9 2 mins 10 yrs

It was George Orwell who coined the phrase “Four legs good, two legs bad” back in Animal Farm days. Who would have thought that the new Labour leader (and winner of the Ray Romano look-a-like competition) “Red” Ed Miliband would use that as the basis for his economic policy?

You see Red Ed thinks that there are “good” companies and “bad” companies. The good guys are  “genuine” wealth creators – who, he will say, should be championed and encouraged – and the bad guys are the  “asset-stripping predators”.

Just a few points on this;

1. Who decides if a company falls into the good or bad category?

2. What criteria apply in evaluating these companies for what could be punitive categorisation?

3. How can a different tax regime be applied to one group of companies and not to another? What is “good” companies go bad? Or vice versa?

For someone with such a strict Marxist background as Miliband, it may seem natural to want to categorise private business and then attach punitive taxation to those deemed unworthy. However given his total failure to get to grips with the bloated unproductive State sector, I suppose it is natural that he focuses on the sector that creates wealth as the real enemy.

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  1. David –

    1. Who decides if a company falls into the good or bad category?

    A government minister by the sound of it. They may as well call it the Invite to Corruption Policy.

    Aside from the impertinence, aside from the soviet instincts for which he should be banished from polite conversation, it’s clear Miliband has no idea what he’s talking about, that no-one who ran their eyes over the speech knows about economics.

    “Asset stripping” is wealth creation. Close down (i.e. “asset strip”) the old, failing coal depot and open up a supermarket or Homebase/Halfords/PC World on the site and you’ve increased values, i.e created wealth. That’s how it works.

  2. I agree with him. One of the worst companies for tax dodging and sharp practice is GMG. Guardian Media Group – The Grauniad. They have a complex web of shell companies including an offshore trust – The Scott Trust. All designed to cheat the UK taxpayer of the proper amount of tax, and they’ve been at it for years.

    How does that class warrior hypocrite the honourable Polly ‘Tuscan Villa’ Toynbee justify working for an organisation that has purposely set out to steal so much from the common man?

    So yeah Ed? Stop throwing stones whilst your in a glass house. How much tax did you expense cheat flippers pay then Ed?

  3. You have to admire the chutzpah.

    Ed Miliband, a sociopath dedicating his life to maximum power over people, accuses other of asset stripping.

    How does he think government exists and sustains itself?! He was an officer in the greatest band of asset stripping looters in our history and made off with plenty of loot. He still makes off with plenty of loot.

    What a magnificent lack of self awareness.

  4. Of course there are ‘good’ companies and ‘bad’ companies, the problem comes, as with most things in life, – in the detail, in this case the definition of what is ‘good’ and what is ‘bad’.

    A prime example of a ‘bad’ company might be the former British Leyland, badly managed in the first instance, then handed to asset strippers, – with a push from government,- whose sole concern was to extract as much cash from the infrastructure of a large – and let’s be honest’ – a failing icon of British industry. Their efforts were not for the benefit of shareholders or employees, but solely for a ‘Johnny come lately’ board of directors, and their ‘contacts’ in some ministry or other.

    Selling freeholds and then renting them back was the least of their efforts, great brand names sold to the highest bidder, – all for a handsome commission, – for the directors, of course!

    There is a long list of similar ‘clever tricks’ which any accountant worthy of the name, might turn his hand to, – if he were so inclined, and if the intent was to eventually ‘wind up’ a company and to dispose of the assets.

    Now this could be seen as quite honourable – in certain circumstances, – it can also be seen as a scam to release asset value, but for the benefit of the new directors, and not for shareholder nor employees. A much less moral or honourable situation.

    The problem really hits hardest in those industries and areas where companies have beeen long established, and have provided regular employment for a local workforce. The disbandment of such companies, – which with the right management, had a viable future, is what really constitutes a ‘bad’ company.

    As has often been said -‘It all depends’, with each company being very different from any other. Heaven help us if it is left to some political lackey to decide which company is ‘good’ or ‘bad’.

  5. EY- selling your premises and renting it back can be done for different reasons. Lloyds did it to fund Equitas which assumed liabilites on behalf of impoverished insurance syndicate members. Now it’s a different debate if these people of limited means should ever have become names or how some were probably ‘fleeced’ by some members agents.
    Willis Faber did that to keep the company afloat and to fund building of a whizzy new HQ in London Lime St. Thus keeping valuable eastern european builders in gainful employment.

  6. DiG,

    I did say that each case was different and unique! What is a good answer for one company can be stupid for another. It isn’t just a case of the degree of spivery involved, there is also a moral side to business, which, unsurprisingly often gets ignored.

    Any action taken should be the decision of the shareholders, not some government numbskull, nor the directors, – if they do not also have a financial stake in the company.

  7. Noel,
    please take note:
    Ed ‘Millipede’ is Jewish.
    He is a total charlatan, a snake oil salesman; and I can’t stand him.
    Jack Straw ditto.

  8. daisy,
    Welcome veh t’hyah ad meah vehessreim!

    We have an ongoing fight debate between those who support Israel (of which I am one) and those who regard it as a neo colonial, neo Nazi, Obstructionist State; responsible for all the ills of the Middle East.
    The proponents of this view are often also afflicted with piles, or emerods as the Old Testament would have it (1 Samuel 5)
    Most appropriate says I…
    I was pointing out to one of my cyberfriends who often mocks my position that I am not a blind supporter of all things Jewish: ergo, Millipede and Straw.

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