Sunday 31 March 2013

Sunday, March 31, 2013 Posted by Jake 3 comments Labels: , , ,
Hold on to your rights.  Rights are not given to you by the powerful through their benevolence. Rights are given only when the powerful need you to fight their wars, work in their companies, or vote for them in elections. Rights are given reluctantly, and are taken back when the opportunity arises. Such an opportunity was created by the banking crisis, smuggled in under the cloak of 'Austerity'.

In the last two centuries the industrial revolution and worldwide wars made the powerful very dependent on ordinary people. Robber barons needed ordinary people in their armies and their factories just to stay ahead of other robber barons. Things are changing. Recent decades have brought automation of factories, computerisation of routine jobs, globalisation of the supply chain, and missiles and drones requiring very few to press the buttons that destroy very many. As time passes, the powerful need us less.

When the powerful tell you they are taking away your rights for your own good, don’t trust them. Employment rights, the right to a fair trial judged by your peers, the right of habeas corpus, the right to a fair share of the nation’s wealth, the right to the protection of the law regardless of your ability to pay a lawyer, the right to a high standard of health and education, and many more hard won rights are being eroded. The powerful are using the opportunity brought by banking crisis austerity as cover. 

They tell us we are in a crisis so severe that we must cut costs by cutting benefits, pay, pensions, and services. But not severe enough that we can't still cut top rate income tax, cut corporation tax, and not severe enough that we need a wealth tax. Give the rich a bigger share and, in exchange for our rights they promise the rich will be generous to us. We don't trust in this bargain, but in the face of the powerful we feel powerless.

Saturday 30 March 2013

Saturday, March 30, 2013 Posted by Jake 2 comments Labels: , , , , ,
Guest post from the Scriptonite Daily blog; the "Barnet Casino" video is from The Barnet Alliance (produced by Azi Khatiri, drawn by Ellis Nadler).

It is clear and beyond doubt: it simply costs more to live in a state where the basics we need to survive are handed over to private interests to profit from.  We had it better when we shared.

So, the privatisation of our public services has seen a rise in personal debt; that makes sense.  But one would think that there would have been a corresponding fall in public debt.  Instead, as we have seen, the debt has risen.  So what are they spending all this money on?

The truth is, they never really privatised as they said they did.  They privatised profit, and they socialised investment and losses.
It doesn’t matter which sector you choose, the role of the state has become handing out tax breaks and subsidies whilst acting as a guarantor against losses.  This is the role of tax payer money which successive governments have prioritised above social utility – or making life better.

Socialised Losses
The most obvious recent example was the Bankers Bailout.   In the bailout of 2008/9, the UK government had to guarantee funding to the banking sector, of 101% of GDP.  That is, the UK diverted over £2trillion of tax payer money from public expenditure, to a handful of banks.

This is equivalent to almost 3 times its entire annual budget;  twenty years of NHS spending (£106.7bn a year); forty years of education spending (£48.2bn); or five hundred years of job seekers allowance (£4.9bn a year).

Friday 29 March 2013

Friday, March 29, 2013 Posted by Hari No comments Labels: , , ,
KJ to the rescue?...

Thursday 28 March 2013

Thursday, March 28, 2013 Posted by Jake No comments Labels:

New £80bn 'Help to Buy' scheme may get you on the housing ladder – but if prices rise, so does your debt
Help to Buy should initially mean it becomes easier to get on to the property ladder. But the Chancellor admits he hopes it causes a steep climb in house prices. But this will cause a mini bubble. When the scheme ends in three years, the number of buyers will drop, and house prices will fall again. This could leave many homeowners who bought a home with a small deposit stuck in negative equity — i.e. they owe more than the value of their home. DAILY MAIL
(“Cheap credit to house buyers who can’t otherwise afford it? Why didn’t I think of that first? Oh, right, I did,” said every bank that caused the biggest global economic collapse since the 1930s...)

