On National Insurance and Child Benefit

There's recently been coverage in the media of a thing called 'The Living Wage', that is a wage upon which people can live comfortably, a somewhat higher wage than the current minimum wage. By a quirk of statistics, the Living Wage is within a few pence of what the take home amount of the minimum wage if it wasn't taxed. That is, if people on minimum wage didn't pay income tax, they'd be taking home the living wage.

Fiscally, I'm a big fan of raising the income tax threshold to £16,000 or so, enough to take the minimum wage earners out of the tax system. And then, with feelings of generousity, I'd raise the threshold to the median wage, so the poorest half of the UK paid no income tax, and the rest pay the rest of it, at whatever rate balances the books.

However, I'm not the chancellor, and I have doubts. There's the whole concept of National Insurance, which I still believe is an insurance scheme and not just a different name for tax. I feel that all earners, no matter what their income, should be paying national insurance, like putting away a little bit each pay day, for when they fall ill, or become unemployed or otherwise fall on hard times.

And here we land at the problem with Child Benefit. Within twelve months, those earning £50,000 or more will not receive Child Benefit. Whether or not this is fair depends entirely on whether that money comes from taxes or national insurance.

If its from the National Insurance Fund then it ought to be a universal benefit, paid for all children regardless of their parents' income. Imagine if you paid for insurance on your car or your house, and then when disaster strikes, the insurance company turned round and said, no, you can afford to repair or replace without the insurance money so we're not paying up. In which case, I imagine you would do your damnedest to ensure that the insurance company never received a penny from you.

But if Child Benefit is paid from tax, then fair enough, deprive the rich of it benefit, as they are paying for everyone else's services anyway, its part of the package, part of the deal you sign up to when choosing how closely you comply with a country's tax regime*. The tax rates vary regularly anyway so any gains or losses are transient rather than long term.

It appears that Child Benefit is not paid from the National Insurance Fund, and is administered by HM Revenue and Customs and so is paid from tax.

In order to hold views such as this I try to indulge tax avoidance as little as possible, I don't give money to charity, I don't use GiftAid, and I don't keep my savings in an ISA.

*Its widely believed that only the rich can take advantage of tax regimes in different countries to maximise their wealth. I believe this is untrue as I've worked for minimum wage in factories where the vast majority are workers who've travelled thousands of miles from far off lands to work for minimum wage and then send a proportion of their earnings back home to ensure their families have a higher quality of life. This is the same package as Sir Philip Green's wife living in Monaco receiving the benefits of the Arcadia group in the UK.

Public Entertainment Licences in Scotland

There has now been a small pile of coverage in the blogsphere about the controversy of Public Entertainments Licences in Glasgow. Rays of light here and there.

Helen Shaddock brings us the response for Nicola Sturgeon MSP including this:-

However, it is important to stress that the new law does not mean that local licensing authorities are required to insist on free-to-enter events having a Public Entertainment Licence. The discretion lies entirely with the local licensing authority - in this case Glasgow - to determine what types of events they licence. The public entertainment licence is a discretionary licence. It is for the local authority therefore to decide whether to licence public entertainment and if they do, what specific types of entertainment they wish to include.

As I understand it, there is nothing whatsoever in the law to prevent Glasgow from exempting all or certain categories of free to enter events from the requirement to have a public entertainment licence. Indeed they already have exemptions in place in relation to school halls, church halls, fetes and gala days and there is no reason why other events cannot be added to this list of exemptions.

Via For Pete's Sake we learn that Glasgow music scene heavy-weights Belle and Sebastian have weighed in on twitter with the jaw-dropping put-down:-

Not cool GlasgowCC [City Council], not cool at all.

Art Tokens wonders why there's no corresponding fuss about Edinburgh City Council who require exhibits to have licences, perhaps this is because their policy is for venues with paid entry. They don't seem to have changed their policy in line with the change in the law.

Linn Labour gets all political about it, having a go at Nicola Sturgeon MSP for clarifying the Scottish parliament's position in the face of Glasgow City Council's warning about the repercussion of the change in legislation. Somewhere along the line there was a miscommunication, a fine article on the subject in The Firm explains that

The licensing of public entertainment is an “optional” civic licence. This means it is a matter for each licensing authority to decide whether or not public entertainment events should require a licence, and secondly to decide what forms of entertainment are treated as “entertainment” for licensing purposes.

Thus bitch-slapping Glasgow City Council, bang, right in the chops.

There's a neat letter in The Herald pointing out

In this year of the Queen's Diamond Jubilee, many people will be considering ways to publicly celebrate this event. How many organisers will be aware that free entry community events will now, according to the legislative briefing on Glasgow City Council's website, require a public entertainment licence?

Which is a rather neat angle, outwith art galleries and popup gigs.

The campaign is still going strong on Facebook, with useful titbits filtering through, Zara Gladman wrote to her MSP Bill Kidd, who's aide Alison wrote back, possibly having looked at my list of what other councils are doing:-

...The interpretation of this and decision on what scale of event requires a license is up to local authorities, It doesn't appear that other local authorities are taking the same approach as Glasgow, which would tend to suggest that the problems... ...are of [Glasgow City] Council's making. There is nothing in the Act which would automatically penalise small scale free events...

Yeah, take that GlasgowCC, in your face.

The latest actual news via The Herald

...a spokesman for the local authority said it will seek a temporary solution so that small art exhibitions will not require a licence.

The move – a redefinition of the term exhibition, the council said – will represent immediate steps which help to protect Glasgow's art scene.

