Posts Tagged ‘Offshore companies’

George Galloway Interviews on China and Tax Dodging by the Rich

December 6, 2017

This is a very interesting edition of Sputnik, one of the programmes on RT, hosted by media bete noir George Galloway, and a young Asian lady simply called Gayatri. Sputnik was, of course, the first satellite put into Earth orbit by the Russians. The name means ‘fellow traveller’ in Russian, and has come to mean an artificial satellite ever since.

In the first half of the programme, Galloway and Gayatri interview Jeanne-Marie Gescher, a British sinologist, who has been studying China ever since the notorious Tiananmen Square massacre in 1989. Gescher has written a book about the country and its transformation, and describes how she was just about the only western person flying into China after the massacre, when all the other westerners were trying to get out. This, however, gave her a head start of a couple of years over the other academics researching China, when she was one of the very few westerners actually in the country. Galloway talks about President Xi’s party congress, and makes the point that most of it was about ‘socialism with a Chinese face’, rather than economics. He and Gescher also discuss the role of a strong central authority in governing and forming China, ever since its foundation all those millennia ago. They make the point that the role of a strong central authority is so much at the core of the country’s character and government, that it has been said that without it China is like sand. Gescher states that ever since the ancient shamans led the earliest ancestors of the Chinese to settle down, there has been a tension between two philosophies towards government and the natural order. One is that the natural world is too complex for people to understand, and so government is best carried out by a single ‘son of Heaven’ – the official title of the Chinese emperor – who governs autocratically. The other recommends instead that the world be subject to a structured investigation. This is not democratic, but it is wider than the concentration of power in a single autocratic figure. Gescher also describes the way China has repeatedly fragmented over the ages, only to come back together as a single, unitary empire again, with a quote from The Romance of the Three Kingdoms, one of the great classics of Chinese literature. To people of a certain age, the book is best known as the basis for the Chinese swashbuckling tale broadcast by the Beeb in the ’70s, The Water Margin.

They also discuss Donald Trump’s apparent volte-face last week. Before he went to China, he was full of anger at the Chinese and there was much resentment in the American media about perceived Chinese mistreatment. Trump was going to tear them off a strip about it. After he got there, however, and met the President, he ended up praising the country. Gescher states that this has shown the Chinese that Trump ‘flip-flops’. This will worry them, as there is nothing more dangerous than a leader, who so capriciously changes position.

Next on the show is Professor Steve Keen, who has also written a book demolishing economics. Keen’s a former economics professor at Kingston University, though at the end of the interview he states that he has left academia to go his own way via Patreon. Keen, Gayatri and Galloway discuss the infamous Paradise Papers and the tax dodging by the very rich. Keen himself isn’t shocked by the way the super-rich like Bono, Lewis Hamilton and the Queen have deprived the treasury of their taxes. He seems to accept that it’s just part of the pathology of the very rich. He states that they’re terrified of anyone else getting their hands on their money, and so pay enormous fees to people, who tell them how they can legally avoid paying cash.

Galloway is shocked, however, and makes the ironic point that the Queen, in her case, is actually avoiding paying tax to herself. Which is true. He also wonders about the mentality of the rich, who will spend their money on colossally expensive items like luxury super-yachts. Keen states he knows someone, who has actually bought one. This man had a 120-ft yacht, but turned it in for a 140 foot vessel, complete with space for a grand piano. He states that this comes from the sheer greed and sense of entitlement of the rich.

He then talks about the various fake holding companies and offshore accounts that the rich use in order to avoid paying tax in the country where they really make their money. He’s actually been to the Cayman Islands, and seen the office block, where so many multinational companies legally have their headquarters. He states that he read so many of the brass plaques on the building’s walls before he gave up. But it was all a scam. There was no-one in the building. It was all very much a legal fiction.

