Judgmental, immoral fussbuckets - an everyday tale of NHS management

This is, quite simply, wrong. Not wrong as in 'incorrect' but wrong as in 'immoral and indefensible':

Patients who smoke will be breathalysed to check they have given up before being referred, while those who are obese must lose 10 per cent of their weight.

Doctors claimed it was the latest example of rationing which is becoming 'more commonplace' across the NHS. The two trusts, East and North Hertfordshire and Herts Valleys Clinical Commissioning Groups, are trying to save £68 million this year.

Any patient who is obese – with a body mass index above 30 – will have to shed at least 10 per cent of their body weight before being referred for non-urgent surgery.

I know there are pressures on the NHS but singling out lifestyle choices for exclusion is not how we should respond to a lack of cash. Imagine for a moment that it's your Dad who's been told he has to quit smoking in order to have a hip operation or you Mum they're telling to lose a stone before they do her cateract operation. The people proposing these things - just to save a bit of cash - are ghastly, self-centred and uncaring, yet we're told every day how wonderful the NHS is and how it's employees are living saints. This proposal proves - once again - that the service is filled with judgemental fussbuckets.

It is time the Government put an end to NHS Trusts and Clinical Commissioning Groups implementing these policies.

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Morals, ethics and the matter of paying taxes

As is the case with much of our national political discourse, the recent tit-for-tat over taxation is more notable for its sound and fury than for due consideration of the principles and issues being discussed. However, at the heart of all this is a very confused debate about the morality, ethics and practicality of paying and collecting taxes. A confused debate because these three things - morals, ethics and practical administration - are all muddled up in people's minds.

Part of the muddle is deliberate. Some on the left want to make the paying (or not paying) of taxes into a moral issue - indeed something of a moral crusade. In Bradford, we recently joined lots of other local councils by signing up to something called "Towns Against Tax-dodging" - a futile piece of political posturing but one that warms the cockles of some Labour councillors' hearts. Collectively we were 'sticking it to the man', sternly disapproving of those nameless, faceless plutocrats running tax-dodging businesses and pointing out that if they all paid loads more tax then we'd have no austerity. Or something like that.

And these moral crusaders have a point. Not one I agree with but a point nonetheless - these righteous folk believe that taxation is a moral issue. Such people believe collecting taxes isn't simply a practical thing, the means by which government gets the cash to do the things government does. For the true progressive believer tax is the means by which the wrongs of inequality are righted and the sins of capitalism mitigated or removed.

So when these bushy-tailed campaigners come across people who take a different view of tax from them, seeing it as, at best, a necessary evil, their instinct is to point and shout about their moral position. How dare such people - especially the ones with plenty of money - how dare they try to avoid paying taxes. Do they not realise how immoral such acts are, how they deny governments the cash to right wrongs and mitigate the corrupt world of those rich folk.

The problem is that this debate about morality is contested. Some people - quite a lot of people in truth - take a different (and equally valid) moral stance in believing that high rates of taxation, whoever they are levied on, are essentially immoral and that governments have a moral duty to keep levels of tax to a minimum. I know that the true progressives don't get this - or recognise it as a legitimate moral stance - but it is central to why the framing of our debate about taxation is misleading and unhelpful.

The place for resolving this debate about the morality of taxation, the role of taxation in society and the need (or not) for redistribution is in parliaments. Our political process exists precisely to resolve such disputes. And, given the nature of the system, we can expect the emphasis in taxation to swing backwards and forwards between tax as a tool for social betterment and tax as primarily a means to secure government revenues. None of this is about the specific behaviour of individuals engaging with the tax system.

Such individual behaviour is a matter of ethics rather than morals. And ethics tells us that our responsibility is to comply with the rules - essentially the morals - of the system. We make a distinction between the matter of keeping what we pay in tax to a minimum (avoidance) and not paying taxes we should have paid (evasion). In simple terms it is perfectly ethical to do the former and unethical (not to mention illegal) to do the latter.

The problem comes in the fairly extensive grey area between avoidance and evasion - what some now refer to as 'aggressive avoidance'. It's one thing, we might say, to make appropriate arrangements so as not to pay tax we don't have to pay. In my self-employed days I fully expected that the money I paid my accountant to complete my tax return would be more than covered by the money he was able to save me on my tax bill. But somehow this isn't quite in the same box as joining some complicated scheme so as to reduce tax - knowing full well that the only purpose of the scheme is to reduce that tax.

