From 25 Years Ago: Private Eye on the Failings of the Privatised Water Companies

A few days ago I put up a piece about a report in the I that stated MPs had criticized the regulatory authorities for their failure to ensure that the water supply is adequately maintained. According to the I, the supply is in such a terrible state that within 20 years England may run out of water.

This isn’t exactly surprising, as environmental scientists, ecological activists and archaeologists have been warning about the terrible possibility of a global drought as the world runs out of supplies of drinking for over two decades. And in the 1980s the SF author Alfred Bester set his last book, Golem 100, in the ‘Guf’, a sprawling metropolis covering America’s eastern seaboard somewhat like Judge Dredd’s Megacity 1. Society in the Guf was decaying, with different areas controlled by various gangs and terrorist groups. Crime was rampant, and in addition to the social and political decline and fragmentation the huge megacity also suffered from a shortage of drinking water.

The regulatory authorities aren’t solely to blame for the deleterious state of England’s water. The industry is also responsible, and particularly its privatization in the 1980s and ’90s by the Tories. This was supposed to bring new investment. This hasn’t materialized in the privatized utilities, either here or in the US. In this country, these industries owners are foreign companies, which put the minimum into maintaining them while taking the profits out of the country.

Private Eye was a sharp critic of the Tories privatizations when they were being pushed through by Maggie Thatcher and then John Major. And one of their criticisms at the time was that the Tories appointed as heads of the new regulators, such as Ofwat and the Environment Agency in the case of water, people from the private sector, who shared the Tories view that government should leave industry to regulate itself. This was the beginning of the corporatist system, in which private industry is entwined with government to the point where it dictates official policy. This became notorious under Tony Blair, with leading industrialists like David Sainsbury of the supermarket company given posts on government bodies, that Guardian hack George Monbiot wrote an entire book attacking it, Captive State.

I found three reports of some of the antics of the privatized water companies in the ‘Privatisation Round-Up’ column in an old copy Private Eye from 25 years ago, Friday, 16th June 1995. They were as follows:

It’s tough at the top of a water company – especially if you are William Courtney, chairman of Southern Water, and all you hear are grips about your salary, your £250,000 share options (cashed) and the increasing cost of water in your area.

The public probably doesn’t realise how hard Mr Courtney works. In his capacity as director of Waterline Insurance, for example, a major subsidiary of Southern Water, he recently had to attend a long conference. As did his long-suffering wife Margaret; his diligent finance director at Southern Water, Ray King; and Ray’s long-suffering wife Sandra.

The relevance of the conference – on “international risk management” – may not be immediately obvious to Southern Water consumers, who will ultimately foot the bill; but the surroundings were relevant. Hard-working Mr Courtney and Mr King and their spouses attended the five-day conference at the luxury Marriott’s Castle Harbour Hotel in Bermuda – and as everyone knows Bermuda is surrounded by, er, water.

OFWAT, the water regulator, likes ot boast of its own successes, but the residents of Clyst St George in Devon are not convinced. Their case has been sitting in OFWAT’s tray for three years.

Their argument began when the National Rivers Authority ordered a clean-up of local ditches which acted as open sewers for septic tanks. The bill for householders could have run into the thousands. When the case finally ended up in court it was ruled that the responsibility fell on South West Water to bring the ditches up to modern hygiene standards.

South West Water had better things to spend the money on – like share options worth £144,95 for its managing director. The consumers turned to the apparently powerful watchdog OFWAT to force South West Water to take action. Finally, after no encouragement from OFWAT, the company is now thinking of installing the new sewerage system. But it still refuses to foot the bill and has approached the residents for a financial contribution towards the clean-up.

The European Union, meanwhile, is investigating why Yorkshire Water, which is now trying to buy up its own shares, was once given £23 million of regional aid to fatten it up for privatisation when the sold-off company now makes profits of more than £140 million a year.

The money, from a fund earmarked regenerating regional economies in the EU, was spent on improvements to three sewage works – improvements that had to be carried out in any event. When the EU bureaucrats sent the cheque, perhaps they forgot to point out that regenerating local economies does not mean boosting shareholders’ dividends and executive salaries.

I have a feeling that Yorkshire Water was hit by so many scandals that it ended up re-branding itself as Kelda.

These stories are an example of why English water is in the terrible state it is: greedy senior management doing as little as possible to maintain or improve the supply, awarding themselves grossly inflated pay and benefits and flitting off to foreign junkets and complacent and apathetic regulators doing as little as possible to protect the interests of these companies’ customers.

