Derek Conway proves the Tories can still do corruption

Read this and recall: George Galloway was suspended from parliament for questioning the motives of those pro-war MPs who were investigating his campaign against the sanctions regime in Iraq.

Derek Conway defrauded the taxpayer of £13,000. Why aren’t the police involved?

A Tory MP is facing a possible suspension from the House of Commons after he was rebuked for using his staffing allowance to pay his son – a student at Newcastle University – for research work.

Derek Conway, a former Conservative whip, paid his son an “excessive” salary and it was not clear what work was carried out, according to the Commons’ standards and privileges committee.

“There appears to be no evidence, independent or otherwise, of any aspect of Frederick Conway’s work for his father”, the committee said in a report.

The committee said the MP should be ordered to repay up to £13,000, make a personal apology to the house and be suspended from the Commons for 10 days. The issue is likely to be voted on by MPs within the next fortnight.

Mr Conway, who has represented Old Bexley & Sidcup since 2001, said he fully accepted the criticisms and apologised for his “administrative shortcomings”.

But he said the parliamentary commissioner for standards had ”accepted there was a need for the tasks I had set my son, that he was qualified to undertake them and he did indeed do so”.

The report comes at a potentially sensitive time, with MPs having backed a 1.9 per cent pay increase while winning an increase in their staff expenses to cover 3.5 employees a year instead of three.

Reprimands by the committee are rare and taken seriously within parliament. The last time it issued a similar rebuke was when it recommended the suspension of George Galloway, the Respect MP, last summer.

Frederick Conway was 19 when he first started work as a part-time research assistant for his father in September 2004. His contract employed him for 17 hours a week on £10,000 a year, subsequently increased to £11,773. He also received four one-off sums on his father’s recommendation.

The report said that the salary was probably higher than justified by his qualifications and experience – and by the nature of the work he was required to do.

The the youngster had been “all but invisible during the period of his employment. “He had little or no contact with his father’s office, either in the House or in the constituency. No record exists of the work he is supposed to have carried out, or the hours kept.”

The only evidence of such work was provided by the Conway family, it said.

The report concluded that the case was a “serious breach of the rules”. It recommended that Mr Conway should repay £6,000 in salary and £3,963 in respect of the bonuses, rising to £7,161 if it was impossible to reclaim the tax and National Insurance on this.

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Will there be an ad campaign targetting tax cheats?

Cost of benefit fraud = £800m a year.

And:

Tax avoidance by the super-rich costs the British taxpayer £13bn a year – enough money to increase old-age pensions by 20 per cent.

Tax dodging is the problem

The first ever forensic study of Revenue figures to establish the true scale of tax avoidance by some of the wealthiest people in Britain will pile pressure on the government to prevent the tax burden falling disproportionately on ordinary working people.

The study, commissioned by the TUC and to be published later this week, estimates the Treasury annually misses out on £3.8bn through the controversial non-domicile tax laws, which allow those with overseas connections to escape tax on their income. So called ‘income shifting’ by millionaires, which includes placing wealth in the name of a spouse or setting up a limited company to shield income, costs the UK £3.2bn. Tax planning and other loopholes account for the remaining £6bn.

TUC leader Brendan Barber said: ‘For years there has hardly been any debate about whether the tax system is fair. But a wise government would recognise the shift in public mood when they see police officers marching against a decision that a modest pay rise was unaffordable when it looks like tax has become optional for a small group of the super-rich.’

Lib Dem Treasury spokesman Vince Cable said: ‘The government has created new loopholes for the super-rich to avoid paying tax. Even last week, by setting capital gains tax at 18 per cent when the top rate of income tax is 40 per cent, they’ve allowed potential for clever accountants to turn income into capital.

Bliar gets another “job”

Oh yes, another one

He will advise the Swiss insurer Zurich on “developments and trends in the international political environment”, including climate change.

The appointment comes less than three weeks after Mr Blair took on a similar role with investment bank JP Morgan worth a reported £500,000 a year.

Mr Blair said he wanted to ensure business “can play its part” in preserving the environment.

Bliar hasn’t been reading the Indie lately, then:

Global warming ranks far down the concerns of the world’s biggest companies, despite world leaders’ hopes that they will pioneer solutions to the impending climate crisis, a startling survey will reveal this week.

