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Tag Archives: Corporation Tax

‘The Budget that confirms Britain is worse-off under the Tories’

19 Wednesday Mar 2014

Posted by Mike Sivier in Bedroom Tax, Benefits, Business, Conservative Party, Cost of living, Economy, Employment, Food Banks, Health, Housing, Labour Party, Liberal Democrats, Media, People, Politics, Poverty, Public services, Scotland referendum, Tax, Transport, UK, Utility firms

≈ 12 Comments

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alistair darling, banker, bedroom tax, benefit, benefit cap, benefits, budget, business, Coalition, Conservative, Corporation Tax, cost of living, council tax, cut, debt, deficit, Democrat, economy, Ed Miliband, employment, energy, environment, food bank, George Osborne, government, green, high speed rail, ISA, Labour, Lib Dem, Liberal, living standard, medical research, Mike Sivier, mikesivier, North Sea oil, nurse, Parliament, pay, Pensioner Bond, people, personal tax allowance, politics, public sector, referendum, restraint, rich, rise, saver, saving, Scotland, self, senior citizen, service, shale gas, social security, special advisor, spending, tax credit, Tories, Tory, Treasury, unemployment, Vox Political, welfare, work


Mr Os-bean: As Ed Miliband gave his response to the Budget, George Osborne had a gormless smile on his face that made him look like Mr Bean.  This is not him - but it's the closest image I could find at short notice. [Image as credited]

Mr Os-bean: As Ed Miliband gave his response to the Budget, George Osborne had a gormless smile on his face that made him look like Mr Bean. This is not him – but it’s the closest image I could find at short notice. [Image as credited]

If a Conservative government is returned to office after the 2015 election, there will be yet more spending cuts and service cuts afflicting hard-working, low-paid families.

That was the message for most people in George Osborne’s latest attempt at a Budget speech today.

There were plenty of groan-worthy moments as the part-time chancellor trotted out the Coalition’s catchphrases: “We will fix the roof while the sun is shining” (groan. The job is taking so long, one has to question whether the contractor is Con-ning the client). “We are all in this together” (groan). Oh really?

Benefit spending is to be capped at £119 billion per year, albeit rising with inflation; public sector pay “restraint” will continue for the foreseeable future. This is from the government whose Prime Minister was confirmed, only minutes previously, as having approved 40 per cent pay rises for his special advisors!

Most significant is the fact that Osborne avoided mentioning ordinary working people for most of his speech; this was a budget for businesses, with the benefits reserved for fatcat bosses.

No major advanced economy in the World is growing faster than the UK, said Mr Osborne; more people are in work. This appears to be borne out by current employment figures (although it should be noted that this is due to a vast and questionable boom in self-employment – the number of employees has dropped by 60,000).

Where is the benefit to the British economy? Why has the deficit not been eliminated? Osborne said it stood at £157 billion in the year he came to office, and would be £108 billion this year, but in fact £39 billion was removed due to measures brought in by the previous Labour chancellor, Alistair Darling. He has cut government spending by something like £80 billion so far, but the deficit has dropped by – possibly – £10 billion. Not a good start to his speech.

There will be further investment in high-speed rail, even though there is no way of predicting whether this hugely costly investment in making train journeys 20 minutes faster will create any economic improvement.

There will be money to fund new centres for medical research – but will these be absorbed by private health firms after the public purse has paid for them?

There will be investment in faster extraction of oil from the North Sea – aiming to get as much as possible out before the Scottish referendum, in order to impoverish the Scots if they decide to go for independence?

And there will be investment in low-cost energy (finally killing the highly questionable green agenda) – meaning money for shale gas companies, and to hell with the environmental cost.

All this investment will go into businesses whose main contribution to the Treasury – Corporation Tax – has already dropped by a quarter (from 28 per cent to 21 per cent) and will go down to 20 per cent this year. This is less than the lowest level of Income Tax.

Up go the profits – down go the tax payments. Who benefits?

Council tax in England remains frozen, meaning fewer public services.

The personal tax allowance is to rise, so people may earn £10,500 before paying tax. This is nowhere near enough to offset the massive drop in living standards that has been caused by the Tory-led Coalition. The cost of living has risen for 44 out of the 45 months of this Parliament – for the whole period, if the earnings of high-paid bankers are removed from the calculation.

The threshold for payment of the 40p tax rate is to rise, so fewer people will pay the higher rate.

Savers are to be helped but – again – this is not a boost for the poor. Most working and unemployed families don’t have any spare money to put into the banks. How does it help them to know they would not pay any tax on savings up to £15,000 in an ISA, when they cannot afford to open one?

And there is a new Pensioner Bond for rich senior citizens (poorer pensioners don’t live long enough to benefit).

As Ed Miliband said in his scathing response, the Coalition can afford to give a tax cut of £200,000 per year to bankers who earn £5 million – but can’t afford £250 per year extra for nurses.

Mr Miliband said the Budget speech was more significant in what it hid than in what it actually said.

Working people are suffering under the Bedroom Tax, under cuts to their tax credits, and they are having to visit food banks if they want to eat.

This is a government that gives with one hand, but takes back much more with the other.

And the Conservatives have the bare-faced cheek to call themselves “The Workers’ Party”.

Follow me on Twitter: @MidWalesMike

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A few words on the large government-funded corporations who don’t pay their taxes

16 Saturday Nov 2013

Posted by Mike Sivier in Politics, Public services, Tax, UK

≈ 9 Comments

Tags

allowance, Atos, avoid, benefit, benefits, British Army, capita, Chris Grayling, Coalition, company, Conservative, corporate, corporation, Corporation Tax, court, Democrat, electronic tag, employment, ESA, firm, G4S, government, GP, Justice Secretary, Liberal, Liberal Democrat, Mike Sivier, mikesivier, offender, Olympic, out of hours, overcharge, overcharging, people, phantom, politics, Serco, support, tax, taxpayer, Tories, Tory, translation, Vox Political, work capability assessment


[Picture: Another Angry Voice}

[Picture: Another Angry Voice}

Apologies are due to readers for the fact that new articles have been few and far between this week; Vox Political creator Mike Sivier has been occupied with other concerns including work at the Citizens Advice Bureau and campaigning to be a Labour candidate in the 2015 election. Normal service will resume (hopefully) on Monday.