Jeremy Corbyn and the Labour Party were quite correct to demand these companies’ renationalization, along with other utilities. And it can’t come soon enough.

Kenneth Surin on Brexit and May’s Corporate Attack on the Poor

On Tuesday, Counterpunch published a long piece by their contributor, Kenneth Surin, on Theresa May’s plans for Brexit, and how this will inevitably harm the poor and the working people of this Sceptred Isle. And it’s what you’re already expecting, if you’ve read the Groaniad, those bits of the I newspaper that are still even remotely genuinely liberal, and bloggers like Mike over at Vox Political, the Canary, Another Angry Voice, The Void and so on. May, he predicts, will talk a hard Brexit in order to counter some of the opposition from the Tory Right, but will leave some room for a soft Brexit. She, Boris Johnson, and the other vicious grotesques currently infesting the halls of power, want to use it to turn Britain into a tax haven. So he predicts that the City of London and its connections to some very dodgy individuals – he has a paragraph giving the names of some of them – will get even murkier. But, as he points out, Britain already is a tax haven through the Channel Islands.

He states that we are likely to be given a very hard deal by the EU. He states that there was friction between Britain and the European Union as while the EU represents the power of corporate capital, it draws a line on their direct influence in government. The lingering Social Democratic tradition in these countries, like France, Germany, and the Scandinavian nations, means that the government governs for industry, but is not run like an industry. Unlike the Neoliberal vision, exported to Britain from the US, which wants government to be run exactly like a business.

He also predicts that May and her grotty team will inflict further misery on the poor, because that’s what appeals to the right-wing British press, like ‘the foreigner Murdoch’ and the ‘tax-dodging, Nazi-supporting Rothermere family’. The Tories will follow Farage, and privatise the NHS, just as the are already privatising services and levying charges for them.

He also rebuts May’s feigned concern for those ‘Just About Managing’, or the JAMs. Despite all the crocodile tears she and her cronies shed, she has done absolutely nothing for them. Wages are still stagnant, the opportunities to upgrade one’s skills are similarly being cut, as are welfare services to support the poor and unemployed.

Surin begins his article also by pointing out that when it comes to the day, the vote on Brexit is likely to be influenced by factors and issues that aren’t really relevant. He also talks about the way May has already shot herself in the foot by trying to promote Brexit using images of places, which have actually benefitted from the EU. Like the northern shipyards, which were given a million pound grant.

Surin begins his piece

“So at this moment of change [Brexit], we must respond with calm, determined, global leadership to shape a new era of globalisation that works for all”.

— Theresa May

“My plan for Britain is not just a plan to leave the EU but a plan to build a stronger economy and a fairer society, underpinned by genuine economic and social reform. To make Britain a country that works for everyone, not just a privileged few”.

— Theresa May

The UK’s Brexit roll-out is a constantly evolving project, zig zagging along because the Tories in charge of it, like everyone else, have no real idea of how it will culminate. So far it has been ad hockery all the way, though one or two of the project’s connecting threads are starting to be visible.

One week, Theresa “the woman without qualities” May, who voted against Brexit, is in favour of a “hard” Brexit (basically one involving no deal of any kind with the EU regarding the single market and immigration), the next she softens her tone and hints that a more placative agreement with the EU, amounting to a “soft” Brexit, might be welcomed in whatever hoped-for way.

Nothing was more symbolic of this chaos and muddled-thinking than the most recent pro-Brexit television broadcast by May, which showed her against the background of ships moving in the Scottish port of Aberdeen.

Oops– the port of Aberdeen was granted a €258 million loan from the European Investment Bank on 20 June 2016, just 3 days before the UK voted to leave the EU!

It all seems to depend on how much heat the pro-Brexit right-wing of her party, citing that chimerical entity “sovereignty”, can turn on her.

Her predecessor, “Dodgy Dave” Cameron, weary of feeling this heat, called the Brexit referendum to cool down his party’s right-wing, absolutely confident in his nonchalantly patrician way that Brits would consider themselves better-off by remaining in the EU.

Such referenda, although purportedly on a single-issue, tend invariably to have outcomes determined very much by the mood of the electorate, which is affected by a plethora of considerations having nothing specifically to do with the issue officially on the table on referendum day.

