Wednesday, 29 November 2017

Hillside Christmas lights this Friday

It is good to see that Hillside Independent Traders (HIT) have arranged an event this Friday to switch on their Christmas lights and to provide some related entertainment. Congratulations to them. We were pleased to be able to make a contribution to this event from our ward funds. The event runs from 4.00pm til 5.00pm

Tuesday, 21 November 2017

Budget, the Liberal dog that hasn't barked

Featured on Liberal Democrat Voice a double dose of recognition this week as this posting was also included in Liberal England Six of the Best and it also got the seal of approval from Roy Connell
For decades, in the post-war era, there was not a budget day when the Liberal Party did not move an amendment to promote employee ownership and industrial democracy. Jo Grimond and Richard Wainwright were always looking for opportunities to make the case for the redistribution of ownership. Not only did they believe that this would lead to a fair distribution of wealth and influence they saw that it would contribute to productivity improvement-but more of that later

Donald Wade, (who for younger readers, was the MP for Huddersfield West,) laid out the argument in his pamphlet Our Aim and Purpose which sold over 100,000 copies. It is important to recognise that the Liberal idea was not just to radically distribute ownership but also to shift where economic initiative was centred:

Managers and employees, acting in partnership, should employ capital, since all business requires capital. But the idea of capital employing labour is an out of date concept. It is an old fashion notion which Liberals reject.

These ideas were not new- they go back to J S Mill. He saw total employee ownership as the final stage in political-economic evolutionary process, and in Principles of Political Economy he argues that:The relation of masters and workpeople will be gradually superseded by partnership, in one of two forms: association of the labourers with the capitalist; in others, and perhaps finally in all, association of labourers among themselves’.

Vince Cable's article in the Guardian  lays out some excellent ideas and certainly addresses the case for 'progressive redistribution' with an important proposal for endowments for young people. He is good on tax avoidance wanting the government to go after tax cheats as aggressively as the Tories love to go after benefit 'cheats'. But no word on the signature policy of the Grimond revival.
It is worth rehearsing some of the arguments and looking at the 'ownership effect'. Many years ago I served, for about a decade, as a  member of the party's Standing Committee that became the Policy Committee. I recall one policy discussion based on a paper by James Meade. Meade received the Nobel Prize of economics. Let us pause for a moment and just unpick that a bit. One of the great disasters of the Clegg leadership was the way it was captured by economic commentators who had fallen under the spell of those false gods-the neoliberals. We are still living with the consequences despite Tim and Vince's efforts. This was particularly evident in the coalition negotiations in 2010. Writing in the Journal of Liberal History David Howarth observed:
.. Liberal Democrat leadership took no external advice about the issue, or about the separate issue of accelerated deficit reduction. Both the Treasury and the Bank of England would have reinforced the acceleration view, given half a chance, but that view is built into their nature. Others took very different positions on the optimal path, from the NIESR’s moderate caution to David Blanchflower’s jeremiads. The puzzle is not that the party took one view or another, but that it did so on the fly without consulting specialists. Has the party of Keynes lost touch with economics as a discipline?
James Meade was not just any economist. He struggled with the ideas that concern social liberals. He was a self-described liberal-socialist and sought ways to create a fair and prosperous society where free citizens lived rich and fulfilling lives. Decades before Piketty examined accelerating inequality he proposed policy solutions. He identified that as wealth was created it was going disproportionately to the shrinking number of owners of capital and employees were getting proportionately less. This was a situation which automation and the failure of inheritance taxation were exacerbating. Meade championed employee ownership. Writing on the Open Democracy website the academic Stuart White in his essay 'Citizen Ownership: The Lost radicalism of the Centre explores this challenge and Meade's other ideas.
If the return to capital is rising relative to labour, then the way to prevent this leading to growing inequality of income is to democratise claims over wealth – over returns to capital. This can be done in two ways.
First, the stateionatley  can enact policies to encourage a wider dispersion of privately-held wealth. This is what Meade means by ‘property-owning democracy’. Meade himself puts a lot of emphasis on designing an inheritance or accessions tax in a way that will break down large concentrations of wealth and encourage people to give wealth to those who have yet to receive much from this source. One can readily imagine other, complementary policies to help with this goal. In one interesting response to Paul Krugman’s article on the ‘rise of the robots’, Noah Smith argues along Meade-type lines, suggesting the idea of a universal capital endowment as a right of citizenship
Second, the state can itself build up a stake in national wealth and distribute this as income to citizens. For much of his career, Meade was an advocate of what he termed ‘Topsy Turvy Nationalization’. He was not supportive, in general, of the state buying up private sector firms and then trying to manage them. But he did strongly support the creation of a state investment fund. The state would own a portfolio of assets across the economy. The return on these assets could then be returned to the citizenry, e.g., as a uniform social dividend or basic income. One might call this a Citizens’ Trust.
A second issue that employee ownership answers is of particular interest to those of us who live outside of London. How do we create sustainable long-term employment in our communities? The Employee Ownership Association (EOA) -whose first chair was Jo Grimond - has some budget proposals on its website and this is an area they specifically address.
....two thirds or 4.7 million businesses, are family owned, as reported by the Institute for Family Business and the report earlier this year of the lack of business succession planning in the UK’s family owned businesses. Equally important to the future of SME’s are the ambitious plans of the Government-supported Scale Up Institute and the opportunity for employee ownership to play a critical part in engaging the entire workforce behind a growth or scale up plan.
Secondly, employee ownership is a growing feature across every regional economy. With the ability to help root businesses in a place for the long term, unlike trade sales which often result in a loss of a business or jobs, employee owned businesses contribute to more sustainable economies, with their higher levels of resilience and their longer-term orientation.
William Wallace in his Beveridge Lecture explains why the absence of regionally based sustainable business is so important. I would add to William's observation the point made by the EOA, that a lot of businesses are sold off when the founders retire and the default position of banks and accountants is to dispose of them without any thought about the long-term future of the company or the local economy. The record is that jobs are lost and in the short and medium term companies close.
Part of the problem we face is that globalization, in the form of foreign takeovers and cross-national mergers, has weakened domestic corporate leadership.  The directors of regional banks, the CEOs of companies based in Manchester, Leeds or Newcastle, are no longer there to create the ‘place-based industrial regeneration’ that government is now beginning to discuss.  
LEPs draw in the regional managers of multi-national companies, many of whom are committed to their roles for as long as they stay in their posts; but it’s striking that BEIS documents often refer to universities as triggers for regional regeneration rather than financial or corporate leaders.  And – I would argue, though some of you may not agree – that the looseness of the UK’s takeover rules, and the short-term culture of Britain’s financial institutions, continue to lead to too many of Britain’s new enterprises being swallowed by American or Asian takeovers as they grow: thus failing to generate the new regional leaders, the new players in the global market, that will revitalise the British economy.  
The contrast with Germany is striking: greater support to German companies from financial institutions, tighter restrictions on takeovers, contribute to maintaining a dynamic domestic economy the benefits of which are dispersed across the country rather than concentrated in and around the capital.
The needs to sustain local and regional business and create a UK version of Mittelstand is crucial. So what is to be done? The EOA has some budget advice for the Chancellor and I would add that we should look at employee 'right to buy' when a business is sold. This would require government-backed enterprise bank until local institutions like Caja Laboral can be established. Back to the EOA:

