Simon T. Kaye

…or, why Bono shouldn’t pay up.

This week, U2 will be headlining at the Glastonbury festival. As expected, rock music purists are debating whether U2 is just too pop; whether this might be another symptom in the festival’s dumbing-down (Snoop Dogg, Beyonce and Jay-Z being among recent headlining artists).

But the musical discussion has been overshadowed by a political one. Art Uncut, a spin-off from the  UK Uncut protest movement which we heard so much about during the tuition fees arguments of late last year, is staging a demonstration against U2. Not because Bono isn’t rock’n'roll enough, but because he – in their view – is dodging his taxes.

I encourage you to read the 3rd June piece about this on the Art Uncut website. Titled “It’s crucial we send a message to Bono that what he is doing is wrong”,  the piece forwards what is now becoming a very familiar argument: that there is a moral obligation to maximise individual tax contributions.

The ‘Bono Pay Up’ Facebook event page now has around 200 registered participants, all of them (presumably) ticket-holders for the expensive Glastonbury event. Perhaps this seems a little meagre, given that around 177,000 people are set to attend the festival. But the overall power of a moral argument against tax-avoidance has gathered massive support elsewhere, mixed well into a generally politics-flavoured cocktail of state spending cuts opposition and distaste for specific coalition reforms. Protests and sit-ins at Fortnum & Mason, Topshop and the like have attracted news headlines and big-name support from the likes of the Guardian‘s Polly Toynbee.

Let’s run through the ‘uncut’ argument.

1. State spending cuts are bad, and will undermine valued services which are best provided by the state.
2. Budget deficits, like the UK’s annual £170 billion debt rate, are also bad. It is right to try and reduce national debt and the spending deficit.
3. Raising taxes is not always good, though preferable to reductions in public spending.
4. How then do we plug the deficit, without reducing spending or raising taxes too much? Simple: we force rich companies and individuals to stop avoiding their taxes.

On the face of it, this is a powerful, practical ‘everyone wins’ argument. Congratulations should be offered to UK Uncut and its spin-off campaigns for bringing their agenda into the public eye through the targeting of a few case-studies. Bono and U2 are just the latest example of this.

So what’s the problem? Let’s dig down into the case against Bono and U2.

1. We are not morally or legally obliged to maximise our tax contributions.

I would even view this as a human right. We have the human right to act rationally wherever such action is legal. Minimising our tax contribution is always rational – particularly, in fact, for the very rich, as they are far less likely to need state support at some later point.

Being a multinational company or rich individual and earning a lot of money shouldn’t change this. Human rights aren’t human rights if they stop applying to you over a certain income threshold. Put it another way: at what point does a state gain the remit to delimit human rationality?

This is not to say that civil society shouldn’t be concerned with encouraging selfless, generous, charitable and social behaviours. But Bono surely ticks a lot of these boxes independently, as we shall see below.

2. Ireland is not a ‘developing country’…

…not in the sense that this term is usually understood, anyway. Art Uncut argues:

… [T]ax issues are crucial to development. Christian Aid estimates that developing countries lose $160bn annually, more than the global aid budget, thanks to unscrupulous multinational companies dodging tax. If we want poor countries to become richer, we need to adopt an ethical approach to taxation. It’s clear that U2 take anything but an ethical approach to taxation.

Even allowing this assertion – that developing countries are often screwed by tax-dodging multinationals – cannot help in the case of U2 and Ireland. Ireland is a highly developed and economically modern country.

3. Why should Bono trust Ireland with his money?

There is a reason, after all, why Ireland is now having to embark on a significant austerity programme. As a state, Ireland has hardly demonstrated fiscal prudence.

Irish spending policies contributed to a landmark unemployment rate and the country’s first recession since the 1980s. When the financial crisis occurred, the cost of bank-bailouts contributed to an already-vast deficit. Eventually, the EU and IMF stepped in, and other countries lent fiscal support to Ireland.

Perhaps Bono wouldn’t agree with the spending priorities of the Irish state. Perhaps he didn’t agree with the largely ineffective 40 billion Euro stimulus package, or the policy of buying out failing banks with their toxic credit. By the time of the 2008 crisis, U2 was already tax-resident in a different country; this was both legal and rational and, as an internationally successful band, not particularly strange either.

4. What if Bono spends his money more wisely and charitably anyway?

As the Art Uncut article states,

Bono presents himself as someone who cares deeply about development.

This is putting it mildly. U2′s philanthropy is near-legendary. The band has spent more than a decade (perhaps ironically) campaigning on third-world debt. Bono co-organised the Live 8 charity concert project. He is a founder of the Product Red charity brand campaign. He has his own charity – the One Foundation. This and other work represents millions of pounds of charitable contributions, on top of robust political activism.

I’m not a particular U2 fan, and there may be many good reasons to arch an eyebrow at some of Bono’s posturing, or question the effectiveness or sensibility of his approach. But to suggest that Bono is money-grubbing seems decidedly churlish.

