Anorak News | Ed Miliband’s Plan To Increase Political Corruption

Ed Miliband’s Plan To Increase Political Corruption

by | 27th, September 2011

IT’S not that I mind people having different ideas, different biases, to mine, it’s that I do mind people spouting total and complete nonsense about how the country should be run.

To take an example from Ed Miliband’s ideas at the Labour Party conference. As background, and I know you’ll find this hard to believe, British politics is remarkably free of corruption. I speak as one who has worked in both the US and Russia and believe me, a few dark corners of the occasional local council aside, brown envelopes and cash bribery really aren’t part of the British political scene.

Ed seems to want to change that:

He will tell delegates in Liverpool: “Let me tell you what the 21st-century choice is: are you on the side of the wealth creators or the asset strippers?

“For years as a country we have been neutral in that battle. They’ve been taxed the same, regulated the same, treated the same, celebrated the same. They won’t be by me.”

While not spelling out the detail of how venture capitalists in particular could be assessed, Mr Miliband believes that a tougher tax regime could be imposed on some firms deemed less responsible than others.

The problem is in that “deemed less responsible”. By whom? Deemed by the politicians in power at any moment of course: which means that every company now has an incentive to throw money at politicians. Firstly, to get “their” ones elected, who will lower their tax rate and secondly, at those already elected to make sure that the deeming doesn’t hurt them. I’ve lived and worked in countries that do that and believe me, it just isn’t an advance in civilisation from what we have now.

Elsewhere, Ed has given Southern Cross as an example of the sort of company that’s an asset stripper and which should be punished, unlike those wealth creators. Which is almost as bad, for this is simple ignorance. Moving an asset from a low value use to a high value use is the very definition of the creation of wealth. That’s what it actually means. So asset stripping is wealth creation.

But worse than that is the example of Southern Cross. OK, so they ran lots of care homes and went bust. OK, what happened next? Other people came in and asset stripped Southern Cross. Took the contracts to run care homes, the staff, the customers (the assets) and put them all into new companies and now they’re worth more than they were than when they were part of Southern Cross.

Quite simply, Southern Cross got asset stripped and we all think that’s a damn good idea, well done!

So what is this stupidity asset strippers not creating wealth?


Posted: 27th, September 2011 | In: Key Posts, Money Comments (2) | TrackBack | Permalink