Friday 31 January 2014

A moral case for higher taxes

 I have a dream. I'm sitting in a studio somewhere, interviewing a Captain of Industry about Labour's idea to bump the top rate of income tax back up to 50 per cent.

"Captain: Ridiculous. Hugely damaging. Economic vandalism. Politics of envy.

"Me: So what difference would it make to you personally?

"Captain: Well, er, that's not the point, is it? It sends out the wrong message … anti-business … discourages investment …

"Me: You'd still be able to afford family holidays overseas, even if you paid a few thousand pounds more in tax?"

"Captain: Yes, but …

"Me: And you'd still be able to scrape together the school fees for your children's private education? Your wife wouldn't have to give up her 4x4? You'd just about manage to keep on the house in Provence?"

As I say, it's a dream. In a letter to the Telegraph last week, 24 Captains of Industry claimed that the re-introduction of a 50p top rate on income above £150,000 a year would be "a backwards step which would put the economic recovery at risk and would very quickly lead to the loss of jobs in Britain."

So let's just look at that for a moment. Jobs will be lost because bosses have to pay a bit more tax? How does that work? They're going to shut down factories, lay off staff, because they have to pay a bit more income tax? I don't think so.

Investors will tear up their business plans because they feel sorry for UK chief executives with fewer pounds in their pockets? Why on earth would they? It simply makes no sense -- and voters know it. That's why there's a clear majority -- including 40 per cent of Conservative voters -- in favour of the Labour idea.

Among the signatories to the Telegraph letter was Sir Stuart Rose, who used to run Marks and Spencer. When he started there as a management trainee in 1972, the top rate of income tax was 75 per cent. Didn't exactly put him off starting the climb up the executive ladder, did it?

Trick question: what was the top rate of income tax during the first nine years of the Thatcher government? Answer: 60 per cent. Was she lambasted by the titans of industry for her anti-business policies, for discouraging investment? Er, no.

Here are some more numbers for you to ponder: according to a report from the Tax Justice Network, between 1998 and 2011, the average pay of a chief executive of a FTSE-100 company rose by around 500 per cent. In the same period, average pay for a worker in full-time employment rose by just 20 per cent. So, in little more than a decade, the ratio between the two has widened from 45:1 to 185:1. (Useful fact: about 99 per cent of UK tax-payers have a taxable income below £150,000 a year.)

To talk about raising top levels of tax isn't the politics of envy. It's the politics of justice. I firmly believe that most people have an innate sense of what is fair -- they don't expect chief executives and hospital porters to be paid the same, but they do expect that when people at the bottom are struggling to survive, then those at the top can properly be expected to give up something as well.

Can anyone genuinely argue that it is morally acceptable for bankers to be paid six-figure bonuses at a time that their banks are either losing shed-loads of money, or being fined billions for all manner of past skullduggery, or being supported by tax-payers (including, of course, hospital porters, care workers, and street cleaners)? This isn't about politics, or economics. It's about morality.

Can anyone argue that top earners like Sir Ian Cheshire, chief executive of Kingfisher, another of the Telegraph Captains (total calculated compensation last year: £2.6 million), can't properly be asked to cough up a bit more in tax so that -- perhaps -- the Environment Agency can have some of its budget restored to enable it to protect the people of Somerset from catastrophic floods?

Does anyone think it is morally acceptable that food banks are struggling to meet unprecedented demand from people who can no longer afford to feed their families after having their benefits cut, while the top 1 per cent of earners scream blue murder at the prospect of having to shell out a bit more in tax?

Yes, I know there's an argument that increasing top rates of tax doesn't necessarily translate into increased tax revenues -- because top earners (and their accountants) are remarkably adept at finding ways to wriggle round the rules. The evidence, from what I can see, is somewhat less clear than the anti-tax advocates would have you believe.

And one final point worthy of your consideration: there's plenty of evidence to show that countries with the highest income gaps also suffer the worst health records. It's not so much that poor people suffer worse health, but that where the gap between the poorest and the richest is widest, more people suffer ill health, even if they themselves are not living in poverty. So here's a slogan to campaign on: "Raise taxes. Help the NHS save money."

Wouldn't it be refreshing if someone came out and said it loud and clear: taxes are a necessary part of a fair and functioning society. If there's not enough cash to pay for essential social welfare programmes, for a modern transport network, decent schools and environmental protection, you don't always have to cut costs. Raising revenue is also an option. 