***

May’s calculation requires her to “talk” a hard Brexit, to neutralize the right-wingers who ended her predecessor’s political career, and to gain the support of the right-wing press– owned by the foreigner Murdoch, the Nazi-supporting and tax-dodging Rothermere family, Richard “Dirty Des” Desmond (the former head of a soft porn empire), the tax-dodging Barclay brothers, and a Russian oligarch.

This overseas-domiciled and tax-dodging (in the cases mentioned) crew have set the low-information agenda for those inclined towards Brexit, so May’s strategy, if we can call it that, has been accommodating towards their hard Brexit stance, while leaving things vague enough for loopholes to enable a “softish” Brexit if needed.

May, craving electoral success, has to cater to all sides and eventualities. The results are likely to be calamitous for the UK.

Why is this?

May’s primary objective is to convey the impression that Brexit will “work for all”.

Alas there is no evidence for this claim.

***

The UK’s pro-Brexit movement, in the absence of anything resembling a Lexit, is not going to be shackled by this or that constraint previously imposed by the EU.

For instance, the UKIP leader Nigel Farage, Trump’s non-American sycophant par excellence, though a minimal figure, has always advocated the privatization of the NHS. And this is exactly what the Tories have been pursuing by stealth since 2010.

***

May has already said she “stands ready” to use Brexit as an opportunity to turn the UK into a tax haven, or as the financial press euphemistically puts it, “a low-tax financial centre”. It is already one of course (this being the primary function of the islands of Guernsey, Jersey, the Isle of Man, and Gibraltar).

What May clearly means is that London’s financial sector, which is already awash in murky water, will become an even muddier swamp able to match similar swamps in the Cayman Islands, Bermuda, Panama, Hong Kong, Singapore, and so forth. Dwellers of these swamps include assorted drug dealers, human traffickers, gun runners, owners of illegal gambling syndicates…

***

In addition to May desiring this state of affairs for the City of London, it is clear from the composition of the team put together by the secretary of state for international trade Liam Fox to negotiate post-Brexit trade deals, that Brexit UK is going to pursue a thoroughgoing pro-corporate agenda.

***

This corporate bonanza will probably be accompanied by a weakening of environmental regulations, since most of the leading Brexiteers are climate-change deniers or supporters of fracking (and in most cases, both).

Pro-Brexit climate-change deniers include Farage, Michael Gove (who tried to ban climate change from the school curriculum when he was education minister), the foreign minister Boris “BoJo” Johnson, Thatcher’s finance minister Nigel Lawson, and the above-mentioned Liam Fox.

***

This hugely attractive and compassionate bunch (sic) are not going to be too concerned about pollution, biodiversity, natural habitats, animals abused by industrial farming, climate change, the prohibition of lethal pesticides, declining fish stocks, the international trade in endangered species, and the use of GMOs, when the agribusiness corporations howl about environmental regulation being a burden to them.

There will be no remotely green agenda under this ghastly crew.

***

May prates on about her deep concern for “just about managing” families (JAMs), but the austerity agenda passed on by the disastrous former Chancellor of the Exchequer George Osborne is being implemented with only a slight cosmetic tweak here and there.

The UK economy has grown since 2010, but, according to the Guardian, 7.4 million Brits, among them 2.6 million children, live in poverty despite being from working families (amounting to 55% of these deemed poor) — 1.1 million more than in 2010-11.

The report cited by the Guardian, produced by the reputable Joseph Rowntree Foundation (JRF), shows that the number living below the Minimum Income Standard – the earnings, defined by the public, required for a decent standard of living – rose from 15 million to 19 million between 2008/9 and 2014/5. The UK’s population is 65 million.

These 19 million people, or just under 1/3rd of the UK’s population, are its JAMs.
***

Social care is becoming increasingly unaffordable for them, the NHS is starting to charge for treatment as it undergoes a backdoor privatization, they have fewer opportunities for upskilling in order to raise their incomes, and so on. This while their wages are stagnant even as the cost of living is increasing for them.

***

Such important and pressing issues need to be addressed as a matter of urgency, but they are not.

The Tories pro-corporate Brexit agenda has become the proverbial tail wagging the dog.

***

Many have a name for what is really and truly going on in the UK and US: class warfare.

The bastards have the underprivileged by the throat. All the mainstream political parties are terrified of offending them, if they haven’t already thrown their lot in with the bastards.

What is desperately needed, for the dispossessed and disadvantaged, is a reversal of this situation, in which many firm hands turn round and grasp the throats of those responsible for the misery of tens of millions of people.

