91Èȱ¬

Robert

It is sometimes hard to reconcile the youthful pleasure of flying round the World as often and as fast as possible with the more, and it must be said, dull virtue of looking after our planet.

Both Virgin and BA deposit rather nasty gases in the upper atmosphere. From a green standpoint any arrangement that increased air fares to limit air travel would be a good thing so rather perversely a merger may be good for the environment as it will most probably increase fares.

Personally I do not like to use price to limit air travel, but realistically it may be the only way.

I have little time for either company and would rather people avoid air travel if possible. But as this will not happen, and the USA will never, in my opinion, open its airlines to genuine foreign ownership and we will always be the ones who draw the short straw, on balance it may be better to side with Virgin (although it pains me to say so.)

The present / coming slump will also drive the USA into further protectionist measures and the 91Èȱ¬land Security issue will prevent foreign ownership - so on balance I also think it is not commercially sensible for BA to try any from of quasi merger as they will get the costs and, like the USAF tanker contract, will gain little advantage.

These are my two reasons for being against the 'merger'.

I agree with John that for the sake of minimizing the environmental damage of flying, prices will need to rise a great deal in order to cut down on the number of flights.

However, I'm an American living in England, and as it is I can't afford more than one flight home per year. Sigh. :)

Hopefully prices will remain low(ish) on long-haul flights where flying is the only option, while rising significantly on short-haul flights that have competition from trains.

---

Back to the subject at hand, Branson seems rather pathetic trying to play the scrappy underdog after spending over a decade as one of Britain's richest men. I remember his early fights with BA over Heathrow slots, and it was easy to feel that he was on 'our' side then-- because he needed public support to build his nascent brand. Now, however... he's just involved in the nasty world of big business, and he's no different from Willy Walsh.

Your can't blame Sir Richard Branson for having a good. News media has certainly picked up on it. Could it be an elaborate publicity stunt? Virgin's got more publicity from this than many of their product launches. Most folks would find Branson more likable than many other businessmen, or politicians for that matter. All you can do is try.

This comment was removed because the moderators found it broke the house rules. Explain.

To the greens above: surely if you want to save the planet you should support BA/AA, not Virgin?

BA and AA want to improve efficiency by co-ordinating schedules,etc. This will allow them to cut costs by cutting flights, presumably.

Surely this is a good thing from an enironmental point of view?

So it is not necessarily true that only higher fares can save the planet - better schedules could also play a part.

Richard Branson should look at what is good for the UK and not his own pocket. British Airways used to be a world leader. It's now 3rd in Europe. Air France has joined forces with KLM, Lufthansa has joined forces with Swiss and looks likely to buy BMI next year. British Airways needs to join forces with AA and IB, if it doesn't then the UK may well loose its flag carrier. Virgin Atlantic has joined forces with Virgin Nigeria and also has Virgin Blue in Australia and Virgin America in the US, none of them are very good at what they do. He should concentrate on improving his own business instead of rubbishing others to line his pockets. British Airways gets a lot of bad press, Terminal 5 is fantastic I have used it nearly 10 times now. Club World is a fantastic product. First Class is still one of the best in the world. British Airways is the best in premium travel.

#6:

Why should Branson consider any interests other than his own pocket in this? To be consistent, you would then have to say that Willy Walsh should not put the interests of his shareholders first - not only would that be stupid, but also illegal
(breach of fiduciary duty).

In any case, why is it in the UK's interests to have a "flag carrier"? Do you think Italy has benefited fom their flag carrier, Alitalia? I would say not, unless you define throwing good money after bad as a benefit.

Oil Price down from high of 140 dollars or so to 113 dollars a barrel.

Mortgage rates falling.

Any more good news we should hear/read?


Nothing wrong with saying something positive once in awhile !

Or do you get a commission from an antidepressants company !

You can report good news too ?

You are allowed to ?

Just curious, the Beeb does seem to be the doom and gloom channel at the moment.

It is well-reported that BA is a price-fixer, with accusations dating back to the days of Laker's SkyTrain. Willie Walsh still was apologising about price-fixing in 2007.

In order to present a believable case, it has to spend the next few years humbly building up some credibility.

