Archive for the ‘Politics’ Category

Avoiding tax avoiders

Stefano_PessinaThe UK Labour Party is under pressure, apparently, because big business is not endorsing tax policies. The most recent criticism has come from Stefano Pessina (left) the boss of Boots, the iconic British pharmacy-cum-drug store. Boots was founded in Nottingham, England, in 1849. It is now privately owned and has its headquarters is in Zug, Switzerland, to avoid UK corporation tax.

Now out of the woodwork are the fickle Simon Woodroffe, he of Yo! Sushi fame, who has funded both Labour and the Conservatives simultaneously just to hedge his bets, and Charles Dunstone, founder of Carphone Warehouse, now part of the Dixons empire. Both of these supported Labour under Blair. Arguably, Labour under Blair was conservative, and hence not a risk. Actually it would have been a risk not to support them in the run up to the 1997 election. Even Murdoch did that.

Labour under Miliband has targeted inequality as a key economic factor much to the chagrin of so-called ‘business leaders’ who took us in to recession and are unwilling to contribute to the state infrastructure that enables them to trade in the country safely and predictably.PricewaterhouseCoopers_Logo

Enter Price Waterhouse Coopers (PwC) the accountancy firm has been chastised by the UK Parliament’s Public Accounts Committee, Chaired by Margaret Hodge, for its speciality in advising firms on tax avoidance strategies on an ‘industrial scale’. Denied, of course.

Which other firms offend? We know well about Starbucks, Facebook, Top Shop, Amazon, Google, Apple and Virgin. That said, it is ok for Richard Branson because he is a philanthropist. Maybe we can define a philanthropist as someone who gives away part of their fortune to rectify the ills caused by their own business practices?

Other tax avoiding firms include: Dyson and Wolseley UK, owners of Plumb, Pipe,  etc, Centers.

Celebrities have always moaned about tax. Michael Caine went off to the US, albeit when tax rates were somewhat higher than they are today (but even then, the high rate was a marginal rate).  Unfortunately, Paul Daniels did not go when he threatened to back in the 1990s, let us hope that the likes of Griff Rhys Jones and Ray Winstone do leave as they threaten. Gary Barlow, Anne Robinson, the Arctic Monkeys, Katie Melula, George Michael and comedian, Jimmy Carr (I could go on) have all been exposed as intentional tax avoiders.

Picture: Stefano Pessina – Alliance Boots, available through Wikipedia

 

Syriza and the Greek response to austerity

Increasingly, it is clear that globalisation has globalised wealth in the hands of a number of elites – from Flag_of_Greece_svgoligarchs in Russia, bankers in the UK and land speculators in Bombay. When the crash came in 2008, the perpetrators – the financial services elites – ‘hoovered’ up the public money pumped into the system to obviate a capitalist meltdown. No one went to jail; but Europe’s people were handed down a dose of austerity in return for their support. What is perplexing is how any sane policy-maker can sustain an argument that austerity helps declining economies. In Greece, for example, something in the order of 70 per cent of the country’s under 25s are unemployed. They are neither economically active nor productive. In the UK, unemployment goes down not because the economy is growing and the demand for labour is increasing; rather because people are taking zero-hour jobs or, indeed, taking jobs for an hour through ‘freelancer’ websites. Or, most disturbingly, if unskilled – at the unconnected end of the labour market – ads in supermarkets and shop windows. Alexis_Tsipras3

Syriza’s victory in the Greek general election last week represents something positive. It is populist, but from the left rather than the right. The rhetoric is one of alternative, fairness and equality. It is a David and Goliath story in the making. The new Greek Prime minister, Alexis Tsipras (left), takes his secular oath, appoints radicals to his government (such as Yanis Varoufakis as Finance Minister), halts privatisations, reappoints the cleaners who were sacked from their jobs in the finance ministry, initiates tax reform and targets corruption. They have even put up all of the ministerial BMWs up for sale.

We learn that the first port of call is not the IMF, the European Commission or even the German government in Berlin, rather opposition parties in Italy and Spain – next up on Europe’s election merry-go-round. I wait and see what happens, but there is optimism about Europe’s prospects and the rightness of Syriza’s approach to the crippling debt that they have inherited. I trust the elites do not share my optimism.

Flag: Fry1989, Wikipedia

Photo: Lorenzo Gaudenzi

Apple’s cash mountain

2015-02-01 13.44.12I am not an Apple fan. I do not like the design. I do not even like the font they use on their iOS interface. I hate the hype. But the results announced last week suggest I am in a minority. Apple reported profits of $18bn for the third quarter of 2014 generated by selling 34,000 iPhones per hour for the whole of that quarter. Mind boggling.

