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This has been a pretty bleak week-and-a-half in politics. It started on Wednesday 21st April, when the Chancellor of the Exchequer, George Osborne (a millionaire and the heir to a baronetcy, eventually) gave his third Budget speech.
Budget Day in Parliament is surrounded by traditions dating back to the 19th Century. Up until relatively recently the details of the budget were kept secret until the Chancellor started speaking at 12:30pm, after a somewhat anemic Prime Minister's Questions, for on Budget Day the PM is definitely second-fiddle. This time, though, some of the details of the Budget were leaked beforehand, but not the parts that have caused the Government the most grief.
First was the so-called "pasty tax". There has been an anomaly in the VAT (value-added tax, a kind of sales tax on steroids) for hot food. VAT was charged on restaurant meals, but not on hot food to be taken away to eat elsewhere. Osborne announced that, from the beginning of the fiscal year (I believe it's April 2nd this year) VAT would be charged on food from shops and stalls which was served at a temperature "higher than the ambient temperature". This was meant to catch items like Cornish pastys which are normally served up hot at a stand, or sausage rolls sold at chains such as Greggs the Baker.
As soon as the Chancellor was finished speaking, questions began to be asked. "Ambient temperature" was thought to be quite an odd definition, as if it were a hot day it's likely that the sausage rolls might be cooler than the outside. Did that mean that the VAT should be charged or not depending on how hot it was outside? Cornish pasty shops (which have proliferated in the past ten years or so) warned that they would be forced to close if VAT of, say, 50 pence (around 75 cents) were to be charged on a £2.50 pasty.
The Prime Minister, David Cameron, tried to defuse the situation. When asked when was the last time he'd eaten a pasty, he replied that he'd recently had one at Leeds railway station, and very good it was, too. Of course, the local press went to Leeds station and discovered that the last pasty shop in the station had closed months ago (and Cameron hadn't been to Leeds in a while) and the last Cornish Pasty stall had closed several years ago. So, in his attempt to be seen as a man of the people, Cameron actually revealed that he wasn't very populist after all.
It seems likely that this charge will be disputed. It seems that if the pasty is sold cold, but facilities (such as a microwave) were available in the shop to heat it up, VAT won't be payable. So all the money that Cameron and Osborne counted on to come in from hungry working-class Brits may be lost if the pasty shops and stalls invest in a small microwave.
Second, Osborne forgot Rule #1 in politics: Do Not Increase Taxes or Reduce Payments to Old People. As in the US, there has been an increased exemption on income taxes for old age pensioners here. Osborne promised to increase pensions and remove this exemption. Of course, the newspapers correctly divined that this was a slight on older people, and started to call it the "Granny Tax". When Rule #1 is broken, the oldsters stop voting for those who broke it. I suspect that Cameron, Osborne, & Co. are betting that enough oldsters will kick off or be forgetful by 2015, when the next election is due. I also suspect that the news media won't allow the oldsters to forget it (they can't do much about old people dying, of course…)
Third, the top tax rate for people making over £150,000 a year was reduced from 50% to 45%. As Cameron, Osborne, & Co. are fairly wealthy, this was correctly diagnosed as taxing the poor (pasty-eaters and poor grannies) to give tax-breaks for the rich (who wouldn't know what a pasty looked like, keep their grannies well out of sight, and make squillions). The newspapers were chortling in their joy.
So the newspapers were full of this for a few days, with the commentators slavering over the budget. Then Sunday rolled around.
The Sunday Times reported that the Conservative Party treasurer, Peter Cruddas, had been stung by people posing as wealthy UK expat representatives of a foreign company. He had said that a donation of £100,000 was chicken-feed, while one of £250,000 (US$393,116 at current rates) would get you a private dinner in the Prime Minister's flat at Number 10 Downing Street, with pictures and perhaps with Mrs. Cameron there as well whipping up the potatoes.
What a gift, not only to the newspapers, but to the Labour Party. Ed Miliband, the Labour leader, immediately demanded a list of those who had had dinner at the PM's flat. The Conservatives wanted a list of all the labour union leaders who had access to Ed Miliband and who donate millions to Labour. The PM bleated that most of his dinner guests, while being donors, were also personal friends, and wasn't he entitled to have friends over for a pasty or a sausage roll? Oh, and Peter Cruddas resigned on Monday. The damage had been done. Fat cats were paying for access to the Prime Minister. Worse, the contribution that the stingers proposed would be highly illegal under UK election law, but Cruddas told them that there were ways of getting around that requirement. How many other contributors had given money illegally, asked Labour.