Only when that is done should we consider allowing BA to collaborate with AA.

Otherwise, looking back over the history of the firm, we may be setting ourselves up for more price-fixing abuse.

@8 - Oil prices are down on the back of falling demand from the USA. Their demand is falling because their economy is moving into recession. And if USA goes into full recession oil will drop even lower.

But the down side is that the old saying 'If America sneezes the world catches a cold' is as true now as it was when it was first made.

Just remember what oil and US recesssion in the early/mid 1970's did to the western economies as a whole.

What I am never able to understand is that given the tax-exempt status of airlines around the world, guaranteed by international treaty not to pay fuel duty, import duty on parts and so on, why is the industry seemingly in perpetual risk of going bust?

According to them if they had to face the same standards as terrestrial business they would all go pop tomorrow. Since this would save the planet at a stroke I fail to see why we don't call their bluff.

It might also help to bring Mr Branson's balloon back down to earth.

Virgin Atlantic is 49%-owned by Singapore Airlines. So Virgin itself already has an overseas partner and is far from a UK champion.

Virgin Atlantic admitted swindling UK and US consumers over the issue of fuel surcharges. However, Virgin shopped BA to the competition authorities ensuring that BA was fined a huge sum whilst Virgin Atlantic, though just as culpable, walked away free of charge. Don't you just love a snitch? Just because it didn't have to pay a fine doesn't mean it didn't do it. Some consumer's friend.

Most importantly, BA is a UK plc with a transparent corporate structure that pays UK tax, which pays for hospitals, schools, pensions and police. Virgin Group's structure is opaque and uses tax havens and clever accounting methods to avoid helping UK plc to pay for the said hospitals, schools, pensions and police. Since this story involves the US, perhaps we ought to invert the colonists' call for 'No taxation without representation' and tell Branson 'No representation without taxation'

I don't understand why the press so happily reprint Branson's press releases. I think it is generational.

The older generation perhaps remember Virgin records and are willing to forgive Branson's selling records destined for export to UK consumers and his failure to clean up Britain's litter with Margaret Thatcher.

The younger generation sees a rich, old, bearded bloke with terrible dress sense, who:
- failed to rescue Northern Rock but got paid millions by the Treasury for his trouble;
- makes bad cola which people don't drink;
- runs late and expensive trains;
- provides cable broadband that is much slower than it promises;
- flies planes that are contributing massively to global warming whilst, rather laughably, having policies for recycling cups and menus.

Why has our nation become ashamed of telling rich public figures that they should pay their fair share?

Branson it correct. What is happening here is classic 'competition burn'. Having lost their un-competitive monopoly with the Open skies agreement, BA are now colluding with AA to use their economies of scale and huge aviation industry influence to undercut the competition (like Virgin) and put them out of business.
This would be great for the consumer (although not the environment) if it wasn't for the knowledge (we learn from history) that as soon as the competition lie wasted all around that BA / AA will once again have their uncompetitive monopoly and be able to fix prices and over charge customers whilst operating an inefficient airline propped up by it's market position.
It's a bit like creating yourself a private / nationalised industry.

I don't know about everyone else, but I would much rather trust Mr Branson than any politician, Airline CEO, BAA or industry watchdog - or anyone else connected with any airline.

He may be a capitalist - but he's the only one I have any respect for. You may think it's 'good PR' but this is the only man who has made an attempt to improve the railways (in the handcuffs that is network rail), the only one who has tried to break the BA monopoly on US flights andthe only man to hold the record for the fastest amphibious crossing of the channel.

What a guy - lets replace GB with him and maybe we'll get somewhere.

Oil prices have come down 23% in the last month from a peak of USD 147 a barrel to USD 113 today.

Yet I've not seen any of the scheduled airlines reducing their fuel surcharges which they kept putting up when the price of oil was going up.

I'm sure I'm the only one to have thought this. It's not strictly relevant to the story but does relate to the BA / Virgin spat re price fixing.

Also Mr Ryannair has been rather quiet re prices of oil coming down as well!

Just your average informed cynic!

How far will oil prices drop when the American continental/coastal fields are opened up ?

Time for the Funds to leave oil then !

# 13

You can tell 'rich public figures' that they must pay their fair share but they simply have no need to comply.

