Author Archives: the45

Poundage rates for Scotland and England

Tories In Disarray Over Business Rates

One of the main lines of Tory attack for the upcoming council elections is the increase in business rates. The Tories love to portray themselves as THE pro-business party, so they’ve been pushing this theme relentlessly. All of the sycophantic media has been slavishly publishing the Tory propaganda. So I thought we should take a look at the issue and see if the Tory claims bear close scrutiny.

What are business rates?

Here’s how they are described on the myscotgov website: “Business rates (also called non-domestic rates) are a tax on business property to help pay for local council services. They are based on the property and generally don’t reflect the turnover or profits of your business. If you have business premises, it’s important to consider business rates in your financial planning.”

So business rates are based on the property value, not the profitability of the business. Its stands to reason then that if the property value increases then the business rates increase also. There’s even a kind bit of advice on the website, best keep those rates in mind when doing your financial planning. I’m sure most well run businesses would heed that advice.

Who decides on the value of the property?

As we all know, property values vary over time. If we want businesses to pay the correct amount then their properties must be revalued from time to time; in Scotland this is carried out every 5 years. This valuation is performed by the Scottish Assessors Association who are an independent body. The assessors for each area are appointed by a cross party committee of councillors, one of the Aberdeenshire Council Committee members was Cllr Gillian Owen, Conservative and Unionist Party. So if the Tories are complaining about the valuations, they only have themselves to blame.

How are business rates calculated?

Once the rateable value of the property has been determined then the business rates can be worked out. The Scottish Government sets the rate which is known as the poundage rate, i.e. how many pence in the pound will be charged. The poundage rate normally increases with inflation (RPI) and it also matches the increases in England. The Eric Young & Co website has the details:

Poundage rates for Scotland and England

Poundage rates for Scotland and England

So we can see that the poundage rate increase for properties valued below £35000 is exactly the same as the English rate for properties below £18000. The more expensive properties then have to pay a Large Property Supplement. In England this starts at a lower rate than in Scotland (1.3%) but the Scottish rate is higher (2.6%).

What’s the problem?

With the increases being closely matched then you would expect there to be howls of discontent in England too. Poor Victoria Beckham’s store rateable valuation is up 415%. But it can’t be the annual increase that the Tories are moaning about , it must be the revaluation

What does the UK government have to say about it? Well a government spokesman said, “This revaluation improves the fairness of rate bills by making sure they more closely reflect the property market.”

Oh, according to the tory government in Westminster the revaluation improves fairness. The message couldn’t have reached the branch office then because Ruth Davidson says this on the branch office website, “This revaluation is threatening jobs and the wider economy, and needs to be addressed as a matter of urgency.”

Which is it? Either fairness is improved or jobs are threatened, I’m a bit confused.

Perhaps Murdo Fraser can enlighten us?

He says, “This is fast becoming a crisis for businesses the length and breadth of the country. Many say they face closure, while others are being forced to hike their prices to cover these increased costs. This is not an acceptable state of affairs, and we need to know what Scotland’s finance secretary intends to do about this. It’s time for the SNP to prove it’s not an anti-business government and take some meaningful action to help these businesses which are the lifeblood of our economy.”

So the SNP government is anti-business, what does that make the Tories in Westminster then?

Hmm, maybe we can get some help from the tory candidates for the upcoming council elections?

Here’s Colin Clarke, currently the Conservative and Unionist party councillor for Inverurie and district.

“Inverurie has a thriving town centre with a strong High Street shopping culture, but local firms are being squeezed by SNP tax policy. We should be supporting our employers, especially during the current downturn in the north-east economy. Many of these are family firms with strong links to the local area, but they are being hit with ever-increasing bills. I want to see a freeze on business rates to offer some relief to these companies which are finding it tough at the moment.”

So the increase doesn’t support employers in Scotland but improves fairness in England.

He goes on to say, “At the moment, it seems the SNP see the north-east and towns like Inverurie as a cash cow, with rising income tax, stamp duty and business rates providing a triple whammy of higher bills”

Oh dear Colin, you’re a liar. There has been no increase in income tax in Scotland. The income tax rate next year is exactly the same as it was last year. In fact most people will paying less income tax next year than they did this year due to the lower earnings limit being raised.

Perhaps former Provost Councillor Jill Webster can enlighten us? She gets a mention in the Evening Express. “Cllr Jill Webster said her own manufacturing business faces a six-figure increase which was “quite shocking”. She added: “The Finance Secretary should have done something about this one earlier and rushed this North-east situation on earlier.””

