Tax refugees

Shire Pharmaceutics, a FTSE100 firm worth GBP5.5bn, is to relist its head office offshore for tax reasons. Global firms (as Shire now is) can report profits anywhere – and Shire will move to Jersey and pay tax in Ireland (where corporation tax is 12.5% for trading income, not 28%). It is a move explicitly “designed to help protect the group’s taxation position”. Shire is fearing a bid from Pfizer, and perhaps quitting the UK tax system is a form of defence. This fits a trend. Hiscox and Amlin have already switched. Amazon recently headed to Ireland.

Businesses do not petulantly say: we’ve had enough of Brown, we’re off. This likely represents a ten-year forecast of what Britain will be like, and (I suspect) involves the conclusion that things would not get much better under the Conservatives – but will get better in our competitor nations. CityAM broke the story – read it here, and Shire’s statement here.

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A reshuffle for the better?

Can things get any worse for Gordon Brown? With the news this morning that a minister is threatening to quit, our Dear Leader needs something to change. And quick.

On that front, he seems to be pinning his hopes on a cabinet reshuffle this summer. According to the Telegraph, those due a promotion include Jim Murphy, Liam Byrne and – surprise, surprise – Ed Miliband. Whilst Hilary Benn, Des Browne and Hazel Blears can expect to be flung from the battlements.

This isn't so much a reshuffle, then, as a dilution. Whilst Murphy et al. may be capable in their own right, their youthful presence will hardly reassure voters in these tough economic times. 

As James has already pointed out, there's an arsenal of big guns on the Labour back benches – including Charles Clarke, Jon Cruddas, Alan Milburn, Frank Field, Stephen Byers and David Blunkett – who'd fit the bill perfectly. But Brown's internecine stubbornness means they'll never get fielded. A shame.

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One of Gordon's goats is abandoning him

Tomorrow’s Times splashes on the news that Digby Jones will resign before the next election as he is not prepared to say that he supports Gordon Brown during an election campaign. The Times reports that the former CBI head made the remark at a private event at the end of January.

Brown must wish that the news had leaked out earlier as coming now it fits all too well into the current narrative that this is a government in disarray and on the way out. Expect plenty of Labour backbenchers to say I told you he was a rat, many had always questioned the wisdom of making someone a minister who wouldn’t even say if they voted Labour or not.

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Channel 4 fact check

George Osborne had a bit of a rough ride on Channel Four news at 7pm and the Labour Party has gleefully sent around a transcript. Jon Snow put to him that “the IMF says that our growth is going to be 1.6%, not only this year but next year as well, and that outstrips any other country in the whole of Europe and the United States.” Utter nonsense, of course, but Osborne did not correct him when asked to name a country that would do better. Again Snow said to Osborne that “on the IMF figures, Britain comes out on top” and later “you reject the absolutely key finding which growth which is – you swear by growth – UK growth is 1.6% which is better than anyone else in the developed world”.

I daresay Snow actually believed this junk but I’d like Channel Four’s excellent fact check service to have a proper look at their anchorman’s claim. What they’d find is the IMF data from World Economic Outlook April 2008 (here) names several developed economies expected to better than the UK’s pathetic 1.6% this year. They include Greece 3.5%, Australia 3.2%, Norway 3.1%, Finland 2.4%, New Zealand 2.1%, Sweden 2%, Austria 1.8%, Spain 1.8% and Ireland 1.8%.

All this matters because Brown’s claim is that we should be grateful for this dismal 1.6%. His little “say a little prayer” routine today (“every day that I wake up is about keeping this economy moving forward”) suggests any growth at all is seen as a triumph. In fact, of the 31 countries the IMF considers to be “developed”, a full 19 will do better than Britain. So Britain better than anyone else in the developed world, Mr Snow? Not even Gordon Brown would claim that.

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Who should you vote for?

Still undecided on who you'd have as London mayor?  If so, this nifty "Who should I vote for?" quiz that Sky have put together should help you decide.  It asks questions on a policy-by-policy basis, and then picks your man for you.  Simplicity itself.  

Any surprising results for CoffeeHousers?  Do tell...

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A change of address

So – in an effort to save taxpayers' money – David Miliband is to permanently vacate his lavish official residence.  Over at Three Line Whip, Con Coughlin is disappointed by the move, thinking it will undermine the stature of the Foreign Secretary – “Foreign visitors expect to be received in some style when they come to London”. David Hughes counters by pointing-out that “there’s hardly a dearth of venues for official receptions and dinners”.

I’m with Hughes. Foreign visitors may have their expectations, but British taxpayers expect something too – namely, that their cash isn’t used to fund the gravy-train. And – whilst there’s a slight whiff of opportunism about Miliband’s decision – it’s still good to see a high-ranking MP eschew some of the “trappings of power”. 

Michael Martin should take note.    