In the meantime, here’s some information from a VP reader (who very kindly asked not to be credited) on some of our favourite private companies with entire fists – never mind fingers – in the public sector pie.

With around half of all public sector spending now paid to private companies, lets look at some facts about the four largest recipients – Serco, Capita, Atos and G4S.

In total, they have received more than £4 billion of taxpayers’ money in the past year, making a cumulative profit of £1.05 billion. This means that, if the work had been carried out within the public sector, the taxpayer would have saved more than a quarter of the money used. That’s a lot of money!

With Corporation Tax currently standing at 23 per cent, let’s look at how much tax they paid: £75 million (around 7.5 per cent).

But the situation is actually worse than that! This is only the tax paid by Capita and Serco.

Atos and G4S paid no tax at all.

Furthermore, none of these companies has successfully delivered the public services they were contracted to carry out, despite having been paid anyway. Did G4S successfully manage security at the 2012 Olympics, or was that the British Army? Did Capita provide adequate court translation services? Has Atos carried out work capability assessments for Employment and Support Allowance in a professional and unproblematic manner? What about Serco and out-of-hours GP services?

These firms have been content to take taxpayers’ money but avoid paying tax on it, and then provided botched services. Two of them – Serco and G4S – are currently under investigation by the Serious Fraud Office for overcharging on electronic tagging of offenders.

It seems we were paying for these companies to monitor 3,000 phantom offenders. They were charging for 18,000 while only 15,000 were being monitored.

Coalition Justice Secretary and part-time clown Chris Grayling told MPs in July that an external audit had revealed the overcharging, which included bills for tracking the movements of criminals who had moved abroad, who were back in prison, who had had their tags removed and even, in a few cases, those who had died.

Even so – and despite sanctions against the companies as a result, the scenario presented in the image (above) is still possible, thanks to the Coalition government.

Outsourcing – a good deal for taxpayers? You decide…

(Source: http://www.theguardian.com/politics/2013/nov/12/public-sector-paid-outsourcing-firms-4-billion-pounds)

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Duncan Smith weighs in with support for Tory bid to impose right-wing bias on BBC

29 Tuesday Oct 2013

Posted by Mike Sivier in Bedroom Tax, Conservative Party, Housing, Immigration, Media, People, Politics, Television, UK

≈ 20 Comments

Tags

BBC, bedroom tax, bias, Capital Gains Tax, Cardiff University, Conservative, Corporation Tax, Damian Green, Department, DWP, Grant Shapps, Iain Duncan Smith, immigration, Inheritance Tax, Mike Sivier, mikesivier, minister, national, office, ONS, Pensions, returned to unit, right-wing, RTU, secretary, social housing, social security, spare room subsidy, statistics, tax avoidance, tenant, Tories, Tory, under occupy, unemployment, Vox Political, welfare, window tax, work


131029bbcbias

The Secretary-in-a-State about Work and Pensions, Iain Duncan Smith, has joined Grant Shapps in attacking the BBC with entirely fictitious claims that it has a left-wing bias.

Smith, affectionately known as ‘RTU’ or ‘Returned to Unit’ by this blog because of doubts about his achievements in the Army, is a serial spreader of falsehood, as has been documented here many times.

It seems he missed his true vocation and should have been a farmer; he spreads muck so vigorously.

And this is the case today. The Daily Mail has reported in its usual bombastic style that RTU is angry because the BBC keeps describing his charge on social housing tenants who the government deems to be “under-occupying” their homes as a “bedroom tax”.

His “furious” letter states that the corporation has been misleading viewers because the phrase is “innately politically and indeed factually wrong”.

Oh, is it, Iain?

Let’s have a look at his reason for saying this: “A tax, as the Oxford English Dictionary makes clear, is a ‘compulsory contribution to state revenue, levied by the  government on workers’ income and business profits, or added to the cost of some goods, services and transactions’.”

That’s right – and the state under-occupation charge (to give it it’s correct title) is a compulsory contribution to state revenue, added to the cost of a service. In this case, the service is rental of a dwelling. There can be no doubt that the contribution is compulsory, and it is clearly the state that receives (or rather, keeps) the money.

It is a tax. And we can say that, since the number of spare bedrooms in a dwelling is used to apply the charge, it is a bedroom tax. It’s the same principle as was used to describe the ‘Window Tax’ of the 19th century or thereabouts.

Some pundits have stated that it cannot be a tax because it is not paid by everybody, but this is also nonsense. Does everybody pay Inheritance Tax, or Capital Gains Tax? No. Even the corporations don’t pay Corporation Tax any more, according to all the reports we hear about tax avoidance!

And it may also be stated that the BBC is simply reflecting public parlance in its use of the phrase. People do not talk about the “underoccupation charge” or the “removal of the spare room subsidy” – they talk about the Bedroom Tax.

So RTU can whine all he likes; the BBC is factually correct in using the phrase, and it also reflects public custom in doing so.

His letter continues by claiming the BBC has adopted the language of the Opposition, stating, “We do not believe it is the job of the BBC to use misleading terms and promote the views of the Labour Party.”

Again, he is wrong to claim that the BBC has a left-wing bias. You may get tired of reading this, Dear Reader, but research by Cardiff University has shown that “The BBC tends to reproduce a Conservative, Eurosceptic, pro-business version of the world, not a left-wing, anti-business agenda”. Read the report for yourself.

