So Barclays has now been exposed pursuing two tax avoidance schemes so “highly abusive” that this government, which gets half its donations from mega-wealthy City banks and individuals, felt obliged to take retrospective action to stamp them out. The Barclays wheeze was designed to escape payment of at least £500m in taxes by (i) avoiding tax on profits from buying back debt at less than face value, and (ii) generating tax credits on income even when no tax had actually been paid. Barclays’ excuse was they were advised these scams were legal, other banks were doing it, and the sordid truth only came out because they were ‘good corporate citizens’ in checking with HMRC. The stench however is still unmistakeable. Does Barclays think good corporate citizenship lies in perpetrating a massive tax dodge even if (because of lax government regulation) advisers say it’s legal? Does Barclays think tax cheating is OK as long as others are doing the same? How can Barclays claim it’s somehow high-minded to duck their liabilities when they’ve signed a code of practice on tax avoidance to stick not only to the letter of the law but also the spirit? And how can Barclays pretend to be a Good Citizen when it conspired with government to keep these patently unsavoury practices under wraps at all costs? (more…)
While bankers remain hate figure no.1, it is important to recognise that many other top occupations have joined the Gadarene charge to the trough. And it’s not just the board members and chief executives of the mega-corporations, who had a 49% increase in remuneration last year when the income of the bottom tenth rose just 0.1%, i.e. a 500:1 ratio between top and bottom. It’s the lawyers too. In a revealing article in the New Law Journal two weeks ago, Geoffrey Bindman QC pointed out that there is a ‘magic circle’ at the top of the legal profession, chiefly commercial solicitors and mainly based in the City of London, who have devised a charging system which produces astronomical profits. The million a year (£19,230 a week) is now becoming the metier of succdess across the board. (more…)
As if the woes of decade-long austerity, pay freeze, and demolition of the NHS and Welfare State were not enough, the signs of a final showdown in the Eurozone are becoming more ominous, at three simultaneous levels. True, huge efforts, and money, have been poured into finding a solution. The European Financial Stability Facility (EFSF), which proxies as the Eurozone bailout fund, now has resources of €780bn, banks on the edge with enormous amounts of Greek and Italian debt are being re-capitalised (again), and a haircut of near 60% for past investors in Greek debt seems about to be achieved till it was scuttled at the last moment. But that still leaves three thunder-clouds threatening the scene. (more…)
One of the unnoticed offsets from the Huhne resignation is that the grip on the Department of Energy and Climate Change (DECC) held by the Big Six energy companies may intensify in the hiatus created before a new minister is sufficiently in harness to take effective charge. Already, even under the firm control of a strong minister like Huhne, the official declaration of ministerial meetings shows that in the 18 months since the election there have been no less than 195 meetings between DECC ministers and the energy industry. Even more telling, over 50 personnel from oil, gas and nuclear companies such as EDF, npower and Centrica have been working on energy issues within government over the last 4 years. Companies only second their senior staff to government if they are likely to get a good return in terms of insider knowledge, preferential treatment and the general benefits of influence. (more…)
There is much to welcome in David Miliband’s call for a ‘comradely and serious debate’ about the future for the Labour Party, as prompted by Roy Hattersley’s recent article in the Political Quarterly on social democracy. He is certainly right about the spirit in which the debate should take place, but this initial foray will have to sharpen its edge drastically if it is not to fade into a merely pious exchange about abstract aspirations. The starting point has to be what went terribly wrong in the last decade or two leading to financial collapse and cataclysmic defeat in 2010. Those factors include financial deregulation which opened the way to toxic derivatives and the crash, a bonus culture that pumped up recklessness in the City and ballooned inequality, over-reliance on finance to the huge detriment of manufacturing, a naive belief in the self-regulation of markets, and an extension of privatisation into all public services on ideological grounds irrespective of outcomes. David does not mention one of them. (more…)
It’s not just the well-reported antics of Mark Kennedy that call in question the activities of undercover policing against political and protest groups. It’s the almost total lack of accountability about the clandestine operations of police spies over the last 40 years. The HMIC report on this episode draws attention to Kennedy’s failure to “follow codes of practice for undercover officers ” or to report his sexual activities with those he was targeting, but fails to equal attention to the much more serious charge that his handlers or the CPS, or both, deliberately ignored evidence that Kennedy had provided, in order to secure the false conviction of 100 protestors at a power station in Nottinghamshire. (more…)
Business, SMEs in particular, need funding fast, so why doesn’t Osborne just order RBS and Lloyds to ratchet up the lending? After all he owns 80% of the former and 40% of the latter, more than those who talked about seizing the ‘commanding heights’ of the economy ever dreamed of. Why instead did he go cap in hand to the Bank of England begging it to overseee the pumping of loans to small firms through a process known as ‘credit easing’, thus bypassing the banks even though he owns two of the largest? Or why does Cameron refuse to stop the obnoxious payment of gigantic bonuses in the City piggery on the pretence that he can’t micro-manage the banking system? It’s because the byword in neoliberalism is that the private market is untouchable – governments should get out of the way, never interfere, the market knows best – and the banks are sacrosanct. Compare that with the treatment of those now being deliberately made homeless by government fiat – maybe a fifth of a million families: not untouchable, just violated.
The government’s own estimate is that ‘only’ 67,000 families will be affected by the housing benefit cap debated in Parliament today. Of these, even the government itself admits that 12% of the families will lose as much as £100-150 a week, and another 17% will lose over £150 a week. That is justified by IDS on the grounds that they should be working and it isn’t fair that they’re getting more in benefits than many people in work. This ignores however certain crucial facts. No less than 60% receiving housing benefit are not able to work – pensioners, disabled, or lone mothers with young children. The reason the housing benefit budget has soared in recent years is not because tenants (though it’s nearly always the landlords) who are raking it in, it’s because far too few houses are being built, so that demand far exceeds supply, forcing up prices and then housing benefit as a consequence. And now the Tories are pushing the Right to Buy again, reducing the supply, pressing up rents still further, not least because social housing rents are now being deliberately adjusted upwards to match private rents in the locality.
One law for the bankers, another for families made destitute and homeless. One law for the 99%, another for the 1% who inhabit a different planet. One law of inviolability for the financial elite, another for the poorest whose exploitation is seemingly limitless.