Another day, another blunder: David Cameron can’t say anything right, it seems.
David Cameron is to be congratulated. Just as the furore over his ‘Road to Tory Ruin’ election poster might be expected to die down, he has thrown more fuel on the fire of public discontent with a series of false claims prior to a TV appearance.
He told The Guardianthat the Labour Party’s plans, if it wins the election in May, would cost £13.5 billion in extra interest payments on the country’s debts.
The report also quoted his interview in The Sunday Times, in which he stated: “Money that should be used for schools and hospitals will be effectively poured down the drain.”
Some might point out that the Conservative Party is doing quite enough already to drain away money that could be used for schools and hospitals – into Tory donors’ bank accounts – but Labour responded in a tweet: “Problems with Tories’ latest attack on ‘Labour’s policy’: 1) not Labour’s policy 2) based on outdated forecasts.” It added, mockingly: “Apart from that, not bad.”
The Conservatives’ electioneering blunders have provoked a storm of protest on the social media, and Cameron’s silly claim has now prompted even those who are usually silent to comment. Here’s ‘Wez’, responding to the Guardian article: “I’m not usually a follower of politics but I definitely feel this party has turned this country into a shambles.”
And Richard Murphy, of Tax Research UK fame, tweeted: “If the Conservative election campaign goes as well in the rest of 2015 as it’s gone so far they might just make quite a lot of people happy.”
After the Guardian report was published, Cameron tweeted: “I’ll be talking about why in election year it’s vital we stay on the road to recovery with [The Andrew Marr Show] on BBC1.”
This prompted the following response from DJ Tony Blackburn: “Did you enjoy your coffee in Starbucks this morning? My producer Dan Roberts spotted you.”
Of course, Starbucks caused heated controversy over tax avoidance. The fact that Cameron was seen there is yet another public relations mistake, as many will consider this to be tacit support for the company’s strategy of not paying HM Revenue & Customs what it owes.
Not such a sweetheart: Dave Hartnett, formerly of HMRC, now of Deloitte’s. There’s a line by Herbert Morris – “something in the lad’s upturned face appealed to him. He hurled a brick at it”. Would THIS man’s upturned face appeal to you in the same way?
Dave Hartnett, the former tax executive responsible for the hugely controversial “sweetheart deals” that allowed multinational corporations including Vodafone and Starbucks to avoid paying billions of pounds in taxes to the UK treasury, has started work with Deloitte, the accountancy firm and auditor of – guess who? – Vodafone and Starbucks.
Hartnett quit as Permanent Secretary for Tax at HM Revenue and Customs and then took on the one-day-a-week role (according to, among others, The Independent). Deloitte – one of the so-called ‘Big Four’ accountancy firms at the heart of every major scheme for tax avoidance – continues in its role at the UK Treasury, helping (if you can call it that) to write the law on – guess what? – tax avoidance.
Considering all of the above, does anybody seriously expect us to believe that Hartnett was working for the public when he was at HMRC?
0sborne has every reason to be red-raced with embarrassment over his pitiful record regarding tax avoidance. Parliament’s public accounts committee has done all the hard work for him and he still can’t put it into practice!
Revenue and Customs bosses, reeling from the broadside they took for claiming the UK’s tax-dodging public enemy number one was a hairdresser from Liverpool, can take no solace from the attitude of Parliament’s own public accounts committee.
Three days before HMRC published its silly little list, the committee called on it to “publically name and shame” all organisations and individuals who sell or use tax avoidance schemes, in order to discourage such activity.
The fact that the organisation has not taken the opportunity to do so serious undermines its position.
Let’s have a look at what the UK Parliament’s website – www.parliament.uk – has to say about the government’s stance, because the criticism is so heavy it’s almost funny:
Tax avoidance—using tax law to gain a tax advantage not intended by Parliament—reduces the money available to fund public services and is completely unfair to the majority who pay the tax due. HM Revenue & Customs (HMRC) estimates that in 2010-11 the tax gap due to avoidance was £5 billion. HMRC further estimates that the present total tax at risk from avoidance over time is £10.2 billion.
In Australia, promoters have to get clearance for schemes before they introduce them. An advance ruling system of this type could deter contrived avoidance schemes and increase certainty in the tax system. Australia has also introduced powers to fine those who promote schemes that could not reasonably be expected to work or comply with the advance ruling system.
“Promoters of ‘boutique’ tax avoidance schemes like the one brought to our attention by the case of Jimmy Carr, are running rings around HMRC,” said Margaret Hodge, chair of the public accounts committee.
“They create schemes which exploit loopholes in legislation or abuse available tax reliefs, such as those intended to encourage investment in British films, and then sign up as many clients as possible, knowing that it will take time for HMRC to change the law and shut the scheme down.
“Their clients can then take advantage of this window of opportunity to make a lot of money at the expense of the taxpayer, while the promoter simply moves on to a new scheme and repeats the process. It is a game of cat and mouse and HMRC is losing.
“It has allowed a system to evolve where the die are loaded in favour of the promoters of tax avoidance schemes. The complexity of tax law creates opportunities for avoidance, there are no penalties to stop people promoting these schemes, and HMRC is ineffective in challenging promoters who are deliberately obstructive or deliberately sell schemes they know do not work. Promoters pocket their fees whether their schemes work or not.
“There is also a lack of transparency that makes it very hard to find out who is involved in marketing or using these schemes. HMRC publicises details of schemes that do not work but does not name the promoters or the clients. We have seen how public anger and consumer pressure can influence large companies, such as Starbucks, to behave more responsibly.