A six figure increase! That sounds dramatic, lets take a look at this claim then:

Cllr Webster,or Jilly as she’s known, runs a couple of businesses at the same time as being a councillor. She does this on a part-time basis we are told, does that mean she is a part-time councillor? Anyway the businesses in question are Rubberatkins Ltd and Reactive Downhole Tools Ltd. A quick search for the Rubbertkins business yields the postcode AB23 8GW.

Lets see how much the rateable value has increased by entering the postcode into the search engine on the SAA website. This tells us the current rateable value is £209000. Looking at the proposed valuation on the same page we see that it will be £307000, that’s an increase of £98000. But that is the rateable value, not the actual business rate, which can be estimated by the business rate calculator on the mygov website. This yields a business rate of £151044.

Rubberatkins business rates 2017

Rubberatkins business rates 2017

But Jilly said that her business faced a six figure increase, so at least £100000 then. Lets work it out shall we?

Her old rateable value was £209000. The old rate was 48.0% up to £35000 then 49.3% above that. Which give us £12250 + £85782 = £98032. So the increase is £53012. It looks like Jilly can’t do her sums.

I wonder what could have cause the increase in the rateable value? Could it be the 1000 square meter extension to the business premises that is mentioned on the company website? Looks like our Jilly didn’t heed the Scottish Government’s advice to “consider business rates in your financial planning.” If she did then she would have seen the business rate rise coming.

So there we have it, the Tories say that the business rates rise is about improving fairness in England but is all kinds of SNP bad in Scotland. Tories’ council candidates lie and can’t do their sums. Who would vote for them?

 

Hard border mainland UK

Borders, NoB orders and Brexit

Hard borders, soft borders, no borders, we’ve heard it all. There has been much debate about which type of border would exist between a post Brexit Scotland and England in the event of Scotland being able to avoid sinking, along with the rest of the UK, into an insular little xenophobic fug with post-imperialistic tendencies. There are various permutations of the argument but we know that the British parties and their “Scottish” stooges will always plum for the most extreme variation in order to scare people into complying with their way of thinking. So lets take a look at that extreme option.

Scotland voted to remain in the EU by a hefty margin, of course the democratic will of the Scottish people matters naught to the British Fundamentalist so they insist that Scotland retains its chains to the sinking ship Britannia and we’ll all sing Jerusalem as we descend to the bottom of the North Sea amid glorious waves of red, white and blue. But let’s assume that Scotland somehow manages to retain her full EU membership (or something very close to it). This option could probably only be achieved with full independence since there is no political will on the part of the British Fundamentalists to do otherwise. They know best you see, just get back into your tartan shortbread tin Scotland.

The British Fundamentalists tell us that a hard border would exist between Scotland and England so we would should really understand what a hard border looks like. First up is the Irish border as it used to look during the euphemistically named “troubles”.

A watchtower on the Irish border

A watchtower on the Irish border

The border itself was very porous with no actual fence or wall dividing Northern Ireland from the Republic of Ireland. There were roadblocks and checkpoints, watchtowers positioned at strategic points and armed soldiers manning them all. This was a hard border. It existed between two EU member states. It blocked the movement of goods, people and services and damaged both countries economies.

The next border is another hard border, more extreme than the last one. It is the former Inner German Border which used to exist back in the days of the Cold War. I used to patrol it and it was scary, it looked like this:

Inner German border

Inner German border

There were walls, anti-vehicle ditches, mine fields (the ploughed strip above), fences, war dogs on running leashes, watch towers, armed troops and all manner of listening and observation devices. The main difference between this border and the former Irish border was that this one was designed to keep people in, not out. I like to think that this would be the type of border that would exist between England and Scotland, one which is designed to keep the poor little Englanders in since they all aspire to get into the prosperous Scotland which stayed in the EU, well maybe not.

The fact is that all borders are artificial constructs, animals and birds do not respect borders. They are by human beings, for human beings. Designed to keep human beings on one side or the other. They exist only by the will of man.

So would this type of border exist between a post Brexit England and an European Scotland? If it did it would be an extension of the English southern border. It would be an English construct since Scotland neither needs nor wants one. The only people who would want one are the UKIPpers and their Daily Express reading followers who have been fed a constant diet of the dangerous migrants and glorious Britain with its smashing Empire. It would be the border between what remains of the UK and the EU/EEA. If rUK made it difficult at one point the EU would make it difficult at all points.  If rUK made it difficult to cross from Scotland within the EU/EEA into rUK then the EU would make it difficult to cross from all EU ports into rUK. For this reason sanity dictates that it would never happen (assuming some sanity still exists in this world).