Such practices might be frowned upon - those true progressives who feel paying taxes is a matter of morality will be most frowny here - but, in strict terms, they are not unethical. Yet we have leapt on those using such schemes as if they were great sinners rather than people who, for whatever reason (probably the fine one of self-interest) choose to take a different moral stance on paying taxes. Some may not like - may even feel cheated in some way - by the schemes but the problem is the framing of tax rules not the ethics of the person legally reducing his tax liability. So the criticism should rest with the government or governments responsible for the rules of the tax game not those who make creative use of flaws in those rules (and the more rules there are the more holes and the more flaws).

There are two ways to deal with this problem. The first is to reduce the level of taxation - not just because it is morally right to do this but for the practical reason that lower taxes will mean less incentive to avoid paying those taxes. The second is to make tax rules less complicated, to cut out the reliefs, differential rates and other well meant (but exploited) elements of the tax code - with a simple uncomplicated tax the opportunity for avoidance is reduced.

In  the end we need to be rather more relaxed about the problem. Rather than point fingers at all the bad people who selfishly want to keep more of the money they're earned for their own uses, what we should be doing is trying to work out how to match those folks selfishness with our interests. That way everybody wins. For sure there's a moral debate about tax but, in truth, it's a pretty practical business that should be determined by the reality of Colbert's observation that “the art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.”

Right now there's a lot of hissing which suggests we might have got the balance wrong.

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Enough of the moralising - people avoid taxes because they are too high.

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There is no point at which paying or not paying taxes is a matter of morals. There may be some ethical questions involved – complying with the law, for example – but tax is not a moral issue. Here is the legal bit from Lord Clyde in the 1929 case of Ayrshire v Inland Revenue:

"No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue"

See folks even lawyers and judge think taxes are about rules not morals. So what frothing demon has possessed the Treasury Minister, David Gauke:

"When a tradesman says, 'Here's a 10%, a 20% discount on your bill if you pay me cash in hand' that is facilitating the hidden economy. That's as big a problem in terms of loss to the Exchequer as tax avoidance. Revenue is not being paid as it should be paid."

Is it? Can Mr Gauke be so sure that receiving cash means avoiding VAT or non-declaration of income? I suspect that he cannot and, more to the point, so what? The rules about taxes are pretty simple – if they are low, easily understood and hard to dodge people pay them. Under every other system people try to avoid them.

More to the point, the reason for the tradesman offering discount for cash isn’t known to me. The plumber or electrician doesn’t say “because that means I won’t put it through the books” or “otherwise you’ll have to pay VAT” – he just says; “I’d prefer cash, guv!”

And what about the sweet shop or the bakers where I always pay cash – “that’ll be £3.47 thanks”, I’m going to pay that by cheque!

Or better still there’s the informal time-banking approach – I do your website/books/leaflets and you fix my boiler. No cash changes hand but everybody receives the service. Perhaps Mr Gauke might like to think about taxing barter.

I am mighty fed up with this newly found penchant for wagging the moral finger – I fear that it is the sign of a government that has rather lost its way. One day we hear ministers threatening to name and same celebrities (however defined) for some presumed moral infraction rather than any actual tax dodging. And the next the idiot minister is telling us we are moral lepers for paying the ironing lady in cash.

All I can say is that I intend to go on paying in cash where the supplier wants cash and especially where I get a lower price. And if that means the government gets a little less income to waste on stupid nuclear missiles, dozens of “special advisors” and a host of grand projects designed merely to make some minister look good then so much the better.

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On taxes, morals and practicality

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Once again tax has become a matter of moral debate. Rather than asking the sensible and practical questions – “how do we raise the amount of money we need to deliver those ‘vital’ public services?” or “what is so ‘vital’ about this or the other bit of public spending?” – we are debating whether it is or isn’t morally repugnant for a person to use the rules to minimise the amount of tax they pay.

And the target for all this is “the rich”, a group of ill-defined, nameless, faceless individuals onto whom we must heap opprobrium if they have the audacity to move their money around so as to pay a little less tax. Every now and then one self-righteous newspaper hack or other latches onto a particular person or a specific company and calls down the anger of the gods upon them – how dare they not hand over nearly all their income and most of their wealth to the government, how dare they!

And so the game goes – today The Guardian latches onto a dead man so as to have a pop at that dead man’s son. Nobody is suggesting that the son has done anything wrong but the sins of the dead man – reducing his tax bill by moving his money around – must mean that the son is a sinner too! And, sadly, the response of many is not to castigate the values that led to such an attack on a dead man but to accuse the paper (and others) of hypocrisy since they too indulge in such international money management for the purposes of tax minimisation.