Keen himself has recommended his own way to stop this. At the moment, the tax on profits allows the rich to dodge paying tax by allowing them to cast their companies as subsidiaries working for a parent organisation somewhere else in the world. To stop them doing that, Keen recommends that there should be a tax on transactions instead, which would bring money back into the treasury and which couldn’t be avoided by setting up fake parent companies.

He also has a very different view of taxation than other economists. He argues that the point of taxation isn’t to pay for government services. Governments, by their nature, create money. They pump it into the economy. What taxation does is take it out of the economy, so you don’t have runaway inflation.

Talking about his decision to leave academia, Keen states that it was forced on him by the government’s effective privatisation of higher education. This has turned students into ‘informed consumers of higher education’. However, the league tables concentrate on the Russell Group, and so the new universities that were created post 1992 are starved of funding. This has led him to break with the university, and start crowdfunding his work. He states that he has a great bunch of people funding him through Patreon, and that he’s learned a lot from them. He is also critical of university tenure, because it creates a very conformist mindset. It’s not supposed to. It’s supposed to do the opposite, but he states that by the time professors have done all the things needed to gain tenure, they are afraid of stepping out of line.

The programme ends with Galloway and Gayatri reading out some of the Tweets they have received on the shows contents. Several people remark that, whatever Trump says, America very much needs China to avoid collapsing. And others are about the Queen and the rest of the rich dodging tax.

This is interesting, as it shows that Galloway is a very good interviewer. I also find it quite a nostalgic experience, as it reminds me of what quality television on BBC 2 used to be like in the 1970s and 1980s. No fancy graphics, just the programme’s host or hosts in the studio and his or her guests, talking. You can see the same approach used by Tariq Ali on his TV show. And while it is talk, it’s very much informed talk by experts, that isn’t dumbed down and reduced to soundbites by programme editors afraid that too much pop videos have left people with an attention-span no longer than a gnat’s.

Keen’s perspective on the rich and their sheer avarice is interesting, as is his proposed solution. I’m also struck by his innovative attitude to taxation. I’ve read similar things like it on Mike’s blog, where he has reblogged material from the Mainly Macro economist. As has the Angry Yorkshireman, Tom Clarke. This looks like a positive approach to the dismal science that will break the Tory orthodoxy about taxation and paying for the welfare state.

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Vox Political on the Tories’ Plan to Turn Education into a Tax Avoidance Scam

April 25, 2016

Mike over at Vox Political posted up a very ominous piece reporting the tax affairs of one of the academy chains. Bellevue Education, which runs a number of academies in the south east, appears in the Panama Papers as an offshore company registered in the British Virgin Islands. In other words, it’s a tax avoider. Mike draws the obvious conclusion from this that as David Cameron and Nicky Morgan want all schools to become academies, and thus tax avoidance schemes for the big business fat cats running them.

The Tory plan to turn education into a tax avoidance scam

I don’t doubt for a single moment that Mike’s right, and this fact has very grave implications for the quality of the service these academy chains will provide, and their stability as businesses.

One of the points George Monbiot makes about the PFI initiative for hospitals in his book, Captive State, is that the overheads in running hospitals are so large, that the corporations approached to fund and run them can only be persuaded to do so through massively inflating their costs to the British taxpayer, and by cutting the service delivered to the public. It’s why, thanks to the Private Finance Initiative, Britain now has fewer hospitals than it actually needs, which have been more expensive to build than if the government simply raised the money through the usual sources of bonds, loans and taxation. It’s also why the PFI hospitals are smaller.

The hedge funds that were responsible for running so many of the care homes, that collapsed and were prosecuted for the extremely poor treatment of their elderly or disabled residents, were also involved in massive tax avoidance scams. There was some kind of financial trick involved, which made these homes run at a technical loss. This meant huge profits for the hedge funds running them, but it also meant that they were extremely vulnerable financially. The result was the slew of scandals, which got into the page of the Private Eye’s ‘In the Back’ column, which reported on the extremely dubious financial arrangements behind them.

