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Ed Balls is probably still trying to work out his response to the Guardian newspaper referring to ED Miliband as a 'drip' yesterday. Their suggestion that the picture of him in a flak jacket made him look lkike a bewildered schoolboy who had just won a trip to Afghanistan was priceless.

I'd be suprised if Ed Balls can concentrate on matters in hand with respect to the banking levy. He could be plotting his next move...

It's grim up north London...

Mmm, all sounds very tactical when what we need is strategic. Still, maybe "Merlin" will be the plan we're all waiting for. We certainly are waiting for it.

The Chancellor need look no further than his own Enterprise Investment Scheme run by Revenue & Customs as a way for Bankers to contribute to the Big Society.

If Bankers were to invest just one tenth of each million pound bonus in an EIS, they would enjoy a tax rebate of 拢20,000. Happy Investors!

Their 拢100,000 investment could create 4 new jobs at salaries of 拢25,000 each. Happy Workless!

Tax & NI for those staff would total about 拢24,000. Happy Tax-man!

Unemployment is reduced. Happy Politicians!

Graduate new employees repay their Student Loans. Happy Treasury!

Banks eliminate 'high cost' small loans to business. Happy Bankers!

After 3 years, EIS shares are repaid from profits earned (free of Capital Gains Tax). Happy Business!

After 2 years EIS shares are exempt from Inheritance Tax. Happy Inheritor! Sad Taxman! Emotion of Deceased...unknown!

Who's to lose? Even if EIS shares become worthless, losses can be offset against future tax.

A face-saving way for Banks to pay bonuses at no cost to the Treasury...EIS is a winner.

Well poor old G Osborne has to have something to hang onto when it becomes obvious that Project Merlin as the name implies is far from what it will be made to seem. E Balls will have open season with the Chancellor of the Exchequer. At the end of the day it is clear this government has an ideological problem in being anything but hands off when it comes to the private sector and Mr O will obligingly be too small to succeed.
I suppose he is not a "tax cutting Tory" like his toff mate.

All mouth and no trousers: Bringing the bank levy forward from the budget so as to have something to wave at Mr.Balls!

The chancellor is making an art of short termism,the instant response,if you blink you miss it.Policies scribbled on the back of envelopes,long sessions with press secretaries and political advisors,proper analysis relegated.

No strategic vision,political down to his shoes and waistcoat.Unlike this country he`s not drowning,he`s dressing.

A tiny piece of good news from a whole ocean of bad policy decisions by the coalition. This government appears to be even more about politicking/and less about real policies that work than the last one.

But without systemic banking reform these policies are useless. And it won't soften the anger that so many feel who are being attacked by the government like those on disability benefit and the like.

Report card says - Must try harder Osborne.

Is there a real Tory in the Cabinet? Higher taxes on bankers, no tax reductions, what is going on? - how does this reconcile with creating an environment for businesses? (Is it still in draft as Cable was dancing the night away?) On the other hand this is great for Cameron and Osborne, GDP growth looks like it will positive, avoiding double dip, and this is the right politial move for the masses. Only a few weeks ago I thought "we" did not publish pre Budget issues (fuel tax levy etc.), but this is too good to miss. Question is what else can Cameron capitalise on? I still feel he has taken on too many big issues meaning he gets 6 pieces of bad news to 2 pieces of good news, and has to rush to the defense of all his key guys Lansley, Gove, Cable, Clegg. Osborne has had a free run to date, and this will help keep that going. I think this may help buy him some much needed time as Labour seem to be gaining ground on their version of the economy "it wasnt that broke"..., they lied - again

This announcement by GO reminds me of that joke about Nelson. When faced with twenty enemy ships (Alan Johnson) he says "Bring me my red jacket, so if I'm wounded my men won't see the blood". Then he's told that there are in fact a hundred enemy ships (Ed Balls). His response: "Bring me my brown trousers".

Unfortunately for Mr Osborne, he won't be able to bring forward an announcement from the budget every time he has to face Balls.

re #3
Brilliant.

And correct.

Many ways to a good end. {I nearly posted 'to skin a cat' but, even though a cat person myself, would have no doubt had opprobrium heaped on me by posters who do not understand 'figures of speech'.}

(Wouldn't be surprised if some bonus recipients already do as Ron suggests, especially if they are advised by andy C555!)

I have no doubt that bertie wooster's bosses - the banks - have given him permission for this trivial amount of tax to be levied.

Looks like he is still awaiting their permission for the other changes.

re #5
Wonder if a tabloid newspaper tomorrow will be brave enough to run the screamer 'Osborne emasculates Ed Balls' on the front page.