Apple now sits on a $180bn cash pile, a good amount of it is stashed in a bank account in Ireland selected so as to avoid paying tax on it in the United States of America. Good citizenship if ever I saw it.

So how does Apple reward its shareholders – ultimately the owners of the company? Well, apparently, according to the BBC’s Ian Jack (his explanation can be heard below), Apple is borrowing money in order to buy back its own shares so that shareholders pay a lower tax rate – capital gains tax rather than income tax.

It has been pointed out by the likes of Mariana Mazzucato in her book The Entrepreneurial State that, notwithstanding the immorality of avoiding paying tax, buying back shares also diverts money away from investment in new products, processes and technologies. Essentially, these companies not only avoid paying tax in the countries where they trade and/or are based, but they also get subsidised by the public sector through universities that make up the shortfall in basic research that should be done by the firms that utilise that research for new products and services. A double injustice.

Here’s the next challenge to our liberties

TTIPSo here is the next outrage – the inappropriately named Transatlantic Trade and Investment Policy, coming to a court not near you very soon. It is inappropriate because it is not really a trade and investment policy. Such a policy would, on the whole, be benign. This one, by my understanding, gives large corporations the opportunity to challenge nation states/governments on issues that they view as restrictions on trade. So, a nationalised health service is conceivably a restriction on trade of US healthcare providers. Under this argument, US corporations would be able to make the case that they should be able to compete for contracts in the NHS – the whole of the NHS, not just the bit that the UK Conservatives have so far transferred to their private sector firms. Equally, all environmental policy could be viewed in this way. Restricting carbon emissions, for example, imposes costs on firms, that is a restriction on trade. Surely corporations should be able to pollute as much as they like?

Women Fashion Power – Design Museum, London (part 2)

DSCF0981The second part of the show continues the chronology but also introduces biography. So for example, various designers are introduced; notably Coco Chanel on the one hand, and Vivienne Westwood on the other. Chanel drew her inspiration from the functional male wardrobe including cardigans, waistcoats, tweeds, trousers, cufflinks, etc. Not forgetting her iconic Little Black Dress of 1926 (left is a version of the LBD from Chanel’s chief designer, Karl Lagerfeld of 1991).

There are some lovely garments capturing the ‘flapper’ period in the 1920s. This seems to have been a opportunity to work shoes into the story. Even I was taken by some of them (see right)DSCF0962.

DSCF0964Elsa Schiaparelli, a name with which I was not familiar before the exhibition, designed on the basis that clothes had to be architectural. The body should never be forgotten and must be used as a frame as used in a building. Whilst I am not entirely sure what this means, and hence convinced, she had a most exquisite jewellery box (left).

Zips arrived in the 1930s along with Rayon, a cheap alternative to silk. There is a whole section on nylon stockings, naturally! And then on to Dior’s so-called New Look. This was, of course, an old look and reverted back to hour-glass figures and generated a market for ‘waspie’ corsets, with Triumph International leading the market.

The 1930s also saw the influence of Hollywood. Female stars were becoming important figures for designers to be associated with. Their ability to popularise designs is familiar to us today. Madeleine Vionnet is credited in the exhibition for introducing the bias cut enabling a flattering cling of clothes to the body and a further release from strict undergarments enabling ever-more revealing evening wear to be worn by the stars. Marlene Dietrich, Ginger Rogers and Bette Davis are three of the stars featured.

DSCF0970However, these clothes were still out-of-reach for many women. Publishing houses like Condé Nast guided women in the art of dressmaking and the Hollywood Pattern Company sold patterns to make the stars’ dresses at home (left). All that was needed was a sewing machine.

This link with fashion, entertainment, industry and machines is fascinating. The power, element, however, short of progressive loosening of undergarments, is less well articulated. The re-emergence of the corset in the 1940s indicates how fashion has power over women rather than the other way around. One way of getting round this for the curators of the DSCF0974exhibition is to dedicate a large section to the dress selection of modern powerful women. A couple of dozen women – for example, designers Zandra Rhodes and Vivienne Westwood, lawyer Shami Chakrabarti, journalist Kirsty Walk, children’s campaigner Camila Batmangehlidjh – donate a garment and explain why it is important to them. This is a bit self-indulgent, a bit of a filler. That said, as the picture (right) shows, one can get up really close to the garments and look at that stitching.

I would say visitors need at least 2 hours to do the exhibition justice. There is a café in the museum, it is worth visiting half-way through to recharge. There is a lot of information to process. A break is needed.