And this was only five days. Worse was to come.
This week the UNITE union, which represents drivers of petrol delivery tankers (=US gasoline tankers), voted to strike. The leadership of the union was leaning towards a strike over the Easter holiday. In the UK, the Easter holiday is a traditional travel time, with people visiting their grannies (who will be so impoverished by their tax increases that they won't be able to offer them a pasty) and driving a lot. The possibility of a strike raised the spectre of people not being able to drive to their granny's place, or to the airport to catch a plane to see Granny.
The Government put forward Francis Maude, the Cabinet Officer minister, to speak on the problem. Mr Maude told motorists they should keep a jerry can in the garage to cope with a potential fuel shortage, and top up their gas tanks. This was widely reported in the newspapers.
The fire brigades were aghast. The rules on keeping gasoline on private premises are strict. A jerry can holds around 20 liters of gasoline and is made of metal. However, if you want to keep gasoline in your UK garage you are allowed only two plastic containers holding up to 5 liters apiece. The fire fighters went public with their information and the government hastily amended its advice. Too late.
A 46-year-old woman, who was trying to help her daughter who was out of money and gasoline, tried to decant fuel from a jerry can into a glass jug in her kitchen. The oven was on at the time. You can guess the rest. The woman suffered burns over 40% of her body when the gasoline fumes ignited and set her clothing on fire. She is now in hospital, and we hope she will recover fully.
The Government was caught napping on this one. Besides the duff advice on storing gasoline, long queues formed at gas stations, which promptly ran out of fuel, even though the strike hadn't even been called yet. Fights broke out in places. Keeping gas tanks topped up meant that, two days ago, the UK pumped 150% of a normal day's supply of gasoline.
The newspapers and some politicians yelled for Francis Maude's head. The Government rescinded its advice. Worse was to come—the UNITE union called off any potential strike over Easter.
The Conservatives tried to get Labour to condemn the strike, which was unlikely given the fact that UNITE is a large bankroller of the Labour Party. Ed Miliband said that a strike would not be a good thing and urged both sides to get around the negotiating table. Grown-up words from Lbour, for a change.
The news was not all rosy for Labour, however. Elections here are normally on a Thursday, and a byelection in Bradford, a northern city that has a large number of Muslim residents, had been called to replace a Labour MP who had to resign on health grounds. The seat has been a Labour one for more than 40 years.
However, George Galloway, a maverick politician here in the UK who was kicked out of Labour for protesting against the Iraq war in 2003, and who beat a Labour candidate in East London in 2005, stood for the Bradford seat. He turned a safe Labour seat into a huge Labour rout. He won by more than 10,000 votes.
Galloway was carried in trumph on the shoulders of his supporters out of the counting hall at 3am. The Labour candidate, who had taken victory somewhat for granted, left the counting hall without making the traditional concession speech. He hasn't surfaced since; I'll bet he's stinging a bit. Galloway took a victory tour the next day in an open-top double-decker bus, where the good citizens of Bradford West cheered as he passed. This is the first time that the official Opposition has lost a byelection for decades. Now Galloway, who has been on Big Brother, and was famously filmed in a leotard pretending to lick cream out of a woman's cupped hands, and who was suspended from the House of Commons for unparliamentary behaviour a while back, will return to London as an MP. (US readers may recall that Galloway appeared before a Senate committee that had accused him of oil profiteering in Iraq and wiped the floor with them.)
Labour hasn't come up with a good reason for losing yet. The Respect Party, which Galloway founded, is now represented in Parliament once again. They are unlikely to gather more MPs, as I believe Galloway's larger-than-life persona is responsible for his big win, rather than any organised opposition to the Government. But Gorgeous George will enliven the House of Commons more than even Dennis Skinner, the Beast of Bolsover, has done for the past 42 years.
What's next? Who knows? Parliament is in recess now for Easter, but the crises will still roll on. I shall be in the US from Wednesday until the 19th of April, so I hope nothing important happens until I'm back. I'd hate not to have a front seat for the festivities.