The Daily Mail goes on to report that former Immigration Minister Damian Green has been unhappy with the Beeb’s reporting of immigration data, saying it was “mystifying” that a 36,000 drop in migration was described as “slight”.

But it is Mail readers who should be mystified at this claim. Didn’t they read, only last month, that more than two million immigrants have been given British passports since 2000 – one every two and a half minutes? Was this not accurate? In comparison to that figure, 36,000 is indeed “slight”.

And Mr Green might have had a little more sympathy for the BBC report if he had bothered to read the latest information on immigration by the Office for National Statistics, which stated that a drop of 39,000 long-term migrants between December 2011 and December 2012 was “not a statistically significant fall”. This is the information used by his government.

Of course we all know the reason for this latest round of BBC-bashing – the Tories are putting out a ‘marker’ for the general election.

They are telling the BBC, in no uncertain terms: “Behave. We don’t want any trouble from you in the run-up to May 2015 – just nice stories saying how great we are. Otherwise it will go badly for you after the election.”

Considering the evidence that the BBC already has a right-wing, Conservative-supporting viewpoint, it would be perfectly understandable if any high-ranking member of the corporation, receiving that message, did the exact opposite.

These Tories are ungrateful. They should know it is impossible for the BBC to hide the vast amount of cock-ups, miscalculations and intentional harm they have inflicted on the nation in the last three years. Attempted intimidation can’t alter the facts.

But then, threats are a part of the Tory way of life – especially for Iain Duncan Smith.

That is clear to anyone who has spent a few months signing unemployed at a Job Centre.

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Sort out the tax dodgers, Labour, then the benefit bill won’t be a problem

13 Sunday Oct 2013

Posted by Mike Sivier in Benefits, Business, Conservative Party, Corruption, Cost of living, Economy, Employment, Health, Labour Party, Law, Liberal Democrats, People, Politics, Poverty, Tax, UK, unemployment

≈ 35 Comments

Tags

accountancy, accountant, Arcadia, avoid, Bank of England, benefit, Big Four, Capital Gains Tax, chief secretary, Conservative, Corporation Tax, David Gauke, Denis Healey, dividend, economist, evasion, exempt, fraud, Gordon Brown, HM Revenue and Customs, hmrc, Interest, jobs guarantee, Labour, Mike Sivier, mikesivier, Monaco, multinational, offshore, overseas, part-time, Pensions, Philip Green, Rachel Reeves, sanction, shadow, subsidiary, tax, tax gap, tax haven, Tina Green, Tories, Tory, tough, Treasury, Vox Political, work, zero hours


Off-message: If Rachel Reeves had promised to get as tough on tax avoidance in her previous job as she is promising to be on benefits now, Labour might have had more credibility.

Off-message: If Rachel Reeves had promised to get as tough on tax avoidance in her previous job as she is promising to be on benefits now, Labour might have had more credibility.

A lot of people have been getting their knickers in a knot about Rachel Reeves’ interview in today’s Observer – and rightly so.

In it, she tells us (wrongly), “We are not in an environment where there is more money around,” and says that Labour will be tougher than the Tories when it comes to slashing the benefits bill. She stressed that she wanted to explode the “myth” that Labour is soft on benefit costs.

There are a few myths feeding into these statements. Firstly, the myth that millions upon millions of British citizens are living a life of luxury on benefits, which is, quite frankly, infantile nonsense. Benefits do not pay the ordinary claimant enough to afford huge luxuries and never did. They were always intended to cover the cost of survival while the recipient looked for something better. Anything else is a lie concocted by unscrupulous politicians, that you would be a fool to believe.

Then there’s the myth that the British taxpayer is being defrauded out of a fortune by benefit cheats who are (again) living a life of luxury at our expense. One look at the figures dispels that idea! The fact is that only seven people in every thousand commit benefit fraud – at a consequently small cost to the overall budget – and the amount they receive simply would not support the lifestyle our politicians are suggesting for them.

Let’s move up to a bigger myth – that people prefer to live on benefits than get a job. We’ve now moved from infantile nonsense to dangerous nonsense. The current situation, engineered by the conservatives in both Coalition parties, means there are very few jobs available – around 500,000 at any one time, with 2.5 million people chasing them.

And what kind of jobs are they? How many are zero-hours contracts? How many are part-time? These jobs do not pay more than benefits (“Making Work Pay” – another Tory lie) so anyone taking them will be out-of-pocket.

Meanwhile, the Tories in power have rigged the system so that anyone who does not spend the entire working week pestering local businesses for jobs that they aren’t offering will be sanctioned and will lose their benefit for a period of up to three years! It is entirely disproportionate, considering the state of the economy, and may cost jobseekers a lot more than a few quid a week in the long run.

But this is how the benefits bill will be slashed – by the Conservatives and by Labour, if Rachel Reeves is to be believed. Ministers of any party, living in the la-la land of made-up statistics, will sanction people for failing to work hard enough at securing jobs that don’t exist!

Ms Reeves says Labour’s jobs guarantee will ensure that those jobs do exist but we don’t know that for sure. We do know that she intends to continue Tory policy on sanctions – blindly.

Finally, we have the biggest myth of all – that there isn’t enough money. HM Revenue and Customs just released estimates for the last-but-one tax year (2011-12), suggesting that it failed to collect £35 billion in evaded or avoided tax during that year.

That’s seven times more than the national bill for JSA, and more than 29 times the estimated cost of all benefit fraud. But wait – it gets better! This is only an estimate and it has long been believed that the true cost of the so-called “tax gap” is £120 billion – equal to each year’s national deficit, 24 times the cost of JSA or 100 times the cost of benefit fraud.

Why isn’t our government going after these criminals? Why hasn’t Labour promised to go after them if the Tories won’t?

Simple: Both main parties have been re-writing tax law to make it easier for rich individuals and large corporations to avoid paying tax, and ignoring flaws in tax laws that make avoidance possible.