OECD says UK tax hits stay-at-home mothers hardest
A family with one worker and two children lost 27.9% of wages in tax in 2012. This compared with 26.2% in 2009 before the Coalition was elected. The international average for such a family is 26.1%. Also, “well off” British families with stay-at-home mothers are now worse off, paying 40.5%of earnings in tax compared to international average of 38.6%. This contrasts with both single people and two-earner families which have benefited from cuts in the tax-free personal allowances and other changes. DAILY MAIL

The Cayman Islands Monetary Authority has officially revoked the banking license of HSBC S.A. (Cayman Islands Branch)
The CIMA concluded that HSBC’s activities were “detrimental to the public interest, the interest of depositors or of the beneficiaries of any trust or other creditors and that the direction and management of its businesses has not been conducted in a fit and proper manner.” Following recent record fines for money laundering whilst paying multi-million pound bonuses to hundreds of its staff, HSBC’s marketing teams are already at full stretch trying to rescue their reputation. CAYMAN NET NEWS
(NEWS LATEST: HSBC launches new advertising campaign, called “We try so hard to dodge tax for you, even the Cayman Islands won’t touch us.”)

45% rise in UK banks’ core profits wiped out by billions in fines, regulation violations and their own mistakes
The UK’s five major banks were hit by PPI mis-selling compensation costs of £7.4bn. In addition, there were other fines and penalties from regulators and "redress provisions" of £4.7bn, and a £12.8bn accounting hit for losses caused by the revaluation of "own debt." The news is likely to provoke stern words from bank shareholders. BBC NEWS
(...those stern words being: “Either stop screwing customers, or stop getting caught. Preferably the latter.”)

Tuesday 26 March 2013

Tuesday, March 26, 2013 Posted by Hari No comments Labels: , , , ,
Cameron catches up on the news...

Sunday 24 March 2013

Sunday, March 24, 2013 Posted by Jake 4 comments Labels: , , , , ,

As the 2013 Budget cuts corporation tax to the lowest in the G20, we look at some statistics from our guest post from the Tackle Tax Havens blog

$1-1.6 trillion

Annual cross-border flow of the global proceeds from tax evasion, corruption and criminal activities. Every $100 million recovered could fund full immunisations for four million children or provide water connections for 250,000 households.

$120 billion

Amount that could be delivered to fight poverty per year by Tax haven crackdown.
Oxfam, press release, 13th March 2009

$100 billion

Amount that the Senate Permanent Subcommittee on Investigations estimated in 2008 that the U.S. lost in tax revenue due to offshore tax abuse every year.
Committee on Homeland Security and Governmental Affairs, Permanent Subcommittee on Investigations

$1 trillion

Amount of unrepatriated foreign profits sitting offshore.
Drucker, Jesse. “Tax Holiday for $1 Trillion May Lure Back Profits Without Growth.” Bloomberg. 17 March 2011

Friday 22 March 2013

Friday, March 22, 2013 Posted by Hari 2 comments Labels: , , ,
KJ, Fee and Chris try to keep up with the news...

Thursday 21 March 2013

Thursday, March 21, 2013 Posted by Hari No comments Labels:
Barclays quietly announces £38.5m fat cat bonuses on busy budget day, hoping nobody notices
Barclays promised it was "changing" after being fined £290m last year for its role in the Libor-rigging scandal. But it has just awarded its investment bank chief Rich Ricci £17.5m and CEO Antony Jenkins £5.3m. Ricci’s payday was dwarfed by the £44m he collected in 2010. Barclays were accused of sneaking out its news on budget day, in the hope that the media wouldn't notice. GUARDIAN

(But did Rich Ricci notice? £44m in 2010, £17.5m now? Probably not...)

Morrisons wants government to crack down on big corporates that dodge tax
Dalton Philips, CEO of the supermarket giant, said he was concerned about the tax transparency of other large corporates who were dodging tax, giving them an unfair trading advantage, and wanted the Government to require those operating here to disclose payments. ‘We believe that this will encourage those companies that are concerned about their reputation to ensure they pay their fair share,’ he said. DAILY MAIL

(“Our reputation, eh? How about we used a fraction of the dodged tax to pay for another glossy marketing campaign saying how much we love you all,” said a chorus of the marketing directors of all the tax dodging corporates...)

