29 July 2012

Credit where credit is due – the BBC predicted that the Jet Stream was about to move and consequently bring us a spell of decent summer weather. Naturally, I doubted the accuracy of the report and put it down to wishful thinking or an attempt to bury the unremitting stream of bad news with something sure to cheer up the British public. Now I realise that the BBC is 100% accurate in everything they report, I will never doubt their weather forecasts again and I am delighted to be able to set the record straight.

We have, indeed, enjoyed some thoroughly outstanding summer weather this week – bright, sunny skies with pleasantly warm temperatures – just into the low 80s (27 to 28 degrees Celsius in new money), with a light and very pleasant breeze. Naturally, since we’ve had such a miserable summer so far and we’ve no idea how long this good spell will last, we’ve had to cram everything into this week – barbeques, bike rides and photographs of some flowers in the back garden. Click for a larger version.

A few stories caught my eye this week – one on the scale of off-shore tax avoidance by the elite world-wide, another on the publication of the first UK Happiness Index and one on a puzzling scientific mystery.

The Guardian published this article on tax avoidance last weekend and the sheer scale of the issue is simply staggering – the article estimates that there is something in the region of £13 trillion ($21tn) in tax havens around the world, moved off-shore specifically to avoid paying tax. Two things in the article particularly struck me – firstly, if the financial institutions were more honest and transparent, and didn’t allow corrupt individuals to hide their wealth abroad, there needn’t be any third-world debt – even if these hordes squirreled away were taxed at a modest 30%, the debt could be eliminated.

The problem here is that the assets of these countries are held by a small number of wealthy individuals while the debts are shouldered by the ordinary people of these countries through their governments,” the report says.

And secondly, a tiny, tiny proportion of the population controls a staggering amount of wealth hidden away off-shore out of the reach of the tax authorities.

The sheer size of the cash pile sitting out of reach of tax authorities is so great that it suggests standard measures of inequality radically underestimate the true gap between rich and poor. According to Henry’s calculations, £6.3tn of assets is owned by only 92,000 people, or 0.001% of the world’s population – a tiny class of the mega-rich who have more in common with each other than those at the bottom of the income scale in their own societies.

A related article makes a simple point about the “failure” of the so-called trickled-down effect.

Wealth doesn’t trickle down – it just floods offshore, new research reveals

This can’t be right and, given the present economic conditions, you would think that those responsible for digging us out of our present circumstances would be right on the case. Trouble is, of course, many of those in a position to do something about it, are involved in the same off-shore havens themselves and have no inclination to bring their own and their friends’ dubious practices into the light of day. Our government has recently announced that they intend to “Name and shame” those involved. Useful strategy, no doubt, but, given that we already know many of the names, why not announce the intention to do something about it instead?

The tax authorities in this country display an interesting contrast in attitude when it comes to pursuing tax avoidance, evasion or simple under payment. There was a newspaper report of a plumber in Surrey the other day who was caught having underpaid £50,000 in VAT receipts. Tradesmen are often willing to do a job for cash and not record it, thus avoiding paying 20% of their receipts to the taxman. So, a “well done” to the authorities for pursuing that case. At the same time, however, large corporations who have avoided paying tax through a variety of convoluted accounting practices involving a range of off-shore accounts and loans to themselves, are let off with a “tsk, tsk” – Google “Vodaphone” and “tax avoidance” for one of the more high-profile cases in the UK.

The second article that caught my eye this week was the publication of the long-anticipated Happiness Index. This was initiated back in 2010 soon after the Coalition government came to power. Faced with the inevitability of grim economic indicators for years to come, Cameron was keen to find some other way to mark his government’s “progress”. So, someone came up with the idea of finding out what factors determine how happy and fulfilled we feel.

In the grand scheme of things, the £2m cost of conducting the survey and compiling the results is small change but that hasn’t mitigated the criticism of the whole idea. Among the amazingly surprising results:

People who are married, have jobs and own their own homes are the most satisfied with their lives . . .

Now, call me a cynic but do you think one really needs to spend £2m to find out that those who are in a stable relationship, who have a full-time job and are fortunate enough to own their own home are likely to be more satisfied with their lives than those who are divorced or separated, unemployed and living in a run-down, one-room rented bedsit. Duh! Oh, and by the way, it doesn’t hurt to be white, apparently.

Another “amazing” discovery which stands out for me – teenagers and those above retirement age are the happiest. Huh? You mean those that don’t have to work are happier than those that do? Yep, there’s a surprise and well worth £2m of anyone’s money.

Prime Minister David Cameron has described it [the report] as crucial to finding out what the government can do to “really improve lives” – but Labour ridiculed the survey as a “statement of the bleeding obvious”.

One last “headline” result to give you a feel for the depth and sophistication of the report:

factors such as noise levels, public transport, crime, whether they felt safe walking home alone after dark and access to parks and open spaces also had an influence on happiness levers, the survey found.

Well, bugger me backwards!

I ran across an article on the BBC web site on Thursday which addressed (but didn’t really answer) a scientific mystery that I too had been mulling over during the week – how do flying ants know which day to emerge and mate? It seems that this all happens on a specific day each year, is synchronised between nests and is dependent on weather conditions. Fascinating.

Finally, the Olympics have kicked off, of course, and you will be as relieved as we were to see the new group of security agents recruited by G4S, the private firm contracted to provide security for the Games.

Olympic Security Volunteers

Love to you all,

Greg