Wednesday, March 22, 2006

We want our money back

Having lived in post-communist countries, I have some experience of corruption. I have been asked for bribes. I know people who have paid them. Some regard them as a tax. Some regard them as a useful degree of "flexibility" in an impossibly bureaucratic system. Friends who grew up under Communism, where the State's involvement in every aspect of the people's lives made corruption inevitable have listened politely but have - I suspect - never believed me when I have told them that generations of my family have been in business in Britain without paying bribes.

I have been running an experiment in this matter for 15 years. I have deliberately set out never to pay even the smallest bribe in my personal or business life. I have encountered much incredulity from policemen to whom I have paid the full fine for minor traffic offences (always imaginary) in order to get an official receipt, as opposed to accepting the usual "discount for cash". Accepting the impossibility of obtaining a driving licence properly in Russia as a foreigner, I have elected to be driven. Life is less convenient. Others who enter into the spirit of the corrupt life enjoy friendly relations with policemen; one friend even has a "season ticket" which allows him to break any traffic laws he likes on a particular stretch of road he uses regularly. Others boast about poking banknotes through car windows to be snatched deftly at speed as they make time-saving illegal turns.

Corruption is not a joke. As a lawyer, I don't believe that laws are good per se. Rather, I agree with Montesquieu who said that "If it is not necessary to make a law, it is necessary NOT to make a law". Laws are, at best, a necessary evil. They always cost something; at best they transparently cost money to enforce and to comply with. At worst they inhibit personal freedoms, waste precious time in our finite lives, or encourage corruption. Since all these costs are compulsory, they are tantamount to money extorted under threat of personal violence. Try not paying your taxes or fines and you will ultimately face physical assault by agents of the State and compulsory detention.

Taxes are legalised extortion. Laws are legalised assault. They should only be deployed when, as Montesquieu said, they are truly necessary. Our interfering State has lost all sight of that test. It is willing to legislate the minutiae of our private and business lives. It is seriously suggested, for example, that Tessa Jowell recently committed an offence subject to a £20,000 fine when she and some colleagues burst into public song at a demonstration, as this was an unlicensed musical performance. I heard a recording, and am prepared to defend her on grounds it wasn't music at all, but you get my drift.

Taxes in Britain are effectively much higher than they seem because of the number of people businesses have to employ to ensure compliance with tax and employment laws. Many of our private sector employees don't serve their employer's customers; they serve the State. Compliance costs lead - when they become a threat to the existence of a business - to corruption.

For the first time in my middle-aged life, I am sensing the existence of widespread corruption in my home country. I know of people in Britain going out of business because of corrupt demands from low level employees of the Health & Safety Executive, for example. These demands come on top of compliance costs, direct and indirect, which are making the business uneconomic.

I don't believe these are isolated incidents. They go to the top. As a lawyer, I know a little about reorganising business affairs so as lawfully to avoid legal or tax obligations. After a couple of decades, while you still need to check carefully what you are doing, you develop a sixth sense about the borderline between lawful "structuring" and crude evasion or fraud.

When Tony Blair's fund-raiser asked businessmen for loans rather than political donations, he and they will have known exactly what it was about. A donation would be public and any benefits the donor received in return would have been a matter of public discussion. A loan would be private, allowing any benefits to the lender to pass without comment. Someone who would might perhaps be embarrassed to be seen to "purchase" an honour or some other benefit with a donation, could bask in the glory of that honour without his family, friends and shareholders realising that it was bought and paid for.

Since the Labour Party has no income but membership dues (precious few) and donations, one wonders how the loans were ever to be repaid. That the Party should be in danger of bankruptcy now that embarrassed "lenders" are calling in their "loans" suggests that repayment was not seriously expected. That loans were solcited with words to the effect that "You would be doing the Prime Minister a favour" strikes a chord with a long-time resident of the post-Communist world. Believe me, if a Minister in the old Soviet Bloc asked for something - anything - with those words, every businessman would get the message immediately. He would understand he was being offered something in return. One has to ask what was going through the mind of the bank or building society manager who awarded the Blairs a mortgage well beyond their ability to repay. Was s/he "doing the Prime Minister a favour" too?

These direct - and crude - examples of sleaze are only the tip of the iceberg. When a Party so organises the constitution that 84% of the nation is governed by legislation passed on the votes of legislators whose own electors are not subject to those laws, is that democracy? Either we are one nation, or we are not. If we are, then we must accept that laws in Scotland and England depend of the votes of all MP's. If Scotland's laws depend only on Scottish legislators, but England's depend on those from Scotland (because the Labour Party cannot otherwise govern in England) that is a corrupt arrangement. It was designed by Labour to favour its electoral heartlands and punish the voters of other parties.

When the Prime Minister, without the prior knowledge or approval of Parliament or even of his Chancellor (Finance Minister), gives away two billion pounds of taxpayers' money per year to other European nations, with no advantage for his nation in return, we are entitled to ask the question "cui bono?" and to be alert to future benefits to the man who made the otherwise inexplicable decision.

When local taxes are raised 40% during a Party's reign in its electoral heartlands, and 87% in those parts of the country where it is not favoured, then one is entitled to suspect that the nation's finances are being corruptly rigged to purchase votes.

Britain today is a profoundly corrupt nation. I suspect there is much more corruption than we presently know about. I cannot explain the craven attitude of most journalists to the present Government, for example. I cannot understand why every reference to Labour corruption is set in historical context by reference to stories of similar misbehaviour by other parties - even if the journos have to make unaccustomed visits to libraries to find examples from previous eras. I cannot understand why, during Labour governments, satire in Britain closes down. Why "The Goodies" and "Little Britain" are typical lowbrow comedy during Socialist admnistrations, while "Not the Nine O'Clock News" and "Yes, Minister" are more typical of the BBC's efforts when the Tories are in power. One can smell rottenness, even when one cannot pinpoint the source.

I am depressed that, just when the public may finally sense the costs of Labour's misrule, the Tories have chosen to fight on their enemies' home ground. Dave Cameron may have eschewed "Punch and Judy" politics just when Mr Punch was finally in position to get in a damn good whack with his stick on the crocodile of Labour corruption. Opinion polls suggest (who gets paid to phrase these questions, one wonders?) that the public think Labour is "as sleazy" as John Major's Tories. By breaking with the past, Dapper Dave has lost the chance to make the obvious point that the alleged Tory sleaze related to hundreds of pounds in "cash for questions" and hotel bills, not millions or even billions in extortion and misdirected State funds!

I remain of the opinion that many members of our current Cabinet belong not merely out of office, but out of polite society. Some may even have earned a right to a rather different kind of rent-free accomodation at Her Majesty's expense than the "grace and favour" residences they so enjoy in office.

Telegraph | News | We want our money back


Anonymous said...

Superb analysis of the rotten state of the nation.

Anonymous said...

Your article just scared me...Never knew things were bad to such an extent in this country. Corruption is going to let Britain rot completely. Sommething should be done as soon as possible