Now it’s true that I could be wrong here but

Third, I’d like them to actually make clear that audit is about ensuring companies are solvent when at present this fundamental requirement of UK law, implicit in the duty of an auditor to check that a company is able to pay a dividend without prejudicing its creditors, is ignored by the FRC.

I am under the impression – mistaken no doubt given that I appear to disagree with the Egregious Professor – that it is the duty of directors to ensure that a company is a going concern, is solvent.

I can’t really see any other way of this being done either. Audit is a once a year procedure, taken after year end. Companies go bust throughout the year….

We knew about this, oh yes we did

Former hacktivists have reacted with bafflement after the Conservative MP Kemi Badenoch admitted that she hacked Harriet Harman’s website in 2008.

Badenoch confessed to the hack, which carried a jail sentence of up to five years at the time she acted, in response to a question about the “naughtiest” thing she had done.

Badenoch gained access to Harman’s website by guessing the credentials (she later gave an anonymous interview revealing that Harman’s username and password were “harriet” and “harman”), and posted a hoax blogpost claiming the then Labour minister for women and equality was supporting Boris Johnson in the London mayoral race.

We knew about it at the time. “We” being those who knew about it of course, a somewhat select group to be sure.

Interesting observation

Worried about the information Facebook has on you? What about TfL?

We take protecting the privacy of our customers extremely seriously (How to keep data truly safe? Don’t collect it in the first place, 4 April). Aside from cases where it is essential that we know the identity of a holder of an Oyster card – such as when checking customers are entitled for free or discounted travel – there is no requirement for anyone to share their personal details with us.

For all cards, including those Oyster cards where proof of identity is required, we deliberately break the link in our systems between the card and the journeys made with it as soon as that link is no longer required for customer support, such as processing fare refunds.

No, not what they say they do, what could they possibly do?

Self solving problems

Varoufakis has found someone to fund his idea of contesting the EU elections as one party across the continent. He insists that this is very important:

What we need, in the UK and in the EU, is a combined municipal, national and pan-European strategy to tackle our common crises: private and public debt; the low levels of investment that contribute to precariousness, unemployment and poverty;

He is an economist. Perhaps not a ground breaking one but certainly a competent one. Thus he knows that we’ve already solved that low levels of investment problem.

As everyone continually complains, capital returns are up, capital is gaining ever more of the economy (not actually true but they keep complaining it is) and asset prices are sky high. As any economist does know that increases the incentives for capital formation and investment, doesn’t it?

Thus we’ve already solved that problem.

Hills just can’t let it go, can she?

Don’t let Brexit undermine Ireland’s peace
Hillary Clinton
Those who say the Good Friday agreement has run its course are wrong. Reinstating the Irish border would be an enormous setback

Boilerplate blather etc.

Except:

Even now, I can picture clearly my husband’s first trip to Northern Ireland as president. On a cold winter night in 1995, Bill and I joined thousands of people at Belfast city hall for the lighting of the Christmas tree.

Still her best claim to fame is her hubby, eh? Strong independent woman or what?

Elsewhere again

We’ve just managed to make the British economy a little more medieval, which really isn’t an improvement. A reasonable and useful reading of Adam Smith’s Wealth of Nations is to see it as a railing against the guilds and their control of the medieval economy, followed by an insistence that we must instead have a market economy, one with free entry into lines of work and production. Certainly, this discombobulates the producers who find the protections of their economic rents withering away under the force of competition, but then that’s the point.

It’s more than a little odd that in this neoliberal age we seem to be starting to rebuild those protections. But that’s what we’re doing as estate agents become the latest protected occupation. Mini-driving spivs who show you the front room of a “des res” will have to have a professional qualification. This will mean that showing people around front rooms will become a protected occupation, and only those with the appropriate piece of paper will be able to do it.

More elsewhere

One of the great truisms about our world is that the truly stupid ideas arise from people not understanding how the world works. Such is true of this latest idea that Facebook, and by extension companies like Google and so on, should be paying us for our data.