Budget Day in Parliament is surrounded by traditions dating back to the 19th Century. Up until relatively recently the details of the budget were kept secret until the Chancellor started speaking at 12:30pm, after a somewhat anemic Prime Minister's Questions, for on Budget Day the PM is definitely second-fiddle. This time, though, some of the details of the Budget were leaked beforehand, but not the parts that have caused the Government the most grief.
First was the so-called "pasty tax". There has been an anomaly in the VAT (value-added tax, a kind of sales tax on steroids) for hot food. VAT was charged on restaurant meals, but not on hot food to be taken away to eat elsewhere. Osborne announced that, from the beginning of the fiscal year (I believe it's April 2nd this year) VAT would be charged on food from shops and stalls which was served at a temperature "higher than the ambient temperature". This was meant to catch items like Cornish pastys which are normally served up hot at a stand, or sausage rolls sold at chains such as Greggs the Baker.
As soon as the Chancellor was finished speaking, questions began to be asked. "Ambient temperature" was thought to be quite an odd definition, as if it were a hot day it's likely that the sausage rolls might be cooler than the outside. Did that mean that the VAT should be charged or not depending on how hot it was outside? Cornish pasty shops (which have proliferated in the past ten years or so) warned that they would be forced to close if VAT of, say, 50 pence (around 75 cents) were to be charged on a £2.50 pasty.
The Prime Minister, David Cameron, tried to defuse the situation. When asked when was the last time he'd eaten a pasty, he replied that he'd recently had one at Leeds railway station, and very good it was, too. Of course, the local press went to Leeds station and discovered that the last pasty shop in the station had closed months ago (and Cameron hadn't been to Leeds in a while) and the last Cornish Pasty stall had closed several years ago. So, in his attempt to be seen as a man of the people, Cameron actually revealed that he wasn't very populist after all.
It seems likely that this charge will be disputed. It seems that if the pasty is sold cold, but facilities (such as a microwave) were available in the shop to heat it up, VAT won't be payable. So all the money that Cameron and Osborne counted on to come in from hungry working-class Brits may be lost if the pasty shops and stalls invest in a small microwave.
Second, Osborne forgot Rule #1 in politics: Do Not Increase Taxes or Reduce Payments to Old People. As in the US, there has been an increased exemption on income taxes for old age pensioners here. Osborne promised to increase pensions and remove this exemption. Of course, the newspapers correctly divined that this was a slight on older people, and started to call it the "Granny Tax". When Rule #1 is broken, the oldsters stop voting for those who broke it. I suspect that Cameron, Osborne, & Co. are betting that enough oldsters will kick off or be forgetful by 2015, when the next election is due. I also suspect that the news media won't allow the oldsters to forget it (they can't do much about old people dying, of course…)
Third, the top tax rate for people making over £150,000 a year was reduced from 50% to 45%. As Cameron, Osborne, & Co. are fairly wealthy, this was correctly diagnosed as taxing the poor (pasty-eaters and poor grannies) to give tax-breaks for the rich (who wouldn't know what a pasty looked like, keep their grannies well out of sight, and make squillions). The newspapers were chortling in their joy.
So the newspapers were full of this for a few days, with the commentators slavering over the budget. Then Sunday rolled around.
The Sunday Times reported that the Conservative Party treasurer, Peter Cruddas, had been stung by people posing as wealthy UK expat representatives of a foreign company. He had said that a donation of £100,000 was chicken-feed, while one of £250,000 (US$393,116 at current rates) would get you a private dinner in the Prime Minister's flat at Number 10 Downing Street, with pictures and perhaps with Mrs. Cameron there as well whipping up the potatoes.
What a gift, not only to the newspapers, but to the Labour Party. Ed Miliband, the Labour leader, immediately demanded a list of those who had had dinner at the PM's flat. The Conservatives wanted a list of all the labour union leaders who had access to Ed Miliband and who donate millions to Labour. The PM bleated that most of his dinner guests, while being donors, were also personal friends, and wasn't he entitled to have friends over for a pasty or a sausage roll? Oh, and Peter Cruddas resigned on Monday. The damage had been done. Fat cats were paying for access to the Prime Minister. Worse, the contribution that the stingers proposed would be highly illegal under UK election law, but Cruddas told them that there were ways of getting around that requirement. How many other contributors had given money illegally, asked Labour.