Is there anyone in the almost moribund Labour party, torn apart by infighting caused by its still significant Blairite remnant, capable of saying any of the above unequivocally?

Go read the rest of the article at: http://www.counterpunch.org/2017/04/18/the-calm-determined-stronger-fairer-uk-brexit-zig-zag/

In answer to Surin’s final question, yes, there are plenty of people in the Labour party willing to point all this out. They’ve tried to do so ad infinitum. But the Blairites and the Tory media are doing their best to stop that message getting out. They never report what they say about the detrimental attacks the Tories and Blair have made on the welfare state, the NHS and the economy, but selectively quote them in order to make it all fit the narrative that Corbyn and his wing of the party are ignoring these issues. And it’s done deliberately to fit the narrative of Corbyn as a Trotskyite entryist.

It’s why I’m afraid that the next two months will be a very hard struggle for everyone desperate to save Britain from the corporatist swamp created by the Thatcherites and their media lickspittles.

Private Eye on Daily Mail’s Hypocrisy over Tax Avoidance

Ed Miliband this week announced he was to abolish the non-dom tax bracket, that allows businessmen and others to avoid paying taxes in this country on the grounds they are living abroad. One of the most notorious beneficiaries of this arrangement has been Lord Rothermere, the owner of the Daily Mail. Rothermere inherited his non-dom status from his father, who lived for most of his life in France. The current Lord Rothermere, however, shows every evidence of living in Britain, even building what amounts to his own stately home.

I put up Private Eye’s article on how Rothermere was using his non-dom status to avoid paying tax on his millions. And on Wednesday, the day that Miliband announced his policy, it was by far and away the most popular article on this blog.

It’s almost needless to say that Miliband’s policy was much less popular with the right-wing press, who all harrumphed about how this was going to harm Britain by driving all the non-domiciled rich titans of industry and Lord Rothermere away. Yet Rothermere’s mighty organ, the Daily Mail, has also shown the immense hypocrisy it’s known for by attacking other companies for avoiding UK tax.

In 2010 it launched a campaign against Kraft foods, which Private Eye reported and criticised in a brief article in its issue for the 23rd December.

“If you won’t pay our taxes, we won’t eat your cheese, Kraft.” So runs the Mail on Sunday’s campaign against the US firm that has taken over Cadbury and is transferring ownership of some of Britain’s favourite brands to Switzerland to avoid tax.

Another internationally tax-efficient company of course is the Daily Mail and General Trust, owned through a Bermudan company and a series of offshore trusts so that the principal beneficiary, the “non-domiciled” Lord Rothermere, can avoid tax on his income from the group.

“If you won’t pay our taxes, we won’t buy your paper, Rother5s”, runs nobody’s campaign at all…

The Mail was absolutely right in that Kraft should pay taxes in Britain for profits raised through its British firms. As should the Daily Mail, who, after running this campaign, should keep resolutely silent about Miliband’s campaign to end the non-dom tax breaks.

Privatised Railways and the Failure of Popular Capitalism

One of the Ed Miliband’s election promises has been to renationalise parts of the rail network. As recent polls found, most of the population of this country would like to see the utilities returned to public ownership, including the railways. They’ve been marred with poor service and overcharging since they were first privatised by John Major back in the early 1990s. To make matters worse, the railways are receiving far more in government subsidies than they were when they were nationalised. The British public are paying through the nose for a worse service.

Anthony Sampson discusses the massive failure of the privatised railways in his book, Who Runs This Place: The Anatomy of Britain in the 21st Century. The book examines and describes how Britain has become less democratic, with politicians, government officials and industrialists more remote and unaccountable. He devotes nearly two pages to the privatisation of the railways, pp. 289-90, in which he states

The most disastrous of the privatisations was the last, British Rail, which was also the most visible to the public. Margaret Thatcher had shrewdly resisted selling it off, but John Major weakly gave in to pressure from bankers, and went ahead in 1996. The selling off of the vast railway network was devised by the Treasury to maximise the short-term gains, and was masterminded by Sir Steven Robson. The stations and the 23,000 miles of track would be run by a national company, Railtrack, while separate operating companies would buy and run the trains in different regions. The old railway managers were soon demoted: the chairman of Railtrack was Sir Robert Horton, who had just ben fired as chief executive of the oil company BP; and he chose as chief executive a finance director, Gerald Corbett, who had risen through Dixons shops, Redland cement, and Grand Metropolitan drinks. the track maintenance was delegated to private contractors.