That is the unpalatable bottom line for yer average PAYE drone.

Only those in the middle pay 'their fair share', probably more than, but there it is.

The tax system in England could, by drastic simplification, be restructured to be reasonably 'fair' but nobody seems to have the political will to tackle it.

Branson makes most of his money from rights granted to him by the State - landing rights at Heathrow, the train franchises he holds, the cable franchises, etc. Yes, he could say he does not wish to comply but his businesses would be worth nothing without the ability to run trains or land planes.

Why should a doctor, teacher or any other 'PAYE drone' see up to 50% of their salary disappear in deductions whilst the rich pay far less? Why should a baggage handler, cleaner or shop worker lose 30% of their salary when the rich pay far less? We, as a society, have lost the courage to ask this question.

If people like Branson or Philip Green can chose to live abroad to avoid our taxes then we can chose to stop them carrying out their businesses here. Who could disagree that a reasonable share of the profits made here would not be better spent on hospitals and schools in the UK rather than a £32 million yacht moored in Monaco?

The US and Germany are far more relentless and ruthless in making people pay their taxes with evasion seen as socially unacceptable and a serious crime. There is no reason why the Revenue in the UK could not adopt a similar approach. If some chose to leave the UK, others will make profits from planes, trains and clothes.

The task is not impossible: efficiency and fairness in taxation is a sign of a successful and advanced economy (consider the corruption and injustice in less advanced and successful economies). This isn't a question of right or left but rather right or wrong. It was, after all, the Tory Prime Minister Ted Heath who coined the phrase 'the unpleasant and unacceptable face of capitalism'.

# 18

I think I saw some figures recently which showed that the 'rich' in Engand do pay a significant amount.

But when we are discussing the mega-rich such as Branson, Green et al, then we have a totally different problem to solve.

Firstly, we have to accept that broadly these people, as individuals, have the capability to choose how much tax they wish to pay in a given tax domain.

If you accept that reality, and it is the reality, then the best that can be done is to encourage their 'animal spirits' to enable them to create jobs and businesses in England.

I can tell you that but do not expect any political to state it so bluntly.

This comment was removed because the moderators found it broke the house rules. Explain.

Virgin is where it is today because of competition in the airline industry. Open skies agreement promises even more competition. Virgin's complaints about BA-AA merger is not about competition but a "poor man's whining".

Open skies agreement means more landing points, more flights with more take-off and landing time slots. Evidently Virgin's lack of finanacial clout to invest in more planes and to develop more landing spots prompted Virgin's castigating BA-AA co-operation.

Finanacial restructuring of firms is symbolic of an industry's competitive landscape. Virgin's championing the consumer is an insult to the consumers' intelligence. As long as choices can be made from the available airline flights, it is competition. There is nothing sinister about the BA-AA co-operation. There is no evidence to show that the airline industry cannot support both the big players and the always belly-aching little guys.

Comments 18 and 19

The key to tackling the problem of ensuring that multi-national businesses pay an equitable amount of tax, is to forget completely about trying to deal with this from the perspective of profit. The offshore boys, and their lawyers and accountants, have developed surefire ways of fine-tuning the amount of profit that is left in group companies that are subject to non-haven tax arrangements; fine-tuning that generally leaves as little profit as the multi-nationals feel they can get away with.

Having established this, the next step is to examine, really examine, the requirements that an expense has to fulfil to be allowed as tax-deductible. You can be absolutely certain that the lawyers and the accountants have been through every word of the legislation, and that only legal means are used to siphon profit away from countries where it will be assessed at normal rates of tax. The answer, I'd suggest, is to focus on the location where the other side of the transaction is to be accounted for. This cost that is being levied against the profits in, say, the UK - where is the income side of this transaction being accounted for?

And if it's not being accounted for in a UK-approved tax jurisdiction, then it is not allowed as a tax-deductible expense. So, for example, intra-group franchise fees levied on UK transport companies by holding companies in the British Virgin Islands would no longer be allowed as charges against tax-assessable profit in those UK companies. Fair enough?

# 22

My posts here generally were with respect to individuals, not any companies they controlled.

Each year around the Budget, HMG produce a little leaflet which shows HMG income and expenditure.