Now our Tory Brexiteers insist that there would not be a hard border between a post Brexit Northern Ireland and the Republic of Ireland. No real border exists there now and that’s the way that most people on the emerald isle want it to stay. So how can that be? How can Northern Ireland remain within the UK and have no borders with the Republic of Ireland? Well here’s how:

Hard border mainland UK

Hard border mainland UK

The border would exist around mainland UK! Taking us back to dark days of WWII. If you want to travel around the UK you will have to show your papers. Fancy jumping on a ferry to Larne? You’re going to need your passport. Live in Belfast and want to sell those goods to mainland UK? You’re going to have to pay customs duties and fill in lots of paperwork. This is the reality which awaits Northern Ireland and its soft border with the Republic of Ireland, the hard border will exist but it will be on the mainland.

So to sum up, no hard border will exist between Scotland and England whether or not Scotland retains EU membership or not. If NI remains part of UK it will have a hard border at the UK mainland and no border to speak of with the Republic of Ireland, but if NI remains within the EU it won’t have a border at all. Got it?

OFGEM Announcement

I should have known better

Considering myself a canny consumer I always shop around for the best deals for my electricity supply (no gas here, see It’s a gas, gas, gas). So i was relatively pleased with myself when I found a good deal with a company called GB Energy Supply. The name very nearly put me off but it was a good deal so I went ahead with the switch, but I should have known better.

Like the non existent country that this company is named after this company went bust. But they didn’t bother to tell anyone about their financial troubles. The first I heard of it was on a news site. So I went to the website but it was down, then I went to OFGEM. To be fair they provided plenty of reassurance and information about what was happening. But I had some concerns about whether I would ever see the credit that I had with GB energy again.

That was two days ago and yesterday came the news that a Supplier of Last Resort had been found. That supplier is Co-operative energy.

OFGEM Announcement

OFGEM Announcement

I also receive an email from my new energy supplier telling me that they will honour the terms of my contract with GB Energy Supply, so I keep the same tariff and that they would give me the credit that I had built up. So far so good.

But then I did some digging, being an ethically minded person after all. I thought that I should do some due diligence and see who this new supplier was. It turns out that they are part of the Mid-counties co-operative. Which in turn are part of the Co-operative group.

Digging around some more and I find that the Co-operative group had donated a big wad of cash to the Co-operative party in Q3 2016. £312800 to be precise.

Co-operative Group Donations

Co-operative Group Donations

Then I looked for the Co-operative party and I found their website here.

About the Co-operative Party

About the Co-operative Party

Further down the page I find this:

Co-operative Party Politicians

Co-operative Party Politicians

So if I stay with this energy supplier I will be directly funding Unionist politicians, warmongers,  WMD fans and ermine socialists. Why would I want to do that?

So that’s it I’m off to another energy supplier as soon as I can. If you’re one of the 160000 former GB Energy Supply customers you may wish to reconsider this offer too.

Smackeroonis

The Seven P’s

Prior Planning and Preparation Prevents Piss Poor Performance. So went the acronym so beloved of military instructors as they regaled their students with the importance of being prepared for as many eventualities as they could think of. They were absolutely correct and we need to be prepared for the upcoming maelstrom created by the EU referendum and today’s announcement, by the First Minister, of a draft bill for a second Scottish independence referendum. I don’t have a crystal ball but I don’t need one to see some of what comes next. I’ll try to be as logical as I can, but there is not much logic around at the moment so please forgive me if I seem to go off at a tangent here and there.

It’s the economy stupid

The UK economy is in the first stages of what will probably be viewed as the most severe depression ever. The vote to leave the EU caught the UK government with its pants down and exposed its utter complacency in assuming a No vote. Now we are drifting along the river Brexit with no navigator and no means to propel towards any particular destination even if we knew where we wanted to go. The reality of our desperate situation is slowly dawning on the currency markets and they have been dropping the pound as if they have suddenly realised that they are holding a turd (which they are).

The resulting sell off has seen the pound dredge some entirely depths not seen for 168 years according to the FT.

pound-to-euro-13oct16

Pound to Euro 13Oct16 (Graph courtesy of http://www.xe.com)

The fall against the Euro, our biggest market, is bad enough. But it’s the fall against the US dollar which is more alarming:

Pound to Dollar 13oct16

Pound to Dollar 13Oct16 (Graph courtesy of http://www.xe.com)

Since all commodities are priced in dollars the recent falls in the pound/dollar exchange rate are going to push the prices of everything up, the Marmite/Unilever issue is just the tip of the iceberg (Unilever wanted to increase prices by 10%). This will feed through into the inflation figures in around 6 months time and the Bank of England will be under severe pressure to increase interest rates. For an economy which is hooked on cheap money this will be very damaging, can you afford a 5% increase in your mortgage rate? Now would be a very good time to reassess your situation and maybe lock in a fixed rate for a while.

