(dis)trust in institutions May 28, 2009Posted by Bradley in : Uncategorized , comments closed
The stories about MPs having designated one of their homes as a main residence for tax purposes and a different home as their main residence for the purposes of their parliamentary expense claims, about married MPs each claiming different homes as a second residence to maximise expense claims, second homes (which should be related to representation of constituents in some way, surely) miles from constituencies, and rent and salary payments to family members do seem to be in some ways a distraction from the real issues facing the country. But I think they do raise some very real questions about trust in institutions. How can people who seem to be very preoccupied with making sure they can manipulate the rules to their own best advantage be trusted to make sure that financial regulation works properly? It’s not clear how some of the possible reactions to the expenses scandals really respond to this underlying issue. How do fixed terms for MPs necessarily do much other than encouraging them to think about making sure they have profitable jobs after they leave?
Joan Smith complained this week in the Guardian that this was all really unfair to hardworking MPs. But a large number of commentators disagreed (some quite vehemently). Like it or not, MPs present themselves as representatives of their constituents’ interests and it doesn’t look good if they are able to maintain servants’ quarters and duck islands at taxpayer expense when the taxpayers worry about whether they will be able to keep up payments on a mortgage or feed their families.
multilingual eu news May 26, 2009Posted by Bradley in : translation , comments closed
libor twitters May 22, 2009Posted by Bradley in : markets , comments closed
Or, the BBA is now publishing Libor via twitter (and there’s a new libor website). The title of the press release describes libor as “the world’s most important number.” Others would disagree, arguing that the number is 350.
whether pringles are similar to potato crisps …. May 20, 2009Posted by Bradley in : food , comments closed
The BBC story on the Court of Appeal decision on the rate of VAT applicable to Pringles (over-ruling the decision of the High Court, and encouraging deference to the decisions of VAT Tribunals on matters of fact) misses quite a lot of the fun (although it points out pretty clearly the bottom line for Procter & Gamble). Food products are zero rated for VAT, but this treatment does not apply to:
potato crisps, potato sticks, potato puffs and similar products made from the potato, or from potato flour, or from potato starch, and savoury products obtained by the swelling of cereals or cereal products; and salted or roasted nuts other than nuts in shell.
On the question whether Pringles are similar to potato chips, Lord Justice Jacob said that:
This sort of question – a matter of classification – is not one calling for or justifying over-elaborate, almost mind-numbing legal analysis. It is a short practical question calling for a short practical answer.
And Lord Justice Mummery said:
it is vital to recall why the Tribunal was required in the first place to answer the question whether the goods in question are “made from” the potato. It was not in answer to a scientific or technical question about the composition of Regular Pringles, or in response to a request for a recipe. It was for the purpose of deciding whether the goods are entitled to zero rating. On this point the VAT legislation uses everyday English words, which ought to be interpreted in a sensible way according to their ordinary and natural meaning. The “made from” question would probably be answered in a more relevant and sensible way by a child consumer of crisps than by a food scientist or a culinary pedant.
It’s pretty clear that Pringles are treated as being the equivalent of potato chips in my house – however they are made.
considering retrospectivity May 20, 2009Posted by Bradley in : fundamental rights , comments closed
In the same week that the Select Committee on the Constitution published a report critical of provisions for retrospective legislation in the Banking Act 2009 (the statute allows for orders with retrospective effect where the Treasury considers it desirable), the House of Lords wrote about retrospectivity. The case involved a doctor with Nigerian qualifications who went to the UK for a clinical attachment and then applied for leave to remain as a postgraduate doctor. After she made the application, but before a decision on the application was taken, the immigration rules were changed to provide that persons with foreign medical qualifications were not eligible for permanent leave to remain in the UK. The immigration rules are rules which can create legal rights but as executive statements they are not subject to the same sort of presumption against retrospectivity that applies to statutes. The House of Lords held that changes in the immigration rules took effect when they said they took effect and new rules could be applied to applications pending at the time they came into effect.
The Law Lords were very critical of the fact that the Home Office declined to refund the application fee in these circumstances. Lord Hope of Craighead stated:
Fair dealing, which is the standard which any civilised country should aspire to, calls out for the fee to be repaid.
Lord Scott of Foscote:
So what benefit did the appellant receive for her £335? The answer is ‘None’. She paid her money on what turned out to be a false and misleading prospectus. The least that the Secretary of State can be expected to do is to return her fee.
