Beware Outlawing the IT Contractor Mr Osborne

It seems Mr Osborne’s attack on contractors continues apace… In the last 12 months or so we’ve had VAT Moss, the Dividend Tax and the proposed but defeated 1 month IR35 rule.

One suspects Mr Osborne really doesn’t like contractors and now we’re going to have to watch the budget, once again, very closely

George Osborne is planning a clampdown on a tax dodge used by media stars and mandarins who have their salaries paid through special companies to save thousands of pounds a year.

The Chancellor is expected to use Wednesday’s Budget to tackle the practice of paying staff ‘off the books’, which costs the Treasury more than £400 million a year.

As many as 100,000 people – including senior civil servants and NHS staff – receive their income through personal-service companies: it is intended to benefit temporary workers, but is widely used as a perk by long-term employees.

A couple of points to make here… First you shouldn’t base legislation around a minority of celebrities and useless, overpaid bureaucrats. It won’t end well…

Second the £400m figure lost to the treasury has clearly been plucked out of thin air. It is based on what contractors are paid today. If contracting were outlawed wages would drop dramatically so there would be far less to tax — also no VAT to collect. My prediction, an even bigger black hole in tax receipts…

But my main point here is that huge swathes of Government IT infrastructure is supported by contractors. The very people George wants rid of. The reason is simple to understand, contractors are far more flexible and they don’t add to the employee head count. If George continues with his war he will shoot himself in the foot eventually and I can imagine a little conversation in a few years time between him and one of his SPADs…

SPAD: Wake up George, wake up!!

Gideon: What… What is it..?

SPAD: Nothing’s working George! None of it’s working!!

Gideon: What do you mean, ‘none of it’s working’?

SPAD: The servers, the applications, the IT infrastructure… It’s all offline, it’s all down!!

Gideon: What!! How?!? Is it the Chinese?!?

SPAD: No, no, not the Chinese… There’s no one left to maintain it… I mean there’s that guy Steve who we promoted from admin to Head of IT, but no one else.

Gideon: How?!? How is there only one man maintaining our whole IT infrastructure?

SPAD: Well sir, and you’re not going to like this, you outlawed contractors.

Gideon: Didn’t you offer them permanent positions?

SPAD: Yes, but as one developer put it, “I’m not working on a Government IT mind fuck for £35k a year!”

Gideon: But that’s a good wage, you said they could earn 50 if they worked hard for 10 years? I mean where have they all gone..?

SPAD: Yes, yes we told them all that, but they just laughed and said they were going to work in Advertising…

Gideon: Advertising?!? Why?

SPAD: Well it turns out you get free coffee, a beer trolley on Fridays and there are floors and floors of young, normal, attractive people who might talk to you…

Gideon: Shit!!

I agree with Ed Miliband on Policing

Ok, shock horror, I actually agree with Ed Miliband on something

Labour leader Ed Miliband will today make a speech saying the G4S fiasco was evidence there should be a halt on government moves to massively increase private sector involvement in policing.

He will also call for a moratorium on any new public money being awarded to G4S after a failure that “beggared belief”.

He will address a gathering of Labour candidates first elected as Police and Crime Commissioners (PCCs) in England and Wales.

He will say: “Before they are awarded any new policing contracts, we need a review of G4S’s ability to deliver.”

I also believe policing should not be sub-contracted out to ‘private’ companies. After reading a bit about how the Roman Republic used to sub-contract out tax collection to private companies, to devastating effect, I’m of the view that it can only ever end in tears.

First you’re creating another client of the State. A profit hungry one that has an inherent interest in more government and more sub-contracting.

And Secondly if the State is to privatise it should give me and you and every other individual in the country the power to decide who provides us with a particular service. The Government of the day should not decide on our behalf.

Ultimately we need less government, not more ‘privatisation’.

Cameron isn’t a Conservative and Never Will Be

There is a delusion among some Tories that eventually Cameron is going to magically become a Conservative and save both his Party and country from the abyss…

Bruce Anderson in a piece titled — Tory voters won’t stay with UKIP if Cameron delivers economic competence and strong leadership — writes…

At the next Election, economic competence and leadership are likely to be the two most important factors. Both should assist the Tories, as long as the government displays more grip and makes fewer mistakes. But that necessary tightening needs to be reinforced by the right rhetoric. There are no magic solutions. There is no easy way to generate more growth and relieve the pressure on living standards. That makes it even more important to find the right words.

