8: FAT CATS TAX LAX
“We don’t pay taxes. Only little people pay taxes.” Leona Helmsley, wealthy widow of a New York property tycoon *
SchNEWS reckons it’s time to point out the bleedin’ obvious – it’s always Christmas time for the super- rich and the multinational corpora- tions. Under Neo Labour those with the most cash have doubled their money. A report on inequality from the Office for National Statistics shows that the top 1% increased their share of national wealth from 20% to 23% in the first six years of the Labour government. The top ten per cent of Britain now owns an incredible 54% of the wealth.
Meanwhile Chief Executive (CEO) pay is out of control. In the UK it rose 25 per cent a year from 1983 to 2002 – no matter how a company was performing. If a CEO remained in post for seven years, he (and it is always a he) could expect to see his salary double – twice. CEOs now pocket around 50 times as much as ordinary employees. In fact, a new paper from business school academics reckon that “corporate managers are somewhat like landed aristocracy in the 19th century, or political elites of the Third World” with their pay far outstripping their contribution to the company or the country.
Office cleaner Abdul Durrant stood up at HSBC annual general meeting in June and asked if cleaners at the bank’s Canary Wharf headquarters could be paid more than £5 an hour. It was not, he said, enough to live on. HSBC Bank chief executive William Aldinger didn’t answer – and why should he care. He has a £37 million three-year package to live on, as well as free dental and medical treatment for life.
Not that you’ll read about this in the corporate media where it’s divide and rule. You skint? Then blame those poorer than you. So The Sun runs another ‘Shop a Skiver’ campaign but forgets to nominate its owner Rupert Murdoch. In 1999 The Economist reported that Murdoch had made £1.4 billion in profits over the previous 11 years but had paid no corporation tax. After an examination of what was available of the accounts, it reckoned Murdoch would normally have expected to pay enough tax to “build seven new hospitals, 50 secondary schools or 300 primary schools”.
Or what about Richard Desmond, owner of Express Newspapers, who paid himself £46.2m last year. Yet his papers run a relentless campaign against asylum seekers and how they are bleeding the country dry.
Richard Branson’s Virgin Group is based in the Caribbean – yet since privatisation, Virgin Trains have received £1.57 billion in public subsidies. That’s taxpayers’ money, for someone who pays hardly any tax, for a service that is crap.
TREASURY TAX DODGE
Corporation tax under Labour has now reached an all time low. When corporation tax falls, guess who the burden falls on – yep, the ‘little people’. Minutes of an Inland Revenue meeting revealed the agency was going soft on multinational tax returns for fear of driving investment away from the UK. They might be a bit late – a 1997 report by accountant Deloitte and Touche put the figure for legal avoidance alone at a staggering £85 billion a year. That’s more than is annually spent on the National Health Service. A leading accountancy expert, Professor Prem Sikka reckons that billions are lost by multinationals basing themselves in tax havens. No one really knows the figures, because the Professor says “the Treasury refused to undertake detailed research to get accurate estimates. It is dodging the issue.”
So, what does Chancellor Gordon Brown do? In his last budget speech, he promised to deal with tax cheats, and then announced 40,500 jobs would go at the Inland Revenue and Customs and Excise! The Inland Revenue has already faced massive redundancies in the nineties which journalist Nick Davies said had meant government’s efforts to catch tax avoiders had “collapsed in a heap of mismanagement and staff cuts.” It avoids rubbing the corporations and the super-rich up the wrong way by refusing to release its figures on enforcement.
So while we hear about how the government is trying to crack down on benefit cheats – such as people washing up one night a week in a restaurant for a few extra quid to supplement their crap dole money – they refuse to go after fat cats like Murdoch.
When you hear about another fraud hotline or politicians bleating that we can’t afford decent pensions, wages, new hospitals, schools, social housing etc., remember it’s the business tax dodgers and corporate scroungers that are to blame. Britain is the fourth richest country in the world – the only belt tightening should be round the corporate cowboys’ necks!
* Helmsley eventually went to prison for tax evasion!
MATHS WITH JARVIS
Jarvis, the cash strapped corporation that bit off more Private Finance Initiatives than they could chew, can’t be allowed to go bankrupt despite debts of £240 million. Who says? The banks that lent them the money in the first place!
The bankers, principally Royal Bank of Scotland and Barclays, are worried that if Jarvis go down the pan, they would be forced to take over many of the firms’ projects, including schools, hospitals and road programmes which Jarvis are running under the joke privatisation-by-the back-door-Initiative.
The Whittington Hospital NHS Trust in north London is one Jarvis PFI hospital project where work recently stopped. They say that the banks are ultimately responsible for ensuring the multi-million-pound facility is completed.
Next month, the Crown Prosecution Service will decide whether to press charges against Network Rail and Jarvis for alleged health and safety breaches following the Potters Bar rail crash** over two years ago, in which seven people died and dozens more were injured.
Looks like they will get away with financial incompetence, will they get away with murder as well?
** Senior executives at Jarvis were given £1 million pound bonuses during the year of the crash.
*** