The Times makes a pretty dismal effort to convince people to give them £1 a month for their crummy blogs:

Comment Central is on the move. You can find it here.

The blog will remain the same, but be part of our new website. That means that when you first go to the new site you will have to register.

And soon, there will be a charge. However, the good news is that a full week of Comment Central only costs £1 for 30 days when you first sign on and £2 a week after that.

And, even better, I have managed to persuade The Times to allow Comment Central subscribers to read TheTimes.co.uk free!

Yeah, or you could just save your money and unsubscribe from their RSS feed. Which is what I'll be doing until The Times goes back to its old model.

Filed under: Other blogs with tags fail, times
3523No Comments »http%3A%2F%2Fwww.fcablog.org.uk%2F2010%2F06%2Fgoodbye-times%2FGoodbye+Times2010-06-25+18%3A00%3A12Christie+Malryhttp%3A%2F%2Fwww.fcablog.org.uk%2F%3Fp%3D3523

So, part of the government's solution to the deficit crisis will be to raise the state pension age more swiftly than previously announced, perhaps to age 66 by 2016.  The aim is to raise it to 70 and beyond within the next few decades.

We shouldn't let the government do this.  It's wrong, it represents a massive broken promise and, if it's not already illegal, then it should be.

My first job was at age 16, for the princely sum of about £60pw.  I was helping out at the company where my Dad also worked. It was boring work, so I told them I wanted to quit, but they really needed the help so doubled my pay.  And as a result, in that year I acquired my first full year of national insurance contributions.  Since then, I have paid 23 more years of contributions, all of them on the basis that I will be allowed to receive a state pension when I reach age 65.

So, how dare government turn around now and tell me they've changed their mind and will be deferring payment for a few years?

I accept the need to rebase the state pension and to pay it later.  But benefits already earned must be honoured.  Indeed, a government that keeps its promises is essential in a civil society, else we may as well descend into anarchy.

Instead of arbitrarily raising the state pension age for all, government should pay the proportion of state pension already earned on a "from 65" basis and then make future contributions earn pension benefits from an older age.  Government could even pledge to review life expectancy every ten years and adjust the state pension accrual basis accordingly.

I have sufficient private pension savings to see me through.  Millions won't, though, and it's shameful that government will be robbing them of entire years of retirement that they've already paid for.

Filed under: Current issues, Ethics, Politics with tags deficit, pensions, state pension
35183 Comments »http%3A%2F%2Fwww.fcablog.org.uk%2F2010%2F06%2Fwe-shouldnt-let-the-government-raise-the-state-pension-age%2FWe+shouldn%27t+let+the+government+raise+the+state+pension+age2010-06-25+09%3A37%3A56Christie+Malryhttp%3A%2F%2Fwww.fcablog.org.uk%2F%3Fp%3D3518

Benjamin Fox bleats that the rise in VAT from 17.5% to 20% will push thousands of families into poverty.

Yet, the Guardian said only a week or so ago that we must view poverty in relative, not positive, terms.  While, I don't agree with that, it does make for an amusing rebuttal of Fox's article.

Poverty is currently defined as having income that is below 60% of median income.  Lefties love the definition because otherwise we could already have declared that the war on poverty was won decades ago.  It gives them a reason to continue trying to steal other people's money.

But VAT doesn't impact income at all, it impacts expenses.  So, by the very definition of poverty, an increase in VAT won't - indeed, cannot - impact poverty at all.

The only conclusion is that Fox doesn't agree with the relative definition of poverty, in which case we should direct him to the massive improvement in living standards of families in Britain, in which almost nobody starves, almost nobody is homeless, nobody goes without education or healthcare.  Who, by that standard, is poor?

Filed under: Other blogs, Taxation with tags benjamin fox, guardian, median, vat, welfare benefits
35142 Comments »http%3A%2F%2Fwww.fcablog.org.uk%2F2010%2F06%2Fmore-vatballs%2FMore+VATballs2010-06-24+09%3A39%3A55Christie+Malryhttp%3A%2F%2Fwww.fcablog.org.uk%2F%3Fp%3D3514

Via a press release from Save the Children UK.

VAT - The facts

• A 20% rate on VAT means those on the lowest income could spend more than £1,600 a year on VAT - or £31 a week
• Poor families currently spend more of their disposable income on VAT than richer families with the poorest 10% spending 14% versus 5% for the richest
• An increase to 20% would see the average cost of telephone bills rise £11.96 a year, while adult clothing would be an extra £19.76

Let's just take a look at those facts.

£31 per week means those on lowest incomes are spending £1,600 on VAT every year. Or, put another way, they're buying £10,000 of VATable goods every year.  To my auditor's nose, it sounds like complete bollocks.

And, taking a quick glance at the Office for National Statistics release on the effect of taxes on household incomes, it is demonstrably bollocks.  Table 14 (Appendix 1) shows that the lowest decile households pay £1,100 of VAT annually.  It's only when you get to the fourth decile that you get anywhere near £1,600.  Surely they wouldn't just have made the number up?