This way madness lies! We do not have taxes as some form of punishment for those who have the gall to be very rich. Nor do we have taxes so as create some form of “morally beautiful” status of equality. We have taxes to pay for government. That’s it. No other reason is remotely defensible. And the job of the government is to raise those taxes efficiently.

Nowhere in this is there any matter of morals. Merely a set of practical issues: what is the best rate of income tax; what should the balance be between direct and indirect taxes; should reliefs be offered for desired actions such as philanthropy, business investment or saving for retirement?

However, those who cheer at the attack on a dead man choose to make this a debate about morals. So let's respond.

I do not believe that we have any more moral duty in paying taxes than to comply with the rules set down by the government. And if that means that a very rich man can avoid paying tax at the same rate as a much poorer man, the fault lies with those who set the rules not with the man avoiding paying the tax.

Instead we should ask why it is that very rich men – and others who are far from very rich – put such effort into avoiding taxes? Could it be, perhaps, that these men feel that rates of taxation are too high? Perhaps – and it’s hard to take issue with this sentiment – the very rich man believes that it is wrong for the government to seize more than half what he earns? Maybe, the very rich man believes it to be morally wrong for government to take such a large proportion of someone’s income?

We have got ourselves into such a state – with politicians forced into publishing tax returns and hints that ministers will be expected to do the same. I cannot but think that the idea of a very rich man giving public service – as rich men have been wont to do throughout history – is likely to become just that, history. Why should that man bother when his reward will be sneering attacks on him for the apparent sin of being rich? Instead, the man heads to his private island or grand house, shuts the gates and perches on his pile – having first ensured that only the smallest possible part of it goes to the government in taxes.

And the fault for this separation from public service will not be the rich man’s. The fault lies first with government for demanding too much of that man’s income and secondly with the frothing mob led by hypocritical journalists who castigate him and his sort – even beyond the grave – merely for having money.

Attacking the rich may make some of us feel a little better, perhaps more able to tolerate less pleasant personal circumstances. But it does not help the government in that task of raising taxes efficiently and it is not the championing of some moral righteousness. Taxation must be a matter of practicalities not moralities. If we get to the stage of shouting about morals then the only conclusion is that our tax system is not fit for its purpose of raising the money the government needs for its business.

And so it is. Taxes are too high on the rich and too high on the poor. In the former case we can see they are too high because of the lengths that rich men go so as to avoid those high rates. And in the latter case because we have to tax the poor because the rich aren’t there to be taxed.

I don’t know the right answer – the system that would work – but I do know that the current debate misses the point entirely. Taxation must be a practical matter if it is to work. Moralising about it just makes things worse.

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All business conducted within the law is good business...

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What is it about politicians wanting to pass moral judgement about business? Today it’s Nick Clegg’s turn:

The Deputy Prime Minister will launch today a campaign for a “well-rewarded workforce”, saying that businesses owned by their staff are more dynamic and have higher morale.

He wants to encourage companies to follow the model of John Lewis, the department store group which is owned by its employees and distributes its profits between them.

Mr Clegg’s call for “responsible capitalism” will come as City firms are preparing to pay executives billions of pounds in bonuses, despite pledges from politicians to curb excessive pay and growing hardship among ordinary families.

Those words – “responsible capitalism” – echo the sentiment of interventionist politicians down the years.  From Heath’s “unacceptable face of capitalism” to Miliband’s crass distinction between ‘producers’ and ‘predators’, we find politicians seek political capital from the making of moral distinctions between ‘good’ and ‘bad’ businesses.

None of this is to say that it’s a bad idea to reward employees with shares – this cements their interest in the firm’s success and acts as a spur to profitability. But it is a matter for the owners of businesses not a concern of government – granting some sort of “right” to demand that the company gives shares to employees is a pretty gross intervention in those businesses however much we might think it a good idea.

It is simply not the role of politicians – however well-qualified we make think we are – to pass moral judgements about capitalism. I can respect someone who believes that capitalism is immoral – they are wrong but honestly wrong – but the person who says that some capitalism is bad and some capitalism is good is trying to have his cake and eat it.

For my part, I believe that capitalism is inherently moral since it is the only form of economic organisation that reflects the primacy of individual choice and preference. All other forms – those imposed by governments in a futile search for man’s perfectibility – are immoral since they require that some people are told “no you can’t make that choice”.