Starting with those who can afford it most …

By the way, if you're reading this before 11am on Friday, you're in time to listen to my documentary The Road to Sochi on BBC Radio 4. If you've missed it, you can catch up via the BBC Radio iPlayer.

Friday 24 January 2014

What a wonderful world

I wonder if I can persuade you that, despite the utter horror of this week's headlines from Syria, we are lucky to live in an era of unprecedented human progress. Yes, I'm going to try to convince you that for more people, in more places, the world has more to offer now than at any time in the history of our species.

Despite Syria. Or Ukraine, or Thailand, or South Sudan, or Central African Republic, or a dozen other hotspots of human misery. (I won't even mention the current state of the Lib Dems -- even I have my limits.)

There is, I hope, method in my madness, because I want to argue that however bad it looks, it's always worth trying to make it better. The temptation, when bombarded with so many images of human horror, is to turn away, to throw up our hands: "It's so awful, and there's nothing that anyone can do about it."

That's one reason why, according to yesterday's Guardian, the Ministry of Defence has concluded that there's "a growing reluctance in an increasingly multicultural Britain to see UK troops deployed on the ground in future operations abroad." After all, why send troops to risk their lives overseas if they're not doing any good anyway?

Incidentally, why do the opponents of international military intervention always quote Afghanistan, Iraq and Libya as examples of why using the military inevitably makes a bad situation worse, but never Sierra Leone, Bosnia, Kosovo or East Timor, where it's perfectly possible to argue the opposite?

And while we're on the subject of military intervention, I can't help wondering if this week's report, validated by three highly respected international war crimes prosecutors, that thousands of prisoners in Syria have been systematically tortured and murdered, will reopen the debate about Western military action. After the chemical weapons attacks last year, I suggested that the Syria "horror-meter" still wasn't high enough for Western action -- I suspect it's just gone up several notches.

But back to my apparently idiotic notion that, despite everything, the world is in much better shape now than it has ever been. My principal witness is Bill Gates, the founder of Microsoft, who has just regained his title as the richest man in the world. In his 2014 annual letter, he writes: "By almost any measure, the world is better than it has ever been. People are living longer, healthier lives. Many nations that were aid recipients are now self-sufficient."

Gates and his wife Melinda run a global foundation through which they channel billions of dollars to help improve health care and reduce extreme poverty in the world's poorest countries.  They know more -- and do more -- about global poverty than almost anyone else. (I would admire them even more if Microsoft Windows weren't such a ghastly piece of software.)

Here, taken from Bill Gates's letter, are some of the data: "Since 1960, the life span for women in sub-Saharan Africa has gone up from 41 to 57 years, despite the HIV epidemic. Without HIV it would be 61 years. The percentage of children in school has gone from the low 40s to over 75 per cent since 1970. Fewer people are hungry, and more people have good nutrition. If getting enough to eat, going to school, and living longer are measures of a good life, then life is definitely getting better there."

It's not only Africa: Gates says that within the next 20 years, "every nation in South America, Asia, and Central America (with the possible exception of Haiti), and most in coastal Africa, will have joined the ranks of today’s middle-income nations. More than 70 per cent of countries will have a higher per-person income than China does today. Nearly 90 per cent will have a higher income than India does today."

Look at the health picture: 25 years ago, there were 350,000 new cases of polio every year. Now it's down to 400 and the number is still falling. In Cambodia, the number of people dying of malaria has dropped by 80 per cent in the past decade. What it means is that there are millions of people alive today who wouldn't be alive had they been born a generation earlier -- and millions are living healthier, happier and more productive lives than would have been the case even 20 years ago.

Last year I visited Sierra Leone and Democratic Republic of Congo to look at what United Nations agencies are doing to improve child health and reduce maternal mortality rates. I saw villages with clinics where before there had been none, and midwives in places where there had been none. They were saving lives, daily.

Ah, you are thinking. If more people are living longer, that means faster population growth and even more pressure on our planet's dwindling resources. Not so, in fact: when more children survive, women have fewer children and population growth slows. Bill Gates quotes Thailand as an example: "In the course of just two decades, Thai women went from having an average of six children to an average of two. Today, child mortality in Thailand is almost as low as it is in the United States, and Thai women have an average of 1.6 children."

None of this, I know, has any direct connection to what's happening in Syria or Ukraine. But it shows that not everything always gets worse, and that actions can make a difference. What's more, as we start four years of commemorating the centenary of the First World War, it's worth recalling that the world today, despite all the headlines, is almost certainly a more peaceful place than it has ever been. (The proposition is more fully argued in Steven Pinker's book The Better Angels of Our Nature, published in 2011.)

