Sun Shame

February 29, 2012

The Sun is on a moral crusade. The Sun…. on a moral crusade. THE SUN! The very idea baffles me. Whilst they’re currently being investigated for paying police for stories, they’re taking the moral high ground elsewhere.
Today The Sun has said it:

CALLS on all Brits to be patriotic and report any cheats you know by calling the National Benefit Fraud Hotline

– This is in reponse to their story that benefit fraud costs the UK £1.2bn a year. The figure sounds huge, especially when written in block capitals, as it is in the Sun article. The problem is, the figure is actually tiny.

The story comes from figures released by the Department for Work and Pensions called “fraud and error in the benefit system”. What it actually states is:

The estimate for the percentage of total benefit expenditure overpaid due to fraud in 2010/11 has remained the same when compared to the 2009/10 and preliminary 2010/11 estimates, at 0.8%

– £1.2bn is actually representative of just 0.8% of the total benefit expenditure. If the total benefit expenditure was a £1 coin, less than 1p would be lost to fraud.

In December 2010, the Parliamentary Public Accounts Committee found that HMRC happily ignored Corporate tax avoidance worth up to £25bn. Vodafone was allowed to write off its tax bill of £6bn. Rather coincidentally, the head of tax policy at Vodafone is a man named John Connors. Connors used to work at HMRC and enjoys a close relationship with current head of HMRC, David Hartnett. They go for cosy lunches together, and then they casually wipe £6bn from the Nation’s second largest company on the Stock market’s tax bill. Perhaps the “scroungers” mentioned by the Sun should give Hartnett a ring and go out for lunch. All would be fine then.

According to the tax justice network’s report into tax abuse, the figure of £25bn, when added together with tax evasion (the likes of Labour candidate for Mayor; Ken Livingstone accused of using a tax loophole to save up to £50,000) costs us £69bn.

Corporations involved in widespread tax avoidance love Hartnett THAT much, he is the most ‘wined and dined’ civil servant in the Country, having been treated to wonderful Corporate hospitality a total of 107 over three years. I’m sure they do it just because he’s a nice guy. That must be it. I’m sure of it. How many times have you been asked “who would your ideal dinner guest be if you had a choice?” I always answer “Not Oscar Wilde, not John Lennon, not Christopher Hitchens, not Mohammad Ali… none of them…… give me David Hartnett any day of the week! What a guy.

Another company that enjoyed the dining company of Hartnett, was Goldman Sachs. It will come as no surprise that Hartnett personally shook hands with Goldman Sachs officials on a deal that waived £10,000,000 interest on a tax avoidance program that went wrong. If you’re a single mum struggling to raise kids, and are taking a few quid more than you’re legally entitled to, the Sun want you dead. If you’re a multimillionaire company that believes it owes nothing to anybody and actively breaks the law; as long as you take the head of HMRC out to lunch, you’re perfectly fine.

Like everything The Sun says and does, hypocrisy is at the apex of this story. News International owns The Sun. When its CEO Rupert Murdoch is not defending allegations of hacking the voicemail of a dead school girl, or bribing police for stories, it used to spend its time losing legal battles over unpaid taxes. In 2009 the Australian capital territory won its battle to reclaim $77 million in taxes and penalties owed by News Corporation. When News Corp moved its headquarters to the US, through tax loopholes, it deprived Australia of millions of $ in unpaid capital gains taxes.

The Sun has decided to block use of its “beat the cheat” picture on its article. It can be found here.
But I thought I’d create my own.


The hypocrisy of the Guardian.

April 3, 2011

In 2009 The Guardian ran a
series of stories surrounding Corporate Tax Avoidance and its worse
adherents. One of the Guardian’s chief reporters on the situation
is Richard Brooks. Brooks, in 2009 wrote this:

The Guardian’s investigation aims to shine some light into this
dark corner and challenge an ultimately anti-democratic tax
avoidance industry. The practices exposed merit comparison with the
excesses of the financial sector (many of which also include a fair
measure of tax avoidance). Moves towards more responsible,
better-regulated business in the wake of the financial crisis
should cover tax avoidance too

They exposed
companies like Diageo PLC who, through complex methods and
exploited loopholes, avoid great swathes of tax whilst the wages of
the average worker remain stagnant. As noted in previous blogs,
whilst benefit cheating costs the UK £900mn a year according the
Government’s own figures, Corporate tax avoidance costs the UK
£25bn. It is quite obviously time to close every loop hole that the
treasury can find. The Guardian is correct. So it might come as a
bit of a surprise that whilst the Guardian is on an apparently
righteous mission to rid the World of tax avoidance, the Guardian
Media Group (the parent company of the Guardian) is one half of a
partnership which is incorporated in the Cayman Islands. The GMG is
tax avoiding. GMG and private equity firm Apax, set up Eden Bidco
in the Cayman Islands in order to purchase a company called Emap.
Apax at the time of the acquisition had a man named Adrian Beecroft
as its Chief Investment Officer. Beecroft is now on George
Osborne’s “Independent Challenge Group”, which states as its
mission:

The group will have a remit to think
innovatively about the options for reducing public expenditure and
balancing priorities to minimise the impact on public services.

Perhaps not setting up vehicle companies for
tax purposes by a multimillionaire, would be a good start in
achieving their aims. Perhaps not appointing other members like
John Nash, the Chairman of Private Health Care provider Care UK
would be a good start in achieving their aims. Coincidentally, John
Nash’s wife, Caroline Nash, gave £21,000 in a personal donation to
Health Secretary Andrew Lansley’s election campaign, and have
together given more than £200,000 in donations to the Tory Party.
Care UK has recently been awarded a £53mn prison healthcare
contract. Suddenly the word “independent” in “Independent Challenge
Group” is looking rather tedious. The Guardian tried to absolve
itself of all wrongdoing by stating that it was Apax who insisted
on the creation of Eden Bidco and its tax structure, in order for
the deal to buy out Emap to go through. It would appear that Apax
have been rather naughty for some time, and that the
multimillionaire Beecroft who is now advising the Government on
spending has a bit of explaining to do, because one search of the
Cayman Islands Company Register shows the following companies set
up in the Cayman Islands:

APAX CAYMAN SIX
LIMITED 110745 APAX CAYMAN TEN LIMITED 110850 APAX CAYMAN THREE
LIMITED 110724 APAX CAYMAN TWELVE LIMITED 110852 APAX CAYMAN TWO
LIMITED 110717 APAX CSG HOLDINGS LIMITED 34379 APAX EUROPE VI NXP
FOUNDER GP LTD 174622 APAX EUROPE VI NXP FOUNDER L.P. 18092 APAX
EUROPE VI NXP FOUNDER MLP CO LTD 174678 APAX FINANCIAL CORP 221135
-SO 22113 APAX GLOBIS PARTNERS & CO., LTD. 88778 APAX NXP
US VII, L.P. 18065 APAX PARTNERS & CO (GERMANY) II LTD.
72401 APAX PARTNERS & CO (GERMANY) LIMITED 36877 APAX
QUARTZ (CAYMAN) GP LTD. 195012 APAX QUARTZ (CAYMAN) L.P. 21487 APAX
US VII GP, L.P. 17341 APAX US VII GP, LTD. 163273 APAX US VII
INTERNATIONAL PARTNERS, L.P. 18392 APAX US VII, L.P.

For the Guardian to take a righteous stand
against Corporate tax avoidance, whilst firstly doing business with
a prolific Corporate tax avoiding company, and secondly actually
setting up a tax avoiding company themselves, is mightily
shameful.