Nearly nine in 10 of them do not rate it as a priority, says the study, which canvassed more than 500 big businesses in Britain, the US, Germany, Japan, India and China. Nearly twice as many see climate change as imposing costs on their business as those who believe it presents an opportunity to make money. And the report’s publishers believe that big business will concentrate even less on climate change as the world economy deteriorates.

Six energy companies competing… to be the biggest rip-off

Ah, the wonders of our privatised energy industry…

Recent price rises by gas and electricity firms are not justified and the Competition Commission should investigate, a watchdog has said.

Three energy companies have raised their prices by an average of 15%, affecting 27 million consumers.

[..]

Energywatch says it is impossible to calculate how much excess profit energy suppliers are making because they are not transparent about what they pay.

Allan Asher from Energywatch told BBC News 24 that the entire energy market should be reviewed by the Competition Commission.

He said: “The price rises we’ve seen are not justified.

“There’ll be more, but sadly the market is not working well and that’s leading to consumers paying much, much more than they need to.”

The UK market is dominated by six providers – Npower, EDF and British Gas are the companies which have recently raised their prices and rivals are expected to follow suit in coming weeks.

[…]

But Russell-Hamblin Boone from the Energy Retail Association insisted that the prices set by energy companies were fair.

“We have the most competitive market in the world, and it’s important to recognise that there are lots of additional costs as well as just the wholesale price cost that are now being incorporated into our bills,” he added.

Ho-ho-ho!

Credit crunch kills Private Finance Initiatives?

I learnt a new word today.

“Monolines”…

UK defence plan hits finance snag
By Sarah O’Connor and Sylvia Pfeifer
Published: January 25 2008 22:48 | Last updated: January 25 2008 22:48

The turmoil in credit markets has dealt a big blow to the UK government’s defence procurement programme, putting in jeopardy plans to help fund a new fleet of Airbus tankers for the Royal Air Force with a bond issue.The £13bn project over 27 years, the largest private finance initiative, is now expected to be financed by bank debt.

The government and a consortium led by EADS, the aerospace and defence group, had been planning to raise £2.5bn in the City through a combination of bank debt and a bond issue. These bonds were expected to be supported by guarantees provided by troubled bond insurer Ambac.

However, Ambac and other bonds insurers have been hit hard by losses on bonds they have insured. The credit rating of Ambac was cut below AAA by Fitch Ratings and further downgrades are thought likely, sharply reducing the value of their guarantees.

For the past 10 years, PFI deals have been using bond insurers to support their bonds when raising initial capital for the projects. The insurers, or “monolines”, give their triple-A creditworthiness to the bond, making them cheaper to sell and so cheaper for the government to raise money.

But as the credit turmoil has spread, the price of all monoline-wrapped bonds has shot up as the market worries about the ability of the insurers to stand behind their commitments.

“The investment banks didn’t think they could place any Ambac paper in today’s markets efficiently,” said somebody close to the deal.

The other monolines the government was considering working with – including triple-A rated MBIA – were similarly struck by a collapse in market confidence.

“Although other monolines have not been as hard hit, there is scepticism generally around the monoline market,” said Anthony Forshaw, managing director at Deutsche Bank, the consortium’s financial adviser.

Instead, the government and the AirTanker consortium are likely to revert to their earlier plan to finance the deal solely through bank debt. They had sought to raise some money through bonds after the banks demanded a high rate of interest during the summer credit-crunch.

Last night, Phill Blundell, the chief executive of the AirTanker consortium, said: “It is fair to say a more bank-driven solution is now likely. We still expect to achieve the affordability targets we agreed with the government.”

HBOS will lead the group of banks lending the money. Lloyds TSB are also involved, and the consortium expects to get the deal away by the end of March.

The shift could be the death-knell for the monolines’ involvement with PFI, because unless the market’s confidence in them returns, their “wraps” will be virtually worthless. “Unless the cost of capital arbitrage returns . . . it’s going to be very difficult for the monolines to recover market share,” Mr Forshaw said.

Cracks in the Alliance: Afghan PM Karzai criticises UK forces

Ah, the puppet speaks again:

Downing Street has hit back at claims by Afghan President Hamid Karzai that the arrival of British troops made security in his country worse.