At the next Election, David Cameron should be able to present himself as the pilot who weathered the storm: the PM who took the hard decisions to avert disaster and promote recovery; the leader of the government which introduced radical social reforms even in the midst of a crisis; the only realistic candidate for No.10. If he can evoke great national purposes in that way, UKIP would be where it ought to be: marginalised. All that is easily possible – as long as the government does not trip over its own feet.

Let’s be honest. This ain’t gunna happen. After two years Cameron, and Osborne, have displayed no Conservative, financial competence. And there is no evidence to suggest this will change.

So what does Conservative, financial competence look like? There are three signs…

  1. Taxes lowered across the board.
  2. A small surplus in Government spending.
  3. A State that makes up no more than 1/3 of GDP.

Now, before you all shout, “Crazy Libertarian!!”, let’s be clear. There is nothing remotely Libertarian about these points. A Libertarian Government would go far, far further — and for good reason.

On all three points our ‘Conservative’ dominated Government doesn’t even come close. And doesn’t even look like it is making any progress. Taxes have only been tinkered with. By 2015 we’ll still have a deficit. They wouldn’t use the term “Structural” otherwise. And the State will still make up over 45% of GDP. It currently sits somewhere around 50% — which is double ‘Communist’ China’s…

How can Cameron paint a picture of Conservative, financial competence when there is no evidence to support his case? And how can he convince wavering Tories and Libertarian outliers to stick with the Conservative Party when he displays no Conservative intentions? He can’t. And on this basis one can only assume that true Conservatives and Libertarians will continue to desert the Conservative Party.

In 2015 we’ll have another hung Parliament. And the only thing that will save Cameron from oblivion is the sheer incompetence of Clegg and Miliband.

Cait Reilly’s Two Weeks of Forced Labour…

If you don’t know who Cait Reilly is, she is the girl who wants to launch a judicial review into why she was forced to work two unpaid weeks at Pound Land. And today she has written a piece in the Guardian — where else — about her ‘ordeal’

In a routine appointment with my personal Job Centre Plus adviser last October, I was informed of an open day for people interested in potential retail jobs. Having been unemployed for some time, I was more than happy to attend, and was told by my adviser that, if chosen, I would undergo a week’s “training” followed by a guaranteed job interview. It quickly became clear at the open day, however, that the period of “training” would potentially last for up to six weeks. I explained to my adviser my reservations about taking part: I was already in the middle of a work experience placement that I had organised for myself (and which was more relevant to the museum career I hope to pursue), and I already had retail experience.

I thought the “training” was optional, and it came as a shock to be told I was required to attend or risk cancellation or reduction of my £53 per week jobseekers’ allowance – despite the fact I have always actively sought paid work. So I began the “placement” with Poundland – it was not training, but two weeks’ unpaid work stacking shelves and cleaning floors. I came out with nothing; Poundland gained considerably.

It’s difficult to like Miss Reilly. As a smart, young, graduate it’s hard to believe she hasn’t found any work in 18 months. Also her desire to work in an obsucure profession — Museum Curator — makes her seem naive. You would have thought after 18 months of nothing she might have had a rethink…

But nonetheless, as a friend of mine pointed out, she is right about one thing. That the Government should not be subsidising big business with free/cheap labour.

Now, it is understandable if the Tax Payer is going to fund the unemployed that those people should not be allowed to remain idle. Ergo — forced work-placements… But giving big business a helping hand in this way really is a terrible idea. And as Miss Reilly points out, probably won’t resolve Britain’s unemployment problem.

However the real issue here is not idleness but who pays. One of the main failings of the British welfare system is that it is funded out of current Tax receipts. Or National ‘Insurance’ as the Government describes it…

It is a problem because it raises all sorts of moral issues — as highlighted above — around what is expected of those who are funded. To resolve this problem, and others, we need to radically reform how welfare is funded. And it must be based around the individual.

If the individual covers their own welfare there is no moral obligation placed on them to work, or do anything. I’m not going to get into how we do this. But if we want to resolve many of the problems with welfare in Britain we need to create a true individual-based insurance system.