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Tag Archives: workers

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

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'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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Britain’s worst idlers – the MPs who wrote Britannia Unchained

20 Monday Aug 2012

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

≈ 8 Comments

Tags

bailing, banker, benefit, benefits, borrow, Britannia, Britannia Unchained, British, Cameron, Chris, comic, commerce, commercial, constituencies, constituency, Dandy, David, debt, director, directorship, disabled, dividend, Dominic Raab, economy, effort, elite, Elizabeth, employment, Enterprise, executive, expense, failure, financier, Free, Free Enterprise Group, GDP, government, graft, grant, Group, humour, hypocrite, idlers, industry, Kwarteng, Kwasi, laziness, leave, lie-in, manager, mismanage, MP, Patel, pay, pension, political, price, Priti, promotion, propoganda, reckless, remuneration, resettlement, reshuffle, right-wing, risk, salaries, salary, senior, share, shareholder, sick, Skidmore, slacker, something-for-nothing, subsidise, subsidy, tax, Tory, Tory-led, Truss, Unchained, unemployment, vacation, workers


I have been saddened to learn of two events that will take place in the near future: The death of The Dandy, and the publication of Britannia Unchained.

The first needs little introduction to British readers; it’s the UK’s longest-running children’s humour comic, which will cease publication (in print form) towards the end of this year, on its 75th anniversary. The second appears to be an odious political tract scribbled by a cabal of ambitious right-wing Tory MPs, desperate to make a name for themselves by tarring British workers as “among the worst idlers in the world”.

The connection? Even at the end of its life, there is better and more useful information in The Dandy than there will be in Britannia Unchained.

The book’s authors, Priti Patel, Elizabeth Truss, Dominic Raab, Chris Skidmore, and Kwasi Kwarteng, all members of the Free Enterprise Group of Tory MPs, argue that British workers are “among the worst idlers in the world”, that the UK “rewards laziness” and “too many people in Britain prefer a lie-in to hard work”.

They say the UK needs to reward a culture of “graft, risk and effort” and “stop bailing out the reckless, avoiding all risk and rewarding laziness”.

Strong words – undermined completely by the authors’ own record of attendance at their place of work.

Chris Skidmore’s Parliamentary attendance record is just 88.1 per cent – and he’s the most diligent of the five. Kwasi Kwarteng weighs in at 87.6 per cent; Elizabeth Truss at 85.3 per cent; and Priti Patel at 81.8 per cent. Dominic Raab is the laziest of the lot, with Parliamentary attendance of just 79.1 per cent.

To put that in perspective, if I took more than a week’s sick leave per year from my last workplace, I would have been hauled up before the boss and serious questions asked about my future at the company. That’s a 97.9 per cent minimum requirement. Who are these slackers to tell me, or anyone else who does real work, that we are lazy?

Some have already suggested that these evil-minded hypocrites are just taking cheap shots at others, to make themselves look good for promotion in an autumn reshuffle. Maybe this is true, although David Cameron would be very unwise to do anything but distance himself from them and their dangerous ideas.

I think this is an attempt to deflect attention away from the way the Tory-led government has mismanaged the economy, and from its murderous treatment of the sick and disabled. As one commentator put it: “They get a token Asian, a token African, a token Jew, mix in the middle class/grammar school rubbish propaganda, and suddenly they are just ordinary people? No they are not; they are stooges for the ruling elite.”

Britain doesn’t reward laziness among its working class. What it rewards is failure by managers, directors of industry, financiers. These people continually increase their salaries and other remuneration while their share prices fall, their dividend payments are lacklustre and shareholder value is destroyed. What have they given shareholders over the past 10 years? How many industrial or commercial leaders have walked off with millions, leaving behind companies that were struggling, if not collapsing? Does the criticism in Britannia Unchained apply to senior executives and bankers?

Our MPs are as much to blame as big business. They vote themselves generous pay, pensions and extended vacations (five months per year). They never start work before 11am, never work weekends (or most Fridays, when they are supposed to be in their constituencies, if I recall correctly). They enjoy fringe benefits including subsidised bars, restaurants and gyms. They take part-time directorships in large companies which take up time they should be using to serve the public. Only a few years ago we discovered that large numbers of them were cheating on their expense claims. They take more than £32,000 in “Resettlement Grant” if we kick them out after one term – which, in my opinion, means all five authors of Britannia Unchained should be applying for it in 2015.

These are the people who most strongly represent the ‘something-for-nothing’ sense of entitlement the book decries.

Have any of them ever worked in a factory or carried out manual labour? I’ll answer that for you: With the exception of Elizabeth Truss, who did a few years as a management accountant at Shell/Cable and Wireless, none of them have ever done anything that could be called real work.