The contention is that this data is valuable and that’s where the mistake is: it ain’t. Certainly the information extracted from that data is valuable. But as anyone with even an ounce of knowledge of the real world should know, data and information are not the same thing.

Elsewhere

But then that’s how new tools are always used. The very definition of establishment is those who control the current structures of society. Any monopoly will, as economists insist, eventually be overturned by technological change. It’s not paranoia to insist that the vast majority of the US media was anti-Trump. Heck, most of the Republican Party was.

I used to be a press officer for Ukip and the very idea of leaving the EU was some fringe interest shared only by my fellow “fruitcakes and loonies”. It certainly wasn’t something to be allowed into the polite conversation of the mainstream media, as my working day repeatedly reminded me.

Those with the more conventional views are right to be worried about social media in this political sense, for that’s exactly where the next irruptions against convention are going to come from – precisely because of the manner in which the unconventional faces the gatekeepers.

Shut up and like it!

And that is its weakness from the outset. Politics rarely supplies what people want. If it did free holidays in Barbados would be available on the NHS. It has to, if it is to be useful, instead provide what people need.

Makes you wonder why we have the elections so that the people can decide what they want really.

Isn’t this kind of him

There is a solution to this whole issue. It is to make Amazon and eBay liable for collecting VAT on all sales through their platform unless the retailer using their services can prove they are not liable to be registered for VAT purposes. I know this may penalise some smaller retailers with an extra admin burden. And it will mean that Amazon and eBay would have to ensure that non-VAT chargeable sales such as books could be kept out of charge. But given the tax losses that are happening I think the costs this would impose would be fair and would justify a small price increase to cover admin, if necessary.

Isn’t that just peachy? Amazon gets to charge all of its punters more to cover the costs of collecting tax? Are we certain that shouldn’t read HMRC offers Amazon a slice to cover those costs?

If only the Egregious Professor grocked…

…Anything at all:

Now there may be good reason for that: broader markets, real reduced risk because of better information, and so on. The absence of world war helps too. But it also means that if we were to return to ‘normal’ or the mean then the change in rates would be massive:

The most useful contrast is with 1997 – 2007, of course. We’re talking adjustments of four percent or more.

That is not going to happen. There are good reasons. Most mortgage holders would fail to make their payments. Most banks would then collapse. and government debt costs would increase and may politicians would panic at that whether appropriately or not. I will be blunt. Everything has changed. Those rates are history.

This though has massive implications. If this is the case then monetary policy as a mechanism for controlling inflation and economic activity has died: rates that let it work cannot be recreated. And yet almost the whole of macroeconomic thinking is premised on its use, as is the role of central banks in our economies.

The reality is that everything has changed. And yet there is, so far, almost no reaction. Fiscal policy – spend and tax – is the only tool left to the government now and yet no one is saying so.

Four percentage points, not four percent. Jeebus.

But more than that. We’re currently using, as we have this past decade, monetary policy to avoid the risks of deflation. That QE and all that. Ritchie’s insistence is that because we’re successfully using monetary policy it’s not possible to use monetary policy successfully and therefore fiscal policy is the only option left.

Err, yes, yes…..

Got a Myles book for the recent birthday

Which enabled me to do this piece:

Today’s economics lesson comes from Myles na gCopaleen

One of the great comic writers or journalists of the past century might not be thought of as quite the place to find an economics lesson, nevertheless it is so:

{This is the first time a newspaper article was started in brackets. Innovation, you see. The homeric task of creation. Bringing into being a thing hitherto not here, much more exhausting than building pyramids in Egypt.

A letter in The Guardian

Danny Dorling rhetorically asks (Letters, 3 April) whether the Oxford Diocesan School Trust is paying part-timers less per hour than full timers, and if that is the explanation for their large gender pay gap. The answer is obviously yes, something we should expect the professor of human geography at Oxford to know. The gender pay gap being reported currently is the total, unadjusted, one; of all men and women in work and it’s around 18%. The pay gap, unadjusted for any other factor, among full-timers only is 9.6% by the same ONS figures.

