Thursday 21 January 2016

While executives in corporations dine out on double Irish Dutch sandwiches, the rest of us are told to eat cake.


When residents of Crickhowell in South Wales heard that Facebook paid just £5,000 UK corporation tax last year, which is less than almost every independent trader on our high streets, it stuck in their throats. Wednesday night’s BBC documentary, How a town took on the taxman, was a refreshing alternative to Benefits Britain. It exposed the real scroungers in society as executives in designer suits who invoke complex schemes, known as Dutch and double Irish Dutch sandwiches, to avoid paying UK tax. The tab for which is picked up by independent businesses and ordinary tax payers. The poor are left with the crumbs.

Despite HMRC being informed that HSBC helped over 1,000 of its UK customers dodge tax, the investigation against them has been quietly dropped, leaving so many questions unanswered. Not least, why was former HSBC boss, Lord Green, appointed as a Tory minister months after the government received the damning files? 

It seems, if you de fraud the state dressed in a designer suit and armed with a top of the range “tax adviser”, it’s not illegal, even if it is morally bankrupt.

On Monday, The Independent reported that none of the “Big Four” accounting firms  (PricewaterhouseCoopers (PwC), KPMG, Deloitte & Touche and Ernst & Young) have ever faced regulatory censure for devising tax avoidance schemes deemed illegal. Regulators, such as the Financial Reporting Council and the Institute of Chartered Accountants in England and Wales were criticised for being staffed by the very firms they are meant to scrutinise.

Prem Sikka, Professor of Accountancy at Essex University, said: “Successive governments have failed to investigate the firms. Instead, the partners of major accountancy firms are given knighthoods and government consultancies. The same firms have colonised regulatory bodies, fund political parties and provide jobs for former and potential ministers. This has brought them political insurance and their anti-social practices continue to inflict enormous social damage.”

The Tories have managed to fast track legislation that squeezes the life blood out of the poorest in society, such as last weeks’ surreptitious invocation of arcane parliamentary procedure to scrap student grants for those on lower incomes. Yet, known loopholes that allow the rich to dodge paying their fair share of taxes, remain conspicuously open. 

Also on Monday, Oxfam produced a report exposing the fact that the Richest 1% in the world own as much as everyone else on the planet and the gap between rich and poor has risen “dramatically” in the last 12 months.  Oxfam urged David Cameron to clamp down on tax dodging by the rich so that the lost revenue could be recouped and used on the NHS, education, and anti-poverty measures.

Tax loopholes allow wealthy bosses to pay a lower tax rate than nurses and teachers. These legal tax dodges rob the public coffers of some £5bn a year. In addition, Kevin Farnsworth, a researcher from York university, recently warned that, at the same time as the government is making 12bn in welfare cuts, taxpayers are handing businesses £93bn a year in hidden subsidies. That’s more than £3,500 from each household in the UK. You don’t have to be Carol Vorderman to do the maths.

Unless you’re an Independent reader, you’d be hard pressed to know any of the above. The Oxfam report, criticisms of the big 4 accounting firms, the student grants being scrapped behind closed doors, all got buried under the headline; “Teaching Muslim mothers to suck eggs”.

As was Jeremy Corbyn’s progressive vision for a fairer society. He proposed pay ratios between top and bottom to ensure a wider distribution of profit and power in businesses with more than 50 employees. Directors would also be prevented from distributing dividends until they pay all their workers the living wage. Corbyn, like Oxfam, the OECD and the good people of Crickhowell, know that the gaping chasm between the rich and poor destabilises society and the economy.

By taking their taxes offshore, the high street traders of Crickhowell are laying down the gauntlet to HMRC. Either we all get to play this game, or close the loopholes so that no-one can. Whatever the outcome of their experiment, the little town in South Wales has shown that people power should not be underestimated. I’m off to CafĂ© Nero (mega tax dodger) to order a double Irish Dutch sandwich. If it’s not on the menu, I’ll go elsewhere and have something that won’t leave a bad taste in my mouth. That rules out humble pie and cake. 





