Wednesday, May 13, 2009

My Hairshirt is Bigger Than Yours

It is almost getting comic. Our politicians now seem to be indulging in a competition to see who has the most impressive hairshirt. Still, it makes a nice change from troughs.

After the PM's lamentable effort last night, this morning it was the turn of Nick Clegg, who took on the role of "outraged of Tunbridge Wells" in his Today Programme interview. He said he would give the taxpayer the whole gain from any financial gain he made on his second home. Ah, said Evan Davis, what if you make a loss. Clegg did his goldfish impression. He clearly hadn't thought about that at all. Make policy in haste, repent at leisure. Davis let him off the hook. Clegg then claimed he had always intended to do this anyway, long before the current crisis. Can any reader point to when he has said this before?

Oh well, another auspicious start to another day in the Westminster mad house commences.

UPDATE 11am: I did Nick Clegg an injustice. THIS Times report from April 9th shows that the policy had been raised before and he was aware of the negative equity issue, even though he hadn't yet found a solution.

29 comments:

Ted said...

More to the point, have you seen Andy Burnham at http://news.bbc.co.uk/1/hi/uk_politics/8045722.stm

Hilarious. But does more to rebuild politicians' reputations as real human beings than anything else I have seen recently.

Dot Neck said...

The idea of paying back any capital gain has immense problems. If (as is likely for second homes purchased in the last couple of years) there is a loss, does the taxpayer share in that?

When is the gain crystallised? If the property is not sold immediately on leaving office how is the gain during the period of office calculated?

What about stamp duty and other transaction costs?

strapworld said...

Iain, I saw a comment on Guido and wondered if any one, with tax accountancy knowledge, can elaborate.

It suggested that you cannot pay back Capital gains tax just like Ms Blears has said she is doing.

It suggested that she must complete self assessment returns and they would need to be investigated and reassessed.

It went to to say that if she has not broken the rules, her liabaility would be nothing. And, as this is now a tax matter we cannot put in Freedom of Information requests.

Suggesting that all this bad publicity goes away with no proof she has repaid anything.

Can this be so?

Cybgen said...

To be honest long may it continue, I think we need all the hidden skeletons out now, and make sure the cupboard is bare. If we do this then British politics can start the long climb back to something like respectability.
Nothing is going to be worse than 2-3 months down the line and some new scandal comes out.
On a side note, if all these MPs are saying that they need the expenses because they are not paid enough where are they getting the money to pay back what they over claimed.
Phil Hope £41k and and Hazel Blears 13.5k, how many people have £41k laying around in there banks.

Eddie said...

I agree with Clegg on this. It is unfortunate that he had not thought it through.

The second home scheme (as far as mortgages are concerned) simply has to work in the same way as the Key Worker scheme.

http://www.direct.gov.uk/en/HomeAndCommunity/BuyingAndSellingYourHome/HomeBuyingSchemes/DG_4001345

The Government retain a share in the equity of the property, in proportion to the amount of equity that the MP does not buy through their own resources.

So if an MP pays for 50% of the property from their own resources, or finances that part of the mortgage themselves, and callls on the taxpayer to fund 50% of the mortgage, then on sale the MP only gains (or loses) form 50% of the change in house price.

golfwidow said...

No hat-tip to your friend Ann Widdecombe for the hairshirt analogy?

Writing on the wall said...

Why would an MP want to realize negative equity on the 2nd home, while still an MP?

More relevant is what happens when the MP retires or loses his/her seat. Surely as a regular citizen he/she could keep the gain.

The gains from flipping are only part of the story. Matthew Parris admitted this week to have made a £100,000 gain when he left the Commons.

My advice to MPs is "when you see the writing on the wall; read it"

Anonymous said...

This wasn't made up today. Clegg made this proposal in late April - possibly earlier, if anyone can be bothered to research it.

Iain Dale said...

Golfwidown, there would indeed have been a hattip if I had heard Widdecombe say it. It is worrying to think that we were both thinking along the same lines!

golfwidow said...

Indeed!

sunonmars said...

The problem is this, that for Blears to repay, she would have to admit she lied with information and defrauded the inland revenue, sorry but that is just unaaceptable.

Can you see any of us going to the IR and saying, "oh yes it was my second home but i didnt tell you and kept the money, you'd have a 10 year audit and be credit busted and most likely fined and prosecuted.

Anonymous said...

So if a burglar gets caught now, all he has to do is hand back his swag and say sorry! Not good enough. Criminals should be prosecuted, starting with Whacky Jacqui, the Home Secretary and the McNulty creature.Once those fish have been landed then the net should be spread as wide as possible. Apart from the few honest MP's of integrity, the rest should be highlighted so that, if they have the nerve (they will have!)to stand for re election, the voters can get rid of the lot and let the new brooms sweep Westminster clean- for how long would remain to be seen since, it seems,fiddling had become a way of British.

Naynaynay said...