This new revelation that Bellevue Education is based off-shore, suggests that the private education chains running the academies similarly find it difficult to run them at a profit without indulging in tax avoidance at a massive level. Mike reports that academies perform poorly compared to ordinary LEA schools. This bears out the conclusion that for-profit firms cannot effectively run services, like schools and hospitals, that are properly the responsibility of the state. Like the PFI hospitals, it shows that the private investment in schools is more expensive to the British taxpayer, in terms of tax money lost to the government, the burden of which is then passed on to the rest of us. And it also suggests that as businesses, they are also vulnerable and likely to collapse at the merest drop in profits. And then, no doubt, the fat cat bankers behind them will be squealing for the British taxpayer to bail them out.

Private Eye on Daily Mail’s Lord Rothermere Purchases Parking Space with Offshore Company

March 15, 2016

Private Eye in their issue for 20th December 2014-8th January 2015 published an article on how Lord Rothermere’s tax dodging had gone so far that he had actually used an offshore company to buy a parking space in London.

Offshore Ownership
Why Lord Rothermere Is Parking Mad

Daily Mail proprietor Lord Rothermere, also known as Jonathan Harmsworth, appears to go to extraordinary lengths to keep his millions out of the taxman’s clutches. The Eye has discovered that he has even bought a parking space near his Kensington office through an offshore company.

Land Registry data shows that in February 2009 a company called Harmsworth Holdings Ltd bought a 125-year lease on space number 76 at the exclusive underground private car park under York House, just across Kensington High Street from the Mail’s Derry Street offices. The company is registered in St Lucia, 300 miles off the South American coast.

Why Rothermere would need this bizarre arrangement is not clear – he would not comment on the matter to the Eye – but buying assets through offshore companies controlled by family trusts carries big tax advantages for “non-domiciled” taxpayers like Milord Rothermere (see Eyes passim).

The company owning the parking space is considered an overseas asset and remains outside the scope of a “non-dom’s” future inheritance tax bill. And if the parking space was bought out of the ample income received by the Bermudian company and offshore trusts through which Rothermere controls Daily and General Trust plc, there would be no “remittance” to the UK to generate an income tax bill.

The same St. Lucian company also owns land and one further, unidentified property in the Kensington area. Yet another Rothermere company, Harmsworth Trust Co (PTC) Ltd, registered in the British Virgin Islands, owns 10 English properties, most of them near the Rothermeres’ neo-Palladian pile in 200-acre Ferne Park in Wiltshire.

(Most non-doms, incidentally, would lose the inheritance tax break once they lived 17 out of 20 years in the UK. But Rothermere can thank his father for choosing France for his tax exile and thus bequeathing it as his country of domicile, since a longstanding agreement between the UK, and France happily overrides this rule.)

Rothermere isn’t alone in using an offshore company to own 12 square metres of tarmac and a precise 1.9 metres of airspace under York House. Fifteen further spaces – each said to be “large enough to accommodate a Rolls Royce”-have been bought in the same way: five through companies incorporated in the BVI, three in the Isle of Man, two in Liberia, one each in Jersey and Guernsey and a couple of unknown origin.

Rothermere’s purchase was for an unquantified amount, although other spaces bought around the same time went for £100,000, the top price being £149,500. Investors in what is described as “London’s first boutique car park” seem well-pleased. “What a delight,” says one. “Having suffered for many years with the aggravation of trying to find a parking space at night, let alone the frustrated nanny on the school run [sic]. This car park has solved all my problems.”

I’m astonished both at how expensive parking space in the rich areas of London are – £100,000 and over! – and how no purchase seems to be too small or too petty for the Rothermeres and people like them to purchase through offshore trusts. Though if they’re paying up to £150,000 for a parking space, you can see why they’d try a tax dodge. Do they do their weekly shopping at Harrod’s or wherever through offshore accounts? And their bespoke tailored suits – are they owned by them, or similarly the property of a company in the British Virgin Islands or St. Lucia!