Women Fashion Power – Design Museum, London (part 1)

DSCF0950This is my second visit to the Design Museum this year. And as small museums go, this is one of the best. The exhibitions are exceptional in their content, presentation and accessibility. I have already railed against the British Museum. The contrast could not be greater. Whilst there are no opportunities to touch the artefacts (mainly items of clothing), they are all exhibited in such a way that one can view at close quarters. If you want to look carefully at the stitching, you can.

The exhibition runs until 26 April 2015. It starts, naturally, with corsets (examples above left). These were essentially garments of control with dress makers designing only forDSCF0953 those – largely wealthy – women with hour-glass figures. Change comes with the arrival of the concept of, what seemed to me, commercial fashion. French couture became showcased bi-annually in Paris. And that many shows requires constant change. And for women, this was progressive change.

In parallel, Amelia Jenks had the audacity to offer women ‘bloomers’ (right) and the ‘shirtwaist’ – essentially, women were able to wear 2-pieces made up of a shirt and skirt.

DSCF0955But then women took to sport: sea bathing could not realistically be undertaken with even Jenks’s liberated wear. The bathing costume then appears (example left) along with clothes suitable for cycling (another piece of technology eagerly adopted by women). And tennis. And motoring. The brands then emerged led by Creed, Redfearn and Burberry.

The campaigning Suffragettes in the early 20th Century deliberately dressed modestly so as not to conflate political liberation and DSCF0958 decency. But Suffragettes did adopt uniform colours – purple white and green. They also had accessories such as the medal (right). This is a reproduction, but it is a beautiful piece.

The next driver identified in the exhibition is the rise of the department store and mass production itself driven by the rise of the middle-classes, mass consumption and the growth in women’s disposable income.

And finally, in this section, is the patenting in the brassiere by Mary Phelps Jacob. The concept was liberating, it is argued, because it was designed to flatten breasts rather than accentuate them. It was an important de-sexualisation of women.

The landed rich fluff up their feathers

Foxhunting2So, a quarter of a million people turned out on a sunny bank holiday yesterday to pledge their support to their local hunts, for ten years now deprived, by law, of the right to hunt live foxes. This turnout is supposed to be a clear signal that the law should be overturned to allow the rich, again, to tyrannise the countryside in the name of fun. There are seemingly something like 60 million people in the UK. It is going to take more than 250 thousand rich people and their employees to overturn this law.

And then there is architecture. Charles Windsor (aka the Prince of Wales) has apparently come up with 10 principles of architecture that have traction only because he is rich, powerful and the heir to the throne. The principles all reflect his worldview – privilege, aesthetic, means, wealth, ownership, to name but a few. His principles have been put to the sword by architecture critic, Douglas Murphy, in the Guardian newspaper. I have to say that I enjoyed reading the demolition job which concludes with thePrince_Charles_2012 following:

“[W]hen Charles blasts modern architecture, he is essentially blasting the historical processes set in motion by the industrial revolution, and lamenting the diminution of his royal power in the world that it brought about. His dreams of traditionally designed cities are dreams of a world where people forever know their place.”

There’s a lot of architecture that I do not like, but there is an awful lot of architecture that reflects my own origins, sense of place and aspirations. My former university, the University of East Anglia, is one big block of concrete. But I owe so much to that place and the people within it.

Pictures: Master of foxhounds leads the field from Powderham Castle in Devon, England: Owain.davies

Charles Windsor: Dan Marsh

 

Magazine subscriptions

I subscribe to two weekly magazines – the New Statesman and The Economist. The former for twelve years, the latter perhaps four years. The Economist is an essential read for my work. The New Statesman feeds my interest in political debate. I took up reading it when I ended my daily subscription to the Guardian newspaper.

NS_coverWhen big public holidays arrive, both magazines publish bumper editions – sufficient to keep readers satiated for the two weeks that the magazines are on holiday, as it were. The New Statesman’s bumper edition is, generally, full of pap and even some of my favourite columnists let the side down. This year, for example, Will Self has taken to writing about another columnist in the same magazine! And to make matters worse, when that columnist started a few years ago, I only managed a couple of weeks before I lost the will to read any more, life being too short and all that. Holding the fort are the veterans Peter Wilby and Hunter Davies.

The Economist, however, fills out its pages with features on history, culture and science. Although it is unashamedly Economist_coverconservative, neo-liberal, it is at least well written and thoughtful. Hence I’m prompted to relay one of those features to readers (20 December 2014, pp82-84). It tells the story of the rise of pork as a symbol of affluence in China. It is a favourite food. Seemingly, Chinese citizens eat the equivalent of half a pig each per year (that is 500 million pigs annually). Such is its importance for the Chinese government seeking social stability, it is subsidised to the tune of $22bn per year. However, this leads to environmental and resource challenges.

