Robin Wilton's esoterica

In his blog on the BBC site, political commentator Nick Robinson asks (rhetorically) why, if balancing the taxation/public expenditure equation is so easy, Gordon Brown hasn't already done it. After all, Brown's tenure as Chancellor was characterised by its stealth taxes as much as Blair's tenure as Prime Minister was by spin.

I am not remotely qualified to advise anyone on who to balance the national budget, but it seems to me that if the Shadow Chancellor was looking for a few easy policy coups, there were plenty to go for.

For instance, how about policies to redress two of Gordon Brown's more iniquitous tax tactics:

1 - in 1997 he announced the abolition of tax relief on dividends earned by pension fund investments in equities. That turns out to be as complex to fully account for as it is to say. Basically, it meant that pension funds which earned income from investment in the stock market were suddenly being taxed on any resulting 'interest'. As a result, the long-term income forecasts of a massive slab of the pension industry were, at a stroke, revised downwards - not through some slump in the global equity market this time, but because of a few self-funding strokes of the Chancellor's pen.

By 1997, the potential volatility of long-term savings (such as equity-based endowment mortgages) to slumps in the stock market could not have been clearer. For a Chancellor to single out equity-based pension investments as the source of additional tax revenue, then, takes some beating. If it's irony you want, consider the fact that the Tories's 1995 Pensions Act introduced legislation to protect pension funds against this kind of piracy, in the aftermath of the Robert Maxwell/Mirror Group pensions scandal. Brown's 1997 policy, which came to be known as his 'raid on pensions' not only irreparably damaged the long-term financial prospects of those prudent savers, it has also, over the subsequent decade, done much to help undermine the nation's faith in pensions saving as a basis for retirement.

Here's the logic which flows from that policy in the medium term, with all the inexorable pressure of a massive thrombosis: discouraged from investing in pensions, more people turn to property as their hedge against retirement (second homes, buy-to-let and so on); this exacerbates the house-price 'bubble', increasing the likelihood that it will burst - potentially destroying the value of that long-term investment too; it also inflates house prices, making it almost impossible for first-time buyers to enter the housing market... increasing the demand for sub-prime lending, which leads to the collapse of banks like Northern Rock. Does anyone feel sorry, yet, for Alistair Darling, who received this ticking time-baton from the outgoing Chancellor?

2 - in general, Brown perfected the art of taking your money away first, and then letting you have some of it back provided you claimed it properly... thus maximising, of course, the chances that the taxpayer would either not know they were entitled to a rebate, not know how to go about claiming it, or frankly, in some instances, simply not bother to go through the admin to get a percentage of the tax back.

This 'tax first, repay later' tactic has undoubtedly hit hardest at some of those least able to take the blow. By definition, if you're claiming benefits, you're less likely to have the resources to tide you over between getting taxed (or having an allowance withheld) and going through the process of clawing it back. Then there are those citizens, all too well known to organisations like the Citizens' Advice Bureau (CAB), who are in part dependent on benefits precisely because they just can't cope with the complexities of things like invalidity benefit, working families' tax credit, job-seekers' allowance and so on, let alone the added hassle of claiming back this or that slice of whatever benefit that has been withheld "for tax purposes".

Some people talk about the 'honeymoon period' enjoyed by a new Prime Minister. I have this to say about that: on our honeymoon, our car boiled dry and blew up 40 minutes after we left the wedding reception; we had about the roughest Channel crossing I have ever survived; Mrs W and I got 'flu one after the other; as we headed back towards England I ate the wrong trout, and my copious vomiting almost got us thrown out of the hotel. Don't talk to me about honeymoon periods...

OK, this would be the most outrageous piece of own-trumpet-blowing if I didn't also have the excuse that it's also a little obscure... text-book esoterica, in fact!

I got an unexpected parcel in the post today - always a fun moment - and it turned out to be the proceedings from the 30th Anniversary conference of the German Computer Law Association (DGRI), bound into a nice neat paperback. The theme of the conference was "From the punch-card to the global network - 30 years of the DGRI". I had the huge privilege of being invited to give the keynote address, and sure enough, there I am in print - what a happy moment! The conference as a whole gave some fascinating insights - not just because it was a look at 30 years of the history of the industry, but also because of the intriguing perspective you get when you look at IT through a lawyer's eyes.

This is a good opportunity to extend, once again, my thanks to Prof. Dr. Wolfgang Buechner and Prof. Dr. Thomas Dreier of the DGRI for the invitation, and my colleague Dr. Hellmuth Broda, who I suspect put in a good word for me behind the scenes...

For those of you keen to know more about this collector's item, here's the page on amazon.de. Don't get your hopes up too much, though: it's currently showing as 'unavailable'...