The ONS data show only what households actually did spend their money on.  It doesn't answer the question: what should they be spending their money on?  Buy lots of certain processed foods, for example, and you'll pay VAT at 17.5%.  Buy fresh ingredients and you'll pay no VAT.  We simply don't know, but we need to know if we're to take the STC campaign seriously. 

On top of that, as I've dealt with previously elsewhere, they misleadingly give the impression that the increase will be £31 per week, whereas in truth the increase will be a lot less.

This is shabby stuff.  They really need to be a lot more honest with figures, instead of resorting to grubby emotive tricks.

Filed under: Politics, Taxation with tags budget2010, deficit, idiots, office for national statistics, save the children, vat
35081 Comment »http%3A%2F%2Fwww.fcablog.org.uk%2F2010%2F06%2Fvatballs%2FVATballs2010-06-24+09%3A11%3A09Christie+Malryhttp%3A%2F%2Fwww.fcablog.org.uk%2F%3Fp%3D3508

So, the ACCA was busy yesterday tweeting about the Budget.  One of their accounts is ACCA Sustainability, which posts on all matters green.  And yesterday, it was tweeting away about the sustainability implications of the Budget.

Only, very unprofessionally, it kept on referring to George Osborne as "Gideon".  That's not his name, and they're only using it as a pejorative term.  Osborne made a conscious decision to change his name to George:

Originally named Gideon, he changed what he was called to George when he was 13. In an interview in July 2005, Osborne said: "It was my small act of rebellion. I never liked it. When I finally told my mother she said, 'Nor do I'. So I decided to be George after my grandfather, who was a war hero. Life was easier as a George; it was a straightforward name."

He didn't ask to be called Gideon.  His parents did.  And for the last 25 years he has asked us to call him something else.  Just like BP, we must respect that.

Of course, if it's fair game to belittle him by reference to a name not of his own choosing, perhaps all proper chartered accountants should go back to referring to the inferior body as "The Certifieds"?

Filed under: Institutes with tags acca, bp, george osborne, idiots, sustainability
3486No Comments »http%3A%2F%2Fwww.fcablog.org.uk%2F2010%2F06%2Funprofessional-body%2FUnprofessional+body2010-06-23+10%3A35%3A44Christie+Malryhttp%3A%2F%2Fwww.fcablog.org.uk%2F%3Fp%3D3486

Via Larry Crumbley, an accounting professor at Louisiana State University, I receive the following:

Greetings:

Relative to many peer organizations, the AAA nomination process is less than democratic. The Executive Committee is currently in the process of suggesting some amendments that may make AAA even more undemocratic.

The Nomination Committee for many years has suggested only one candidate for each position. The Nomination Committee is composed of three former Presidents, and the four independent members have to be nominated by the Executive Council.

In the spirit of democratizing the nomination process, I would like to suggest that the by-laws for the nomination process should be amended to read as follows:

IX. Nomination and Election Procedures

Insert after first sentence:

The slate shall include at least two names for each position.

[Other sections (e.g., TLC, FIA, ABO) have this more open and democratic process. If sections can handle two-person slates, surely the parent organization can do the same.]

VII. Standing Committees

3. Strike three in front of "most recent Presidents" and replace with two.

Strike "four" and insert "five" in front of "members."

[This change makes the election process more open and transparent.]

New sentence: Rank-and-file may nominate persons to the nomination committee.

[Nominations for this committee should not be limited to those coming solely from the Council meeting.]

We need at least 100 signatures to get the above changes for vote by the membership (clause XIV). If you are in favor of either or both of the above more democratic and open changes, please sign your name and affiliation below and return to me by mail, fax, or e-mail.

Larry Crumbley
Department of Accounting
Louisiana State University
3106A Patrick A Taylor
Baton Rouge, LA 70803
dcrumbl@lsu.edu

The American Accounting Association (AAA) is the largest society for accounting academics in the world.  So it's intriguing that their own governance processes are so arcane.

If you're a member of the AAA (and I'm afraid you have to be a member of the AAA to participate in Larry's petition), you can download, sign and return the petition from here.

Filed under: Corporate governance with tags american accounting association, larry crumbley
34791 Comment »http%3A%2F%2Fwww.fcablog.org.uk%2F2010%2F06%2Fdemocracy-american-accounting-association-style%2FDemocracy%2C+American+Accounting+Association+style2010-06-23+10%3A05%3A36Christie+Malryhttp%3A%2F%2Fwww.fcablog.org.uk%2F%3Fp%3D3479

Amusing stuff from Ritchie, who seems to be getting ahead of himself.  Under the title "That’s 200,000 jobs in the private sector gone as Bloody Tuesday begins" he shrieks:

The National Housing Federation has predicted that forthcoming housing cuts will lead to the loss (or lack of creation) of 200,000 jobs, and to 350,000 people being added to housing waiting lists. If the housing budget is cut by a third, it predicts that 142,000 new affordable homes will not be built.