This is the Spinning ist government ever. Following the pathetic smear attempt by Cameron yesterday - we have Osborne trying to create a figleaf for his inability to extract an agreement with bankers about their bonuses which far outweighs this paltry amount. This government is weak and dishonest -in opposition they talked loudly about how the previous administration was no good because it could not control the bankers remuneration yet here they are in the same position. What a bunch of hypocrites. How useless are the toadying media not able to hold them to account on this.

I do hope Osborne isn鈥檛 scared of Balls. We josh about it but a serious matter if he is 鈥� affects job performance. A few years ago, I had a boss who I was frightened of ... vulgar brute he was ... and my work really suffered. I managed to get him sacked eventually (鈥淚鈥檝e been framed!鈥� I remember him yelling as they frog-marched him off site) but until then it was a big problem for me. That wasn鈥檛 a story of great national significance (was just a minor catering establishment on the South coast) but Osborne is Chancellor of the Exchequer at a time of economic crisis; a whole different ball game.

TORY LIES AND DUPLICITOUS ACTIONS

Please all balance this 'good' piece of news with this information that has been found out by the Guardian's George Monbiot...

To us, it's an obscure shift of tax law. To the City, it's the heist of the century


'In David Cameron we have a leader whose job is to quietly legitimise a semi-criminal, money-laundering economy'

The tax savings that the finance sector will make with this wheeze will make the bank levy increase look like peanuts!

A tactical measure to blunt Labour's charge that the government is being soft on the bankers, but no more than window dressing.

The real questions still remain unanswered by the government:

1. How is banking to be reformed so that state is not responsible for losses that should be borne by private investors?

2. How does the UK manage its reforms so that the industry does not migrate and carry on in the same fashion elsewhere, leading to tax leakage and no improvement in banking?

Plenty of possible answers:

Abolish fractional reserve banking (once the preserve of the Austrian School but now pondered openly by Mervyn King)

Reduce the risks involved in maturity transformation by financing long term investments with equity rather than short term deposits.

Split retail and investment banking, allow investment banks to fail.

Additional capital requirements on top of Basel III.

The increase in the levy raises a bit of money but does nothing about the systemic risks involved in the way banking currently operates.

3 -

拢100k would in fact only fund 4 jobs at 拢22,811 p.a.

tax/NI for those 4 jobs would be - 拢29,344

EIS shares do attract 20% IT relief and are CGT free after 3 years but I don't get your 'are repaid from profits earned' reference. Could be bought back by the company but, then, could also be sold (through a public IPO, maybe).

And I know that tax relief can be obtained for losses but you've still lost your money and only get tax relief, not all your money back.

Not that I know for sure but I'd be amazed if the 'Dragon's Den' people didn't structure everything along EIS lines.

"I'll give you 拢20k for 25% of your potentially multi-million pound business (and get tax reliefs into the bargain)"

"No, thanks, you're a boot-faced old haridan and I'd rather stick pins in my eyes than go into business with someone as sour as you"

That sort of thing.

Still, you're right to highlight the EIS scheme. Along with VCTs, and the more limited EMI schemes, they represent excellent tax saving ideas.

Recommend post 03 @ 09:06am on 08 Feb - 'Ron Arnott'.

Very interesting points.

14 - *sigh* and *good grief*

The guy just doesn't understand what he's talking about.

All this is doing is aligning the current treatment of exisiting overseas subsidiaries with overseas branches.

'Controlled Foreign Company' legislation is to be extended to branches as an anti-avoidance measure so there won't be anything a UK company can get away with that it couldn't already simply by setting up a foreign subsidiary company.

13 saga

A few years ago, I had a boss who I was frightened of ... vulgar brute he was ... and my work really suffered.

>>>>>>>>>>>>>>>>>>>>>>>>>

He left Number 10 last year!

This comment was removed because the moderators found it broke the house rules. Explain.

#2 sagamix wrote: "all sounds very tactical when what we need is strategic"

#5 bryhers wrote: "The chancellor is making an art of short termism"

Just waiting to see the Labour List line-to-take.

The announcement is political. It's what politicians and chancellors do. Grow up.

The strategic choice is cutting the budget deficit over the lifetime of one Parliament.

Another strategic choice is avoiding unilateral action on banking reform that will damage the UK's financial sector. The dilemma (and surely this applies to all serious political parties) is that the UK needs an international agreement on banking reform, but does not seem able to get one.

I understand Labour oppose the first choice (that is clear) but probably support the second.

Chancellors act tactically and strategically. To deduce the absence of the latter from the presence of the former is a logical mistake.

jh66 @ 21

Yes, the re-structuring of the industry - more capital, retail separation (maybe), regulation of shadow banking and off balance sheet, bonus reform etc - should come via the international bodies and be adopted in the main financial centres. Will be crass if this fails to materialise. Really would be saying something (something not at all good).