And this was only five days. Worse was to come.
This week the UNITE union, which represents drivers of petrol delivery tankers (=US gasoline tankers), voted to strike. The leadership of the union was leaning towards a strike over the Easter holiday. In the UK, the Easter holiday is a traditional travel time, with people visiting their grannies (who will be so impoverished by their tax increases that they won't be able to offer them a pasty) and driving a lot. The possibility of a strike raised the spectre of people not being able to drive to their granny's place, or to the airport to catch a plane to see Granny.
The Government put forward Francis Maude, the Cabinet Officer minister, to speak on the problem. Mr Maude told motorists they should keep a jerry can in the garage to cope with a potential fuel shortage, and top up their gas tanks. This was widely reported in the newspapers.
The fire brigades were aghast. The rules on keeping gasoline on private premises are strict. A jerry can holds around 20 liters of gasoline and is made of metal. However, if you want to keep gasoline in your UK garage you are allowed only two plastic containers holding up to 5 liters apiece. The fire fighters went public with their information and the government hastily amended its advice. Too late.
A 46-year-old woman, who was trying to help her daughter who was out of money and gasoline, tried to decant fuel from a jerry can into a glass jug in her kitchen. The oven was on at the time. You can guess the rest. The woman suffered burns over 40% of her body when the gasoline fumes ignited and set her clothing on fire. She is now in hospital, and we hope she will recover fully.
The Government was caught napping on this one. Besides the duff advice on storing gasoline, long queues formed at gas stations, which promptly ran out of fuel, even though the strike hadn't even been called yet. Fights broke out in places. Keeping gas tanks topped up meant that, two days ago, the UK pumped 150% of a normal day's supply of gasoline.
The newspapers and some politicians yelled for Francis Maude's head. The Government rescinded its advice. Worse was to come—the UNITE union called off any potential strike over Easter.
The Conservatives tried to get Labour to condemn the strike, which was unlikely given the fact that UNITE is a large bankroller of the Labour Party. Ed Miliband said that a strike would not be a good thing and urged both sides to get around the negotiating table. Grown-up words from Lbour, for a change.
The news was not all rosy for Labour, however. Elections here are normally on a Thursday, and a byelection in Bradford, a northern city that has a large number of Muslim residents, had been called to replace a Labour MP who had to resign on health grounds. The seat has been a Labour one for more than 40 years.
However, George Galloway, a maverick politician here in the UK who was kicked out of Labour for protesting against the Iraq war in 2003, and who beat a Labour candidate in East London in 2005, stood for the Bradford seat. He turned a safe Labour seat into a huge Labour rout. He won by more than 10,000 votes.
Galloway was carried in trumph on the shoulders of his supporters out of the counting hall at 3am. The Labour candidate, who had taken victory somewhat for granted, left the counting hall without making the traditional concession speech. He hasn't surfaced since; I'll bet he's stinging a bit. Galloway took a victory tour the next day in an open-top double-decker bus, where the good citizens of Bradford West cheered as he passed. This is the first time that the official Opposition has lost a byelection for decades. Now Galloway, who has been on Big Brother, and was famously filmed in a leotard pretending to lick cream out of a woman's cupped hands, and who was suspended from the House of Commons for unparliamentary behaviour a while back, will return to London as an MP. (US readers may recall that Galloway appeared before a Senate committee that had accused him of oil profiteering in Iraq and wiped the floor with them.)
Labour hasn't come up with a good reason for losing yet. The Respect Party, which Galloway founded, is now represented in Parliament once again. They are unlikely to gather more MPs, as I believe Galloway's larger-than-life persona is responsible for his big win, rather than any organised opposition to the Government. But Gorgeous George will enliven the House of Commons more than even Dennis Skinner, the Beast of Bolsover, has done for the past 42 years.
What's next? Who knows? Parliament is in recess now for Easter, but the crises will still roll on. I shall be in the US from Wednesday until the 19th of April, so I hope nothing important happens until I'm back. I'd hate not to have a front seat for the festivities.
