income and effective tax rate, I would advise the following. :

You could publish details of just the personal tax return, which would indicate the tax paid on employment income and dividends on the company.

I would however point out that this misrepresents both Ken's total income and effective tax rate, if, as seems likely from the company's bank account, Ken had retained income within the company, thus a personal tax return only underdeclares income and overstates marginal tax rates when looking at a consolidated view of Ken's income.

So the most transparent approach would be to publish both Ken's personal income tax return, and details of all the income earned by Ken through his company in each period.

But what it looks like Ken has actually done is to publish details of his personal income tax return, then done an add back of a notional amount for the part of the corporation tax relating to the dividends actually paid in the period, in order to make it look like Ken has paid a higher effective tax rate. This is of course completely misleading, as it combines Kens personal income/tax with only part of Ken's income from the company to make the marginal tax rate paid appear higher. Even if an accountant had individually approved the personal tax return and the company tax return, no competent accountant would put their signature to this presentation as it is completely misleading.

Then you have to remember that Ken is the candidate who drones on about what he would like to do to rich tax avoiders, and has falsely accused Boris of not paying income tax on his income, and you have to wonder who in their right mind would vote for such a nasty, cynical, dishonest hypocrite as Ken Livingstone.

But the voters of Bradford West have proved that cynical hypocrisy is no barrier to election for left wingers who are prepared to say and do anything to get elected, but you really would have to hope that when faced with the facts about what Boris says on tax and does on tax, compared to what Ken says on tax and the convoluted arrangements he uses to avoid tax, this is an election that only has one possible result.

No child benefit for higher rate taxpayers - A political car crash in slow motion

Its been a while since the Conservatives announced that families where one parent is a higher rate taxpayer would loose child benefit payments. Since then, despite some signs from David Cameron that the Conservatives were about to row back on the policy, the chancellor and others have indicated it is still the government's intention to stop families with a higher tax paying parent from claiming child benefit.

Watching this unfold is like watching a political car crash in slow motion. There has been every opportunity to turn off the road, and no shortage of warning signs of the trouble ahead, but the politicians journey continues apace towards a catastrophic collision with the brick wall representing the reality of a policy rapidly approaching its intended introduction date that is utterly and inexcusably dreadful.

Its not so much that a Conservative lead government is putting narrow political imperatives to be seen to be kicking high earners above rational policy making - although that is obviously a problem, it is that the policy is so deeply, obviously and in fundamental respects flawed. To be more specific, the policy makes the child benefit claims of one party dependent on the tax status of another, relies on an eligibility test for benefit that can only be carried out some time after the benefit needs to be claimed, has a horribly complex effect on marginal tax rates (including marginal rates in some instances over 100%), and is desperately unfair on families with only one wage earner.

To illustrate the problems better, here is some extracts from an email I wrote to an MP in the Chancellor's treasury team.


"what has been touted as an administratively simple way to generate £1bn in revenue looks actually to be deeply flawed. I'm not particularly interested in a response - certainly not of the political justification type - just hope you can look into the issues raised below and try to avoid a nightmare.

I think there are three intrinsic features of the proposed scheme that will cause problems:

1) The plan will introduce a discontinuity in effective marginal tax rate, including a marginal rate of more than 100% around the threshold.

The size of the impact, potentially £2k or more on post-tax income will make tax planning essential for those near the threshold. At the margins, tax could completely drive economic decisions, such as whether or not to seek a promotion, or to work harder, and act as a strong disincentive to economic activity, which can't be a good thing.

There will need to be many complex anti-avoidance rules around artificially reducing income for those just above the threshold or in the first year of the change, and opportunities for professional advisors to have a field day, at a time when the tax system is crying out for simplification.

The last time something with an effect on marginal tax rates as crazy as this was tried was Labour's anti-avoidance rules around restrictions on pension tax relief for high earners. The system was ludicrously complicated, understood by very few taxpayers, slated as a complete dogs breakfast (e.g. http://www.economist.com/node/15580725), and rapidly reviewed. The child benefit proposals probably affect a much larger group, who are much less able to deal with the financial consequences than those in the £130k+ income bracket.

2) The tax charge on one person could depend on the child benefit claims of another.
This makes anti-evasion and anti-avoidance measures extraordinarily difficult to frame and enforce. Some habitual benefit claimants are already adept at disguising from the authorities when they are in a relationship or living with someone who actually earns some money if it affects their benefit. I thought the party was trying to move away from this type of nonsense, not introducing the regime to an entirely new part of the population.

For example:
One assumes where parents live apart/are no longer in a relationship - the higher earner cannot possibly have to repay child benefit, as they won't necessarily even know if it is being claimed.

This will leave a whole range of opportunities for some people to avoid the charge. If parents separate during the year - will subsequent child benefit claims be clawed back? How will the authorities determine who is in a relationship (if they aren't married)? What if a family lives together, but owns two homes - with one parent registered at each - how does the government intend to police when repayment of child benefit is required in this instance, or will it just be an honesty box?