By 2001 the whole railway system was in serious danger. Corbett was out of his field and Horton was in ill-health; he was succeeded by Sir Philip Beck, chairman (like his father) of the Mowlem construction company, whose experience came from the controversial Docklands Light Railway. The lack of effective accountability became tragically clear after a succession of train crashes, which revealed scandalous lack of supervision. The crash at Potters Bar was blamed on careless maintenance by the subcontractors Jarvis, whose chief operating officer blamed sabotage, of which no evidence emerged; he was then promoted to chief executive. The trail of accountability ended up in the sidings of a secretive private company.

The government at last intervened, withdrew support from Railtrack, thereby bankrupting it, and created a new non-profit company, Network Rail, chaired by Ian McAllister, the former chairman of Ford in Britain, with an engineer John Armitt as chief executive. The environment secretary Stephen Byers, who had responsibility for transport, resigned, and was succeeded by the Scot Alistair Darling, and Darling extended the government’s role in July 2004 when he abolished the independent Strategic Rail Authority – which had been created only four years earlier – and took over most of its functions.

The operating companies, which had been only granted short franchises, were more interested in quick profits than long-term planning, and most boards had little experience of railways. South West Trains was acquired by the bus company Stagecoach, built up by the combative Scots entrepreneur Brian Souter and his sister Ann Gloag, which the Monopolies Commission had earlier accused of behaviour that was ‘predatory, deplorable and against the public interest’. They made a new fortune by selling rolling-stock, and bought the magnificent Beaufort Castle in Scotland; but they soon made rash investments in America which brought down their shares and limited their investment in British trains. West Coast Trains was bought by Virgin, run by Sir Richard Branson whose background was in airlines and pop music. South Eastern and South Central trains were run by Vivendi, the French conglomerate which soon hopelessly overextended its empire, from water to Hollywood. The Great North-Eastern (GNER) was owned by the Bermuda-based company Sea Containers, controlled by its American founder-president Jim Sherwood.

The privatising of the network had undermined much of the traditional British pride in railways. The separate regional traditions and hierarchies of engine-drivers, signalmen and stationmasters were swept aside by the cuts and constraints imposed by accountants and financial directors at headquarters. Many of the cutbacks were necessary if the companies were to be made viable; but the upheavals in the operating companies and the collapse of Railtrack had left few people who understood how railways really worked.

The privatisation of the railways failed because the franchises were short-term, and the firms that bought them thus only interested in making a quick buck. They had no knowledge or experience of running railways, and refused to accept responsibility for the disasters and horrendous crashes that occurred. Margaret Thatcher herself recognised that privatising them would be a bad idea, but it clearly wasn’t bad enough to dissuade Britain’s bankers.

As a result, Blair’s government had to extend government power over the privatised railways, even though New Labour was enthusiastically pro-privatisation. Ed Miliband’s planned re-nationalisation of parts of the rail network will thus undoubtedly be an improvement.

From Private Eye: Lord Rothermere’s Non-Dom Tax Scam

Ferne House: Lord Rothermere’s home, except when it comes to paying tax

In my last post, I reblogged Tom Pride’s article demanding that on Holocaust memorial day, Lord Rothermere should apologise for his newspaper’s shameful anti-Semitic past. The Daily Mail was notoriously the newspaper that shouted ‘Hurrah for the Blackshirts’ in praise of Oswald Mosley’s stormtroopers in the British Union of Fascists. It also ran articles demanding an end to Jewish immigration, and even praising Hitler himself.

The Rothermere’s tradition of extreme right-wing views and demonization of the poorest and most victimised members of society continues today, with its constant campaigns and vilification against asylum seekers, immigrants, the unemployed and the disabled. As Mr Pride and Johnny Void have documented on their blogs, the Daily Mail has even stooped so low as to claim those reduced to using food banks aren’t really starving, but are simply scroungers.

Not only is this factually wrong, it is a piece of astonishing hypocrisy coming from the multi-millionaire Lord Rothermere. Rothermere is not only stinking rich himself, but Private Eye also revealed in 2009 that he was claiming non-dom status in order to avoid paying tax on his stately home, Ferne House. The story was in their issue for 6th – 19th March, and ran:

At Home with Lord Rothermere
Our Top Tax Man and the Non-Dom Press Baron

If an Englishman’s home is his castle, a sprawling neo-Palladian pile in the rolling Wiltshire countryside might be expected to bring with it full British tax status for the lord of the manor. But not, it seems, when the Englishman in question is an immensely wealthy and powerful press baron who enjoys the protection of the country’s top taxman.