Meanwhile the price of oil has been increasing, $52 per barrel as I write this. This will push the price of everything up and therefore increase inflation as well.

Oil price 12 months 13Oct16

Oil price 12 months 13Oct16 (Graph courtesy of BBC)

Coupled with that are the negative yields on government bonds, or gilts as they are known. Effectively the government is being paid to borrow money! This can’t last of course. Once the financial markets look at the levels of UK debt and the potential for the UK to pay that money back, they’re going to want a better yield for the increased risk. This means that the bond prices will fall from their current highs and the respective yields will increase. It is these yields which drive the longer term interest rate. So the Bank of England will be forced to raise interest rates sooner than it wishes.

In short the UK economy is about to suffer a severe downturn, which will make the tired old economic arguments against Scottish independence look weak at best. The economic argument was the most potent weapon wielded by the despicable Project Fear during the first independence referendum but it will become one of our best arguments for independence very soon.

I don’t particularly like the economic argument, for me independence is a normal state of affairs for a country and having the opportunity to fashion our country in the way we wish it is all the argument I need. However we will need every advantage that we can get in order to counter the British state so I will be thankful that the economic argument will be in our favour.

The Brexit vote will allow us to be able to deploy such arguments as:

  1. UK drowning in a sea of debt (which can’t be serviced and a default is imminent)
  2. Big business deserting the UK for the EU
  3. Huge job losses
  4. Massive, and increasing, wealth inequality
  5. Huge hikes in taxation and reductions in public spending
  6. Big reductions in international investments

The bust will be painful, but as an opportunity to counter Project Fear it must be seized.

Currency

The next most potent argument wielded by that ermine socialist Alistair Darling was the currency question. The Tories of all hues gloated that we couldn’t use our own currency post independence. The argument was a straw man, as fallacious as it was arrogant. But the pound is now in free fall and if it carries on then the Smakaroonis could well be considered a reserve currency in comparison.

Smackeroonis

Smackeroonis

The fatal flaw in the currency union argument, even though it was sound and the best solution for Scotland and rUK, was that it gave the initiative to the UK government who ruthlessly exploited it. We cannot allow this to happen again.

For me the only way to answer the currency question is for us to have a pound Scots. A free floating currency would be preferable, however it would probably be necessary for there to be a peg during the currency’s infancy for stability. This MUST NOT be a peg to the pound sterling because this would hand at least some of the initiative back to Westminster. A peg to the Euro, the US dollar, or preferably a basket of currencies would be my solution.

A little known fact is that for every Scottish pound in existence there exists an equivalent pound sterling lodged with the Bank of England. In 2007 there were just over a billion Scottish notes in circulation and an equivalent lodged with the Bank of England. We would be having these assets back of course, they would be a useful deposit for starting our own central bank.

The weakness in the currency argument is that we may be required to use the Euro. However if we can retain our current membership conditions this wouldn’t be a problem. But I expect the forces of darkness will relentlessly pursue this line, perhaps our friends in the EU can help?

You can’t have a referendum!

I can just picture Her Majesty Queen May standing outside No. 10 telling us Scots that we cannot have a referendum as she wields the royal prerogative against democracy again. I see this discussion being had already but it is unlikely to come to pass. The main reason being that we gave the SNP all the mandate they needed to hold one when we re-elected them. It was in their manifesto and all they are doing is keeping their promise, just like the Tories kept their promise to hold an EU referendum.

Of course the power to hold a binding referendum is reserved to Westminster, it was temporarily devolved for the first independence referendum by the Edinburgh Agreement. So theoretically the UK government could withhold the power. This is unlikely to happen because it would play sweetly into the hands of the SNP who would wield the “denying democracy” argument with devastating effect. Can you imagine the outrage if we were to be told by the Viceroy of Scotland that we couldn’t have democracy?

The Scottish government could hold a non-binding referendum any time they choose, there is a pro-independence majority in the Scottish parliament so the bill would be passed. This would allow the Scottish government to hold the referendum free of the constraints of Westminster. Can you imagine the UK government allowing a referendum to happen which they had no control over? Not a chance.

So I think it highly unlikely that the Tories will block a second referendum.

We need to prepare, for the time is short. I will endeavour to ponder more imponderables soon, but it’s late and I have an exam tomorrow, so it’s Bon Soiree.