So for example: In the late 1990s, the then-Labour government removed the tax on dividends that meant companies had to pay tax on profits if they wanted to pay them out to the owners. So for example Arcadia boss Philip Green’s wife Tina, who is technically the owner of the company and lives in Monaco, received a tax-free £1.2 billion dividend in 2005; if this tax had been in place, £300 million of that would have gone to the UK Treasury.

Gordon Brown slashed Capital Gains Tax from 40 per cent to 10 per cent in 2000, meaning income that his friends in private equity managed to engineer into capital gains would be taxed at a lower rate than was paid by their cleaners. Not the finest hour for the Party of the Worker!

And towards the end of its term, New Labour started dismantling the rules that guarded against industrial-scale tax avoidance by British multinationals, meaning profits returned to the UK from overseas subsidiaries would be exempt from tax. This created a substantial incentive for firms to send their income offshore.

Before the 2010 election, our old friend David Gauke made a lot of noise about stopping the limitless tax deductibility of interest payments, that had been used by Boots (the chemist) to slash its tax bill. Six months after the election, when he was in a position to do something about it, he was telling everybody the rules would not be altered because business considered them a competitive advantage.

The Coalition brought in tax exemptions for companies’ tax haven branches and for profits parked in tax haven subsidiary companies. Meanwhile, tax breaks for the cost of funding these offshore set-ups, from the UK, are also provided.

Corporation Tax will drop to 21 per cent by 2014, even though there is no evidence that cutting the rate will make the UK any more competitive in world business.

The Treasury’s mission is now to adjust the framework of tax laws to suit big business. The ‘Big Four’ accountancy firms are now well-entrenched in writing our tax laws for us – and they run the most popular tax avoidance schemes. Consultations have descended into a process of agreeing laws demanded by big businesses.

There are clear and irrefutable arguments that reversing these legislative idiocies and closing every other tax avoidance loophole will do far more for the economy than flogging the unemployed to death, looking for jobs that don’t exist.

But I don’t think former Bank of England economist Rachel Reeves will be interested in that. In 1975, an appalled taxpayer wrote to then-Chancellor Denis Healey, complaining that an employee of the Bank (which is supposed to work on preventing tax avoidance) had been giving advice on how to avoid tax. “I wonder if this is really part of the Bank of England’s duties,” the correspondent wrote.

The behaviour of Ms Reeves, the former Shadow Chief Secretary to the Treasury, suggests that she believes it is.

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Rising tide of protest marks start of Tory conference

29 Sunday Sep 2013

Posted by Mike Sivier in Bedroom Tax, Benefits, Business, Conservative Party, Corruption, Cost of living, Disability, Economy, Housing, People, Politics, Poverty, Public services, UK, unemployment, USA

≈ 25 Comments

Tags

allowance, Andrew Marr Show, avoidance, banker, BBC, bedroom tax, boss, break, British Chambers of Commerce, bubble, ComRes, conference, Conservative, Corporation Tax, David Cameron, David Ison, Dean, Department, discontent, Downing Street Demand, economic, economy, employment, error, ESA, fool, funeral, George Osborne, Germany, hedge fund, help to buy, housing, Iain Duncan Smith, investor, Labour, Liam Byrne, loophole, Margaret Thatcher, married couple tax, mortgage, Nationwide Building Society, Pensions, policies, policy, poll, protest, St Paul's Cathedral, stall, support, tax, Tories, Tory, Treasury, USA, WCA, work, work capability assessment


Falling on deaf ears: The chorus of protest against the bedroom tax is unlikely to be heard at the Conservative Party Conference in Manchester, where delegates will be discussing how to bribe the electorate into supporting them in 2015. [Picture: Matthew Pover in the Sunday People]

Falling on deaf ears: The chorus of protest against the bedroom tax is unlikely to be heard at the Conservative Party Conference in Manchester, where delegates will be discussing how to bribe the electorate into supporting them in 2015. [Picture: Matthew Pover in the Sunday People]

Does David Cameron have any new policies that are big enough to silence the rising clamour of discontent against him?

He’ll need something big – Coalition partners the Liberal Democrats managed only a tax on plastic bags (an idea stolen from the Labour Welsh government) and a few weak cries of “Please let us stay in government after 2015”.

The married couples’ tax allowance isn’t it. It seems this is how the Tories plan to spend any money saved by imposing the bedroom tax, and people are already naming it as an election bribe – albeit a poor one at £3.85 a week.

He has set aside £700 million for the scheme, which is more than the government would have spent if it had not imposed the bedroom tax.

A brand-new ComRes poll is showing that 60 per cent of voters agree with Labour’s plan to abolish the bedroom tax – which hits 660,000 households. And one in five Liberal Democrats could vote Labour in protest at the tax.

The issue has prompted shadow Work and Pensions secretary Liam Byrne to say something with which this blog can actually – for once – agree! He said: “It is the worst possible combination of incompetence and cruelty, a mean-spirited shambles. It’s got to go.”

He added that the bedroom tax was likely to cost more than it saved – a point made by this blog many months ago.

Another hopelessly unpopular Tory policy to come from Iain Duncan Smith’s Department for Work and Pensions has been the work capability assessment for sick and disabled claimants of Employment and Support Allowance. It seems one of the first things the Tories did was alter this test so that it became almost impossible to accumulate enough points to be found in need of the benefit.

The result has been three years of carnage behind closed doors, where people with serious conditions have been forced into destitution that has either caused their death by worsening their condition, or caused the kind of mental health problems that lead to suicide. Thousands – perhaps tens of thousands – have died.

Now, the Dean of St Paul’s Cathedral has written to Cameron, urging him to end the assessments which, he wrote, can “cut short their lives”.

The Very Reverend Dr David Ison, who presided over Margaret Thatcher’s funeral, signed a campaign letter entitled ‘The Downing Street Demand’, which claims Government policies force some of the most deprived members of society to “shoulder the heaviest burden of national debt created by the super-rich”.

