Charles II, hearing of a high character of a preacher in the country, attended one of his sermons. Expressing his dissatisfaction, one of the courtiers replied, that the preacher was applauded to the skies by his congregation: "Aye", observed the king, "I suppose his nonsense suits their nonsense".
The Daily Mail and other media sources, including the BBC have been running stories on the budget proposal to impose VAT on hot take-out food.
Hitherto, things like bacon rolls and hot suasage rolls escaped VAT under our permanent derogation to the VAT Sixth Directive, which allows the to zero-rate most foodstuffs. Now, though, it seems that the preposterous Osborne is planning to bring them into the net, a deed which cannot be undone. The derogation once abandoned can never be restored.
Osborne says he wants to address "some of the loopholes and anomalies" in the tax system, follwing a report from the Office of Tax Simplification last year which called for an end to some existing tax breaks. But this particular proposal is set to cause a lot of grief, so this reason given doesn't really cut it.
As always, though, when you are confronting VAT, you are dealing with the EU and, although our gifted media always ignores the elephant in the room, you can bet your sweet life that, somewhere in here is lurking an EU dimension. And indeed there seems to be just that.
To find it, we have to go back to March last year, when the ECJ ruled on a raft of German cases (C- 497/09, C-499/09, C501/09 and C-502/09, Manfred Bog and others), telling the German authorities that they had to charge the lower rate of VAT on all hot take-out food, instead of the higher rate.
At the time, HMRC said the ruling had no implications for the UK, whence it continued to charge VAT on things like fish & chips and burgers, sold over the counter, but kept as zero-rated foods "which are warm simply because they happen to be freshly baked, are in the process of cooling down and are not intended to be eaten while hot".
However, more than a few VAT consultances and lawyer groups specialising in tax law disagreed with HMRC, such as here and here. They argued that take-out food in the UK should also be charged at the lower rate, which in this country is zero.
By last November, we ended up with the fish and chip shop owners getting together to fight the government on this. They were looking forward to securing a very healthy refund. They also expected to be able to knock around £1 off fish and chips, boosting the trade and stimulating the sale of fish.
The actual amount of revenue at stake has not been specified, but it is likely to run to several billions, if the HMRC lose their case. And what seem to be happening here is that, by harmonising the rate, making it cover all foods without the "freshly baked, etc.," exemption, the tax authoritities believe they can protect their revenue stream.
As long as some hot foods are charged at the lower (i.e., zero) rate, then all hot foods must be charged at that rate. By abolishing the zero rate for ANY hot foods, Osborne can charge the standard rate for them all. This gets HMRC gets off the hook on which the ECJ has impaled them.
Retailers are, of course, hoping that the proposals do not go ahead. Already, the impact of the proposal it such that it has already taken £30 million off the share price of the bakery chain Greggs. But that is small beer compared with what the chancellor stands to lose.
The one thing, though, that you can be sure of is that the media isn't going to tell you what's going on. People might start voting for UKIP for something equally stupid, and that would never do.
This does indeed have all the hallmarks of a distraction. But then, the politicians have long mastered the art of misdirection and are past masters at distracting their audiences. Throw the public a bone, or a red herring, or whatever analogy you care to use, and they will leap upon it, losing sight of the original excitement.
Usually applied to the "art" of magic, the discussion on "misdirection" looks eerily familiar:
Misdirection takes advantage of the limits of the human mind in order to give the wrong picture and memory. The mind of a typical audience member can only concentrate on one thing at a time. The magician uses this to manipulate the audience's ideas, or, perceptions of sensory input, leading them to draw false conclusions.
The sadness is that we fall for it, accepting the politicians' agendas, and taking them seriously. I have already seen half a dozen e-mails today, advertising earnest debates on alchohol pricing. Not one has seen May's "initiative" for what it is.
However, in this case, the accuser is Yvette Cooper, shadow home secretary. And who will lister to her, or give her the time of day? Most will simply buy into the agenda, as they always do. Gullible to the last, that is why we are so easy to govern.
No, I am not going to write a long, or even any, post on the new uniforms for the Olympic team. But that, for a time yesterday that was the main news on theDaily Mail which, as a newspaper, is better than most at divining what their readers want.
You would think people might learn, because here, we actually have the archetypal "bread and circuses". But the reason the Roman emperors expended huge wealth on them is because it diverted the crowd and kept it occupied, allowing their rulers to get on with other matters undisturbed.
As for the newspapers, one cannot avoid the wry smile at the most viewed on theFailygraph, proving beyond doubt my assertion that the collapse of quality journalism stems from the ever shrinking pool of people who are interested in it. Basically, I wrote, the media produces tat because that is what people are interested in.
Certainly, I find that the greater the care I put into my blog posts, and the more effort I devote to writing original and interesting material, the lower my hit rate. I've being doing this a long time now, and have a rough idea of what "sells" and what doesn't. My problem is that I don't really care any more. It is almost a badge of honour to see the hit rate plummet.
On the other hand, if one devotes the time to crowd pleasers, like this Slog bollox, one need never be short of an audience. Repeat the same bollox and then develop the fantasy and you can always be assured of a crowd.
Unfortunately for Slog-bollox, the world isn't going to end tonight. I can confidently predict that Greece will still be in the euro on Monday. But in Slogland, the sun will still be circling the earth and nothing else will change. People so much enjoy the doom-mongering that they will always return for more.
But then, if Slogdoom is not your style, there is always the royal soap opera with the added value ofa little doggie. With animals and royals in the same piece, you can't go wrong.
Tucked at the bottom of the page in The Guardian though is the unwelcome news: fear returns to the market. But we've heard it all before, and if you want serious hyperventilation, you go toZerohedge anyway. They do it so much better.
Me? I'm going for a walk. I may be some time.
Having seen off the Greeks, for the moment, and lined up Portugal for execution, now it's Spain's turn. Confidence is already starting to evaporate, we are told. A growing chorus of economists and analysts is warning that the Spanish economy – the eurozone's biggest after Germany, France and Italy – is in much worse shape than markets might suggest.
Of that, we have no doubt. I've always been dubious about the Spanish economy and am convinced that it has more than its share of funny money. But doom we were predicting back in 2008, and it still isn't happening. Four years ago, I wrote, " … whether we are any closer to a denoument is, as always, anyone's guess".
It still is anyone's guess. But by the time it does happen, we will all be dead from boredom. We just can't keep up the dread factor any more.
Posts