[…]

The Times said Mr Karzai, speaking at the World Economic Forum in Davos, Switzerland, told a group of journalists that “there was one part of the country where we suffered after the arrival of the British forces”, referring to Helmand.

Downing Street has hit back at claims by Afghan President Hamid Karzai that the arrival of British troops made security in his country worse.

[…]

The Times said Mr Karzai, speaking at the World Economic Forum in Davos, Switzerland, told a group of journalists that “there was one part of the country where we suffered after the arrival of the British forces”, referring to Helmand.

He said the mistake was allowing the US and the UK to replace the province’s sitting governor.

“Before that we were fully in charge of Helmand. When our governor was there, we were fully in charge. They came and said, ‘Your governor is no good.’

“I said ‘All right, do we have a replacement for this governor; do you have enough forces?'” Mr Karzai said.

“Both the American and the British forces guaranteed to me they knew what they were doing and I made the mistake of listening to them. And when they came in, the Taleban came.”

He said the mistake was allowing the US and the UK to replace the province’s sitting governor.

“Before that we were fully in charge of Helmand. When our governor was there, we were fully in charge. They came and said, ‘Your governor is no good.’

“I said ‘All right, do we have a replacement for this governor; do you have enough forces?'” Mr Karzai said.

“Both the American and the British forces guaranteed to me they knew what they were doing and I made the mistake of listening to them. And when they came in, the Taleban came.”

It’s said that he fears Paddy Ashdown.

He’s not alone.

Someone claiming to be a “liberal” and a “democrat” who acts as both a lord and a colonial governor is scary to me.

Could the fact “Lord” (he didn’t buy his) Ashdown is to act as Nato’s man in Afghanistan be the reason the Illiberal Undemocrats think the Afghan occupation is the good war?

Anyhow – what the hell is the North Atlantic Treaty Organisation doing in Afghanistan? What is it doing at all? the Cold War ended almost two decades ago…

Didn’t it?

School’s out for Spring?

Not quite:

Teachers to ballot for action on below-inflation pay offer
by Sadie Robinson

The NUT teachers’ union will ballot its members for strike action over their below-inflation pay offer.

The offer, announced last week, would give teachers 2.45 percent this year, and 2.3 percent in 2009 and 2010. As inflation is currently 4 percent this would mean a pay cut for teachers.

Activists in the NUT are confident that they will win a yes vote in the ballot, which starts on 28 February. Across the country there is massive anger among teachers over many issues including pay.

For the last two years teachers have received a pay rise of 2.5 percent. They had hoped to get a decent pay rise this time to make up for this. The fact that they have been given a pay cut by Gordon Brown has added to a widespread feeling that teachers are undervalued by New Labour.

Recent pay rallies have reflected some of the anger that exists among teachers. Many teachers face increasing workloads, bureaucracy, testing and cutbacks in their schools, and feel that the pay offer is the final straw.

The issue of pay can bring teachers together and will have a wider impact as Brown tries to impose his pay freeze on the public sector as a whole. Further education lecturers in the UCU union, for example, are also fighting a below-inflation pay offer and are hoping to take joint action with the NUT.

Teachers are now organising to win a yes vote in the ballot. Organising joint union pay rallies and meetings in schools where the NUT is weaker will be a key part of their strategy. A yes vote could see a national strike on 24 April – the first for more than 20 years.

And what of the NUT’s political fund?

NUT: vote ‘Yes’ for a political fund
By Ed Doveton (Wakefield NUT)
Monday, 21 January 2008

Last year’s conference of the National Union of Teacher’s voted to ballot members of the union to vote in favour of setting up a political fund. This successful vote was a significant advance for the largest and traditionally more militant of the teacher trade unions. While other education trade unions, such as the UCU and even the NASUWT already have political funds, the NUT has remained without. Consequently it has been limited in terms of the political influence it could exert through the use of such a fund.

Although the proposal is not asking the union to affiliate to the Labour Party, the new fund will enable the union to campaign and advertise, both year-on-year and during election campaigns. The union will be able to raise issues important to education in the UK and be more directly active in persuading people to vote or not to vote for a political party.

A postal ballot member’s on the political fund proposal is now going to take place in January 2008. All members of the union should be arguing in their workplace for a Yes vote which will increase the union’s ability to be a campaigning organisation in defence of member’s interests, fight against privatisation and argue the case for improved education in the country.