So what could I dare to dream of from the Chancellor this week?
That the UK Government officially recognises the employee-owned sector, and in doing so advocates and champions it via a nominated Ministerial lead.
That through this recognition, there is broad consideration of employee ownership in all policy development, and especially as HM Treasury goes about its important work of shaping the tax environment to deliver the most sustainable economic returns.
That employee ownership as a solution to business succession and scale up becomes embedded as part of the support offered by LEPs, so that every business owner is able to access advice and understand its relevance to them, from a local champion.
And that until such time as there is more widespread understanding amongst the mainstream banks of employee ownership, that there is support for the financing needs of the sector, with government-supported banks offering suitable products and security.
Employee ownership is not new; it is tested and tried and has credentials that can be seen in every sector of the economy. But just like many ideas that have yet to transcend into the mainstream, it needs government to use its voice, its influence, its advocacy and its convening power in order to realise its potential for the benefit of the UK economy.
My dream, therefore, is that Mr Hammond realises this opportunity and uses his influence to help unlock the sector's potential, and deliver more employee ownership.

Friday, 17 November 2017

Sefton Council Leader should come clean about £684,000 cost (and rising) of Bootle Strand “advice”

At last night's Council meeting I tried to get some straight answers from the Council Leader about the costs related to the £38 million pound purchase of the Strand Shopping Centre in Bootle. 

For a moment let us leaving aside the wisdom of spend such a large sum on retail property at a time when High Streets are in decline due to the Internet and this particular sight is problematical because of the near presence of Liverpool ONE- the council has been forced to agree reductions in rates because of the impact. (Added to which 3000 near by jobs are being relocated to Liverpool. The DEMOS report outlines the impact of Liverpool on the surrounding economies) Instead let us pick away an the unnecessary secrecy. Question have been dodged about the Luxembourg Company the Council bought and the tax implications. Last night I was trying to get to the bottom of the fees another area clounded in secrecy and where the council have not responded openly to press inquires. 