Breaking your word, to even the banks, by increasing the banking levy is a very dangerous thing to do. Especially when you want something from them. Though the amount is not too much, it will almost certainly lead the banks to assume the Government cannot be trusted on this and other issues. This has merely been done to outbid Labour.

Banks just need good regulation not more, that is all that is required for a healthy banking system.

If you split retail and investment banking, those under the state umbrella will be worth much less when they are sold. Thus less money for the taxpayer.

However, I have already accepted that Britain will lose its very lucrative financial sector because of poor decisions.

21. At 11:16am on 08 Feb 2011, johnharris66 wrote:
#2 sagamix wrote: "all sounds very tactical when what we need is strategic"
#5 bryhers wrote: "The chancellor is making an art of short termism"
Just waiting to see the Labour List line-to-take.
The announcement is political. It's what politicians and chancellors do. Grow up.
The strategic choice is cutting the budget deficit over the lifetime of one Parliament.
Another strategic choice is avoiding unilateral action on banking reform that will damage the UK's financial sector. The dilemma (and surely this applies to all serious political parties) is that the UK needs an international agreement on banking reform, but does not seem able to get one.
I understand Labour oppose the first choice (that is clear) but probably support the second.
Chancellors act tactically and strategically. To deduce the absence of the latter from the presence of the former is a logical mistake.

Have nothing against political chancellor`s,if they`re not they shouldn`t be in the job.

Problem: Deficit reduction is not a programme in itself unless it generates a prosperous economy.Richard Lambert said it last week,no policy for growth,Mervyn King in his private moments has similar ideas, Mr.Cameron and Mr.Osborne more interested in politics than economics.

Before the election Mr.Osborne delivered a new policy for the economy every week,once he did it three times. I was getting the measure of the man,typical politician,clever about small things,no knowledge of economic structure and development.All supply side stuff dusted off from Milt and the eighties.

I know he`s your boy,he`s not mine for the reasons given.Pampered,never properly challenged apart from the wall game,until now.It`s all tactics including the latest lunge at the banks,clever in small things,no strategic vision.

"Just waiting to see the Labour List line-to-take."

What is the Labour List? I genuinely don`t know.

#24 Bryhers wrote:

"Pampered,never properly challenged apart from the wall game,until now"

I'm being pedantic, I know, but Osborne never went to Eton.

25 bryhers

Google "labour list". Hopefully I don't have to explain what "google" is!

26. At 2:45pm on 08 Feb 2011, johnharris66 wrote:
#24 Bryhers wrote:

"Pampered,never properly challenged apart from the wall game,until now"

"I'm being pedantic, I know, but Osborne never went to Eton."

You are,and you`re right.Don`t fret,small victories are important.

27. At 2:50pm on 08 Feb 2011, jrperry wrote:
25 bryhers

"Google "labour list". Hopefully I don't have to explain what "google" is!"

Thank you for that,too political for me.Am not attracted to propaganda,too repetitive.I believe there are Tory equivalents where the professionals tool up ready for the day`s work.They`re boring too,not an original idea in their head.

Read an alarming article in "The Times" today that Mr.Cameron and Mr.Osborne model themselves on Mr.Blair,have his book as bedtime reading with well thumbed pages.I suppose the old magician delivered three election victories for Labour and was never defeated.Couldn`t have been boring then.A friend told me the conservatives clapped when he made his resignation speech and left the Commons.Must have been relief.Not a model to follow,charisma,or the gift of grace has a diabolical bedfellow, best avoided.I expect that was why he became Catholic,they are more intimate with sin than the Church of England which is the ornamental aspect of a liberal culture.

Cameron and Osborne beware.

One bank I know has been taking employees form a state owned bank and paying them the bonuses upfront they have not yet been paid by the other.
The banks must change. They operate in a different world to everyone else.....

Now this is getting confusing. The levy, a permanent thing, was brought in by ..er... Conservatives? Starting to forget..And the 拢800 million (projected?) is a one off. Yes? So Cons slightly back tracked and Labour should be happy, surely.
But personally go along with the scaring the banks out of the country scenario. Then there'll be no tax receipts, no NHS etc. All abit silly really. ADarling probably right.

re #14
I have posted elsewhere that it's a bit rich for Monbiot to complain about transfer of income and wealth from poor to rich when he has been personally responsible for some of that shift.

re #11
I was hoping that someone would come up with a great post after I set that one up.

Oh well.

Best I can manage: "Is there a tabloid Ed who can spell emascualate or knows what it means?"

Time to get to work and be careful out there. Oooops!