‘I’ Newspaper Reports Cabinet Secretary Happy with Freedom of Information Legislation

December 23, 2015

Today’s ‘I’ newspaper has a report on page 4 that the Cabinet Secretary, Sir Jeremy Heywood, who declared that some elements of the FOI Act have “a chilling effect” on the workings of government, is now ‘broadly happy with the way the current rules operate’. This is apparently despite the accusations that he has been accused of advocating that the public’s right to government information should be diluted under the current government review into its operation. The article also states that the Civil Service has also made no representations about the review.

I’ve repeatedly covered on here the struggle Mike over at Vox Political, and the efforts other disabled people and carers, to gain access to the figures on the number of people, who have died after being declared ‘fit for work’ by ATOS and their successor, Maximus. As I said in my last blog post, they have been repeatedly denied the information by the DWP. Their reasonable requests have been turned down as ‘vexatious’, and even when they have launched a successful appeal, the government has stonewalled, delayed releasing the information, appealed against the Information Commissioner’s decision, and finally deliberately supplied the wrong information.

Private Eye has also made an FOI request to gather information on the vast amounts of British land that is now held by offshore companies. And guess what? They have similarly been turned down on the grounds that their request is also ‘vexatious’.

This is not open government. This is a return to the kind of Whitehall secrecy that was regularly portrayed and lampooned in the classic comedy series, Yes, Minister. With the exception that we don’t have a premier as fundamentally well-meaning and likable as Jim Hacker, the bumbling Minister for Administrative Affairs. And even the Machiavellian and suavely devious Sir Humphrey was more benign in his way than the current crew of official bandits and snobs now in government. If Jeremy Heywood is happy with the way Freedom of Information Act operates, then this is hardly an endorsement. Quite the opposite. He is happy, because the government is denying people information.

Mike and the disabled have suffered it.
Private Eye is now suffering it.
Johnny Void has made it very clear that those campaigning against workfare have suffered it.

And the government has stated that they are opposed to giving the public information, as they use it to attack government decisions, when they should really be putting up with it all and simply use the information to understand how the decisions are made.

This is not ‘freedom of information’ under any except the most limited definition of the term. The cabinet and the senior civil service are natural elitists and authoritarians, who object to public involvement in government with every fibre of their being. As for the review into FOIA, it is being led by two of the worst authoritarians in government. One of these is the former Home Secretary, Jack Straw, who has stated that the Freedom of Information Act was a terrible mistake.

This is disgusting. The review should be terminated immediately. Or better yet, its members and leaders should be sacked, and a new one drafted, which would demand greater transparency. But that won’t happen until we get to the fundamental problem: the Conservative government and its wretched collaborators, like Heywood.

Private Eye Freedom of Information Request Turned Down as ‘Vexatious’

December 23, 2015

As most readers of this blog probably, Mike over at Vox Political and very many other disability activists have been trying to get the government to release the full figures for the numbers of disabled and chronically sick people, who’ve died after being declared ‘fit for work’ by ATOS and now Maximus. The DWP has been fighting their requests all the way. They have repeatedly turned them down as vexatious, stonewalled and dragged their heels, and then twisted the terms of the request so as to avoid supplying the information the sense of the request demanded. Mike and the others have persisted through this disgraceful process, launching appeal after appeal. This government under the Gentleman Ranker is determined to keep the figures of the people it has killed through its surreptitious eugenics cleansing under the guise of welfare to work.

And Mike and the disabled are very definitely not the only people to have their reasonable requests for information under the terms of ‘open government’ turned down. One of them is Private Eye. In recent months, the Eye has been concerned about the vast amounts of British land that is formally held by offshore companies, who pay no tax. They have built up an alarming picture of just how much is owned through requests made to the Land Registry under the Freedom of Information Act. Now they have hit the same wall as Mike and the others. Their requests for information have been turned down as ‘vexatious’.