In fact, the people they accuse work very long hours – especially the self-employed. When I ran my own news website, I was busy for 12-14 hours a day (much to the distress of my girlfriend). Employees also work long hours, get less annual leave, earn less and pay more – in prices for consumer goods, taxes and hidden taxes – than most of Europe. Average monthly pay rates have now dropped so low that they are failing to cover workers’ costs, leading to borrowing and debt.

Are British workers really among the laziest in the world? Accurate information is hard to find but it seems likely we’re around 24th on the world league table. On a planet with more than 200 sovereign nations (204 attended the London Olympics), that’s not too shabby at all.

Interestingly, the European workers clocking on for the fewest hours are German. Those lazy Teutons! How dare they work so little and still have the powerhouse economy of the continent?

If so many are reluctant to get up in the morning, why are the morning commuter trains standing room only? Or have the Britannia Unchained crowd never used this form of travel?

It seems to me that Britannia Unchained is just another attempt by the Tory right to make us work harder for less pay. The Coalition is currently cutting the public sector and benefits to the bone, while failing to introduce policies that create useful employment, and trying to boost private sector jobs. The private sector has cut wages and pensions. The result is higher unemployment and benefits that cannot sustain living costs, creating a working-age population desperate for any kind of employment at all (even at the too-low wages already discussed).

And let’s remember that Conservatives want to remove employment laws to make it easier to dismiss employees. In other words, they want a workforce that will toil for a pittance, under threat of swift dismissal and the loss of what little they have.

Why do they think this will improve the UK’s performance?

We already work longer hours and have less protective legislation than in Europe (such as the European Time Directive). But we are less productive in terms of GDP than their French and German counterparts, who work fewer hours and are protected by the likes of the ETD.

France is more unionised than we are, yet its production per employee is higher.

The problem is poor management and bad leadership. Poor productivity is almost always due to poor investment and poor training. Workers are abused when they should be treated as an investment. They lose motivation and when managers get their decisions wrong, they blame the workers.

Working class people are sick of grafting for low pay and in poor working conditions, to be exploited by the types of people represented by the authors of Britannia Unchained.

Is it any wonder we feel de-motivated?

I started this article by linking The Dandy to Britannia Unchained, noting that one was coming to the end of its life in print while the other was about to be published for the first time. I’ll end by pointing out a quality they have in common.

The Dandy is closing because it represents ideas that are now tired and out-of-date. Britannia Unchained should never see publication – for the same reason.

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False economies that leave the business books unbalanced

18 Wednesday Jan 2012

Posted by Mike Sivier in Business, People, Politics

≈ 2 Comments

Tags

benefits, bosses, business, cost of living, debt, deficit, economy, government, health, Mike Sivier, mikesivier, pay, people, performance, politics, workers


The flipside to the question I covered in ‘Where’s the benefit’ must be the harm caused by company bosses who have taken, I believe, pay rises amounting to 700 per cent over the past 20 years.

That mean they are now taking home seven times as much money from the business where they work as they would have in 1992.

Compare this with the average workers, who have received rises amounting to only 27 per cent. This means that, in 1992, they were taking home a little less than four-fifths of what they get today.

That’s a huge difference. I think we all know that bosses’ pay rises do not have any relationship with their companies’ performance, so workers are right – in my opinion – to feel resentful.

It seems to me that many employees are finding life extremely difficult now, because the amount they are paid does not cover all their outgoings and they are having to work out what they can do without. The cost of living has risen more sharply than their pay, so they are out of pocket.

This creates stress, which can create illness, which could take them out of work and turn them into a liability to the economy – as they would then be claiming benefits.

That’s bad – not only for the country but also for their company, because demoralised employees produce poor work and the company’s turnover will decrease; having to bring in and train up new workers to replace those who are leaving through ill health is time-consuming and unproductive.

Therefore, in taking the money for themselves, rather than sharing it with employees, bosses are clearly harming their own companies and the economy.

In fact, it seems to me that this is a microcosm of the larger, national economy. In order to keep more money, bosses (and the government) pay less (in the government’s case, to pay off the national deficit). This means less work gets done, and is of poorer quality (in both cases). So orders fall off and firms have to make more cutbacks (or, revenue decreases so the government makes more cutbacks in order to keep up its debt payments).

The message to bosses – and the government – is clear: Cutting back investment in people to keep money for yourselves will cripple your earning ability. Cutting even more to make up for what you lose will put you into a death spiral. You are trying to dig your way out of your own graves.

But there is an alternative.

A reasonable pay increase to employees would ensure they can pay their bills, and would also keep them happy.

Happy workers produce better results.

Better results keep businesses afloat and earn extra work for them.

That in turn creates more revenue, making it possible for bosses not only to increase their own pay but employ more people as well.

Wouldn’t that be better for everybody?

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