So have I convinced you? Have I at least given you some food for thought? I look forward to your responses.

By the way, my documentary for BBC Radio 4, The Road to Sochi, will be broadcast next Friday, 31 January, at 11am. Make a note in your diary -- but if you miss it, you can always catch up on iPlayer.

Friday 17 January 2014

Private lives, public lives

Many years ago, when I was running the news desk of a national newspaper, I took a phone call one evening from a woman who declined to give her name but asked: "Are you interested in a story about the private life of a leading British politician?"

I told her that I might be, but only if the way the politician conducted himself in private was directly relevant to his public responsibilities. "Pity," she said, and hung up.

A few weeks later, the papers were full of stories about how a very senior politician had had an extra-marital affair. It caused a huge amount of excitement at the time, but the politician's opinion poll ratings went up, as did his party's, and he is still a respected public figure to this day. (There is no need, after all this time, to name him, although many of you will probably be able to guess whom I'm referring to.)

As a journalist, I was probably wrong to turn down the chance of a major scoop. If I had to make the same decision today, I would probably be less squeamish. But I was interested to see this week that, just days after we learned of President Fran├žois Hollande's troubled private life, the European Court of Human Rights set out some useful guidelines about where it thinks the line should be drawn when it comes to the private lives of public figures.

The case concerned a book published in 2007 by a former girlfriend of the then Finnish prime minister, Matti Vanhanen. At the time of their affair, she was unmarried and he was divorced. The book's author, Susan Ruusunen, and her publisher were both prosecuted under Finland's privacy laws -- they were first acquitted, but after the prosecution appealed, the verdict was overturned.

Finland's Supreme Court upheld the appeal court verdict, but it significantly narrowed the grounds on which it upheld their conviction. "The only references which, according to the court, had illegally disclosed information about the Prime Minister’s private life were the information and hints about the sex life and intimate events between the girlfriend and the Prime Minister … descriptions of their brief and passionate intimate moments as well as giving massages to each other, and accounts of their sexual intercourse."   

So, in Finland at least, it's a criminal offence to disclose intimate details of a prime minister's sex life. Which brings us to the key question: where exactly should we daw the line between protecting freedom of expression and protecting an individual's right to privacy? The European court's ruling, as you'd expect, is both lengthy and complex. But I've managed to plough through it for you -- here, for example, is the all-important freedom of expression principle as set out by the court's judges (it's paragraphs 44 and 45, if you care to look them up for yourself):

"Although the press must not overstep certain bounds, particularly as regards the reputation and rights of others and the need to prevent the disclosure of confidential information, its duty is nevertheless to impart – in a manner consistent with its obligations and responsibilities – information and ideas on all matters of public interest … The safeguard afforded by Article 10 [of the European Convention on Human Rights] to journalists in relation to reporting on issues of general interest is subject to the proviso that they act in good faith in order to provide accurate and reliable information in accordance with the ethics of journalism. In addition, the Court is mindful of the fact that journalistic freedom also covers possible recourse to a degree of exaggeration, or even provocation."

The Strasbourg court accepts that the right of politicians to have their privacy protected is less than that of lesser mortals: by virtue of holding public office, they are rightly subject to closer scrutiny of their honesty and judgment. ("The limits of permissible criticism are wider as regards a politician than as regards a private individual. Unlike the latter, the former inevitably and knowingly lay themselves open to close scrutiny of their words and deeds by journalists and the public at large, and they must consequently display a greater degree of tolerance." - Paragraph 46)

So the court's conclusion is that most of what the former Finnish prime minister's former girlfriend wrote about their affair was perfectly justifiable. "The information about how and when the former Prime Minister had met the girlfriend and how quickly their relationship had developed had relevance to general public discussion as these issues raised the question of whether in this respect he had been dishonest and lacked judgment. The [Finnish] Supreme Court also found that the information concerning the great differences in the standard of living between the girlfriend and the former Prime Minister, his lifestyle, the data protection concerns and the protection of the highest political authorities in general had relevance to general public discussion. The Court agrees with this. From the point of view of the general public’s right to receive information about matters of public interest, there were thus justified grounds for publishing the book."

All of this is of direct relevance to the French media as they tread warily through the tangled thickets of their president's love life. If my reading of the Strasbourg ruling is right, they're perfectly OK under European law to disclose his affair, because there is a justified public interest in how a political leader conducts himself in private. (And if there were any doubts, his deeply embarrassing inability to answer a question about who is France's current First Lady should surely have dispelled them.)

