I must confess that I had not previously heard of him (but then, he’s probably none too familiar with me either), but I have to report that Sir Stephen Bubb (sic) is a deeply confused man. It appears that he is Chief Executive of something called AVECO (hadn’t heard of them either), which represents 2000 “Charity Leaders” in Britain.
Sir Stephen is concerned that government’s “ill-considered cuts” may have a dramatic impact on “the voluntary sector”, and “wreak havoc in communities”. He accuses local councils of contemplating “a Neanderthal approach to cuts” (though I am not aware that the Neanderthals, whose genes, according to recent research, may run in our own veins, had tax-payers, or cuts, or a voluntary sector). In parentheses, let me note that while I have a number of criticisms of Sir Stephen (see below), I can scarcely fault his colourful use of language. Get more on the story at http://www.bbc.co.uk/news/uk-12102105.
Sir Stephen is wrong on so many counts that it is difficult to know where to start.
Of course he has an ex-officio obligation to speak up in favour of charities, and he seems to interpret that responsibility in terms of perpetuating the right of charities to continue to suckle on the teat of the Welfare State. But we are surely entitled to point out the difference between charity, based on voluntary contributions from the public, on the one hand; and delivery of state-funded services, on the other. I recently wrote about a “charity” called BookStart, which was threatened with closure by the proposed withdrawal of tax-payer funding. In my book, that’s not a charity at all – it’s become an agency of the government.
But let that distinction pass, and let Sir Stephen have the benefit of the doubt on his special pleading for his client-base. We may allow that he is entitled to complain at proposed cuts, and to express his own view, and his members’ views, on the potential damage that such cuts may cause (though we may take them with a pinch of salt).
What he is not entitled to do is to dictate to the government how the additional funds which he requests should be raised. That is what we elect a government for. (In any case there is a deeper philosophical argument against all attempts to raise hypothecated taxes, since they assume we know what would have been spent in the absence of the hypothecated tax – but that’s a “What-if?” question to which no one knows the answer).
In particular, it is an example of the most egregious and self-serving cynicism that he picks on the bankers and their bonuses, hoping to curry favour with a public brain-washed by banker-bashing rhetoric from the media – and from politicians who should know better. (The prime responsibility for the financial crisis rests with politicians and policymakers who deliberately promoted loans for poor risks, and held interest rates too low for too long while a bubble economy developed).
Sir Stephen also parades his deep ignorance of economics. He makes the regular leftist assumption that higher taxes will raise more revenue. But if taxes are too high, and especially if they are seen to be unfair, raising rates will not raise any revenue at all. In this case, it will result in sophisticated avoidance schemes, followed by a mass emigration of London’s financial sector to more welcoming jurisdictions. We will have killed the Goose that laid the Golden Eggs, and there will be even less funding for Sir Stephen’s clients.
These points have been made with great vigour by London Mayor Boris Johnson – and with great courage too, given the equivocal attitude to the banks shown by some of his senior party colleagues. He has highlighted the risks to the City from rhetorical bank-bashing; from threats of arbitrary taxes; and indeed from the proposed 50% income-tax rate. Boris is clearly right, and well done him for fighting his (and the City’s) corner. There was a time when all Conservatives would have seen immediately that Boris is right, and it is highly disturbing that some in the Cabinet can’t quite get their heads around it. http://www.telegraph.co.uk/news/newstopics/politics/8233578/Boris-warns-Cameron-on-bank-tax-and-rhetoric.html
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