Some might say this is typical of broad Conservative policy: Taking from the poor to give to the rich.

The harshness of such a policy, as outlined in the letter, is appalling: “In 2010 you said, ‘I’m going to make sure no-one is left behind; that we protect the poorest and most vulnerable in our society’.

“The reality of the austerity programme is the opposite.

“Since your Government came to power, cuts have meant that disabled people are paying back nine times more than non-disabled people and those with the highest support needs are paying back nineteen times more.”

Dr Ison said: “It’s right to stand in solidarity with people from many different organisations to draw attention to the needs of some of the most deprived members of our society.

“Many disabled people feel desperate facing possible cuts in support, the bedroom tax, and in particular an inflexible and failing Work Capability Assessment scheme which can blight and even cut short their lives.

“The Government needs to respond by enabling disabled people to live with dignity and security.”

Against this background, what is Cameron doing to make his party more attractive?

He’s bringing forward the second phase of his government’s Help to Buy scheme, that helps people in England to get 95 per cent mortgages on properties worth up to £600,000 – a scheme that has been widely criticised for setting up another debt-related housing bubble.

Cameron denies this. Speaking on The Andrew Marr Show this morning (Sunday), he said that outside London and the South East the average price of homes has only risen 0.8 per cent.

But the BBC reported that, during September, house prices rose at their fastest rate in more than six years – and a report from Nationwide Building Society showed the rise was “increasingly broad-based”.

Adam Marshall, of the British Chambers of Commerce (which is normally supportive to the Conservatives), said: “With all the concern expressed about Help to Buy – rushing into it seems less than responsible on part of government.”

It is, therefore, under a barrage of scorn that the Conservative conference begins today. How is Cameron planning to rally his troops?

He would be ill-advised to use the economy – as seems likely from a BBC report today.

He wants the country to believe that “We have had to make very difficult decisions… These difficult decisions are beginning to pay off and the country’s coming through it.”

Even here, the evidence is against him. George Osborne’s economic theory was based on a very silly spreadsheet error, as was proved several months ago by an American student. Attempts by this blog to ascertain whether he had anything more solid on which to base his policy proved fruitless – all the evidence he provided was underpinned by the same discredited document.

No – we can all see what George Osborne’s policies did to the British economy: They stalled it.

We spent three years bumping along the bottom with no growth worth mentioning, which Osborne, Cameron and their cronies used as an excuse to impose policies that have hammered those of us on the lowest incomes while protecting the rich corporate bosses, bankers and hedge fund investors who caused the economic crash.

Now, it seems more likely that the economy is picking up because it was always likely to. Commerce is cyclical and, when conditions merit it, business will pick up after a slump. That is what is happening now, and this is why growth figures are “stronger than expected”.

It has nothing to do with Conservative economic policies at all.

That won’t stop Cameron trying to capitalise on it. Ever the opportunist, he is already trying to pretend that this was the plan all along, and it just took a little longer than expected. We would all be fools to believe him.

And he has rushed to attack Labour plans for economic revival, claiming these would involve “crazy plans to tax business out of existence”.

In fact, Labour’s plans will close tax avoidance loopholes that have allowed businesses to avoid paying their due to the Treasury.

Besides, Conservative policy – to reduce Corporation Tax massively – has been proved to do nothing to make the UK more attractive for multinational businesses; the USA kept its taxes high and has not lost any of its own corporate taxpayers.

That country, along with Germany, adopted a policy of investment alongside a tighter tax regime and has reaped the benefits with much greater growth than the UK, which has suffered from a lack of investment and a tax policy full of holes (because it is written by the architects of the biggest tax avoidance schemes).

So what’s left?

Historically, at this time in the electoral cycle, Tory policy is to offer Middle Britain a massive bribe.

If they try it now, they’ll risk wiping out any savings they might have made over the last three years, rendering this entire Parliament pointless.

This blog stated last week that the Tories seem to want to rewrite an old saying to include the line: “You can fool most of the people, enough of the time.”

We know that millions of people were fooled by them at the last election.

Will we be fooled again?

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Another Tory ‘bait-and-switch’ scam – shares-for-rights scheme is employers’ tax dodge

01 Sunday Sep 2013

Posted by Mike Sivier in Business, Conservative Party, Corruption, Employment, People, Politics, Tax, UK

≈ 5 Comments

Tags

'Starve the Beast', Another Angry Voice, avoidance, bait and switch, budget, capital gains, Coalition, congress, Conservative, Corporation Tax, debt, deficit, dodge, economy, employee owner, employee shareholder, evasion, flexible working, George Osborne, government, Mike Sivier, mikesivier, Mirror, OBR, observer, office, people, politics, redundancy pay, responsibility, rights, shares, social security, statutory, tax, Tories, Tory, trade, training, TUC, unemployment, unfair dismissal, union, Vox Political, welfare, work, workers


shares-rights-tax

“This government is taking action domestically on [tax] avoidance and evasion,” wrote George Osborne in an article for The Observer, back in February. How right he was.

The Tory-led Coalition has done everything in its power to facilitate tax avoidance and ignore evasion, it seems, including the latest wheeze, which is to link it with a feeble attempt to get working people to throw away their rights in exchange for a few shares.

The BBC has reported that the new status of “employee shareholder” has come into force, allowing working people to claim shares in the company that employs them, if they give up the rights to claim unfair dismissal and statutory redundancy pay, the right to request flexible working (except in the case of two weeks’ parental leave), and some rights to request time off for training.

Nobody in their right mind would do this and expert opinion is that take-up will be small. So why do it?

Well, it’s not about the workers at all. It’s about helping company bosses avoid paying their taxes. Even the right-wing-leaning BBC was unable to cover up the facts (although it left them until the end of the article):

“Companies can also claim some corporation tax deductions on the issuance of shares to employees.”