Do you see what he's done here?  The NHF has predicted that forthcoming housing cuts will lead to the loss or lack of creation of 200,000 jobs and Ritchie has contorted that into "200,000 jobs in the private sector gone"

Ah, but chartered accountants are alert to this sort of gimmick.  It's Enron-style accounting or, if you prefer, counting your chickens before they're hatched. Only, when Enron did it, merely thinking about a chicken was enough for the company to book billions of dollars worth of eggs.

This is explained by Ross Watts, accounting academic superstar (and one half of legendary double act Watts and Zimmerman), in his paper What has the invisible hand achieved?  He includes a little diagram which shows the operating cycle of a company, from devising an idea, through making inventories, through taking orders, all the way through to shipping the product and receiving payment.  He criticises Enron for recognising profit at the very first stage, when accounting prudence would lead you to recognise profit later in the cycle.  Ritchie wants to cuddle up to Jeff Skilling, it would seem.

The NHF has made a prediction, which may or may not come true.  Of course, if 200,000 jobs aren't lost, the Ritchies of this world will merely claim that there would have been 200,000 more jobs if only it weren't for those pesky Conservatives.  But even that's not enough.  Blinded by his dribbling hatred of the Conservative coalition, Ritchie's claiming that the jobs have already been lost...  oops!

Filed under: Academic research, Other blogs, Politics with tags deficit, enron, idiots, jeff skilling, national housing federation, richard murphy, ross watts
3500No Comments »http%3A%2F%2Fwww.fcablog.org.uk%2F2010%2F06%2Fsuperritchienomics-ritchie-adopts-enron-style-accounting%2FSuperRitchienomics+-+Ritchie+adopts+Enron+style+accounting2010-06-23+09%3A38%3A51Christie+Malryhttp%3A%2F%2Fwww.fcablog.org.uk%2F%3Fp%3D3500

A judge has ruled that the federal ban on deepwater drilling is illegal.

A U.S. judge ruled on Tuesday against the six-month moratorium that the Obama administration imposed on deepwater drilling over the Gulf of Mexico oil spill.

Now, this is hugely embarrassing for Obama's administration.  It adds to the impression that they haven't really got the faintest idea what they're doing.

What's amusing is that this should reduce BP's ultimate liability.  For BP had set aside $100m to compensate oil workers from other companies that were unable to work because of the ban.  Although BP was stupid ever to agree to such a ridiculous claim, now the ban is quashed, BP should get its money back.

Filed under: Current issues, Politics with tags barack obama, bp, idiots, tim worstall
3474No Comments »http%3A%2F%2Fwww.fcablog.org.uk%2F2010%2F06%2Ftime-to-reduce-bps-liability%2FTime+to+reduce+BP%27s+liability%3F2010-06-23+09%3A26%3A22Christie+Malryhttp%3A%2F%2Fwww.fcablog.org.uk%2F%3Fp%3D3474

Ritchie blows a gasket in apoplecty over  plans to reduce the rate of corporation tax.

So we’re going to end up before this parliament is out with the extraordinary situation that after offset of all the allowances and reliefs large multinational corporations enjoy they might have an effective tax in his country of somewhat less than 20%. And that rate is lower than the basic rate of income tax, lower than the rate of VAT and lower than the rate of tax charged on small companies.

Hmm. You'd have thought he'd have applauded this.  You see, a lower tax rate means two things.

Firstly, it makes it a lot less likely that companies will bother to dodge the tax in the first place, because all that complicated tax planning won't be as cost effective.  They may as well pay the tax, as it'll be cheaper just to comply.

Secondly, even if companies do behave as badly as Ritchie believes they do, the loss to the Exchequer is reduced because a lower amount of corporation tax would have been due on the same profits.

So, whichever way you look at it, the moves announced today will cut both tax avoidance and tax evasion.  Isn't that what Ritchie wants?

Filed under: Other blogs, Taxation with tags idiots, richard murphy, tax avoidance, tax evasion
34903 Comments »http%3A%2F%2Fwww.fcablog.org.uk%2F2010%2F06%2Fsuperritchienomics-on-changes-to-the-corporation-tax-rate%2FSuperRitchienomics+-+on+changes+to+the+corporation+tax+rate2010-06-23+09%3A06%3A17Christie+Malryhttp%3A%2F%2Fwww.fcablog.org.uk%2F%3Fp%3D3490

Ordinarily news blogs consist of a fairly badly constructed article, followed by a shabby load of drivel from extreme left-wing and extreme right-wing commentators.

There's an article over at CiF by Peter Preston on BP, which bemoans the tragedy of their being beaten up over their public relations while the environmental catastrophe continues to unfold. It's miles away from the stereotype - it's really very good. And the comments which follow are truly excellent. Highly recommended.

Filed under: Other blogs, Politics with tags bp, guardian, peter preston
3439No Comments »http%3A%2F%2Fwww.fcablog.org.uk%2F2010%2F06%2Fsome-excellent-commentary-on-the-bp-situation%2FSome+excellent+commentary+on+the+BP+situation2010-06-22+08%3A23%3A47Christie+Malryhttp%3A%2F%2Fwww.fcablog.org.uk%2F%3Fp%3D3439