Lord Neuberger of Abbotsbury also said that it was not “fair dealing” for the fee to be retained. The language of fair dealing and misleading prospectus has some resonance in these days of financial turmoil. This week, one can’t help reading them without thinking of the parliamentary expenses scandal and Gordon Brown’s announcement that he proposes to do away with self-regulation by the parliamentary gentleman’s club. Brown’s use of the gentleman’s club term is a bit ironic here (I think unintentionally so), as fair dealing is supposed to be one of the things gentlemen believe in.
what single market? May 19, 2009Posted by Bradley in : eu , comments closed
The ECJ (Grand Chamber) held today that Member States of the EU are allowed to require pharmacies to be owned and operated by pharmacists. The Court appeared to adopt a rather romantic view of the pharmacist as a professional, saying:
It is undeniable that an operator having the status of pharmacist pursues, like other persons, the objective of making a profit. However, as a pharmacist by profession, he is presumed to operate the pharmacy not with a purely economic objective, but also from a professional viewpoint. His private interest connected with the making of a profit is thus tempered by his training, by his professional experience and by the responsibility which he owes, given that any breach of the rules of law or professional conduct undermines not only the value of his investment but also his own professional existence.
Restricting ownership in this way was justified because requiring pharmacies to employ pharmacists (rather than to be owned by pharmacists) might not adequately ensure the independence of the employed pharmacists which might prejudice the health of customers. News reports suggest that DocMorris, the Netherlands based operation which has been making inroads into the German market, will need to focus on franchising rather than ownership as a result (as well as on mail order). But if the concern is really about the professional independence of the pharmacist, doesn’t franchising risk interfering with this too?
ethics in government May 19, 2009Posted by Bradley in : ethics , comments closed
The UK expenses scandal has forced the resignation of the speaker of the House of Commons, Michael Martin. Meanwhile, Helena Kennedy argues forcefully for some real, rather than cosmetic, changes to British governance:
The temptation for the parties will be to sack a few people and redesign the allowance system but if public trust is to be restored there has to be a much more radical rethink. There has to be root-and-branch reform of parliament, both the Lords and the Commons, a written constitution, proportional representation, proper funding of political parties, a real curb on commercial lobbying, extended powers for select committees and fewer powers for the whips, a proper pay structure for MPs, more participative democracy and a re-ignition of local government to create new avenues for people to enter the world of politics. Any and all reforms must be guided by the knowledge that what people most want is an ethical political system. It is a moment to be seized and if the government is courageous enough it could even change its fortunes.
bankers’ remuneration May 15, 2009Posted by Bradley in : financial regulation , comments closed
In a week when UK press attention has been focused on MPs’ expense claims (it’s a bit like reading about corporate scandals, but on a smaller, rather more ridiculous, scale) the House of Commons Treasury Committee published its report on corporate governance and pay in the City (note that none of the members of the committee appears on the lists of MPs the Telegraph has identified as makers of dubious claims). Here’s a taste:
On remuneration we conclude that the banking crisis has exposed serious flaws and shortcomings in remuneration practices in the banking sector and, in particular, within investment banking. We found that bonus-driven remuneration structures encouraged reckless and excessive risk-taking and that the design of bonus schemes was not aligned with the interests of shareholders and the long-term sustainability of the banks. We express concern that the Turner Review downplays the role that remuneration played in causing the banking crisis and question whether the Financial Services Authority has attached sufficient priority to tackling remuneration in the City.
There are some questions in the report about whether it is wise to rely on people very connected to the financial markets to develop solutions to the current problems, for example:
We suspect that Lord Myners’ City background, and naiveté as to the public perception of these matters, may have led him to place too much trust in an RBS Board that he himself described to us as “distinguished”.
we are not convinced that Sir David’s background and close links with the City of London make him the ideal person to take on the task of reviewing corporate governance arrangements in the banking sector.
But there’s some other, rather odd, stuff too. I suppose that because this report is part of a series (after reports on Icelandic banks and dealing with bank failures) there’s a temptation to shove stuff in even if it doesn’t fit very well, but why does a discussion of the role of the media (in particular of whether the media encouraged the run on Northern Rock, rather than of media coverage of remuneration issues) appear in a report on corporate governance and pay? On the other hand, perhaps this is a good thing, as the committee does not endorse silencing of the media in financial crises:
The press has generally acted responsibly when asked to show restraint in particular areas. Too often, indeed, those responsible for creating the current crisis have sought refuge in blaming the media for their own conduct….it is crucial that the public are kept informed about institutions holding their money. If the public is to trust the banks in the future it needs to be confident it has sufficient information on how they are operating, and that such information is not restricted to those on the inside. Indeed, the Government may wish to look carefully about the disclosure obligations applying to banks and other financial institutions to see if further transparency would be beneficial.
merger of sifma europe and liba May 5, 2009Posted by Bradley in : lobbying , comments closed
SIFMA Europe and the LIBA have announced that they will merge “their London-based operations into a single independent European organisation”. Regional organizations will be linked through a Global Financial Markets Association:
Over recent years LIBA and SIFMA-Europe have increasingly worked closely together. LIBA’s primary expertise in successful policy and advocacy work complements SIFMA-Europe’s product-focused knowledge and activities. The merger is the next logical step toward a fully-integrated, efficient and cost-effective European operation.
As market and regulatory developments increasingly take place on an international stage, a global-facing organisation is the optimum structure to serve best members’ interests.
Rationalization and cost-savings seem to be drivers of the decision, though there will be a loss of whatever benefit comes from having comment letters jointly produced by two organizations.