Back in 1999 the young chairman of the Daily Mail and General Trust, the 4th Viscount Rothermere, aka Jonathan Harmsworth, bought a 220-acre estate called Ferne Park as home for his family, then comprising wife Claudia and two children under six.

By 2001 a new Ferne House had been built in the grounds to a £40m design by renowned Palladian-style architect Quinlan Terry. As the latest generation of the Rothermore dynasty expanded to four children by 2004, the Harmsworths had outgrown Terry’s first effort and in August 2006, local council records show, obtained planning permission for “new east and west wings”.

Despite a reported personal fortune of around £800m, Viscount Rothermere turned to his bankers for loans. Last month, under a regulatory amnesty following the well-publicised failure of Carphone Warehouse boss and Tory backer David Ross to declare his use of shares as security for personal loans, Rothermere came clean on his own similar arrangements. It emerged that in December 2006 he had pledged 8m DMGT shares he owned through a trust and DMGT’s Bermudan parent company Rothermere Continuation Ltd. At the time these were worth more than £50m, though DMGT’s announcement of the arrangement stated that this greatly exceeded the value of the loans. It was, however, “small when compared to the Viscount Rothermere’s net worth”.

Borrowing money rather using some of his offshore wealth had one clear benefit for Rothermere, an advantage he owed to his famous father Vere Harmsworth, the 3rd Viscount Rothermere. By living as a tax exile in Paris for most of his life, the 3rd Viscount had become “non-domiciled” for British tax purposes. And just like his hereditary title, this status passed – as a “domicile of origin” – Jonathan when he was born in 1967. A DMGT spokesman would only say the 4th Viscount’s domicile status was “a private matter”.

The principal tax break for a “non-dom” is that overseas income is only taxable when “remitted” to Britain. For Jonathan Harmsworth this has proved immensely valuable, as the hundreds of millions of pounds in DMGT dividends channelled over the years through Bermudan-registered Rothermere Continuation Ltd into trust of which he and his family are beneficiaries have magically become overseas income. Had this money been brought into the UK to pay for the new home in Wiltshire, it would have been taxable; the loan from the bank, on the other hand, would not.

But being a “non-dom” should not be so easy. The archaic status, used in British tax law since the Napoleonic wars, has to be sustained throughout a non-dom’s life by an overriding commitment to another country. This must be demonstrated by such choices as the location of the family home, upbringing of children and a person’s intended final resting place. As Harmsworth looks to have made a permanent family seat on the Wiltshire-Dorset borders, and he and his wife have reportedly become leading figures on the county scene, his non-dom status looks precarious to say the least.

These developments, coup0led with a strong court of appeal win for HM Revenue and Customs on a domicile case last year, proving the importance of where a person is committed to live with his family, unsurprisingly prompted an official re-think of the viscount’s status. Inspectors were busy investigating his media empire anyway, under “Project Mersey”, after the group had earnest itself a place on HMRC’s “high risk corporates” list by undertaking a number of tax avoidance schemes.

According to sources close to the review, the decision of HMRC’s Special Civil Investigation’s section was to launch a full-scale inquiry with a view to withdrawing Harmsworth’s non-dom status, if necessary through the courts. Late last year the plan was approved by HMRC’s solicitors and a high-level strategy board comprising the directors of the department’s Large Business Service, its Anti-Avoidance Group and its central policy unit.

But then the investigation was blocked by HMRC deputy chairman Dave Hartnett, who regularly steps into tax investigations and boasted to a parliamentary committee a year ago of his “board-to-board” engagement with big business.

When Austin Mitchell MP then asked Hartnett “Do [large companies] get a better deal when you get involved?” Hartnett responded “I sincerely hope not.” Viscount Rothermere appears to have got superior treatment, though, as Hartnett pressured HMRC officials to find a “technical” reason for not pursuing the investigation.

Why the HMRC boss should be so keen to let Viscount Rothermere off the hook, saving him several millions of pounds in tax annually, at the expense of the little people, remains a mystery. There is no evidence that the Mail’s political clout – or its editor and director Paul Dacre’s close relationship with Gordon Brown – played a part. Nor is there any indication that the connection between DGMT and HMRC director-general Melanie Dawes, whose remit covers the Large Business Service, had any bearing on the decision. Dawes, a career Treasury civil servant said by some to have been drafted into HMRC to keep an eye on the taxmen, just happens to be married to Benedict Brogan, who until last month was political editor of the Daily Mail.