That part-timers get lower pay per hour is thus the explanation for some half of that gender pay gap currently being reported, isn’t it? Across the entire economy, it will be higher in those fields and organisations which employ more than the average proportion of part-timers. This is such a well known fact that even those in their ivory towers should grasp it.
Tim Worstall
Senior fellow, Adam Smith Institute

Surprised they published it but the letters page does seem to be still a bit more Manchester than the rest of the paper

Idiot is idiot

Conviviality goes down. Who does the Egregious Professor complain about:

Guess who the auditors are? KPMG. Again. To add to a long list of failed audit clients who have gone from boom to bust very rapidly in the recent past.

Auditors manage the finances of a business do they? Or just check, once a year, that the counting has been done properly?

Note the phrasing here

The Fair Tax Mark certification scheme was launched in February 2014 to allow businesses that are paying tax in a responsible way to demonstrate this commitment to their customers, contractors and associates. Already more than 1,500 shops and offices ranging from AMT coffee bars, to Richer Sounds and the Co-op Group are Fair Tax Mark accredited,

Outlets, not organisations…….

Elsewhere

There’s a broader point at play here. Think through what is really being said. The poor should be taxed mightily upon the little pleasures they can afford – as George Orwell pointed out, those pleasures being little but most comforting – in order that they might die in manners that those who write The Lancet approve of. Not the way to run the world to my mind.

If only the Egregious Professor understood the subject under discussion

The headline:

The UK’s passports for sale scheme is not taking back control: it’s flogging the country to the highest bidder

Well, yes, OK, selling passports could be thought of that way of course. I think it’s a great idea myself but still.

The FT has reported that:

The number of wealthy Chinese acquiring UK “golden visas” that give residency in return for investing £2m or more in assets rose sharply last year as worries over Brexit paled next to Britain’s attractiveness as a secure bolthole for international money.

Mainland Chinese took 116 of the 355 “investor visas” granted in 2017 by the UK government to wealthy individuals, up 56 per cent from the previous year.

Umm, an investor visa is a passport for sale is it?

At a time when migration is an issue in UK politics passports should not be for sale to anyone.

Interesting, I hadn’t known that a visa means a passport. In fact, I rather thought that the one precluded the other. A British passport, a full one, means that you don’t need a visa to come here, doesn’t it?

Secondly, this whole policy clearly undermines the idea of citizenship and commoditises it. This is the antithesis of any idea of nationhood which supposedly so matters to this government.

In fact, it’s not citizenship.

Fifth, there is no evidence that the people who supposedly ‘invest’ in the UK actually deliver value. They may live here. But do they really deliver for the UK? I suspect not, at all. Tourism is useful, but not that useful and many who acquire these passports will not be here much of the year, I suspect.

Well, yes, investment is useful, even from foreigners. And it’s not a passport.

Sixth, and perhaps most important, the whole idea that citizenship is based on principles is abandoned.

It’s still not citizenship.

Here are the rules about such a Tier 1 (Investor) visa:

How long you can stay
You can come to the UK with a Tier 1 (Investor) visa for a maximum of 3 years and 4 months.

It’s not a passport, it’s not citizenship, it’s a time limited visa allowing, for that time period and that period only, residency.

Ritchie’s not a clue, has he?

Err, yes, right

But this does not mean a scrip tax does not make sense: it does. The reason why is that it gives us all a stake in these businesses in a way that is not apparent now. Even those with pensions have not a clue in the vast majority of cases in what companies they have an interest. A sovereign wealth fund would hold that interest very tangibly, and should be actively engaged with companies to protect stakeholder rights.

This is why such a fund is important. It would say to companies that their arguments on shareholder value are wrong. Shareholders would then, very obviously, include real people who have real interest in tax being paid; who want public services and who abhor tax abuse, gender pay gaps, casualised working practices, anti-union attitudes and executive pay that abuses the whole system of market capitalism.

So, err, we’ll be managing a sovereign wealth fund in a more personal and tangible manner than we do our own pensions then, will we?