Indeed, if Bono is choosing to reduce his contribution to one or another state infrastructure, and then pumps what surely amounts to more than the difference into charitable projects, and he chooses to do so legally, who has a moral basis for questioning his actions or attacking his civic sensibilities?

To conclude…

I suppose the broader point is that it would seem peculiarly trusting, even naive, if people imagined that in all cases the state they happen to live in is better placed to dispose of their money with wisdom. Yet to volunteer taxes – to offer, as it were, additional taxes, above those that are legally required – would be exactly the same as minimising personal disposable wealth. It would be an admission of incompetence, perhaps, or a wholesale acceptance of the idea that the state knows best.

Surely, and especially in the aftermath of the last few years, nobody actually still thinks this way?

Happy New Year!

I forgot to say that I wrote another piece for First Drafts, Prospect Magazine UK’s blog.

It’s called Shouldn’t students put voting ahead of activism?, which was (I thought) a fairly uncontroversial thing to suggest.

Here’s an extract:

Students’ tendency to self-disenfranchise may contribute to their willingness to express themselves in alternative ways. But to engage in the public sphere in a non-systemic way without participating in the institutionalised structures of democratic change seems terribly incoherent.

Old news now, I know, but any thoughts or reactions would be welcome.

Has Willetts put his foot in it?

We’re all still awaiting Lord Browne’s report into higher education funding. It’s very likely, as many have pointed out, that he will eventually recommend lifting the cap on undergrad tuition fees, which currently stands at a little over £3,000. Whatever level fees end up at, I think we also know fairly certainly that they will be paid retrospectively via a loan system, as introduced under Tony Blair (still, I think, a good way of going about things). What we don’t know:

• Where the new fees cap will be set – £9,000? £12,000? £14,000?
• How many universities (and university departments) will choose to set their fees towards the higher levels
• What process (if any) Browne or the government put together to ensure continued value for money in undergraduate study. This is a problem now, so imagine how people will feel about their 8 contact hours a week when they’re paying upwards of 10 grand for them.
• Whether, at the last, the government (at least the Tory element of it) will choose to endorse the report wholly, or merely take its recommendations into consideration while formulating some other new policy.

My party, the Liberal Democrats, have always leaned the other way, wishing to reduce or cut undergraduate tuition fees altogether. Under the coalition agreement, Lib Dem MPs retain the right to argue against legislation that would raise fees, and to abstain on any votes. This already seems too weak a stance for many of our MPs who have signed pledges to actively oppose such legislation.

Ming Campbell has already said, on national TV, that he would probably be forced to rebel. You can assume that many Lib Dems will do the same, coalition agreement be damned. It’s not outside the realms of possibility, therefore, that any such higher education funding bill could face defeat in the Commons, and specifically threaten the coalition’s cohesion. So the first consideration here is political: how likely is it that the Tories will pursue a higher education policy that could undermine their position in government? On this basis, I’d say we can assume that the eventual tory policy will be at least fairly ‘mild’ in terms of content, and probably far less radical than Browne’s recommendations.

This has always been a point of difference between myself and the policy platform of my party. I don’t mind owning my own education. Actually, I quite like it. Getting higher education was not automatic for me – as it should not be for anyone. It was a choice. I want to own that choice, and the responsibility for it, in every sense. Now we can argue about the level of cost and the point of income where I start paying back, but I think the principle was always pretty sound. People from my generation of students were torn on the movement from fees of around 1 grand to something over 3 grand now, and the so-called ‘top-up fees’ scheme of paying these costs retrospectively.

Globally, 3 grand per year for an undergrad degree is an almost astonishingly good deal. The real-terms quality of this deal is obviously to do with the quality of your course. My own priority is that some kind of framework ensuring value for money must be put into place.

What happens if fees are raised? Perhaps it’s instructive to look at Master’s degrees – MAs, MScs and so on – which are not capped in the same way as Undergrad degrees. I studied at the LSE, which charges all the way up to £13,000 (or more, and even more for foreign students) for a one-year MSc. Most other UK universities charge between £3,000 and £7,000. Nationally, the range of costs is wide, and higher costs are not always attached to actual quality (though they may be attached to prestige).

So the lesson is: with a raising of the cap, not all institutions will instantly raise fees to the highest that they can possibly get (except, obviously, for the LSE, which has never wittingly missed an opportunity to thus gouge). We can assume that technical, professional and scientific courses – law, medicine, etc. – will set the highest fees. And, paid retrospectively with a revised approach to the point at which one’s income is high enough to swallow the costs, a new regime need not be too arduous, nor put too many people off university altogether.

But, based on his appearances today, Willetts is certainly barking up the wrong tree in another way.

Willetts is suggesting that students avoid the costs of living away from home – living expenses –  by attending classes and learning in a local college, but receiving assessment – and eventual certification – from another, more prestigious university.

Does this make any sense? To anyone? Assessment is oriented around the content of specific courses. How can the UCL run an exam for a course taught by Bath Spa? It might work – just about – for maths or technical subjects. But this is at the cost of university as significant life-change, as an immersion into a culture of learning.