Why is the party increasing the 'couple penalty', rather than reducing it?

3) The test for the trigger can only be performed at the end of the tax year, at which point tax is assessed on the benefit claims during the period, so it will be unclear what the tax effect of an action might be until some time afterwards.
This increases the burden of tax planning, and could result in some nasty cashflow problems around tax return time for people with already stretched financial resources. There are two problems scenarios, failing to claim child benefit then suddenly losing income, and claiming child benefit and unexpectedly hitting the threshold. How would you respond to the following scenarios created by these plans in a surgery situation:

- I thought I was going to be under the limit, but I forgot about the dividends on a few shares I own. If I had of remembered, I would have asked my employer to pay me less in March(!!!), but that £500 now means the taxman wants to reclaim £2,000 from me for the child benefit claimed by my wife, and I can't find that type of cash - I'm the only earner, my wife stays at home looking after the children.

- My husband was earning £50k a year, but he lost his job just before Christmas. The Chancellor said it was sensible for me not to claim child benefit, so I didn't, even though there will no longer be a higher rate taxpayer this year. Now we are in real hardship, and they won't let me backdate a claim for child benefit.

This makes a nonsense of the Chancellor's claim that higher rate taxpayers shouldn't claim child benefit. At the very least they would be advised to claim the benefit and put it in the bank.

The points above are mostly applicable to people near the margins, but looking at the policy politically, there will be a major hit on all higher tax rate families. Working people, particularly in London and the South East have been absolutely hammered under Labour - they pay higher marginal tax rates, higher stamp duty, and I think the reason why we have a Conservative prime minister is that in constituencies across the south voters like this were fed up with a bloated and ever increasing state, squandering taxpayers money and mortgaging their children with its borrowing, leaving them picking up a grossly disproportionate share of the bill. If you wanted to devise a magic bullet carefully targetted to do maximum damage to Conservative core support, I don't think you could do much better than attacking families with one parent working on the high tax threshold, the other staying at home looking after children."

The email was acknowledged with a response indicating that the points would be considered. But that was in 2010 shortly after the policy was first announced, and still the car moves on towards the brick wall.

As someone who was a public face for the Conservatives in Cambridge, I know several people who have raised concerns about the effect of this proposed policy with me - in an 'apoplectic with rage' kind of way. The response if the policy is actually implemented doesn't bear thinking about for the government.

Executive pay is out of control

Executives of large companies are a classic example of the agency problem. They are in place to serve the owners of the company, i.e. the shareholders, but it is all too easy for the directors of large companies to put their own interests first, and line their own pockets with remuneration packages that frequently bear little relation to their performance or what a genuine free market would offer them if shareholders had their say.

Its certainly true that the difference between a good manager and and bad manager can make a significant difference in terms of absolute value to a large multinational company. Trouble is, the senior management team are only one part of the equation, and paying a sizable part of the income of a company that may have a vast income generating asset base seems to be no guarantee that you will get management that is even adequate, let alone high performing.

Over the last few years, executive pay seems to have risen out of control. Managers are paid for high performance, and paid off handsomely when they fail. This has come about as the selection and remuneration of senior management has become ever more the decision of other senior managers, and less and less something that shareholders have any serious say over. Remuneration committees benchmark pay according to whatever other companies are paying and then a little bit more to recognise just how special the new managers that the same people have just appointed are, which can provide a self perpetuating cycle of higher pay. As many councillors have discovered, having an 'independent' panel review pay, where that panel is not actually paying the price itself, can often also have an upwards only impact on reward.

Both the Prime Minister and Labour want to see something done about this. I dare say most of the motivation for this sudden interest is political expediency. The gap between rich and poor, and a few managers on extraordinary salaries whilst western economies are floundering are not unimportant - but we never hear similar concerns raised about the income of Premiership footballers or lottery winners. Ultimately Executive pay is mostly the concern of shareholders - but that still means it is the concern of large numbers of people, for example most people with private pension savings. For a a number of reasons shareholders do not currently have a proper voice in setting Executive pay, and government action is now long overdue.

Labour as ever miss the point, in calling for extra transparency. Annual reports for listed companies have no shortage of detail on executive pay, it doesn't need more taxpayers cash being squandered tabulating this information.

It remains to be seen what the Government has in mind in terms of empowering shareholders, but the first step to a proper solution is to understand the problem. Large plcs usually have a very diverse shareholder base - so it is hard for a group of shareholders to get enough support to block excessive pay. Many individual shareholdings are now held in nominee accounts - where by default shareholders are often denied invitations to vote on executive pay and attend AGMs. The situation is worse for investors in unit trusts or pensions, where decisions are taken on behalf of investors by scheme managers - who may be rather closer to the executives of companies, than they are to their investors.