From memory, I think the Income pie-chart shows about 50% of Government income comes from yer PAYE drones, around 20% from companies and the rest from 'investments'.

As a broad point, it is slightly amazing that HMG felt confident enough to tackle some tax issues which have been parked as 'too difficult' since the early 1960's e.g. non-doms and also the 'mixer' tax.

Only time will tell if HMG's efforts in that area result in more or, as I suspect, considerably less, tax take.

I think you make a valid point about allowable expenses and their income source, for multi-nationals.

I tend to look much further out into the future, when I envisage that the EU will eventually impose federal taxes, ala the USA.

Also, I expect that EU citizens, like the US, will be taxed on their worldwide income, no matter where they actually live.

However, will the EU tolerate a 'Delaware' type situation for companies?

Does'nt seem very likely.

I have limited respect for BA (a company who can be incredibly arrogant with both customers and suppliers). Barely grudging respect for Branson.

After all, Branson's executives colluded with BA equivalents to introduce price-fixing. The fact that they have individual "immunity" does not reduce their culpability. Both Virgin and BA have been fined for their roles in misleading customers.

Branson chose to sell a huge chunk of his company to SIA. (Good airline.) They could have invested in new services from the UK to the USA - much easier to achieve in the more liberal climate than existed previously. How many new routes have Virgin introduced?

Air France (previously given massive state support, but who cares - EU rules only apply to the little countries...)/KLM have anti-trust immunity for trans-Atlantic flight operations. So have LH with their partners.

Seems sensible that BA would try to achieve a similar arrangement with AA.

I guess people don't realise the real extent of the damage done to US airlines after 9/11. Obviously AA and UA were most directly hit, but none of the carriers punches with the same weight now.

I guess that most people don't bother to check how dominant AF are in Paris CDG - or LH in Frankfurt. Makes BA look like a poor relative.

In the media today , a great deal of negativity about interest rates.

Whats the betting base rates are cut in November, ready for the Christmas shopping period ?

Some readers may say this isn't possible, wait and see !

Capitalism is about control, not competition - when did you last hear a company say "we have too much market share, and are profits are too high. Please take them away from us"?

As much as I hate BA (their customer service is truly appalling, unless you are flying premium), Branson is seeking only to promote the interests of his company, not those of the travelling public. I trust the competition authorities both sides of the pond will ignore his trademank whine - when was he last the champion of the little man?

It's all down to BA realising that they have to start something themselves in this new OpenSkies cliamate rather than having it handed out to them on a plate like in previous years.

Think about it

1972: BOAC and BEA merge to form BA a government owned airline.

1976: BA given the Concorde planes for free by the government.

1982: BA forces Laker out of business.

1987: BA privatized

1988: BA buys out BCal, the second largest UK airline.

1993: BA fined in court for dirty tricks campaign against Virgin Atlantic, where they used extremely underhand tactics to try and force the latter, smaller airline out of business.

2001: BA refused permission to merge with AA

2006: Virgin Atlantic get their revenge on BA through the price fixing scandal.

2008: T5 Scandal

It is obvious from the above that an airline as poorly run as BA will struggle like the US airlines in this competitive age, whilst the East-Asian airlines, Lufthansa and Air France-KLM seem to flourish.

It is also obvious that this airline has a cavalier attitude towards its passengers and any British competitors.

Don't forget that AA is a giant of an airline with over six hundred planes and is the only US Legacy Carrier that has not declared Chapter 11 Bankrupcy in its corporate lifetime.

So the proposed BA/AA would be a colossal airline with over 900 planes (not counting Iberian Airlines) and any competition over the Atlantic would be wiped out in a stroke, thus crushing Virgin Atlantic and any realistic challenge from the SkyTeam and Star Alliance carriers.

Meanwhile Richard Branson has had to work hard to get the government franchises and private companies that he now runs. He is a self made man who built his empire from scratch, not through privelage like BA.

BA then has a choice, to continue with this merger idea and to continue with the poor service and high fares, or adapt its game to the harsher, competitive post-Open Skies Airline Industry.

Remember it has only survived thus far thanks to government benefits, government financing and the Bermuda II treaty.

