A constituent asks me as PPC what I think of the 38 degree campaign to apply tax to the earnings of Private Equity Fund Managers. My reply:
Many thanks to drawing my attention to this issue. You are the second to
have done so, and I am fully in agreement with you on this.
It is scandalous that this handful of highly paid Private Equity Fund
Managers should engineer things so as to deprive the Exchequer and the
nation of up to £700 million pa in tax revenues foregone.
That HMRC should have colluded in creating a sweetheart deal to enable
them to avoid taxation on their carried interest, a proportion of their
funds profits, is a tribute to the effectiveness of the lobbying and
political donation system that allows private equity fund managers to
consititute one sixth of the donors to the Conservative Party, and the second largest donor to Labour's "Progress" faction.
I would argue that the lobbying and political donor regime that prevails
in Westminster is a form of corruption, wherein the beneficiary that
uses office (or potential office) for gain is not an individual in this
case, but a political party.
Democracy means that politicians and parties are given power by the
people in order to serve the interests of the people and the people
alone. Political donations and lobbying corrupt this status, and causes
politicians to seek to serve the interests of the rich individuals and
companies with whom they are doing deals.
I note with unease that Private Equity Funds now hold some 5% of UK
companies, particularly water, mental health and social service
providers. I note that mental health services are currently underfunded,
so that the PE funds stand to gain from any top-up that future
Governments may direct towards mental health services.
I am glad to note that the US, Sweden, Netherlands and France have all
made moves to treat carried equity as normal income, though all have
failed up to now - a tribute to the power and influence of these fund
managers. That they can cling so doggedly to their inflated incomes,
despite the fact that they are earning up to £15million a year suggests
very strongly that there is a process of addiction at work here - that a
person in these ranks of the financial market is as dependent on ever
increasing income as a heroin addict is dependent on his or her daily
injection of heroin.
As to the solution to this anomaly, I fully endorse your proposed
amdnedment to the Finance Bill 2015, and if elected, I certainly will
actively back that amendment.
Sadly, the reality of the situation is that the result in Weston constituency is a foregone conclusion: Con hold.
Ukip will somewhat reduce the total size of the John Penrose's vote,
but the fact is that none of the non-Tory candidates stand a chance of
replacing him. The LibDems were the challengers in past elections, but
they are now a shadow of their former selves, thanks to their flirtation
with the Conservatives. The vote in Weston is a glorified opinion poll,
and all non-Tory votes are wasted in the sense that they have no
representation in Parliament. This is the ugly truth of First Past the
Post. Of course, all the other candidates will contradict me, the three
also-rans will assert that against all reality, they are able to win,
and John Penrose will deny that he is a dead cert so as not to look
complacent, but the electoral reality is as I have written.
Therefore the important answer to your email is the one from John
Penrose, and I would be grateful to have sight of the arguments he puts
forward to defend the status quo.
Thank you again for getting in touch.
Green PPC for Weston super Mare constituency