Yes – it’s a tax dodge!

Here’s how it works, according to the Mirror: “New analysis show[s] it could also allow executives to avoid paying revenue on company shares. Tax experts commissioned by the TUC believe ruthless bosses could classify themselves as ’employee owners’ to escape Capital Gains Tax. And the Office for Budget Responsibility estimates the scheme could cost up to £1 billion, mainly due to tax avoidance.”

This will, of course, involve a drop in tax income to the Treasury, meaning increases in the national debt and deficit, which the Tories will no doubt use to justify further cuts to public service budgets as part of their ‘Starve The Beast’ agenda. Remember, this country has a chancellor who, for ideological purposes, actually wants to harm the British economy.

Meanwhile, as our friend at Another Angry Voice has put it: “If you’re thick enough to cash in your labour rights for a few grand worth of shares in the company you work for, then in a couple of years time when people are calling you ‘feckless’ for being unemployed, you’ll be one of the minority that actually deserve it (and your shares might well be worth only pennies in the pound compared to the value they had when you scrapped your labour rights to get them).”

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What a shame the UN can’t end extreme hypocrisy

02 Saturday Feb 2013

Posted by Mike Sivier in Benefits, Conservative Party, Health, People, Politics, UK

≈ 14 Comments

Tags

Andrew Lansley, benefit, benefits, Coalition, conflict, Conservative, Corporation Tax, corruption, David Cameron, debt, disease, George Osborne, government, hypocrisy, Iain Duncan Smith, Income Tax, injustice, Justice, law, legal aid, malnutrition, Mike Sivier, mikesivier, Parliament, people, politics, poverty, rickets, social security, Tories, Tory, un, unemployment, united nations, Vox Political, welfare


D'oh! David Cameron realises he has just described as problems all the conditions he is trying to create in the UK, after his speech to the United Nations. This photograph used because I couldn't find one of him sticking his own foot in his mouth.

D’oh! David Cameron realises he has just described – as problems – all the conditions he is trying to create in the UK, after his speech to the United Nations. This photograph used because I couldn’t find one of him sticking his own foot in his mouth.

The title refers to today’s comments by comedy Prime Minister David Cameron, who has stated that the United Nations needs a new set of international development goals to eradicate extreme poverty.

If he believes in this so fervently, why is he hell-bent on reinstating extreme poverty here, in his home country?

Before I go on, I should make it clear that I know poverty – as defined in the UK – is very much different from poverty in, for example, Africa. I know there are some in this country who would be very quick to get on their soapbox and warn that going without food indefinitely isn’t the same as going without a computer.

That’s all very well, but the fact is that changes made by the currently government will increase poverty massively, pushing hundreds of thousands of people below our extremely arbitrary poverty line. We will see increased malnutrition, and we will see a huge increase in diseases caused by lack of food, such as rickets (which is, itself, already on the rise).

People have already died – here in the UK – from the effects of changes wrought by Mr Cameron’s regime.

The BBC website’s report quotes Mr Cameron, who apparently said the UN must focus on ending factors that contribute to poverty, including “corruption [and] lack of justice”.

I bow to his knowledge and experience of corruption, because I believe he leads one of the most corrupt regimes the UK has had to endure in many a year.

Look at last week’s stories about the accounting firms that run the most tax avoidance schemes being allowed to write the law on tax avoidance (could this be because Mr Cameron and his part-time chancellor are well-versed in making money from such schemes? I think it could).

Look at the number of firms benefiting from Andrew Lansley’s changes to the National Health Service – how many Parliamentarians have a financial interest in those companies? (Hint: Many).

This is why I started the petition to ban MPs from speaking or voting on matters in which they have a financial interest* – and I think I touched a nerve there. It was the top-trending e-petition on the government’s website yesterday. From a standing start on Wednesday, it now totals more than 2,000 signatures, with more being added all the time.

As for lack of justice, let’s just remember this is the same David Cameron who is ending the right to Legal Aid for issues including debt, benefits, redundancy and landlord problems. If you’re poor and you end up with these problems, you won’t be able to rely on British justice.

He later added “conflict” and “lack of the rule of law” to his list. For conflict, let’s look at the riots of August 2011 – and hope that we don’t have similar scenes this year, after the effects of his buddy Iain Duncan Smith’s social security changes kick us all in the stomach.

As for the rule of law, I don’t think we’ve had that since the Coalition came into power and started writing laws that allowed its members and their friends to get their snouts in the trough at the expense of those of us who actually support the British economy.

How can cutting Corporation Tax by a quarter, or cutting the top rate of Income Tax by a tenth help our system? The people who benefit from that won’t be spending the extra money they’ll be keeping – they will bank it, most probably in the tax havens that part-time Chancellor Gideon Osborne has been busily creating while telling us he’s doing the exact opposite. This administration is exceptionally well-versed in doublespeak – saying one thing, meaning the opposite – but dismally slow at realising that we all understand exactly what’s really going on.

So: Corruption, conflict, lack of justice, lack of the rule of law. I do, in fact, agree that fighting these scourges on society – preferably by removing the regimes responsible – would greatly benefit the fight against poverty.

Perhaps the UN would like to start right here, in the UK?

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Molotov cocktails for the propaganda machine

05 Saturday Jan 2013

Posted by Mike Sivier in Benefits, Business, Conservative Party, Disability, Economy, Education, Health, Labour Party, pensions, People, Politics, tax credits, UK, unemployment

≈ 8 Comments

Tags

autumn statement, benefit, benefits, business, Conservative, Corporation Tax, Daily, David Cameron, debt, deficit, Department for Work and Pensions, disability, Disability Living Allowance, disabled, DLA, DWP, economy, education, Employment and Support Allowance, ESA, George, Gideon, government, health, Iain Duncan Smith, Incapacity Benefit, Jobseeker's Allowance, Labour, Mail, Margaret Thatcher, Mike Sivier, mikesivier, NHS, omnishambles, Osborne, people, PIP, politics, sick, tax, Telegraph, Tories, Tory, unemployment, Vox Political, WCA, welfare, work capability assessment


Despicable Him: All the puff pieces* in the world won't save David Cameron when ordinary people can use their computers, look up what he and his government have done, and tell other people about it. *A puff piece is a newspaper article written for no other reason that to promote or advertise its subject; an article with little or no real news value. Like today's Telegraph editorial.