#22

So, the greatest benefit to Branson of the Virgin brand is not its perceived value to the British public but rather the franchise fees it allows to be pulled into tax havens beyond the reach of the Exchequer?

No wonder Branson is so willing to brand-stretch...

The other day I did a straw poll amongst my friends to see how many read the Blogs or indeed the News website.

Not one of them did.

Two of them said they would have a look and get back to me on what they thought.

Well, the first of the two thought the Blogs and comments were all Quite Silly (her words).

The second friend of mine said he wished whingeing were an olympic sport because if it were us Brits would get every medal going !

Is the Beeb in a world of its own or does it really reflect what the British people think?

Somehow I doubt it does.

RE: 29

Well, given how frequently you post here, you obviously think it's important.

I find the exact opposite. I find most of the posts here to be notably literate, thoughtful and informative. The occasional ignorant rant is a small price to pay for that.

However, you are right to observe that the comments on this blog are unrepresentative of the British population as a whole. Very few of the contributors here would have taken 125% mortgages on over priced properties nor fantasised that you could build an economy on that behaviour.

The proposed agreement between BA and AA is little more than a 21st century version of the "Pooling" agreements that existed in 40 years ago, where, for example, BA and SAS would put their flight codes on each other's services and share revenue, and hence profits, or losses.

It was anti competitive then, and it's anti competitive now, and it should be stopped.

I'm not sure these global alliances (One World, Star and the like) are benefiting the traveller to the same extent that they are their members either.

Personally, I believe Branson is being a tad ridiculous.

Much has been made of BA and AA being dominant out of London Heathrow to the US, despite their being significant competition from the likes of Branson's Virgin and other American and Non-American (Air NZ, Air India, Kuwait Airlines) carriers.

However compare the situation with that out of Paris or Amsterdam where Air France and KLM have their home bases. Both have signed substanial anti-trust immunity agreements with US carriers accounting for the bulk of transatlantic routes to and from these locations, with limited 'non-cartel' competition. The situation is replicated in Germany with Lufthansa's similar position out of Frankfurt/Munich.

As such, is Branson only complaining about BA because it wishes to enjoy the same privileges as that of its other European Competitors? Failure by the US or EU authorities to give BA/AA the go-ahead, means that it is clear for all to see that both authorities have dual standards.

No, not important, just amusing !

Back on topic, the airline business appears to be a brutally competitive area for new-comers, especially those who are having to compete against the old 'national-flag' carriers.

It would take a Branson, that is, a ruthless businessman, just to survive in that environment, which is why after the initial few years when it really did offer consumers a better deal, Virgin slid into a 'me-too' mode.

My accountant tells me that at the local airport, most of the supply companies to the airlines rarely employ anybody directly but tells new hires that that must work via 'personal service companies (PSC's)'.

The over-riding reason for this is because these supply companies themselves are 'on contract' to the airlines, with no guarantee whatsoever that the contract will be renewed when the term is up.

Therefore, they have to be able to get shot of people as easily as possible, hence the PSC's.

Underneath the glamour of the aircraft industry is a very tough reality.

What is BA thinking - and have they ever, for one moment, considered surveying the customer service records for both airlines? As an ex-pat Brit living in the USA I long ago vowed never to subject myself to the misery of flying AA again. America's domestic airlines offer poor service at the best of times (compared to most international carriers) and AA is the worst of the lot by far (well maybe US Airways is close). BA on the other hand have always been a joy to fly. The idea of booking a flight on BA with the inherent risk of being shunted to AA for a continuation flight makes me shiver. I think Virgin will have my business from now on.

OT: come one Robert! . where's your blog on Merril's tax avoidance in perpetuity!! in the UK? UK tax payers get shafted again by our foreign friends! ..

# 36

Tax avoidance is not illegal.

Tax evasion is.

It is important to understand the difference.

Despite HMG's best attempts to blur this, ever since the late Lord Denning told us in the early 1960's that people have a perfect right to organise their affairs to minimise the amount that the State can extract.

If HMG really want to stamp out tax avoidance, then the remedy is in their own hands ... they must drastically simplify the tax system.