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Britain is "bust" says Osborne

A first for British politics – standing room only in a speech about economics. George Osborne was at Policy Exchange laying out his “alternative view” and, as he went, ticking many of the boxes I had for him. The first half of his speech was a punchy critique of Gordon Brown, pointing out times where he and David Cameron had mentioned the debt problem. He “imported deflation from Asia,” he said. – and two years ago the Tories had warned about “an economy built on debt is an economy living on borrowed time.” That phrase is very true now. Labour has repeated the mistakes of its past. Anyway, you can read the rest of the speech here.

He slipped out of the vernacular for the second half of his speech, which wasn’t as good and aimed at the financial sector. It was about banks swapping mortgage-backed securities for gilts, off-balance-sheet liabilities etc. All relevant stuff, but on a different wavelength. Andrew Porter from the Daily Telegraph asked him what this boils down to – why would a financially stressed Mondeo Man want a Tory government? He replied that the Tories would abolish stamp duty and help Mondeo Man on to the housing ladder and give support to the property market at this difficult time.

Hang on. If the property market is crashing, how would it help Mondeo Man to be lured into this market? And why on earth would a Tory government want to give help to a property market they believe is overblown and due a correction? I asked him this.

Osborne deflected well. A Tory government will not be in for a while, he said, so this is not a comment on today's house prices. Property ownership is a good thing, to be encouraged in general.

I pressed him on whether he believes there has been, or still is, a housing bubble – he had been careful in his speech to talk about a debt bubble and asset bubble but not a housing one. The word "bubble" implies that a sharp burst is coming.

He said yes, there “has been” a housing bubble. Is there still one now, I said? Halifax said prices are going down 2.5% he replied, do it doesn’t seem like it. There can still be a bubble if prices will fall by 30% as the IMF say, I replied. Well, he said, it’s fairly clear that “we’re in the bust bit, not the boom bit”, now he said.

I’m not sure if he quite intended to go that far – “bust” makes for a good headline, as we see above – but I think his analysis is right. It’s a brave politician who calls the top of the market, next thing you know you're portrayed in the papers as Private Frazer. But Osborne is right to call this bust by its name. Events in the next months, I suspect, will bear this out in full.

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A cut lead for Boris

As Centre Right reveal, today’s Evening Standard records a cut poll lead for Boris. Their latest YouGov poll has Our Man on 45 percent (down 4 on the last poll); Livingstone on 39 percent (up 3); and Paddick on 12 percent (up 2). Things look rosier when second preferences are allocated – Boris lands 54 percent of the vote, compared to Livingstone’s 46 percent.

The slimmer advantage is testament not only to Livingstone’s resilience, but also to a week in which Boris has seemed oddly deflated. His performance in last week’s Newsnight debate was less-than-stellar, and A.A. Gill’s article in the Sunday Times described the Tory candidate as unusually “glum and uninspiring”. The moral is clear: Team Boris needs to get the old electricity back, lest the slide becomes a plummet.

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Brown shouldn't fear the stalking horses

It is a modern ritual that when a party political leader's fortunes plummet - and Gordon Brown's certainly fit that category - there is talk of a leadership contest and, specifically, of a "stalking horse" candidate.

Here's an entertaining look in Slate at the origins of the phrase. But, for most of us, the words trigger memories of Sir Anthony Meyer's challenge to Margaret Thatcher for the Tory leadership in 1989 - doomed in itself, but the key that turned the lock to her downfall a year later.

The Conservative leadership rules in those days were sufficiently flexible to make such a challlenge meaningful, and enabled contenders to step into the second round of a contest. In the Labour context, talk of "stalking horses" is completely meaningless.

A prospective challenger has to secure a whopping 20 per cent of Labour MPs - namely 70 of the 352. Would, say, Charles Clarke receive such backing? Come off it: no serious challenger to Gordon Brown when he was candidate for the post-Blair vacancy - rather than the incumbent - could muster more than 25 names.

But let us follow through the rules, anyway. This imagininary "stalking horse", having implausibly secured 70+signatures, writes to the Labour general secretary announcing his or her intention to challenge Brown.

Then - and this is where we stray into the realm of fantasy - a special conference is held to resolve the matter. Constituency parties and unions are expected to ballot their members on which candidate they favour. The electoral college is split three equal ways between Labour MPs, party members and members of affiliated trade unions, with the one member one vote system introduced in 1993 in operation. The process is lengthy, expensive and utterly disastrous to Labour's prospects at the next general election. Think of the headlines: Never mind the economy, this lot can't even decide who should be in charge.

Can you imagine the Labour machine allowing this to happen? Dream on. Trust me: Gordon will lead Labour into the next general election.

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Just in case you missed them...

Here are some posts made over the weekend:

Matthew d'Ancona thinks Gordon Brown is his own worst enemy.

Fraser Nelson charts Brown's reign of error.

Peter Hoskin tracks the growing sentiment that our Prime Minister won't make it to the next election.

And James Forsyth stresses the importance of May 1 to the Government, and reports on the effort to curb Iranian influence in Iraq.

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