Thursday, 17 May 2012

Financially illiterate, and colourblind to boot.

Owen Tudor, writing on the Robin Hood tax, informs me that..

Robin Hood Tax campaigners will be out in force around the world and on the web. PCS conference in Brighton next week will see tax collectors and DFID staff donning Sherwood green on the seafront to show their support

As a proud Nottinghamshire boy, this annoys me greatly. Not only have they misappropriated our legend who was, lest we forget, someone who was opposed to silly taxes.. they haven't even got the outfits right. Robin Hood, of course, wore Lincoln green.

Monday, 14 May 2012

On schools...

Michael Gove has spoken of the vast overrepresentation of privately educated people in a variety of places, which includes arts and the media as well as the shiny benches of the Palace of Westminster. His solution, as well we know, is to reform the state education sector so that it can provide the same standard of education as the private sector. The solution proposed by George Monbiot and Laurie Penny is to ban private education.

Various people I like to pay attention to have joined in the fun, and both Shuggy and Chris Dillow quickly come to the conclusion that neither Gove nor Monbiot/Penny have the right answer.

I don't think private school should be banned for a variety of reasons. The main one, I'll admit, is ideological.. I find the idea of the state telling people that they don't have the right to educate their children in the way they deem fit to be rather abhorrent. This is especially so when we're banning parents from educating their children in a way that even the people who would ban it seem to suggest is better than the state system. It's not as if we're even talking about faith schools where one (thought not I) might argue that religious indoctrination of children is a bad thing (I had a Catholic education, as did my siblings and 17 cousins, as did an awful lot of other people I know, and, as yet, none of us have set fire to an abortion clinic even though we ALL saw the requisite video nasty.. indeed, I can't think of a single one of us who would even claim to be anything close to a practicing Catholic).

Another reason why I don't think we should ban private education is that I don't think that banning private education will bring about the desired result. As I commented at Shuggy's place..
These objections also focus far too much on the role of the school in the lives of these children… when anyone with half a brain knows that it's what happens at home that matters the most. Schools, as good as they may be, can only work with what the parents send them. Parents make choices which tell us a lot about how they bring up their children. A parent who wants their child to be privately educated, or even one who will pretend to be a Catholic to get their child into a 'better' state school, is probably a parent who communicates with their children, who supports their children, who pushes their children. It's a parent who is trying to give that child the best possible start. The school is only a part of the system which Monbiot and Penny take issue with.. taking away the school will not change that system. 
My mother is a Learning Support Worker in my old primary school which, being in a neglected old coal mining community, has steadily deteriorated along with the economy of the area. She'll tell you that  you can do what you want with the funding, management and structure of the education system.. you can choose the Tory route or the Labour route, you can model it on the USA, Sweden, China, or the lost civilization of Atlantis if you like.... None of it will make a blind bit of difference if parents will not communicate with or engage with their children at a young age, or if children aged 3 and 4 have to be turned away from pre-school because they are not toilet trained, or if bright kids get bullied by their parents, as well as by their peers.

The problem with the 'education system' is that everyone is focussed on the 'education system'.. and no matter how good it is, it can only work with the children that parents deliver. Richard Murphy has opined on another aspect of the tory approach, pointing out (entirely reasonably) that an approach which helps to turn around a single school cannot be applied to a whole system. Of course, his solution is just better funding for the state system, so I think he falls into the same trap.

We are told that Finland has the best education system in the world.. well maybe it does, or maybe it has the best parents in the world? Most likely, the two work in harmony.. whereas in the UK they are frequently in conflict. Why is that? I can find some right wing friends who'll say it's about benefits culture and a lack of discipline, and I can find some left wing friends who'll blame poverty and a lack of hope.. but much like the question of whether the state should embrace/imitate private education, or ban it, I can't help but conclude that these are merely tribal responses to a non-tribal problem.

My mother bemoans those parents who think that it's the responsibility of the school to sort out whatever difficulties a child has.. but is it any wonder that this sort of thinking is widespread if politicians and commentators on all sides speak as if, indeed, that's what the role of the school is? If the right wingers are shouting 'teachers are lazy and are failing your kids' and left-wingers are shouting 'schools are broke and they are failing your kids' then the one clear message is that, whatever the reason, the system is failing your kids and, thus, there's really no point engaging with it.

Our schools and our teachers are being attacked from all sides. Maybe they need more funding, maybe we need to stop educating people on models that date form the industrial revolution.. but I wonder if the first step isn't to start shouting about what's good in the system so that parents and children can buy into it. Because, let us remember, having society get together to build and fund a system to give every child the opportunities that our system gives (which are vast) is worth shouting about.

Friday, 11 May 2012

On Murphy

I feel moved to write about something that Richie 'Richard' Murphy has put out there. Picking on Murphy is a happy pastime for a lot of people, and whilst Murphy does himself few favours (on a variety of fronts) I sometimes find it all a bit much. He is doing something which, I think, needs to be done... educating the wider world about who might not be paying as much into the pot as we might like. Unfortunately, his political and moral compass is very firmly in a certain camp, and there is rarely any balance in a great deal of what he writes.. which is increasingly overshadowing the genuine issues that he could be dealing with. I should add that whether or not [insert tax avoider of choice] should pay more tax is, ultimately, for the people to decide. I am happy for Richard Murphy to explain why he thinks Barclays should pay more tax, and then for the population to decide whether or not they give enough of a fuck to bank elsewhere.

But, returning to Richard Murphy, unless someone turns up to do his job better than he does it, he's all there is.. and constantly poking him with a stick is achieving nothing. He's not going to change and, indeed, his 'popularity' is increasing and, he very much enjoys the sniping which simply reinforces his view that nothing worthwhile comes from those who would challenge him.