Perhaps like what West Lothian council have already done, instead of the boilerplate use of 'Exhibition' in the list of events affected, they specify

Exhibition of persons or performing animals.

and don't refer to art galleries at all.

One thing that has been bugging me immensely throughout is the spelling of licence, license, licencing, licensing?

Another thing is the nagging suspicion that maybe its Glasgow City Council, The Highlands Council and West Lothian who are on the ball in changing their policies, and the other 29 councils will all be playing catch up in the coming months. What if the rest of Scotland still have this battle to face once the various councils's lawyers have finished reading the legislation and then decide to implement it all across the board to the letter.

The main angle of my charge is that Glasgow is being unique in its implementation, and all the other councils are well aware of the change in legislation, but have decided not to implement it, that they know its all optional and have opted not to do anything. But maybe I'm wrong, and the rest of Scotland's art scenes are in for a fight.

Shares and Stuff: My top tips

Its been a month since I started wading in the murky depths of buying shares, and to date I've made a loss of about £40. As I said before, I bought about £250's worth each of Royal Bank of Scotland(LON:RBS), Kenmare (LON:KMR) and Halfords (LON:HFD) shares

The other week I sold the RBS and Kenmare cos they were looking shite. The taxpayer subsidized banking sector is doing down the swannie, with Lloyds giving up on some court case and now having to set aside £3billion to pay as compensation to folk who they'd mis-sold insurance to. Bear in mind that Lloyds don't have £3billion, its all taxpayers money, they're just moving it from one bunch of taxpayers to another. RBS will have to do the same. They're all just a load of shite. And Kenmare, they announced that all was going well and the prices of their products is going up, but that didn't affect their share price. So both RBS and Kenmare are about 42p a share now, compared to the 45p I bought them at.

Halfords is a bit of a success story, if only I'd just bought shares in Halfords. They're up about 11% in the month I've had them, so that's earned me back the commission fee and then some. I'm going to keep hold of Halfords for the summer.

But could I be doing better?

Sure, the housing market. I'm not quite in a position to but a house right now, I still need to make a my fortune with shares, but housing is where its at. Take a look at RightMove, the property website (LON:RMV) and Savills, the estate agents and property management people (LON:SVS). They've done pretty well over the past month compared to my benchmark Halfords.

And check out the past six months. Yeah, I think RightMove is my next big investment opportunity for shares and stuff. Over the past twelve months they've gone up 59%. Compare that to 3.3% return you'd get for a decent ISA, your money could be earning twenty times as much if you want to take the risk.

Shares and Stuff: A brief introduction

Yeah, so right, cos I'm all grown up now, I thought I'd invest some of my wealth in the stock market, or slightly more specifically, buying shares.

It was a rather pleasant surprise to find that the HSBC, who I've banked with for a number of years, have a share investy account thing which is really easy to set up. Just a few clickety clicks and a patient wait for the paperwork to go through, and I have an InvestDirect sharedealing account. This would enable me to buy and sell shares.

Now all I had to do was find some share to buy.

I've found that the easiest way to find companies to invest in and to track share prices is with Google Finance. To start with you search for companies, it tells you the share price and similar companies. What you want to do is find companies that you think are going to do well.

A brief sojourne...
Twenty or so years ago my mum was getting into the buying shares game and asked my advice, I suggested a company called Virtuality Group Plc, who in the early nineties pioneered virtual reality arcade games. I thought, this is the company of the future, Mother, invest now.

How could they fail? I mean, c'mon, VIRTUAL REALITY!! Sadly, they didn't become the new Microsoft, the new Nintendo, Apple or Google. And as home computer processing power increased, their products became pretty much pointless.

Sorry Mother, you asked the wrong twelve year old for stock market advice.

This time round I thought a bit less imaginatively, Royal Bank of Scotland (LON:RBS), for their shares fell about 95% in the credit crunch and subsequent government bailout, from almost £7.00 to 19p a share. Imagine if you had £10,000 tied up in them in 2007, that would be worth about £300, after the crash. You'd be ruined. But my thinking is that the company is much undervalued now, sure they were a bit over-priced before the crash, but their low price now is more a symptom of investors not wanting to touch them with a barge pole rather than an honest valuation of the company. Get the shares now whilst they're cheap, and give them a year or two and I reckon you'd easily recoup.

Another company that caught my eye was Halfords (LON:HFD), the bike and car parts superstore. We are in a recession, everyone's skint, but we still need summer holidays and the sun is shining. So, instead of jetting off to Malaga, folk are going to be driving to Mallaig. If I'm right then in the middle of the summer Halfords is going to be booming, and I could make a profit.

A third company is Kenmare (LON:KMR), they mine in Mozambique, and since May 2010, their shares have more quadrupled, going from 9p to 40p. £10,000 invested this time last year would be £40,000. I reckon they haven't peaked yet, and once their new mine starts churning out whatever magic metals they can find, then the sky's the limit.

So, I've bought myself shares in all these companies, only £250 in each, and the £12.95 commission on each transaction. But, I hear you ask, where do I get this money from? Well, I'm skint, so this money has come out of my overdraft. Its magic money plucked out of the air. But that's okay, its only if their value falls that anyone loses money.

A week passed. I got scared that Royal Bank of Scotland was going to crash again so I sold my share in them at a loss and bought more in Kenmare.

That was probably a mistake too, they were doing their annual salary negotiations with the workforce in Mozambique, and the workers went on strike and shut the mine down.

No matter, the weather's been good and Halfords shares have gone up by about 10% since I bought them. Wehay!