SiliconGlen, Scotland. Tartan Tech Talk.

The BBC reports that as of just over an hour ago Scotland no longer has any bridge tolls

It took a Labour government to sit on this suggestion for nearly 10 years and an SNP government less than 10 months to make it a reality. See my proposal for banning bridge tolls as they simply penalised the communities they serve.

This suggestion was made to the Labour government in November 1997. SNP, time for change. If only all governments were this effective.

Labels: Politics, Scotland, Viewpoint

The UK government is currently consulting on income shifting. This is a consequence of losing the Arctic Systems case last year, the government didn't get its way so decides to change the law to suit its needs. Nice job if you can get it eh? Nonetheless, together with IR35 this is yet another tax on the self employed (e.g. IT contractors) many of whom have family members contributing to the success of the business but will be penalised if income shifting legislation is drawn up. The Professional Contractors group has a useful resource page on this for more information and is calling for people to sign the petition to scrap the proposed legislation.

Here is a summary of the Professional Contractors Group (PCG) position for more information. Incidentally, although Scotland has 10% of the UK population, 17% of the PCG membership is in Scotland, indicating that such legislation may have a disproportionate effect in Scotland versus the rest of the UK.

Introduction

The Government has issued draft legislation, intended for inclusion in the Finance Bill 2008, to place a new tax on what it calls “income shifting”. The result will be significant tax increases for hundreds of thousands of small family businesses.

At present, a business owned jointly by a married (and civil partner) couple can distribute profits equally to each: this allows them to use up their tax allowances efficiently, and can create a tax saving. This is a consequence of the independent taxation of spouses that was recognised and accepted by Parliament when it was introduced in the 1980s. Now the Government wishes to impose a tax increase on everyone who has set up a business in this way.

PCG believes that the proposals are unfair

• The Government seems to think there is something wrong with spouses setting up “non-commercial” arrangements and wants to penalise them: in the real world, married couples enter into financial arrangements on the basis of being married to each other and it is wholly inappropriate to expect them to enter into “commercial arrangements”.
• Profits are distributed as a return on risk: the Government fails to recognise that married couples are jointly exposed to the risk of their business failing, and is seeking to deny them a joint share in the rewards if they succeed.
• For years the Government advised people to set up businesses jointly when possible: now they are to be penalised for following the Government’s advice.
• The proposals clearly and directly discriminate against small business and in favour of big business: if a consultant is hired out by a large company, he will be paid for the work and the rest of the fee will go to the company as profit, which can then be distributed to shareholders in the usual manner. If a consultant took exactly the same contract with exactly the same client for exactly the same payment, but the consultancy happened to be one he owned with his wife, the dividends would be taxed more heavily than the dividends of the large company.

PCG believes that the proposals are unworkable

• The proposed measure will make it impossible for businesses to self-assess their tax bills. How can they value every single contribution made to a business accurately and with confidence? Businesses will be left perpetually looking over their shoulder in fear of an aggressive investigation by HMRC, in which they will have to prove that they have done nothing wrong.
• The Government claims that the new rules will not cost businesses anything to administer, and not cost HMRC anything to enforce: this cannot possibly be the case for such a complex and subjective set of rules.

PCG believes that the proposals are inconsistent with other areas of law

• Spouses are entitled to equal shares in the value of a jointly-owned business in a divorce.
• Spouses are entitled to equal shares in the proceeds, under Capital Gains Tax rules, in the event that a jointly-owned business is sold.
• Under the proposals, spouses will not be entitled to equal shares in the profits of a jointly owned business while it is operational.

PCG believes that the proposals are not justified by the consultation paper

Ever since the independent taxation of spouses was introduced in the 1980s, it has been common practice for married couples who go into business to set up the business jointly; the consultation paper fails to show that anything has changed since then to justify the new rules.