If people want to study – study good materials – from home, and pick up a well regarded degree, then we already have a very good system in place. It’s called the Open University.

Someone should tell David Willetts.

David Laws, the Liberal Democrat Chief Secretary to the Treasury, is justly getting glowing notices in every Parliamentary sketch column in the papers today. I’m thrilled to see someone whom I’ve long suspected is the most talented MP in Westminster picking up some recognition.

Otherwise known as one of the central negotiators and architects of an extremely favourable coalition agreement, David Laws is now cementing his reputation as possibly the only man who can peddle the fiscal pain of the coming years and keep everyone on-board.

Here, theatre poster style, is the praise from the broadsheets:

“A dazzling debut” ****

-Simon Carr, The Independent

“…seeing off the other side with contempt and contumely” ****

-Simon Hoggart, The Guardian

“A star is born” *****

-Ann Treneman, The Times

“The Chief Secretary displayed a calm mastery of his brief: clever without being clever-clever, concise without sounding glib, self-assured without looking arrogant.” *****

- The Daily Telegraph

It’s all recorded as a 45-minute session on the BBC. Alastair Darling opens in an excitable way, which I wasn’t entirely sure was possible for him. Do watch it, I promise you won’t be bored. Here’s the link.

I’ve scribbled a bit more over at First Drafts, Prospect Magazine’s blog. Mostly to do with Disraeli’s failed ambition to form a government with Gladstone and his angry clique of free-trading “Peelites” in 1852: has David Cameron simply succeeded where Disraeli failed?

Take a look here.

Here’s a wee excerpt:

He [Disraeli] seemed to see that coalitions indicate a recognition that differing, conflicting ideas can be equally valid. In both cases he was able to play the hand he was dealt as if it were the one he had been hoping for all along: one trait that Cameron really can claim to share.

I’ve written a short piece on the day’s events and our brand new governing coalition over on Prospect Magazine’s blog.

Here’s a small extract:

In fact, the Lib Dem members I’ve been speaking to are surprisingly open-minded about the future of this deal. There is a sense that the real gain here is the chance for real debate, not only in the newspapers, not only in parliament, but in the heart of government itself: debate around the cabinet table. Gordon Brown tried for a “government of all the talents,” but Cameron has come closer to achieving it.

Electoral reform, improbably enough, is now at the heart of everything. This is the long-discussed ‘dream scenario’ for the Liberal Democrats, and of course they’re terrified by it, even as Nick Clegg, Chris Huhne, David Laws & co. expertly manoeuvre us into the ideal equidistant central position for the last day or so of negotiations. The excellence of David Laws’ “Seven Rules” for coalition-bargaining cannot be underestimated here.

Yesterday, Gordon Brown launched his dramatic final gambit – he sacrificed his own political career so as to increase the likelihood of a fourth parliamentary term dominated by Labour politicians. Regardless of whether this actually works, I rather suspect that Brown has secured a spot in the history books (as well as a total tenure as PM which longer than that of James Callaghan) thanks to the gentle levering from power which Nick Clegg has done so carefully over the last few weeks. We all knew Brown was going – and he used his career as a weapon.

The Tories’ response revealed for the first time the deeper outline of the deal that is taking shape between themselves and the Liberal Democrats. They have taken their common ground on environment, education and civil liberties. The Lib Dems appear to have made the large-scale concession that cuts to the deficit must begin this year, rather than next year. I can only presume that a similar concession has been worked out on immigration, as David Cameron will surely face internal revolt if he doesn’t manage to cap non-EU immigration. Issues pertaining to the EU and Trident renewal must, quite rightly, have been put on the back-burner for now.

In return for these concessions, the Liberal Democrats seem to have got their tax proposals accepted, which is a significant victory, and have also picked up, after yesterday’s Corbomite Manoeuvre, assurance of a free vote on a referendum on electoral reform to the Alternative Vote System, along with the introduction of fixed-term parliaments.

However, there is a third plank to the Conservatives’ interest in electoral reform, and it is this third plank which has spooked Labour out of wanting what must otherwise seem like an appealing term as a strong opposition party with the prospect of powerful renewal under a new leader. The Conservatives will almost certainly make radical constituency boundary changes before the next general election. By equalising the size (in terms of population) of every constituency, they will effectively destroy the source of Labour’s strength. In 2005, their handsome majority of Commons seats only existed in Scotland and Wales. This year, they kept a better grip on their core seats than many expected, but were still wholly defeated by the Conservatives in England alone. The Scottish and Welsh constituencies tend to be less populous. The great worry in the high command is that, if these changes come in, Labour would have to win the next election in England as well: no mean feat.

Scratching out a (probably) unstable alliance with the Lib Dems is therefore perceived to be Labour’s last hope before a generation in the wilderness. This may be completely wrong – the next government is sure to be pretty unpopular as it deals with the deficit and Labour could revel in chastising the Conservatives and Lib Dems together. But the electoral mathematics gets very sticky indeed with the regulation of constituency size. The tories have clearly decided that they can afford AV as a trade-off with this advantage over Labour.