I seem to recall the story about Clegg coming out some months ago.
Clegg published his expenses on his website. http://news.bbc.co.uk/1/hi/uk_politics/7400952.stm
His justification for the massive 2nd home expenditure was that he had bought a rundown house which needed a lot of work. Essentially Clegg, who had the entire housing stock of Sheffield to choose from, deliberately decided to buy a rundown house with the knowledge that he could use expenses to bring it upto scratch - if that's not a capital improvement I don't know what is.
When he previously published his expenses on his website, I don't recall him stating that he regarded his second house as "belonging to the state" as he is now claiming. Furthermore I now note that he has removed the reference to his second home being in a "neglected condition" from his website. Obviously now he is party leader, circumstances and priorities change.

Oldrightie said...

David Cameron is coming out of all this as a very able and good politician. God knows we need one.

Faustus said...

I wonder if you, Iain, would comment on David Davis' troughing, seeing you were his Chief of Staff in 2005 and therefore an insider.
Why did he do it, especially as, like all MPs, he knew the details of his claims would be made public under FOI?

"The former shadow Home Secretary spent more than £10,000 of taxpayers’ money on home improvements in four years, including a £5,700 portico at his home in Yorkshire, it was disclosed.
He also claimed more than £2,000 for the cost of mowing and rolling two paddocks at his home";
Times Online

Iain Dale said...

Faustus, I am not a spokesman for David Davis. He gave a clear explanation for this in the Telegraph yesterday, which you can no doubt find online. But...

1. They were not "improvements", they were repairs.
2. The so-called Portico, is what you and I would know as a porch and was designed to prevent the damp reoccurring that had door to have to be replaced.
3. Unlike you I have seen these so-called paddocks. They are not paddocks. They are what you and I would call a lawn.

What they did not tell you is that he hasn't claimed anywhere near the limit of his ACA and only claims half the mortgage interest he could claim.

Simon said...

Tory Turncoat Sean Woodward once again takes the moral high ground. I assume it won't be long before he re-applies to The Party!

IanW said...

My Hairshirt is Bigger Than YoursWot? No hat-tip to the Right Honourable Member for Maidstone and the Weald?

Anonymous said...

Iain, in any case David Davis's 'porch' was a replacement and not a 'new addition'...

JMT said...

" Anonymous said...
it seems,fiddling had become a way of British.

May 13, 2009 9:54 AM"

I think the Germans have an expression (harking back to my O-Levels) "Kaufen den Englischen Weg" - buying the english way,i.e. to nick it.

Never realised that they meant MPs.

Julian said...

I'm looking forward to PMQ's more than ever and hope Dave is still buzzing from yesterdays events.

Cybgen said...

Has anyone heard if Alastair Darling is going to repay any of his capital gains tax or any of his expenses since he 'flipped' his house 4 times. I thought that the chancellor having to pay back some money would be a big scalp in the news.
Yet the media seems to have forgotten about him over these last few days. Mind you I haven't seen him on the news either.

Unsworth said...

Iain

"What they did not tell you is that he hasn't claimed anywhere near the limit of his ACA and only claims half the mortgage interest he could claim."

So what? That is not a tenable argument. Isn't this whole furore about the fact that MPs regard the ACA as an entitlement? The question one might ask is how did these expenditures relate to his activities as an elected representative?

The fact that Davis only claims half of what he 'could' claim is exactly the sort of response we have seen from the likes of Stephen Pound etc. Surely Davis is more prescient than this?

IanW said...

Cybgen wrote: I thought that the chancellor having to pay back some money would be a big scalp in the news. Yet the media seems to have forgotten about him over these last few days.

Could that be because Gordon's spin-doctors have nudged the MSM in the direction of another Cabinet member who has not only publicly criticised him, but derided him in the process?

That's News said...

15% of people do not want Speaker Martin to go, White pontificates, Maguire whines, yes, it’s the That’s News Morning update for WednesdayOf course, Labour MPs might be tempted to get a silken hair shirt and charge it to expenses...

Cybgen said...

Never mind hairshirts, I can see a new order of flagelants on the rise. There will be competitions about who has got the bigger lash marks and loss of blood.

Ricardo's Ghost said...

On Clegg:
If the taxpayer is to get the capital gains on any second property then why should the ACA be restricted to only interest payments?

On Blears:
Blears is not paying CGT, because she was not liable. She is paying an equivalent value to what she would have paid if she were liable. Hence, she doesn't need to complete any self-assessment forms or suchlike, because she isn't actually paying CGT. I thought this was quite clear from her interview. Clearly not.

Anonymous said...

Easy answer. Do not pay mortgage interest, only pay rent at a rate sufficient to cover a two bed flat in the MPs constituency.

John Moss said...

I wonder?

If Blears pays HMRC, but does not have a liability against which the payment is made, surely she will be regarded as having overpaid and when she submits her next tax return, will be in credit and able to claim it back again!