“HMRC should publically name and shame those who sell or use tax avoidance schemes in order to discourage such activity. With at least £5 billion lost to tax avoidance each year, HMRC has got to get much more robust in its approach.
“The requirement that promoters give early notification to HMRC of new schemes has resulted in the swift closure of some. But the Department does not know how many promoters simply choose to ignore the requirement. We are also alarmed to hear that promoters are getting off paying fines for not disclosing their schemes by pleading that, in the opinion of a QC, they have a ‘reasonable excuse’ for non-disclosure. HMRC is right to explore how to make it more difficult for this tactic to work.
“The number of cases HMRC takes to court is tiny compared to the overall caseload. It must make use of the additional resources it has been given to act much more urgently to investigate and close down new schemes and to bring more cases to court.
“Since our hearing, the Government has announced that it is consulting on draft rules designed to allow departments to ban tax-avoiding businesses from being awarded government contracts. This is a welcome move but we will want to monitor closely how any such rules are applied in practice.”
I wonder if the rules on banning tax-avoiding businesses from taking up government contracts will ever see the light of day?
It is no surprise at all that the UK has lost its triple-A credit rating from make-it-up-as-you-go Moody’s.
The change has been expected since before Christmas, but that doesn’t make it any less significant. Gideon George Osborne spent the first years of this Parliament using it as a stick to beat Labour – that the UK’s credit rating was the best it could be, thanks to his policies, not theirs.
Like all credit rating agencies, Moody’s is a group of people who meet every so often and decide on particular countries’ scores, based on nothing more concrete than their own personal opinions. They can’t predict the future; they can only react to the present. That’s why they’re dubbed “make-it-up-as-you-go” at the top of this article.
But you can work out what that means, at this moment in time: 0sborne can’t pay his debts.
That’s astonishing. This is the world’s sixth largest economy, according to the International Monetary Fund. We make staggering amounts of money every year, so the operative question now is: Why the blazes can’t he pay his debts?
The answer lies in another story that broke last week – HM Revenue and Customs’ list of tax dodgers.
This is the list compiled by HMRC in response to public outrage against the tax-dodging schemes of large corporations like Starbucks, Amazon, the water companies mentioned in this blog before Christmas, Vodafone, Arcadia group and so on.
Who do you think this list marks out as public enemy number one?
A hairdresser from Liverpool.
Apparently this person was scalped of £17,000 for deliberate default. Others include a knitwear firm, a wine firm and a pipe fitter.
Meanwhile the amount of cash seeded away in offshore tax havens by the UK’s super-rich is estimated at £21 trillion. That’s 21 TRILLION – more than enough to pay all of our debts and put us back into surplus.
There is only one conclusion to be reached: The Chancellor is using the HMRC list to laugh at us. He’s mocking the poor, who have to pay tax no matter what. He’s not going to level the playing field because that would harm his own profits and those of his friends.
The Chancellor of the Exchequer is deliberately harming the UK economy.
I know I used this photo very recently, but it’s the only one I feel really gets across the CHARACTER of our vampiric Chancellor.
Oh look, Gideon George Osborne’s an idiot again. Or a genius, depending on whether you’re a fan of responsible government or of shrinking the State.
He’s going to cut government spending by £48 BILLION in the next government spending round (The Guardian says he could increase taxes by that amount but I think we all know that’s not going to happen. Not to the rich, anyway).
It turns out the economy is weaker now than when he started – no surprises there, that’s what his policies were intended to do – so he’ll have a bigger gap to bridge when he makes his next set of multi-year spending plans. Let’s bear in mind that there will be an election around this time; we can boot this bunch of economically-illiterate lunatics back out to rot in their country estates and get someone in who actually wants to do some good.
Assuming that doesn’t happen, according to The Grauniad, in addition to the deep cuts in government departmental spending for 2010-15, Mr 0 pencilled in £26 billion of additional cuts for the next spending round “to complete” – don’t laugh – “the repair work”. Obviously “repair” was a space-holding word and they were looking for an appropriate one. “Demolition” seems a likely contender to me.
It turns out the UK’s structural deficit – that’s the shortfall in the public finances that will remain when the economy has fully recovered from the recession, as they love to remind us – was 1.1 per cent of GDP higher than forecast in March. So that wipes out the one per cent growth we had in the last quarter, then. Harumph.
This means that the current spending round’s cuts of 2.3 per cent will be dwarfed by the 3.7 per cent further cuts required in the next one – so everything is going to plan, you see.
The paper quotes Ian Mulheirn, director of the Social Market Foundation thinktank, as saying: “The chancellor will have to lay out some eye-watering cuts at the next spending review and will prolong austerity deep into the next Parliament.” Eye-watering to you, sir – MOUTH-watering to him.
For those of us who know we’re going to have to pay for it (some of the poorest with their lives, I’m sure. It’s already happened in this Parliament; if the Conservatives continue into the next, it’ll only get worse) also know that it could be very different.
This government has overseen and facilitated some of the worst tax avoidance fiascos in the history of, well, taxation itself, I expect. Look at the article I posted yesterday about the water companies. Look at Starbucks, Google, and Amazon, that are all having to explain themselves because they are companies owned by Johnny Foreigner. It’s all right for British businesspeople to stash your cash in tax havens abroad, but we can’t let just anyone have it, can we?
Come to that, look at how gas prices are allegedly being manipulated for their own ends by the big power companies, which is the lead on The Guardian‘s website as I type this. That market is worth £300 billion, according to the paper. How much of that does the State get, and how much disappears?
If I hear one more overprivileged bozo telling me it’s what the law allows I shall retch in my – in HIS – hat. The law allows it because the laws are being MADE by an overprivileged bozo – Gideon George Osborne!
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.
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