PS: The Eye and others have long pointed ot the numbers of non-dom Labour party friends and donors in seeking to explain the government’s failure to scrap a tax break it once vehemently opposed (last year it settled on a pin-prick £30k annual charge for non-dom status). Perhaps we should have been looking elsewhere in the political forest too.

In other words, there were strong personal and professional links between Brown, senior treasury officials and Daily Mail, so it’s no surprise whatever Rothermere got away with his scam. It’s another example of the suspicious cronyism, which so effectively discredited the last vestiges of New Labour with Brown’s government.

As for Rothermere, I’m not just astonished at the man’s brazen hypocrisy in falsely claiming non-dom status for himself while his organ lambasts the indigent poor for scrounging. I’m also amazed at the way this government closed, or planned to close, one of rights of immigrants working in the UK. The government decided that they wanted to stop welfare payments going from immigrant workers in this country to support their children or dependents in their countries of origin. I can see little difference between an immigrant doing this, and Rothermere falsely claiming to be resident in France, so he can buy a family home here in Britain. If anything, Rothermere’s scam is worse, if only because he is well able to pay for the house himself many times over already. The immigrant workers’ dependents, however, are likely to be poor people in a poor country, and so have far more of a genuine need for the money.

Immigration, ID Cards and the Erosion of British Freedom: Part 1

‘The true danger is when liberty is nibbled away, for expedience, and by parts’.

– Edmund Burke.

Edmund Burke is regarded as the founder of modern Conservatism, the defender of tradition, freedom, and gradual change against revolutionary innovation based solely on abstract principle. He was also the 18th century MP, who successfully campaigned for the Canadian provinces to be given self-government on the grounds that, as they paid their taxes, so they had earned their right to government. His defence of tradition came from his observation of the horror of the French Revolution and his ideas regarding their political and social causes, as reflected in his great work, Reflections on the Revolution in France. While his Conservatism may justly be attacked by those on the Left, the statement on the gradual, incremental danger to liberty is still very much true, and should be taken seriously by citizens on both the Left and Right sides of the political spectrum. This should not be a party political issue.

In my last post, I reblogged Mike’s article commenting on recent legislation attempting to cut down on illegal immigration. This essentially devolved the responsibility for checking on the status of immigrants to private individuals and organisations, such as banks and landlords. As with much of what the government does, or claims to do, it essentially consists of the state putting its duties and responsibilities into the private sphere. Among the groups protesting at the proposed new legislation were the BMA, immgrants’ rights groups and the Residential Landlords’ Association. The last were particularly concerned about the possible introduction of identification documents, modelled on the 404 European papers, in order to combat illegal immigration. Such fears are neither new nor unfounded. I remember in the early 1980s Mrs Thatcher’s administration considered introduction ID cards. The plan was dropped as civil liberties groups were afraid that this would create a surveillance society similar to that of Nazi Germany or the Communist states. The schemes were mooted again in the 1990s first by John Major’s administration, and then by Blair’s Labour party, following pressure from the European Union, which apparently considers such documents a great idea. The Conservative papers then, rightly but hypocritically, ran articles attacking the scheme.

There are now a couple of books discussing and criticising the massive expansion of state surveillance in modern Britain and our gradual descent into just such a totalitarian surveillance state portrayed in Moore’s V for Vendetta. One of these is Big Brother: Britain’s Web of Surveillance and the New Technological Order, by Simon Davies, published by Pan in 1996. Davies was the founder of Privacy International, a body set up in 1990 to defend individual liberties from encroachment by the state and private corporations. He was the Visiting Law Fellow at the University of Essex and Chicago’s John Marshall Law School. Davies was suspicious of INSPASS – the Immigration and Naturalisation Service Passenger Accelerated Service System, an automatic system for checking and verifying immigration status using palm-prints and smart cards. It was part of the Blue Lane information exchange system in which information on passengers was transmitted to different countries ahead of the journey. The countries using the system were the US, Canada, Andorra, Austria, Belgium, Bermuda, Denmark, Finland, France, Germany, Ireland, Italy, Japan, Liechstein, Luxembourg, Monaco, the Netherlands, New Zealand, Norway, San Marino, Spain, Sweden and the UK. Davies considered the scheme a danger to liberty through the state’s increasing use of technology to monitor and control the population.