The Eye describes their attempts to get the information, and the brush off they have received from the Land Registry. They write

As reported in Eye 1402, it [the Land registry] has refused our request for information on the thousands more properties bought by offshore companies since 2014, claiming the request is “vexatious” and the information is “reasonably accessible” by other means” – despite the “other means” being thousands of individual requests at £11 a time and demanding an army of supporting anoraks.

The Land Registry has also refused on the grounds that the information is Crown Copyright, and so exempt from the regulations. The Eye has then pointed out that as this would have made all information collected by the Civil Service exempt from FOI requests, that legal loophole has been ended. Like Mike and the disabled lobbyists, the Eye has launched an appeal to the Information Commissioner. But they state that if the Registry’s refusal is upheld, then Cameron’s professed commitment to open up government information to the public ‘will be so much hot air’.

See the Eye’s article, ‘Freedom of Information: Open Contempt’ in their Christmas issue, 19th December -7th January, page 39.

I wish the Eye all the best, but I think they will find Cameron’s promise exactly so much hot air. Cameron is a natural authoritarian and aristocratic elitist, who instinctively distrusts the proles and looks back to the glory days of the pre-1832 Reform Act. His ideal is an England where the proles meekly accept their station at the bottom of the social pile and touch their forelock to their masters and betters. Where he does support freedom of information, it’s purely to benefit business, not individuals.

Tories: Cuts Can’t Be Savage, Because No-One’s died in the Street

February 15, 2015

Chris-Skidmore_288556k

Chris Skidmore MP: The b*stard responsible for the above quote.

Be warned about this one: it’ll make you really sick and furious. It’s another piece from Private Eye for the 4th to 17th October 2013, this time from the magazine’s ‘HP Sauce’ column. It reports how members of the Tories’ ‘Free Enterprise Group’ dined out at the Conservative conference that year at the largesse of SAB Miller, a beer company eager for avoiding paying tax.

Aren’t they all?

Much more infuriating is the blasé attitude of the Tory diners themselves to the effect of the cuts, and the complete disconnection from the way they were killing people. Here’s the story.

Conference delegates in Manchester frustrated by David Cameron’s coalition compromises could find a more red-blooded Conservatism at the jam-packed fringe meeting of the Tory “Free Enterprise Group”.

MPs Kwasi Kwarteng, Andrew Leadsom, Chris Skidmore and Dominic Raab talked about the really vigorous cuts they want. Skidmore claimed existing cuts weren’t really “savage” because “no one’s lying dead in the street”, while Raab recommended halving the number of government departments ” because existing cuts were only “relatively modest”.

There was some debate about whether proper free marketeers should be tougher on tax-avoiding, monopolist, “too big to fail” corporations that push around governments, but generally MPs and delegates were less keen on this argument. Perhaps this was just as well; the event was sponsored by beer firm SAB Miller, which paid for the room and supplied many bottles of its own Peroni beer to lubricate the free marketeers’ fervour.

PS: SAB Miller is very keen on avoiding tax, with damaging effects – a 2010 report from charity Action Aid accused the brewer of avoiding £20m of tax per year in Africa alone thanks to its offshore subsidiaries.

Skidmore and the rest of the ‘Free Enterprise Group’ clearly don’t know, and worse, don’t want to know, the devastation their nasty views have caused. Stilloaks and numerous other bloggers have put up a list 45 people, who are known to have either starved to death or committed suicide thanks to the government’s benefit cuts.

There has even been an artwork, War Minister, created by an artist to commemorate the victims. This is a portrait of Iain ‘Underpants’ Duncan Smith, composed of photos of the victims. It’s a powerful and moving piece, which Tom Pride has put up on his blog.

Going further, Mike over at Vox Political, Tom Pride and Johnny Void also recorded the deaths of two men after they were sanctioned by Ashton-Under-Lyme jobcentre. One of the men was homeless.

So, Skidmore, people really are lying dead in the street thanks to your policies.

This is the reality of the current Tory government – people who don’t know, and frankly don’t care, how many ordinary people die, so long as enterprise is free and profits are big. For them.

Vote them out at the next election.