And when we look at the distinction made between ‘good’ and ‘bad’ business, it has more to do with the effectiveness of the different firms’ public relations than a real understanding of the morality or otherwise of that business. We like John Lewis because it does nice advertising and runs Waitrose (where the supermarket-hating commentariat prefer to shop) – if Provident Financial adopted the same ownership approach would we suddenly approve of selling expensive loans to poor people?

People start businesses with the intention of making themselves some money not as some noble social project. If people didn’t do this all the lovely stuff we take for granted – you know, the schools and hospitals – wouldn’t be there. If smart young people didn’t work eighty-hour weeks on trading desks the City of London wouldn’t be the world’s biggest financial centre producing £100 billion and more in added value.

If we start pretending that business isn’t about earning a living, if we begin to force our prejudices onto business owners, we set off down a road to a less wealthy, less creative, innovation-free society. Rather than condemning the city trader for his money, we should celebrate the fact that an ordinary guy from Dagenham or Sidcup can make that kind of cash and enjoy the good life that goes with it. It is wrong to make some moral distinction between the hedge fund manager and the artisan baker, to pretend that one is ‘good’ and the other ‘bad’.

All business conducted within the law is good business and the only irresponsible businesses should be businesses that fail.

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On corporate social responsiblity...

I’ve always had something of a problem with “corporate social responsibility” – the idea that business has a wider duty beyond its purpose as a business. I have a still bigger problem with the confusing of this concept with “ethical behaviour”. Here’s Ken Costa, the man charged with finding a form of “ethical capitalism”:

“The present duty – on all boards to maximise shareholder value as the sole criteria for satisfying the return to shareholders – cannot continue... I am aware that this is a big change that will need detailed discussion, but we need to start with big ideas.  For some time and particularly during the exuberant irrationality of the last few decades, the market economy has shifted from its moral foundations with disastrous consequences. I cannot recall when public feeling worldwide has run so high, and even if only a minority takes its anger on to the streets, no one should imagine that the majority is indifferent to their cause.”

Now there’s a place for shareholders to discuss their expectations from Boards of Directors – those they appoint to represent their interests as owners of the business. It’s called the Annual General Meeting and, at that meeting, shareholders can appoint a board or directors that can take a different view that maximising the return on the investment those shareholders make. I’m pretty sure it won’t happen because the reason why shareholders invest is to secure a return on that investment – and we expect it to be the maximum possible.

The point I’m making here is that the corporation exists to serve the purposes of its owners and investors and that such activity is entirely ethical and moral. Indeed, were Directors to take it on themselves to reduce the returns to investors because of some other purpose – some wider “social responsibility” – they would be acting unethically. This is the dilemma of corporate social responsibility – if it is more than trading honestly and complying with the law, then it must be against the interests of the shareholders unless it is merely a marketing strategy or corporate positioning.

In all of this bear in mind that the owners of a business (or to be accurate 50% plus 1 of those owners) can do what they wish – including reducing financial returns in the interests of a wider social purpose.  But it would be wrong if directors acted without the approval of shareholders in taking such a course.

Ken Costa is right that many people are angry about a system they feel led to the problems the world faces right now. However, I am sure that the duty to secure returns for shareholders wasn’t the cause of those problems or the creator of some crisis in capitalism. What is central to all this debate is for us to rediscover the joy of the marketplace and to recognise that, for markets to work, people have to behave (in the strict sense of the word rather than its modern corruption) ethically. Ken Costa gets close to this concept:

Our task is thus to build up trust, both within and beyond the financial world, a slow, bottom-up, trade-by-trade business. It is to rebalance the equilibrium between risk, responsibility and reward. It is to re-embed the financial spirit, our drive to do well, with the moral spirit, our desire to do good. Above all it is to reconnect the various different silos of our humanity – economic, moral and spiritual – so that we live as whole people all the time and not simply as money-makers on weekdays and morally concerned citizens at the weekend.

For me the question is how do we have a system where the right behaviour – moral, ethical or whatever – secures the greatest reward. This isn’t about corporations or institutions but about people changing their behaviour. We cannot legislate for morality but we can educate people so moral and ethical behaviour is second nature.

Finally, we must stop seeking to condemn people for their success, good fortune or wealth – the “bash a banker” or “pillory a politician” approach. Nor should we turn our back on the idea or markets, enterprise and trade – these are fundamental elements of our humanity not some creation of mankind. Rejecting them would be as immoral as was their corrupting through the hubris that was the end to boom and bust.

Above all we must not place on corporations duties we do not place on ourselves – which is what “corporate social responsibility” means and it why it is wrong.

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