UK water companies avoid paying tax using £3.4bn loophole
Water companies are loading up with debt to offset profits and avoid tens of millions in tax. One third of the money we pay for our water bills now goes on paying the debt interest and dividends. Meanwhile, water bills are rising by 3.5% on average to £388 a year, for “infrastructure investment”. The UK Treasury nearly closed the “Eurobond loophole” last October, then decided against it. When asked to criticise the tax dodge, Ofwat preferring to focus on its job as the water regulator, saying “…if companies don’t deliver, we take action. In the last seven years, companies have had to pay out more than £550 million [in fines], from their own pockets, where they have let customers down.” TELEGRAPH

(Errr… and how does that money get into their own pockets, Ofwat? Of-Twat, more like it...)

Tenants use payday loans to pay rent
One quarter of the private tenants surveyed said they have had rent increases averaging £300 in the last year as wages remain stagnant. Almost two thirds are struggling to pay their rent or have fallen behind. So tenants are resorting to "drastic" measures such as using payday loans and credit cards to pay their rent. Some desperate parents have been forced to borrow cash from their children. TELEGRAPH

(All together now with the government’s Plan A mantra: “It’s immoral to have our children pay for a crisis we created!”)

Tuesday 19 March 2013

Tuesday, March 19, 2013 Posted by Hari No comments Labels: , , ,
Osborne hopes Cameron doesn't embarrass everyone again...

Sunday 17 March 2013

Sunday, March 17, 2013 Posted by Jake 4 comments Labels: , , ,

UPDATE NOV 2016: An HMRC taskforce set up to catch wealthy tax dodgers has claimed just one scalp in seven years, and that was back in July 2012. The 380-strong unit targets the super rich who hide their money offshore or use aggressive avoidance schemes. More than 2,000 individuals – each worth at least £20million – are suspected of dodging almost £2billion between them. MPs sitting on the public accounts committee said a report from the National Audit Office, titled HMRC’s approach to collecting tax from high net worth individuals, showed the wealthy were often let off the hook while families and small businesses were hounded.

A chancellor is reputed to have said: 

"Laws, like sausages, cease to inspire respect in proportion as we know how they are made" 

Not said by our chancellor of the exchequer but by Bismark, the Iron Chancellor of 19th Century Germany. He may not have been the first to say it, but like most witticism the originator rarely gets the credit.

Successive British governments, from left to right, have bent over backwards to keep a sausage machine of laws creating loopholes for tax avoidance. The industry knows it; the tax dodgers know it; the government and government in waiting (the opposition) know it.
In Britain tax dodging is a government regulated sport. In a session of the Public Accounts Committee (PAC) of the UK Parliament looking into tax avoidance schemes they questioned Aidan James, a director of a tax consultancy advising those who want to avoid tax:

Q103 Ian Swales: How many of the schemes you have marketed are now illegal?

Aiden James: Most of them.

Ian Swales: Most of them?

Aiden James: All of them, I suspect.

Q104 Ian Swales: All the schemes you have marketed are now illegal, so you are now looking for the next loophole-is that a fair description of your business?

Aiden James: That is how it works, yes.

Q110 Stephen Barclay: The model, if I am understanding correctly, Mr James, is that most of the schemes that you introduce get closed down within a relatively short period of time.

Aiden James: Yes.

Q111 Stephen Barclay: So then you aggressively target a client base and get as many as you can through in a short period of time on the basis that HMRC cannot pass retrospective legislation. Therefore, your clients will get a tax window where they can reduce their tax until HMRC wake up and close that scheme down, by which time you have moved the game on to the next scheme. Is that a fair summation?

Aiden James: I would agree with all that you said apart from "aggressively market". 

Friday 15 March 2013

Friday, March 15, 2013 Posted by Hari No comments Labels: , , , , ,
KJ, Chris and Fee get all confused...

Thursday 14 March 2013

Thursday, March 14, 2013 Posted by Jake No comments Labels:
Government’s Treasury expert says Cameron is wrong over austerity “success” 
The PM insisted that the Office for Budget Responsibility (OBR) had concluded that the austerity cuts had not reduced growth. But Robert Chote, head of the OBR, responded by writing an open letter to the PM saying his report had concluded exactly the opposite: cutting public spending reduces economic growth in the short term. He added that most other economists agree with him. TELEGRAPH

(Cameron’s phone rings off the hook following his latest speech: “The Pope is not Catholic. That’s what he told me, anyway…”)