Most are factory reared. Consequently they are routinely fed antibiotics to stave off disease that could decimate what is increasingly an in-bred, non native pig population. They are mainly fed on cash crops, particularly imported soy beans. These are grown predominantly in South America on land much of which has been cleared of rain forest. Moreover, the Chinese pork industry is responsible for 50 per cent of the total global soy market. Each kilo of pork requires 6kg of feed.

PigThen there is the waste. Each pig produces, apparently, 5kg of waste per day. Traditionally, pig excrement was highly valued as a fertiliser; however, mass produced pigs generate contaminated waste – antibiotics, hormones, pesticides, etc., not suitable to spreading. There is also too much of it. Pigs and pig waste have become increasing sources of water and soil pollution.

Moreover, the pigs themselves produce methane and nitrous oxide. These are potent greenhouse gases somewhat more damaging than carbon dioxide (300 times more so, it is argued).

I gave up meat 35 years ago. I may give up the New Statesman in 2015.

Why calls to keep the East Coast rail franchise in the public sector are folly

logo_eastcoast_3The East Coast rail franchise has been successfully run by the UK state organisation, Publicly Operated Railways (POR), since it was abandoned by National Express in 2009 when it failed to meet its financial targets.

East Coast will return to the private sector in April 2015 after a protracted bidding process was finally won by the joint Stagecoach/Virgin venture (90/10 shares respectively). The Department of Transport somehow avoided awarding the franchise to the French state railway bid (Keolis and Eurostar joint venture).

The anti-privatisation debate has been championed by the Labour party and is logical. DoR has made healthy returns to the Treasury, why hand these to a private company when the public sector has done so well? At the very least, why could DoR not bid to run the franchise?

The Conservative government’s response, essentially, is that anything that the public sector can do, the private sector can do better. Notwithstanding the fact that often they cannot as two of the franchisees for this route – GNER and National Express – have failed. However, the Stagecoach/Virgin alliance has worked on the West Coast route and Stagecoach has been running the London commuter franchise, South West Trains since privatisation in 1996. But ultimately, the Conservative government has an ideological fixation with the private sector. Many of its members have positions in private sector firms that benefit from government contracts.

For me, however, keeping individual franchises in the public sector is a red herring. These are companiesNetwork_Rail_imagesCA0ADM11 that have no assets. Whilst they are the main channel for passengers to access railway services, they are far from being the railway. The assets of the railway are arguably where the value is. Now, fortunately, the key assets – the permanent way, signalling, stations, etc. – are public sector assets after the demise of Railtrack in 2002. But these assets do not generate surpluses. Quite the contrary. Despite announcing a pre-tax profit for 2014 of £1.035bn, the cumulative debt amounts to £20bn.

Class171By contrast, the owners of the rolling stock make a killing out of leasing trains to franchisees. There are three major players whose profit margins after tax seem to be around 10 per cent, according to a Channel 4 News investigation. Whilst there may well be some shrewd investment and management involved, ownership of these firms lacks transparency (two have registrations in Jersey and Luxembourg). Moreover, these businesses were sold at privatisation for a song. Porterbrook Leasing, for example, was sold in November 1995 for £527m. It was resold in July 1996 to Stagecoach for £825m. In essence, it costs a lot of money to lease trains to generate high profits for the leasing companies.

My argument, then, is this. The railway is only meaningful when it is an integrated whole in terms of its ownership and operation. Keeping franchises in the public sector when the real money is made by those with whom they must contract in order to provide train services; namely, rolling stock leasing companies, is to miss the point. It gets the Labour Party off the hook. But it is not public provision of public services.

Picture: Class 171 Mackensen

Public housing

Bill_RandallI was very pleased to hear Councillor Bill Randall being invited on to Radio 4’s Today programme yesterday to discuss current inequities regarding housing in the context of the acute shortage experienced in Brighton and Hove where he is a senior figure and a distinguished housing expert. This being the BBC, he was pitted against Adam Memon (right) of the Centre for Policy Studies an apologist forMemon continued expropriation of public housing by private landlords and provision of public subsidy for this through high housing benefit allowances. Seemingly in Brighton and Hove, 6000 council dwellings have been sold since Thatcher’s flagship ‘right to buy’ policy of the early 1980s; one thousand of these have passed into the private rented sector. Another tranche have been resold to private sector buyers from outside the town – Brighton, in particular, is extremely expensive and ex-council houses are sought-after properties. A cursory glance in the window of an estate agent shows a three-bedroom example for sale at £275,000. The exchange has been captured here:

Picture: Bill Randall: brightonandhovegreens.org; Adam Memon: CPS

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