Today he asks us 'Why are companies paying less tax?', and shows us a graph which clearly illustrates that companies are, indeed, paying less tax..

Richard clearly explains what he has done.. he has taken the number of companies in the UK in each year, and the total corporation tax paid, and he's calculated the average paid per company. He's then drawn a line to show the trend.

Or, as the always well-informed Frances Coppola points out in the comments over in Timmyland..
He achieves this remarkable effect by drawing a straight line through two recessions (the second considerably deeper than the first) separated by a boom and followed by the current stagnation.
In the comments on his post, Richard explains that there was a large rise in company numbers in 2004, and as he wanted to show a 'before/after' picture he started his line before that (as one of his commentators points out that starting the line in 2003/4 would have it trending upwards). I'm not quite sure why 2001/02 thus becomes the starting point. But let us not get too carried away over this sideshow..

Murhpy, eagerly pre-empting anyone who might wish to trouble him with a critical comment, quickly draws attention to an issue (my emphasis)..
It’s immediately possible to say that of course the amount of tax per company has gone down because the number of companies has gone up, but then so has to proportion of profits in GDP, so that doesn’t quite stack, but I agree I need to do more on that issue.
Well, yes. You do. We have an increase of over 1 million companies during the period... or 62%. GDP rose by 42% over the same period, and we have an understanding that there was a spike in incorporations in 2004 due to a (subsequently withdrawn) tax 'fiasco'. That is a huge increase in company numbers, and to assume that the tax profile of those million companies which were added to the register during this period is comparable to that of the 1.6million companies on there at the start, which is what Murphy has done, is farcical... not because it's necessarily untrue (a cursory analysis of table T11.3 in HMRC's corporation tax statistics indicates that the percentage of corporate profits charged at the main and small company rates has not varied a great deal between 2002 and 2010) but because it's wildly premature.

Murphy is eager to point out that 'small companies do pay tax', and he's right... but they pay it at a materially lower rate. He charts a fall in average tax paid (either end of his trend line) from £19,000 to £15,800.. about 17%. The small company tax rate is 25% lower than the main company rate, so a shift in the profile will lower the average rate.

I decided to redraw the graph but adjusted to try and take out two distorting factors..

  1. A disproportionate growth in the number of companies (measured relative to GDP)
  2. The fall in the main company tax rate from 30% to 28%
The first is because I'm saying that if we're going to run with Murphy's assumption that the new companies are comparable with the old, we at least need to take out those which added nothing to GDP (coincidentally, perhaps, this leads me to effectively eliminate the effects of the 2004 spike). The second is because we don't need to look for sinister reasons why average tax might have fallen in the last couple of years (and Murphy does go on to speculate on the sinister).

So here's my graph and trendline (the red ones) on top of RM's (the blue ones). I've got the *real* average tax rising. So everything is fine and Richard Murphy is an idiot, yes?

Well, no.. because Richard has shown that you can prove anything by doing a little bit of research, making wild assumptions, and cherry picking what you present. I have proven that you can take data that has been abused to make one point and throw in a couple of plausible sounding assumptions which
make the data say the opposite. And I could easily go further. And I could easily convince anyone pre-disposed to my desired conclusion and lacking the ability/will to question it, that Murphy has no idea what he is talking about and should be forever ignored.

Murphy goes on to discuss his issue with the failure of 700,000 companies a year to submit their corporation tax return. He thinks that this covering up a significant amount of evasion, and that this is a key element of his much-quoted £120bn tax gap(1). I think that anyone who registers a company should comply with HMRC requests for information. If you wish to incorporate, and avail yourself of the legal protections is affords, then it's not a big ask. I think Murphy grossly overestimates the quantum of the tax loss, but that's something of an irrelevance because I agree that something should be done to deal with the problem. It is not acceptable that 30% of companies don't fulfil the modest obligations that parliament has imposed upon them.

And, so, therein lies my big problem.. he's got a point to make, and it's a point I'm happy to see made.. but I don't want to see it made with the aid of such a clumsy tool (I mean the graph, not Richard Murphy), because Murphy's audience will just take the tool and present it as further 'proof' that Phillip Green is the cause of all of our ills. Murphy knows this, he (I am sure) believes that having these misconceptions continually shouted from the rooftops (literally, on occasion) is a good thing, because the benefit of the PR outweighs the harm of an ill-informed populace looking for hate-targets.

I, respectfully, disagree.

(1) As an aside, but which fits with where I find my greatest frustration, Murphy has never suggested that this is something done by large companies and rich individuals.. because he knows that if there is a problem here, then it's the little guys. It's tax evasion, and people who can afford to minimise their tax legally will usually avoid minimising it illegally. However, his £120bn figure is usually attributed by others (UK Uncut, Union leaders etc etc) almost solely to big business and the 1%. I've never seen Murphy attempt to correct this obvious misreading of his own research, which bothers me because if he really wanted tax justice he would want a better understanding of the fact that evasion and avoidance is something which, whatever the quantum, pervades society. If Mark Serwotka, who made this error on Question Time last week really wants that whole £120bn collected, then he needs to be willing to tell the 99% that we, too, need to stump up our share.

Thursday, 10 May 2012

No signal

Banning mobile phones in schools seems like a good idea. The last thing we want to do is empower children to use devices which use cutting-edge technology to give them access to a worldwide network of knowledge, and which play a vital role in everyday life in both the personal and professional spheres.

Gosh no, far better that we cling on to the wildly outdated approach to learning and development that has* served us so well in recent years and is so successful** in engaging and inspiring young minds by staying relevant to the way we live our lives.

* has not
** unsuccessful