Saga criticised over excessive home insurance cost
Saga promotes itself as a champion of the aged. But they have been caught charging existing customers far more than their new customers, and far more than competitors. The BBC's Money Box programme featured a woman who had been with Saga for 10 years, who said: "My last quote was for £1,214 but it wasn't until this year that my family said you're paying much too much...” She finally got comparable, alternative home insurance from her bank for £236. She felt the discrepancy between the two quotes was unjustifiable: "You think of Saga looking after the over-60s. I couldn't believe they would treat elderly pensioners like that." BBC NEWS

(Saga shares its name with the ancient Norse word for stories of heroic deeds of fantastical make believe. It now shares its meaning as well.)

Archbishop of Canterbury backs campaign attacking Government welfare reforms
The Archbishop of Canterbury, Justin Welby, has backed a letter to The Sunday Telegraph written by 43 bishops who say the benefits cuts will have a “deeply disproportionate” effect on children. They say the cuts could push 200,000 children into poverty. The Government’s reforms will limit the annual rises in benefits to just 1% for the next three years, well below predicted inflation. The archbishop said "As a civilised society, we have a duty to support those among us who are vulnerable and in need. When times are hard, that duty should be felt more than ever, not disappear or diminish.” TELEGRAPH

(“People joke that the Church of England is the Conservative Party at prayer. So we thought we’d bring the UK economy to its knees while we’re at it,” said our family-loving government insider...)

Bitter taste for drinkers as beer is watered down to save money
John Smith’s Extra Smooth will be reduced from 3.8% alcohol to 3.6% - and the price per pint is set to rise. The change is not just because of the rising costs of production, and reduced beer sales in Austerity Britain, but in response to high tax rates. The government’s attempt to tackle problem drinking includes a lower rate of duty on beers with lower alcohol content. The change should save Dutch brewers Heineken, who own the brand, £6.6m in duty per year. A third of every pint now goes to the tax man. TELEGRAPH

(“Errr... couldn’t they just dodge tax like everyone else?” slurred our finance correspondent, weeping through his sixth pint of beer...)

Tuesday 12 March 2013

Tuesday, March 12, 2013 Posted by Hari No comments Labels: , , , , , , , , ,
Cameron tells Justin Welby to stop meddling in things he only half understands...

Saturday 9 March 2013

Saturday, March 09, 2013 Posted by Jake 4 comments Labels: , , ,
Over 500 bankers earned more than £1million at RBS and Barclays in 2012, with 50 paid between £2.5 million and £5 million. HSBC paid 204 bankers more than £1 million, with its five highest paid staff receiving between £3.9 million and £7.5 million. 

Bankers have been permitted by successive governments, Labour and Conservative and Coalition, to loot in a way unseen in any other industry. Excessive bonuses are paid to the bosses of many industries: for example in 2013 the CEO of Centrica arranged to leave that company accompanied by a hearth warming £10m combined share, salary and pension package. The difference is banks hose cash over staff well below top-boss level. None of this is news, but every now and then the bare-faced cheek of one bank is exposed by the relatively less spewing bonuses paid by another bank.

In March 2013 two banks, both rescued by £billions taken from the British taxpayer, announced their results and their bonus pools:

From basic measures, taken in March 2013, Lloyds appears in better shape than RBS. Lloyds total value was double, its revenues 27% higher, and its losses seven times lower than RBS.

Friday 8 March 2013

Fee, Chris and KJ wonder how long the UK can hold out...

Thursday 7 March 2013

Thursday, March 07, 2013 Posted by Jake No comments Labels:

RBS pays £600m in bonuses despite £5.2bn losses
Despite also losing £1.2bn last year, RBS CEO Stephen Hester confirmed that he plans to join his investment bankers in taking his bonus for the first time in four years. It will award him £780,000 in shares next month. Last year he returned his bonus after a massive computer glitch cost RBS well over £100m in compensation. INDEPENDENT
(Well, in that case, fingers crossed for another computer meltdown…)

Computer meltdown hits RBS as customers are unable to withdraw cash
The most seriously affected are customers of RBS-owned NatWest Bank. Today's problems come after technical issues hit RBS and its subsidiaries last June and left millions of customers unable to pay bills or move money for days. RBS apologised. INDEPENDENT
(Errr... whoops!...)