At the time Davies was writing, 90 countries used ID cards including Belgium, France, Germany, Greece, Italy, Luxemburg, the Netherlands, Spain and Portugal. They also included such sterling examples of democracy as Thailand and Singapore. In the latter, the ID card was used as an internal passport and was necessary for every transaction. The Singaporean government under Lee Kwan Yew has regularly harassed and imprisoned political opponents. The longest serving prisoner of conscience isn’t in one of the Arab despotisms or absolute monarchies, nor in Putin’s Russia. They’re in Singapore. A few years ago the country opened its first free speech corner, modelled on Hyde Park’s own Speaker’s Corner. You were free to use it, provided you gave due notice about what you were planning to talk about to the police first for their approval. There weren’t many takers. As for Thailand, each citizen was issued a plastic identity card. The chip in each contained their thumbprint and photograph, as well as details of their ancestry, education, occupation, nationality, religion, and police records and tax details. It also contains their Population Number, which gives access to all their documents, whether public or private. It was the world’s second largest relational database, exceeded in size only by that of the Mormon Church at their headquarters in Salt Lake City. Thailand also has a ‘village information system’, which collates and monitors information at the village level. This is also linked to information on the person’s electoral preferences, public opinion data and information on candidates in local elections. The Bangkok post warned that the system would strengthen the interior ministry and the police. If you needed to be reminded, Thailand has regularly appeared in the pages of the ‘Letter from…’ column in Private Eye as it is a barely disguised military dictatorship.

In 1981 France’s President Mitterand declared that ‘the creation of computerised identity cards contains are real danger for the liberty of individuals’. This did not stop France and the Netherlands passing legislation requiring foreigners to carry identity cards. The European umbrella police organisation, Europol, also wanted all the nations in Europe to force their citizens to carry identity cards. At the global level, the International Monetary Fund routinely included the introduction of ID cards into the criteria of economic, social and political performance for nations in the developing world.

Davies’ own organisation, Privacy International, founded in 1990, reported than in their survey of 50 countries using ID cards, the police in virtually all of them abused the system. The abuses uncovered by the organisation included detention after failure to produce the card, and the beating of juveniles and members of minorities, as well as massive discrimination based on the information the card contained.

In Australia, the financial sector voiced similar concerns about the scheme to those expressed recently by the landlords and immigrants’ rights and welfare organisations. Under the Australian scheme, employees in the financial sector were required by law to report suspicious information or abuse of ID cards to the government. The penalty for neglecting or refusing to do so was gaol. The former chairman of the Pacific nation’s largest bank, Westpar, Sir Noel Foley, attacked the scheme. It was ‘a serious threat to the privacy, liberty and safety of every citizen’. The Australian Financial Review stated in an editorial on the cards that ‘It is simply obscene to use revenue arguments (‘We can make more money out of the Australia Card’) as support for authoritarian impositions rather than take the road of broadening national freedoms’. Dr Bruce Shepherd, the president of the Australian Medical Association stated of the scheme that ‘It’s going to turn Australian against Australian. But given the horrific impact the card will have on Australia, its defeat would almost be worth fighting a civil war for’. To show how bitterly the country that produced folk heroes like Ned Kelly thought of this scheme, cartoons appeared in the Ozzie papers showing the country’s president, Bob Hawke, in Nazi uniform.

For those without ID cards, the penalties were harsh. They could not be legally employed, or, if in work, paid. Farmers, who didn’t have them, could not collect payments from marketing boards. If you didn’t have a card, you also couldn’t access your bank account, cash in any investments, give or receive money from a solicitor, or receive money from unity, property or cash management trusts. You also couldn’t rent or buy a home, receive unemployment benefit, or the benefits for widows, supporting parents, or for old age, sickness and invalidity. There was a A$5,000 fine for deliberate destruction of the card, a A$500 fine if you lost the card but didn’t report it. The penalty for failing to attend a compulsory conference at the ID agency was A$1,000 or six months gaol. The penalty for refusing to produce it to the Inland Revenue when they demanded was A$20,000. About 5 per cent of the cards were estimated to be lost, stolen or deliberately destroyed each year.

The ID Card was too much for the great Australian public to stomach, and the scheme eventually had to be scrapped. It’s a pity that we Poms haven’t learned from our Ozzie cousins and that such ID schemes are still being seriously contemplated over here. It is definitely worth not only whingeing about, but protesting very loudly and strongly indeed.

In Part 2 of this article, I will describe precisely what the scheme does not and cannot do, despite all the inflated claims made by its proponents.