Labels: Business, Politics, Viewpoint

I came across this interesting report from 2004 covering the Scottish investment scene and it goes a long way to explain why Scotland isn't home to as many successful startups as it deserves. Not much has changed in 4 years and to put some figures on it, we are apparently we are only working at 20% of our economy's potential:

A 1993 MORI poll in Scotland estimated that there were over 90,000 latent, or would-be, entrepreneurs and business owners in Scotland, who were frustrated in their ability to act on their aspirations by a range of factors, including the absence of role models, difficulties (actual and perceived) in accessing resources, particularly finance, and lack of knowledge about the process of business formation. Based on figures from the Global Entrepreneurship Monitoring (GEM) research programme around 5% of the Scottish adult population is actively engaged in business ownership or in activities being undertaken with a view to entering business ownership. This is around one half of the level experienced in the US and around one-third the level in other small open dynamic economies such as New Zealand.
Actually achieving this increased level of entrepreneurial activity will require a quantum shift in culture and attitudes in Scotland, which may only be achievable over a generation: as the experience of the business birth rate strategy in Scotland has demonstrated, this is not a ‘quick fix’ option. Specifically, access to finance is consistently cited as the prime obstacle to entrepreneurial activity in the GEM reports, and also in our research and contact with potential entrepreneurs. As it is, at present Scotland is working at perhaps 20% of its entrepreneurial potential.

Next time I have a decent idea, I'm off down to London. We have some of the brightest ideas in Scotland, some of the best graduates and even some of the world's largest banks. Yet we struggle at 20% of our potential. Why should I as an entrepreneur waste my time with a funding sector that isn't fit for purpose?

Our view is that the 90,000 “frustrated entrepreneurs” identified by a 1993 MORI poll (a figure consistent with the GEM data for Scotland a decade later) do not become active entrepreneurs largely because the funding landscape is not only too empty, but is also perceived as empty by those looking to enter it. While market participants respond (with some accuracy) that it is in fact not empty, and that sensible ideas well advised can usually find a funder, this accurate opinion is not helpful to an individual who is in full-time employment during normal working hours, has few or no contacts with the market, has little understanding of how it works, has little spare time to find out, and has a perception that entrepreneurial success relies on unique and specific skills that they may not have and may not be able to acquire.
A Darwinian approach to entrepreneurship would demand that these 90,000 aspiring entrepreneurs be left to live or die on their merits – let the fit survive and the rest remain in employment. Such Darwinism is, however, founded on the false premise (a) that this process will ‘weed out’ weak ideas and businesses, which is economically efficient, and (b) that entrepreneurship ought by definition to be hard and difficult, not least because today’s successful entrepreneurs and investors did indeed have to face harsh and difficult environments, and associate success with difficulty.
This Darwinian approach to the creation of an entrepreneurial economy is flawed, as can be seen from the failure of the Scottish economy to significantly raise the level of new business starts and the rate of formation and growth of high-potential companies over the past decade. A funding landscape that was visibly and obviously rich in sources of risk capital for businesses of every kind would remove a major constraint (real and perceived) on the formation of new entrepreneurial ventures. As such, it would provide an environment for the successful transformation of the culture of the Scottish economy into one in which entrepreneurial activity is seen as a legitimate career option and economic role.

Labels: Business, Innovation, Politics, Scotland

The Scottish Government has just spent £100,000 apparently to come up with a new slogan for Scotland to replace "The best small country in the world". The new slogan is to be "Welcome to Scotland" with the Gaelic translation of "Failte gu Alba" as you can see from the picture in the BBC article.

100K pah, I could have done it for a fraction of that figure. Oh, I already did.

See the comment dated 9:11pm 27 Aug 2006.

The comment was obviously far too ahead of its time and didn't take full account of inflation either.

Aye, right

Craig

Labels: Politics, Scotland, Viewpoint

30th April: Northern Ireland gets smoking ban. The island of Ireland is smoke free and England remains the last part of the UK without a smoking ban in place, highlighting the democratic deficit in England.

2nd May: the 10th anniversary of Labour coming to power. This will intentionally be a low key affair given their unpopularity in the polls.

3rd May: Scotland goes to the polls. The SNP are widely tipped to win and significant steps towards Scotland becoming an independent country, ending 300 years of union will ensue. Like Wales, the SNP are proposing abolishing prescription charges. How long will England remain socially and politically behind the rest of the former UK?