This takes me back to the 80's. Virgin Vs BA - Round 2. Then it was a demographic war, and each party walked away from the battle relatively in tact. This time however we have Virgin standing in the public's corner, and BA standing in conglomerate corner. The question is, who has more clout? Business or population - My money is on Branson to be knocked out in the final round much like the 'People's Lottery' fiasco.

Comment 37 : JohnConstable

"If HMG really want to stamp out tax avoidance, then the remedy is in their own hands ... they must drastically simplify the tax system.

I'd argue with this. The problem, I'd suggest, is not with the complication, but with the refusal to accept that some well-intentioned actions shouldn't happen, because there is no way of preventing major bad consequences that outweigh any benefit arising from the good ones.

This is the basic fault with our system of decision-making. It seems to be carried out with thinking that hasn't got beyond the concrete operational stage of development. There's seemingly no understanding at all that humanity is quite capable of good forecasting, and that there is just no need for so much inappropriate policy to be put in place. But one might just as well speak to a cabbage for all the impact saying this has on anyone.

Of course another point is do HMG really want to stamp out tax-avoidance? Are they not more interested in appearing to be actively working to stamp it out, but actually doing nothing effective about it? Having been made aware by the serial tax-avoiders of the possible negatives of taking action against them, authority has run scared, because it is unable to believe that it's possible to quantify the likely effect of these negatives, and compare it with the benefit from the positives. So, do nothing, just in case.

# 39

As a general point, we should firstly, from our requirements, design an 'ideal' model and from that derive our actual 'real-world' model.

Always striving to keep in mind the ideal model.

So, in the case we are discussing, we (HMG) are designing a tax model in which 'avoidance' does not exist, except where desired to fulfil HMG's objectives.

In practice, we have two components of 'tax avoidance' :

a) that which is officially aproved e.g. Individual Savings Acounts, and

b) that which is not approved e.g. arcane scams dreamt up by tax specialists to circumvent the 'spirit' of the tax laws.

My point is that a drastic simplification of the tax system would more-or-less eliminate 'b' above.

I suspect that very powerful vested interests wish to maintain the status quo and by-and-large, they are succeeding.

[[#39., ExcellenceFirst said:
"do HMG really want to stamp out tax-avoidance? Are they not more interested in appearing to be actively working to stamp it out,"]]

There seems little point in taxing the corporations as they will just go elsewhere. The only sure way to collect taxes is to target the employees. It's very unfair.

What annoys me about the Merril thing is that they are going to declare all their losses on their UK operation, thereby subsidising their global operation on the backs of the UK tax payer. It just like taking money from UK tax payers and giving it to the US treasury where they presumably pay a smaller percentage of tax on their profits. In addition this will make them more competitive against their UK peers, enabling them to take business from companies that do pay tax here.

If I was in charge I'd go all Hugo Chavez on their arses, windfall tax them all to hell, then throw them all in prison when they fail to pay up. .. well I can dream can't I?

Richard Branson has a fairly straightforward business model. He identifies companies that look to be making a fair bit of money yet are being badly run. Or are state monopolys. He sees the opportunity to make money by competing against them. And also of course he is a self publicist.

No doubt I will be put straight if I am wrong but I don't think he has ever come up with a novel business idea.
He has plenty of publicity stunts of course - like his "space" ventures.
These stunts will be funded by tax breaks on his profitable businesses.
After all why should he spend his own money? Much better to do a bit of creative accounting, save tax and spend it on his publicity.
It will be interesting to see how his space adventures complete with huge carbon footprints will be dressed up somehow as good clean green fun.

Comment 40 : JohnConstable

"In practice, we have two components of 'tax avoidance' :

a) that which is officially aproved e.g. Individual Savings Acounts, and

b) that which is not approved e.g. arcane scams dreamt up by tax specialists to circumvent the 'spirit' of the tax laws."

Neither of these is what I'm talking about. Officially approved schemes such as ISAs are piddling at individual level, and there's no reason to suggest that they cause people to act in a ridiculous way purely for the tax saving. Arcane schemes will always be being dreamed up. My experience goes back to the Rossminster schemes of the 1970s. The way to deal with them is to make clear that they will be legislated against the moment they become apparent; to make it quite clear that each scheme will only work once; and that annual tax avoidance is going to be quite an expensive exercise.