So I have a suggestion for government for how to tackle executive pay excesses. With the ready availability of online account servicing from most providers, it should be made compulsory for the 'beneficial owner' of every shareholding in listed companies to be given the opportunity to vote electronically on all company resolutions via the fund or nominee account manager. It should then be compulsory for senior executive remuneration to be subject to approval by these beneficial owners, and it should be possible for small groups of shareholders (say any group with the support of 5% of the shareholders) to propose alternative remuneration schemes.

This would not just apply to shares held in nominee accounts, but also to shares held in pension funds and shares held in unit based investment funds. The fund managers should be required to make the beneficial owners aware of all the companies that their funds are or may be invested in, and give them the opportunity to indicate how they would like to vote on any resolutions, which should be binding on the fund manager for the part of any shareholding attributable to the beneficial owner. This would do away with cosy block votes for fund managers, and herald a new age of shareholder activism.

It might be that shareholders continue to support large executive pay packages that seem to pay out regardless of the long term fortunes of the company - its would be their choice, and it may be in their interests to do so. But more likely I think it would result in executive pay being reigned in, and more importantly, becoming much more aligned to long term shareholder interests.

Why I won't be protesting in Cambridge on Saturday

Most of my knowledge of the English Defence League comes from having recently read most of the website for EDL Cambridge.

In short, they don't much like Muslims. They think they are all terrorists (or rather they think all the radical ones are terrorists, with radical defined as being a muslim that wants to practice their religion in a mosque in the UK). They are bigoted, and ignorant, and not very bright - in ways that would be amusing if the consequences of their behaviour weren't so seriously negative (e.g. "In Britain women should be free to wear what they choose.... Muslim women caught wearing the Burkha should be punished to the fullest extent of the law.", or "If we were in the countries these Muslims are from we would respect their way of life. No one would build a Church in say, India and absolutely no one would practice Christianity in Saddam's Iraq.")

They are are planning a protest March in Cambridge next Saturday (9th July) to oppose plans for a new mosque in Cambridge.

For many reasons, I would like to register my protest at the EDL's planned march.

Firstly, I am a strong supporter of religious tolerance - even if I can't accept the beliefs involved in any particular religion. History has demonstrated time and time again that the world is a better place if different religions can happily co-exist in the same place. I believe this is possible, but not if even a place like Cambridge cannot permit a major world religion to build places of worship.

Cambridge is a city whose success has been built on a global economy. The knowledge based industry that supports so much of the City's economic activity is based on a University that seeks to attract the best academic talent from around the world, regardless of race, colour or creed. As a result, Cambridge is a diverse tolerant place, which are among the reasons why it is such a good place to live. Also partly as a result, the muslim community in Cambridge is very diverse, coming from many different traditions, covering many races and nationalities. It also means they have outgrown their current mosque. The proposed site for a new mosque at the end of Mill Road looks to be an excellent location, and could provide a fantastic regeneration of the built environment, as well as a new home for many of the City's muslims. I think it should not merely be tolerated, but welcomed, and as a result could help break down any barriers between the muslim and non-muslim community in Cambridge that come from ignorance and mistrust, which in turn would make it less likely that violent extremism could thrive.

The campaign group Unite Against Facism are planning a counter-demonstration in the City next Saturday. I would like to feel able to support them, but just can't bring myself to do it.

Their declaration, signed by many community leaders in Cambridge (almost exclusively from the political left) is also ignorant to a smaller extent - if in a somewhat more sophisticated and subtle manner.

"The EDL are deeply Islamophobic – bigoted against Muslims – which is as unacceptable as any other form of racism"

Race, religion and nationality are three different attributes that shouldn't be lazily interchanged. EDL may well be a racist group - I wouldn't be surprised - just haven't seen the evidence from what I've read, and their protest this Saturday is clearly based on religious prejudice - but being Islamophobic is not necessarily the same as being racist.

To the left, to describe someone as racist is about as serious an accusation as can be hurled - but hurled it is all too often in the direction of anyone that doesn't fit the left's worldview. If you aren't from the left, if you didn't support a single European currency, or oppose the EU, both could be seen as evidence of inherent racism. When it comes to immigration, you can be very supportive of the concept generally, but not to the extent that its scale or type causes real problems - but if you're not on the left, this is again more evidence of underlying racism. Cheapening the currency, and insinuating racism at the slightest excuse may help the left, but I don't really want to play along with that.

Finally, there is a fine line between being appalled that this group wants to march in Cambridge because you abhor what they stand for, and campaigning to stop them from being allowed (or physically able) to protest - which is arguably the position of Unite Against Facism. If protest is peaceful and complies with reasonable laws, people should be allowed the freedom to express opinions even if they do cause offence and upset people.

If the left really want all of Cambridge to unite against the EDL, the banner of the left wing 'Unite Against Facism' organisation and its history of violent confrontation in clashes with the EDL isn't the way to go about it - a protest based on the simple message that nasty bigoted people aren't welcome in tolerant Cambridge, and that Cambridge supports freedom to practise religion by supporting the Muslim community's aspiration for a new mosque is all that is required. But as things stand, I won't be protesting in Cambridge on Saturday.