Labour are expected to lose control of the Scottish and Welsh parliaments and do badly in the English council elections, all on 3rd May with their support approaching a 20 year low.

Tony Blair is expected to resign shortly after the polls, realising that the disastrous showing of Labour UK wide and the loss of devolved control in Scotland and Wales is largely down to continued resentment over Iraq, cash for honours sleaze and it is time for a fresh start. Sources indicate 31st May as the favoured date, but in practice a poor showing in the polls would bring this forward significantly.

Prime minister in waiting Gordon Brown has his own problems to deal with though. On 10th May, the Bank of England raises interest rates again. Normally set on the first
Thursday of the month, the Bank of England which was allegedly set free from political control is curiously meeting on the 10th, rather than the day most of the UK goes to the polls. Higher than expected inflation and a strong pound will hit the manufacturing sector and the balance of payments. The economic joy ride that Gordon Brown has enjoyed is coming to an end and the Tories are riding high in the English polls. Whilst the Dow Jones is now at an all time high, the FTSE100 is still some way off the level reached in 1999.


8th May: The devolution picture completes. With the Scottish and Welsh results in a few days ago, today see the Northern Ireland assembly assumes full powers and a nationalist party, Sinn Fein, sharing power. A struggling Labour government has at most three years to recover from a disastrous showing in the polls. Behind the scenes the Labour government has to discourage prominent Labour MPs from Scotland for seeking election to English constituencies as the SNP seeks to hold an independence poll in 2010 and remove Scottish MPs from Westminster. The UK looks to be on course for a SNP government in Scotland confronting a Conservative government in Westminster from 2010 elected almost entirely from English constituencies.
Such a prospect not only favours the SNP but also sees Plaid Cymru and Sinn Fein increase in popularity.

The UK, heading for part of one island (England and Wales) and part of another island (Northern Ireland) needs a clear rethink of its structure as the nationalist movements in Northern Ireland and Wales look to Scotland and the previous negative arguments levelled at Scottish independence fail to hold much ground as Scotland heads towards being a sovereign nation.

From the end of April to the end of May, it will be an interesting month with reprocussions for years to come.

Labels: Politics, Scotland, Viewpoint

This will be my first blog post from the PDA and as I type this I am on a very warm London underground in the middle of December. I can well believe the horror stories of overheating in the summer, especially during rush hour and three trainloads of people queuing ahead of you before you can get on a train,

The problem is caused by hotter air in the Tube failing to rise (as hot air does) quickly enough, coupled with insufficient cooler air from outside replacing it, and insufficient air circulation generally, especially within the trains when the doors are closed. I offer the following as a possible solution and welcome comments on it.

1. Have a system which derives at least part of its power from solar energy.

2. Pump cooler air from outside (possibly augmented by air conditioning) into the gaps between stations such that it flows along the lines, pushed by the trains, into stations. Said air could be sucked in from the street level drainage system.

3. Complete the air cycle by using fans to suck the air out of stations by installing such vans in escalator shafts.

4. Dramatically improve the circulation in trains by having air scoops at the front of the train (where there is high pressure) and feeding this into each carraige separately via units in the carriage ceiling - there is currently a fair bit of spare headroom there that could be put to better use.

5. Install ceiling fans with mesh guards in carriages.

My 2p worth anyway, Ken Livingston are you listening?

Labels: Innovation, Politics

In new developments in the Pope Vs Islam story, this breaking news just in.

Muslim leaders, many of whom accepted the Pope's apology, are now concerned that the violence of recent days is now getting out of hand. Certainly the murdering of a nun and the firebombing of churches are against the core message of Islam which is a peaceful religion.

Noone wants to see the good name of Muslims tarnished by a tiny percentage of followers which use their religion as an excuse for violence and illegal acts.

The leaders go on to say that they understand how the West can often find it difficult to understand Muslims when the press pick on events like this and give the impression that Muslims will take to violence and illegal acts despite all that is said in the holy books regarding respect and understanding.