Despicable Him: All the puff pieces* in the world won’t save David Cameron when ordinary people can use their computers, look up what he and his government have done, and tell other people about it.
*A puff piece is a newspaper article written for no other reason that to promote or advertise its subject; an article with little or no real news value. Like today’s Telegraph editorial.

Whoever wrote today’s editorial at the Daily Telegraph doesn’t realise that we can debunk these articles faster than he (or she) can write them.

And if you’re working at the Daily Mail? That goes for you too.

The article to which I refer is headed with the overly-optimistic line ‘A year for the Tories to restore their reputation’ and goes downhill from there.

The thesis is that the Conservatives, in government, have failed to deliver the “competence and compassion” that they promised in 2010 – competence in putting the government, especially its finances, back on the right track; and compassion in ruling not just for the rich but the whole country – “not least via far-reaching reforms to education and welfare, intended to benefit the most disadvantaged in society”.

The piece is riddled with nonsenses, most of which have long-since been dismissed by anyone of modest intelligence who can use an internet search engine. So:

“The Tories are grappling with a truly toxic legacy (both fiscal and otherwise)” – and yet it is still business as usual for the banks, nearly three years after the election. Why have we not seen the reforms we have been promised?

“It was always going to be a tall order for an administration led by polished public school types to lead the nation through an age of austerity.” For “polished public school types” read “rude, uncultured oiks with over-inflated opinions of themselves”. Oh, and there’s a typo. Between “an” and “age of austerity”, the missing word is “unnecessary”.

Here’s the bit that made my blood boil, though: “In fact, the Tories still have a strong story to tell. Their education and welfare reforms, together with the raising of income tax thresholds that the Lib Dems insisted on, represent a genuine attempt to help the poor.”

Did the author seriously think they were going to get away with that? I couldn’t let it go unchallenged and wrote the following into the article’s ‘Comment’ column: “The education and welfare reforms do NOT represent any kind of attempt to help the poor. Welfare in particular is an ongoing disaster, with thousands of those on sickness or disability benefits already dead, having either suffered terminal worsening of their conditions thanks to the heartless regime inflicted on them by an apparently-psychotic Iain Duncan Smith, or given up and committed suicide just to break the cycle of harassment and intimidation.

“It’s as if this government is deliberately trying to kill off those whose health prevents them from working.

“And I should know – not only am I a carer for a disabled person, I write a blog that regularly focuses on this subject. If any Telegraph readers want to know what’s really going on, I suggest they take a trip across to mikesivier.wordpress.com and read some of the comments from people who have actually been through the system. It might be a bit of a shock!”

I wonder if it has been moderated out of existence yet?

You noticed, I hope, that one area of government that didn’t get mentioned as a “genuine attempt to help” in the article was health? Is this an admission of guilt, I wonder.

Moving on, the article harks back to what the author clearly considers the Tories’ glory days, when Margaret Thatcher led the party during the 1980s: “Mrs Thatcher herself was not universally liked; nor was the party she led. The Tories won then because they promised to do tough but necessary things, which would give voters the chance to build a better life – and delivered.”

I was just trying to get my career started when Thatcher’s government was in power. “Give voters the chance to build a better life”? I can assure you, that didn’t happen unless you were a member of an exclusive club. For most of us it was oppression as usual.

The only difference now is, with this lot the oppression is worse, and so is the incompetence.

It’s impractical to expect the Conservative Party to change its ways at the moment because it is doing precisely what it set out to do: Shrink the state and sell off the most profitable bits to its friends in the private sector. Sorting out the economy has nothing to do with what’s actually happening, other than being a smokescreen.

The worst tragedy for the UK in 2015 will be if the Conservatives win.

However:

Dire though it may be, the author of this article does have a point when turning to Labour’s tactics. “Labour’s announcements on welfare this week show a party devoted to double-counted, sock-the-rich gimmicks rather than the serious business of rescuing the public finances.” While this is almost indigestible, coming from someone who has just been extolling the hidden virtues of a party that has been pursuing a hidden agenda behind a smokescreen of nonsense justification narratives, I can’t see the point of Labour’s latest idea, either. Getting a six-month job for the long-term jobless? That’s just as pointless as the Tories’ current make-work schemes.

No, what we need to build up the UK economy again are some solid foundations. Gideon George Osborne missed his opportunity to make a start on this in his Autumn Statement, when he said he was cutting Corporation Tax again. It’s gone down by a huge 25 per cent since this government took office – why has he not attached a condition to it – that firms must use the money they save to employ extra staff and build their businesses back up to positions of strength?

At the very least, why did he not attach a condition that firms should build up the average salaries of their workers, to ensure that nobody in full-time employment need ever claim a state benefit? Remember, 60 per cent of the benefit cuts Osborne announced in the same Autumn Statement will affect working people just as much as the jobless.

If those workers were properly paid, then the benefit bill might be smaller and the cuts might not be necessary. Doesn’t that make sense?

The Tories are starting 2013 in the way to which we have all become accustomed: Omnishambles.

But now it’s time for Labour to raise its game.

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Toughen international tax laws, says Osborne – ‘cos we won’t in Britain!