But, according to the Strasbourg judges, what happens between the sheets should stay between the sheets.  Once the bedroom door is closed, it stays closed -- even for presidents and prime ministers.

Friday 10 January 2014

Warning: euro elections ahead

I'm sure you already have it marked in your diary: 22 May, the date of the next euro-elections.

If you haven't, you should have -- because they'll be unusually important this year, both in the UK and in many others of the EU's 28 member states. (Yes, 28 -- remember, Croatia joined last July.)

Why? Because, if current opinion polls are right, anti-EU parties will do exceptionally well in several countries, including here in Britain. Difficult though it may be to believe, Nigel Farage, the leader of UKIP, who revels in his beer-loving, ciggie-puffing, man-in-the-saloon-bar image, may soon be one of the most influential politicians in the country.

According to an analysis in last week's edition of The Economist, anti-EU parties could double the number of seats they hold in the 751-seat European parliament, up from 12 per cent to as high as 25 per cent. That would represent a fair-size political earthquake in Brussels, and could have a major knock-on effect on domestic politics as well.

There are, however, substantial differences between the various parties that can be grouped under the "anti-EU" banner. As The Economist points out, they range from the unashamed neo-Nazis of the Greek Golden Dawn party, to the ardently pro-Israel PVV party in the Netherlands. What they all have in common, in the words of The Economist, is that they are "populist and nationalist, that they have strong views on the EU, immigration and national sovereignty, and that as a result they are doing very well in the polls."

The Conservative MEP Daniel Hannan wrote in last week's Spectator: "The European Parliament has always had its fair share of extremists, eccentrics and outright, drooling loons … But it’s not just madmen on the rise. In country after country, genuine protest movements of left, right and centre are surging."

Some are out and out Fascists. Others are rabidly anti-Islam. Or anti-foreigner. Or separatists. What they all represent, wherever they position themselves on the political spectrum, is a serious challenge to Brussels orthodoxy.

And even if you find much of what they say deeply distasteful, as I do, you may also think, as I do, that it's high time that someone delivered a powerful kick up the Brussels backside. For too long, the eurocrats have been both complacent and arrogant in their blind insistence that they, and only they, know the path to salvation and everlasting glory.

Just look at the results of a Gallup poll published on Wednesday. Asked "Do you approve or disapprove of the job performance of the leadership of the EU?", the message from voters was unmistakeable: the "approve" vote was down 32 per cent in Spain, compared to 2008, before the euro crisis engulfed the EU; down 23 per cent in Ireland; down 17 per cent in Sweden, and down 14 per cent in Finland. Perhaps because we have largely stood aside from the euro currency crisis, the UK figure was down a mere 7 per cent.

So here's the danger. A desire to frighten the Brussels establishment into recognising the crisis of credibility that they face could easily turn into support for some very nasty people. The challenge for Europe's mainstream politicians is to acknowledge the need for some fundamental rethinking, while drawing a clear line between rational scepticism and irrational bigotry.

Here in Britain, David Cameron will argue that this is precisely what he is doing, by demanding a renegotiation of parts of the UK's EU deal, and offering an in-out referendum once the haggling is over.

The truth, though, is that he and his party (after all, some things never change) are in a miserable mess over both the EU and immigration. On the one hand, Mr Cameron repeatedly stokes up fears of a wave of Romanian and Bulgarian migrants flooding across our borders (so far, there's been not so much as a trickle)  -- while on the other, his education minister Liz Truss happily admits that at least in some places, children from Poland are actually pushing up exam results in local schools.

The solution? Tell voters honestly what advantages being in the EU brings us, while acknowledging, equally honestly, that in return, we give up control of some domestic law-making. (Just as the people of Cornwall or Cumbria have to accept laws written in London …)

And stop pandering to prejudice over immigration: there's ample evidence that the overall impact is positive, and the answer in areas where there is added pressure on housing, schools, GPs, etc. is to invest in more services. Let us not forget that immigrants pay taxes too, and they are just as entitled as the rest of us to expect decent public services in return. (Declaration of interest: I am the son of immigrants.)

And one last plea: raise the minimum wage -- and enforce it more effectively -- so that there is less incentive for unscrupulous employers to hire illegal immigrants, and more incentive for British workers to take low-paid jobs. In the words of the conservative American businessman and commentator Ron Unz: "A much higher minimum wage would go a long way to reducing the ill effects of heavy immigration levels."