In order that the violence of recent days is put in its proper context, the religious leaders of Muslim groups and nations are today calling for an end to the illegal violence and are organising peaceful marches and protests, filled with the peaceful believers who comprise the majority of the Muslim faith and whose peaceful values and respect for other human beings are being misrepresented by the media focus on a few violent and isolated protests. This mass statement, which will emphasise the peaceful nature of Islam will be a silent protest against the Muslim minority who seek to misrepresent the faith as a whole.


Praise Be This Miracle.

Labels: Politics

I was going to write a longish blog about the Vatican braces for Muslim anger reports.

However, I found this quote from the Dilbert Blog sums it up

My favorite story of the week is about Pope Benedict inadvertently insulting Islam in a speech. He quoted a Byzantine emperor who called Islam “evil and inhuman” but made it clear that it wasn’t his own opinion.

In response to being labeled evil and inhuman by a dead Byzantine emperor, a group of Muslims did what anyone would do in that situation: They firebombed two churches in the West Bank.

This is funny on so many levels that I hardly know where to start.

Maybe we need to breed more atheists?.

Seriously, isn't it great how the Pope can issue a religious text to clarify what he said so that we can understand it better. Just think of the fun that would ensue if we could treat the bible the same way.

How about this for a starter

"Dear faithful. I thought up this religion to impose some order and fairness on early civilisation. Now that you have learnt these rules and adapted your own, you need not be bound by what was written in a dated book 2000 years ago, especially as society has moved on since then. Kindly disregard the stuff about the universe being created in 6 days and women and gays being inferior. Yes, you can have equal rights, that's what I meant really.

I hope you don't meet up with sentient beings from other planets in the future, because I completely ommited that in the bible, sorry everyone makes mistakes even those with complete power over time and space."

Labels: Politics

BBC NEWS | Politics | £141m benefits computer shelved: "It is the latest in a long series of computer problems for the government."

Too right. I put this onto Reddit with some rather choice language and it made the front page.

The government even has a Project Management method called PRINCE2 and a site all about it. So was the method at fault for the £140m problem or the people in charge? Why in the light of these overruns is there no accountability? After all, the 2nd First Minister of Scotland was forced to resign over a sum which is a tiny fraction of the above.

Lets not forget the £6.8Bn NHS upgrade overruns, the ID card running into delays and overruns, 1 month after I said it would and of course the gun register unfit for purpose 10 years on.

Clearly the taxpayer should be expecting better value for money in these projects so that instead of funding overruns the money can be spent on schools, hospitals, etc.

Labels: Business, Politics

There are so many examples I could give to illustrate Rip Off Britain. Ever since I first went to the US in the 1970s, many consumer goods are so much cheaper there.

Clearly over priced goods have an effect on the economy as people will buy less of them. I am interested in other examples of rip off Britain and the government's stance on this.

Here's my example from something I was looking to buy:

WN311B PCI card for NetGear router: Typical UK price £113 plus postage

Now compare it with the US: Typical US Price $96

The US price in dollars is cheaper than the UK price in pounds.

Now for a more direct comparison. Convert the US price to pounds £50.67. Add the rip off tax known as VAT (no sales tax applicable on US internet sales remember). This would make the US price with VAT £59.53. Lets call this £60.00

So the UK Rip Off margin is (113-60)/60 * 100 = 88%. 88% markup!!

Alleged cost of importing and postage $53

And of course where there is no importing or postage, the differential is even less excusable. In this BBC article on iTunes pricing, the UK price is 55% higher than the US price and 93% higher than the Canadian price.

Welcome to Rip Off Britain

Early History:
The UK Internet list, 1992, founded to keep UK Internet prices low.
Rip off prices in 1992
Rip off prices in 1993
More rip off prices in 1993
Rip off prices in 1995

Since Labour came to power, we have
Rip off insurance APR, 1999 and
High training prices 2006, because we're worth it?

Who is responsible for ensuring Britain stays competitive?

Labels: Business, Politics