Friday 8 January 2016

The Bad News That Got Buried Under Jeremy Corbyn's Reshuffle This Week

An edited version of this was published in today's Independent:

http://www.independent.co.uk/voices/the-media-must-give-jeremy-corbyn-a-fair-hearing-a6804821.html

As a therapist, I’ve looked into the eyes of souls broken by right wing policies. Some of which were instigated under Tony Blair’s labour. When you see a teenage mother crack from the strain of living in a BB, far from her family, because she couldn’t get a council flat in London, or a father who is suicidal because he’s dependent on food banks to feed his children even though he has a job, you learn to join the dots. For some, a £10 reduction in benefits can be the difference between eating and starving, being warm and freezing, staying sane and unravelling. Living and dying.

While journalists camped outside Jeremy Corbyn’s office concocting ways the word “chaotic” and “turmoil” could be incorporated into any reshuffle announcement, real news, relevant to real people, went unreported in the bowels of parliament this week.

The housing Bill, described as social cleansing, allowing private developers to profit at taxpayers’ expense, went under the radar. Ian Duncan Smith also escaped scrutiny for failing to speak at a debate on the proposed slashing of universal tax credits, which the The Institute for Fiscal Studies warned would leave 2.6million working families £1,600 a year worse off. Meanwhile, Cameron’s contempt for flood victims at PMQs was passed off as “a bit of artful banter”.

A year ago a report by the Organisation for Economic Co-operation and Development warned that the widening gap between rich and poor had stifled the British economy and that rising inequality knocked almost 9 percentage points off the UK’s growth. The global think tank advised that taxes on the rich would not damage the economy, and could be used to help improve the lives of families with children.

Had Michael Dugher’s “straight talking” involved invoking any of the above to demonstrate that Tory austerity is bad, not just for the vulnerable, but for the economy and society, he would still be in the shadow cabinet. Instead, he pointed his guns at the democratically elected leader of his own party. The man whose mandate is to oppose austerity, not rehabilitate Blairites suffering with post election stress disorder. The media diligently reported the apparent hypocrisy of Dugher being sacked for “a little dissent” by Corbyn who himself voted against his party some 500 times. What the media neglected to clarify is that Corbyn was a back bencher, not a minister or shadow minister. That’s a vitally significant fact that is serially misrepresented.

Pat McFadden had to go because he doesn’t get the link between failed foreign policy that sanctions the killing of innocents abroad and national security. He exploited the barbarous Paris attacks to publicly score (misinformed) points against Jeremy Corbyn.

Last year, the Global Terrorism Index reported that the number of terrorism fatalities had steadily grown over the 14 years since the Iraq war, from 3,361 in 2000 to 17,958 in 2013. The emergence of Isis can be attributed directly to the invasion of Iraq. The former head of MI5, Baroness Manningham-Buller, told the Chilcot inquiry that the Iraq invasion led to a huge increase in the terrorist threat to the UK and that she warned the Government in 2002 that declaring war on Iraq would do just that.

Hilary Benn shares McFadden’s selective amnesia. He voted for the Iraq war on the basis of a dodgy dossier and has now led the charge to drop more bombs, this time on Syria. He did this despite the fact that the Tory chair of the defense select committee, Julian Lewis, warned that Cameron’s claims of 70,000 ground troops was a fantasy, describing them as “bogus battalions”. As for Benn’s speech about “not walking by on the other side” when despots butcher their people. One word Mr Benn, Darfur. When he held the reins of power in his hands as International Development Secretary, he was accused of consistently downplaying the genocide, which rages still today. Not least for his record on Iraq and Darfur and now in Syria, I think Benn’s retention of the foreign policy portfolio is ill advised. Nonetheless, Labour ends the week with a reinvigorated shadow cabinet, just in time to stand shoulder to shoulder with junior doctors next week.

The Tories are wrong about the economy (inequality and social injustice stifle growth) and national security (bombing makes us more, not less, susceptible to terrorist attacks). Labour’s anti austerity message is morally and economically sound. The dignity and integrity of this country, and the wellbeing of our most vulnerable, is dependent on Labour uniting to make that message heard.