But if you're telling me that there are no latter-day examples of the by-product nonsenses of the 1970s and 1980s then I'm quite happy to believe you. The sort of things I'm talking about are

* 100% First Year Allowances, creating the equipment leasing subsidiaries made worthwhile only by the tax savings in the parent

* Stock Relief, when huge purchases of raw materials etc suddenly became imperative just before the year-end

* Business Expansion Scheme, where risk-free non-innovative ventures were put in place purely for the 60% tax saving

* Small Self-Administered Pension Schemes, where a myth of independent control was invented to allow controlled businesses to grow tax free

* Exclusivity - the expenses rule that caused so many employed people to go to such socially-pointless efforts to make themselves able to claim to be self-employed.

* Short-Life Assets - not prohibiting the ability to select, in arrears, which assets to treat a short-life, so that any where the tax effect was negative could be left in the pool.

and others that don't come quite so readily to mind.

# 43

I understand your point now.

The starred list that you have produced are all officially approved schemes as I specified in a) above.

But your point is that these tax concession schemes are often abused and/or used in ways not intended.

It is the responsibility of the designers of such schemes to very carefully construct them such that they cannot be abused, particularly taking into account human nature, which seems to be something that is hardly ever factored in.

It is too late when they subsequently discover one year or whatever later that a given scheme has flaws.

I understand that HMG have tried various measures such as GAAR's to try and stop people abusing 'the system' but I believe that in the end, simple, transparent schemes are the only way to stop clever advisors finding loopholes.

There is often beauty in simplicity and this is particularly so in the case of taxation.

Which by the way, is often subverted by politicians in their apparently insatiable appetite for public money.

BA and AA are both such awful airlines that allowing them to join up could create a Vortex of Suck never before seen in travel. I'm no business expert, but the frequent transatlantic traveller in me is quaking.

superiorcrazycolin must be very deluded if he thinks for one minute that BA is a world class carrier? As a travel manager for one of the UK's biggest travel management compnay I can tell you for sure that the BA products is consistenley complained about! the merger would no more than make these already 2 big airlines into one bigger alliance. BA has one of the worst records od striking behind Alitalia, when thing go wrong only BA can end up in chaos, they have the snottiest crew I have ever have ever met! even the crew on Aerolfot are nicer than the usual dragons employed by BA. our clients stay away from BA in theyre droves after all the dramas they have had the last few years and I dont blame them! Virgin if anything should be our flag carrier, at least they know how to smile and dont train theyre crew to think they are better than you. rant over

Somebody needs to come to the defense of BA.
I am a frequent BA traveller and simply dont recognise your description of the BA service and staff made by other bloggers.
I do agree that the likes of London Heathrow can be a hell hole-certainly not the fault of BA, but once on a BA plane they generally do alright.
As for Richard Branson-I wouldn't trust him as far as I could throw him-for all the same reasons other bloggers have stated. So we shouldn't take his rhetoric seriously and should give BA management the opportunity to align their business with others-as KLM,AirFrance and Luftansa have done

If I were Richard Branson I'd be worried. I mean think about it:

- Terminal 5 generated good short term publicity for Virgin. But now it's a fully functional "death star" for Virgin. It's fantastic with it's short ques and wonderfull lounges! Premium customers will love it.

- If T5 is fully functional then it also wipes out a lot of BA's other problems. Baggage handeling for example becomes much simpler and could even result in BA having one of the best records in the industry in 12 months time. Bet BA love drawing the comparisons then....

- BA is still ranked as one of the worlds top airlines for customer service, what if they teach AA and Iberia the same tricks?

- And so yes I think they may become even more profitable than KLM and Air France, paying more tax to the UK treasury (that thing Virgin tries hard to avoid)

This is why the beared one worries. BA may soon be the world favourite airline again and Virgin may have no answer for it this time. Plus Willie Walsh has no qualms about standing upto him...... yep lots of reasons to try and give the national flag carier a damn good kicking....

Whilst he complains about a tie up of BA and AA his holding group spearheads a bid for Gatwick airport which will make it difficult for other competing airlines to get a foothold - SHAME ON YOU BRANSON.