Here is the statement I released this morning:

Senior Lib Dem councillor Iain Brodie Browne has expressed his concern at the refusal of Sefton Council Leader Ian Maher to come clean over the cost of professional advisors employed over the controversial £32 million purchase of the Bootle Strand Shopping Centre.

Cllr Brodie Browne submitted a formal written question to Thursday evening’s (16th November) council meeting held at Southport Town Hall.

His question asked ‘would the Leader please supply, in table form, details of professional and similar charges incurred so far, to include the following: Name of Supplier, a brief description of the services supplied and the amount invoiced to date’.

However the Labour Leader declined to do so on the night, saying merely that it would be available ‘in due course’.

“There’s no excuse for the Labour Party to try and conceal this information at the present time,” says Cllr Brodie Browne. “The public, as well as opposition councillors, have a right to know how public money has been spent.”

“To try and kick this into the long grass is simply unacceptable.”

However Southport Lib Dem councillors have carried out their own investigation, using freely published data, and think they have found the answer – which is that at least £684,000 has been spent on outside advisors.

“What Cllr Maher appears to have forgotten is that all councils are required to regularly publish details of all invoices over £500.  In fact Sefton Council does this on its own website in a section called ‘Transparency Reports’,” explains Cllr Brodie Browne.

“What we have found is that there are a number of enormous invoices from firms like PricewaterhouseCoopers, Addleshaw Goddard and Lambert Smith Hampton, all charged to a particular cost centre UA25.  These are Tax Accountants, lawyers and property consultants respectively.”

“We’ve even managed to get hold of a copy of the largest invoice – for £205,950 + VAT – from PriceWaterhouseCoopers, and when you see that includes ‘Tax Structuring and Due Diligence’, then even more suspicions are raised.”

“So what we now know is that over two-thirds of a million pounds has been spent, and that was only to the end of August.  That will almost certainly have risen even more.”

“This lack of openness from Sefton Council’s Labour leadership is simply unacceptable.”

Monday, 13 November 2017

Lab told it is time to end secrecy over tax paid on £32 million purchase

In advance of the Full Council meeting on Thursday John Pugh has issued a press statement:

Amid accusations of tax avoidance, hypocrisy and secrecy Sefton Council is being urged to publish in full the details of the controversial £32.5 million purchase of the Bottle New Stand. At the council meeting in Southport this Thursday a motion has been tabled by John Pugh which would commit Sefton Council to publish the details of the deal that was conducted via Luxembourg following tax advice.

According to Cllr Pugh. who has played a significant part in bringing the details of the transaction to public attention ,the council should be prepared if there’s nothing to hide to open the deal to wider scrutiny. 

“This isn’t councillors' or a political party's money and assets that are being speculated with.It’s the public that will pick up the tab. If the council have assisted the vendor in avoiding tax or avoided Stamp Duty themselves on the purchase by structuring the deal via a tax haven, the Luxembourg, there may be serious reputational and financial consequences. Until now the council had been astonishingly secretive and evasive on this subject. That is no way for an elected body to behave and supporting my motion and clarifying the conditions of sale as far as is possible will be a way to show the council wishes to be open and transparent. 

Openness and transparency are a major safeguard for all public bodies."

Background information:

John Pugh's motion

This council: (1) notes the concerns of several members about the purchase of the Bootle New Strand Shopping Centre; and (2) calls for the contract of sale and any additional documents relevant to the understanding of it, to be made available, without redaction or delay, to all members of council .

(2) Quote from e-mail from Cllr Maher 13th April 2017 
        "Firstly,  it is true that one of the important considerations for purchasing the company rather than the asset is that the Council would not have to pay stamp duty land tax. This is a widely accepted tax efficient way of completing the purchase. “

Friday, 3 November 2017

First Lib by election win in Southport since 1938

What a great result!  Whilst anyone who had done any canvassing felt John was going to win few expected him to scoop 56 % of the vote.   This was our first by-election GAIN in Southport since December 1938 when a certain Simms Mitchell (of who more on another occasion) won the Talbot Ward by-election. Simms came from a strong Methodist family and his Mother right up to her death in the early 1960s was a prominent member of the Southport Woman's Liberal Association.

Simms said he owed his victory, at least in in part to the Tory candidate, a Mr Hague who upset the Temperance vote-and you did that at your peril in Southport in those days. Hague’s election slogan was “Don’t be vague vote for Hague” which was based on the whisky advert. Needless to say, this did not go down well with the Temperance folk!