Cadbury accused of opening imaginary factory in India to dodge tax
Cadbury, owned by US food giant Mondelēz (formerly Kraft), is reported to have reprogrammed its accounting system so employees could submit false invoices, purchase orders and other documents that made it seem as if a new plant were operating. DAILY MAIL
(“We’re very sorry and heads will roll… for not sticking with a fake company in the Cayman Islands, like everyone else,” said a genuinely contrite Mondelez spokesperson…)

Banks cut back on loans to business, in spite of getting £14bn “Funding for Lending” from the Bank of England
Funding for Lending was meant to be passed on to small and medium-sized businesses. Instead, bank lending fell by £2.4bn in the final quarter of last year. The Bank of England’s deputy governor, Paul Tucker, admitted that the majority of the £14bn had gone to homebuyers. Businesses confident of expanding and repaying the loans have been turned down by the banks. BBC NEWS
(“...Because only we know how big a mess the economy’s in, stupid. Hey, we created it!” said our sympathetic bank insider.)

“Global centre of banking” Switzerland backs curbs on executive pay
Voters in Switzerland have backed controls on executive pay, forcing public companies to give shareholders a binding vote on remuneration. Swiss companies will also no longer be able to pay so-called “golden hellos” and “golden parachutes”, whereby senior managers receive a one-time cash lump sum when joining or leaving a company. But companies could also seek ways around the new rules and experts have questioned whether shareholders will make full use of their new rights. The new Swiss rules are now the world’s toughest on fat cat pay. TELEGRAPH
(…and the punch line is? “The new Swiss rules are now the world’s toughest on fat cat pay,” said the entire world weeping tears of frustration…)

Tuesday 5 March 2013

Tuesday, March 05, 2013 Posted by Hari 1 comment Labels: , , ,
Cameron can only look on...

Sunday 3 March 2013

Sunday, March 03, 2013 Posted by Jake 3 comments Labels: , , , ,
The UK Minister of Defence said, in an interview with the Telegraph, the "kind of Conservatism I was brought up on says that the first priority of the government is defending the country and maintaining law and order. Those are the two top priorities for me” . Which seems reasonable. There is no doubt that paying for the banking crisis required us to cut defence spending, probably beyond what is prudent. However, he then goes on to say the people from whom money should be taken to pay for Defence are not those with the most money (including bankers), but those with the least. 

The minister went on to say: “There is a body of opinion within Cabinet that we have to look at the welfare budget again. The welfare budget is the bit of public spending that has risen the furthest and the fastest and if we are going to get control of public spending on a sustainable basis, we are going to have to do more to tackle the growth in the welfare budget.”

At least he is being consistently true to the "kind of Conservatism [he] was brought up on". Defence and Law&Order are the "two top priorities" apart from keeping tax down.

They pick us off one at a time. Public servants, then teachers, then 'skivers and strivers'. So who is next? Nick Clegg, Iain Duncan Smith, and various 'think tanks' are softening us up to the idea of cutting benefits to the elderly. Are pensioners so feather-bedded they can afford to lose their benefits?

Fortunately the Office of National Statistics (ONS) is still manned by ordinary Britons driven by maths, and still manages to publish their statistics regardless of the bums on the ministerial seats. They know they need to be careful, as does The National Audit Office (NAO) whose criticisms of various government departments including, among so many others, HMRC and the Department of Works and Pensions may send it the way of the abolished Audit Commission. Following the Audit Commission's abolition it will be for the various government bodies to choose their own auditors. We need look no further than the banks to see what happens when organisations are the paymasters of their own auditors. 

So let's appreciate some of the truths brought to us by the ONS while it is still alive and counting:

a) The UK has similar percentages in poverty to the EU average for those up to 64 years of age (children and what used to be 'working age' before retirement ages were pushed up). However, the percentage of over 65's in poverty is much greater than the EU average.

b) The reason poverty has fallen in the UK since 2008 is that the definition of 'poverty' sets it at 60% of the median income. So when the median (average) income falls there are fewer people in 'poverty'. 

Friday 1 March 2013

Friday, March 01, 2013 Posted by Hari 3 comments Labels: , , ,
Fee, Chris and KJ hope that's the end of the matter...

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