05 Monday Nov 2012

Posted by Mike Sivier in Business, Conservative Party, Crime, Economy, Law, Politics, Tax, UK

≈ 1 Comment

Tags

avoidance, Coalition, Conservative, Corporation Tax, criminal, debt, deficit, economy, evasion, G20, George Monbiot, George Osborne, Gideon, global, Google, government, haven, laundering, loophole, looting, Mexico, Mike Sivier, mikesivier, money, Osborne, Parliament, politics, Starbucks, tax, Tories, Tory, Vox Political, Wolfgang Schauble


Would you trust this man to stop tax evasion and avoidance? No? Good – because he won’t.

George Osborne really thinks we’re all stupid, doesn’t he?

Today he got together with his German counterpart, Wolfgang Schauble, to say co-operation between countries is needed to close loopholes that have allowed high-profile firms like Starbucks and Google to pay next to nothing in Corporation Tax.

They told a G20 meeting of finance ministers in Mexico to help identify possible gaps in tax laws.

Just wait one nit-picking moment, Mr 0!

I remember an article by the great George Monbiot (who happens to be almost a neighbour of mine) about the effects of a couple of minor adjustments to the tax acts of 1988 and 2009 – that meant companies in the UK pay nothing at all on money made by their foreign branches and may claim the expense of funding their foreign branches against tax paid in the UK.

The measures meant any UK company that did not outsource its staff or funnel its earnings through a tax haven would find itself at a competitive disadvantage.

So you see Starbucks and Google have been doing (more or less) exactly what these changes in UK tax law intended them to do – and Gideon’s pose with Schauble is just so much hot air and posturing.

Mr Monbiot went on to say the following: “Our political system protects and enriches a fantastically wealthy elite, much of whose money is, as a result of their interesting tax and transfer arrangements, in effect stolen from poorer countries, and poorer citizens of their own countries.

“Ours is a semi-criminal money-laundering economy, legitimised by the pomp of the lord mayor’s show and multiple layers of defence in government. Politically irrelevant, economically invisible, the rest of us inhabit the margins of the system.

“Governments ensure that we are thrown enough scraps to keep us quiet, while the ultra-rich get on with the serious business of looting the global economy and crushing attempts to hold them to account.”

Not only is Mr 0 shafting us (and by “us” I include anyone with a business that isn’t big enough to indulge in the shady practices listed above); he’s passing the buck onto Johnny Foreigner to put things right (in the certain knowledge that it isn’t going to happen).

Well, Gideon, that’s just too bad because I reckon I’ve caught you red-handed.

Right?

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Government borrowing: Insanity, explained with nonsense

21 Friday Sep 2012

Posted by Mike Sivier in Business, Economy, People, Politics, Tax, UK, Uncategorized

≈ Comments Off on Government borrowing: Insanity, explained with nonsense

Tags

austerity, Bank of England, benefits, BoE, British Chambers of Commerce, Coalition, Conservative, Conservative-led, Corporation Tax, crisis, David Cameron, David Gauke, debt, deficit, economic, economy, Eurozone, GDP, George Osborne, government, government borrowing, Gross Domestic Product, Guardian, income, inflation, Mike Sivier, mikesivier, national, OBR, Office for Budget Responsibility, Office for National Statistics, offshore, ONS, Parliament, people, politics, Royal Mail, Sir Mervyn King, tax, tax avoidance, tax haven, Tories, Tory, Tory-led, Treasury, Vox Political


The Coalition government has no intention of reducing the UK’s debt burden as it provides an excuse to cut spending on public services and shrink the state. Messrs Cameron, Osborne et al know that, when the public becomes sick of all the nonsense they have been spouting about it, they can hand the mess over to the next government and laugh all the way to the (offshore) bank.

Government borrowing figures for August have been released and the Treasury has been talking nonsense about them. Again.

Let’s start with the facts: UK public sector net borrowing was £14.4bn in August – slightly higher than the same month last year, and therefore the biggest deficit for the month since records began. Corporation tax receipts fell by 2.1 per cent; benefit payments rose by 4.9 per cent.

Barring the effects of one-off transactions like the raid on the Royal Mail Pension Plan that I mentioned last month, borrowing from April to August increased by £12.9bn, or 22 per cent, on the same period last year – to £61.3bn.

The British Chambers of Commerce reckon that at this rate, total borrowing for 2012-13 will be £20bn+ more than estimated by the misnamed Office for Budget Responsibility at the time of the last budget.

Public sector net debt stood at £1.04 trillion at the end of August 2012, equivalent to 66.1 per cent of gross domestic product (GDP) – that’s up from 1.032tr at the end of July, or 65.7 per cent of GDP.

The BBC, reporting on its website, has stated that the figures make it more likely the government will fail to wipe out the structural budget deficit by its deadline – and I think it won’t make a difference whether that’s 2015 (already long-abandoned) or 2017.

The Treasury, on the other hand, is still telling us it is getting the deficit down. Exchequer secretary to the Treasury David Gauke said new figures showing borrowing for 2011-12 came it at £119bn, rather than the OBR’s forecast of £126bn meant the government was dealing with its debts.

This is particularly rich, coming from him. Everybody now knows that the best way for the government to pay down its debts is to tax all the rich Brits who have stashed their cash in offshore tax-havens. Mr Gauke used to work for a tax avoidance firm and his wife is a tax avoidance lawyer. He is exactly the wrong man to lecture us on getting the deficit – the difference between government spending and tax receipts – down.

Some, like Sir Mervyn King, governor of the Bank of England, are now saying that overshooting the deficit reduction target would be acceptable if the reason was slower economic growth across the world, and the government has been happy to play its ‘Eurozone Strife’ card many times in the past.

But I’m not convinced. I tend to agree with The Guardian’s summary of the Coalition’s non-achievements so far, which states: UK exports to the EU have been growing, at least until early 2012; the deepening Eurozone crisis was mainly due to the same austerity policies employed in the UK; therefore austerity should have been cut back and demand revived.

What we’re left with should be no surprise to anyone: Numbers that don’t add up and explanations that don’t make sense.

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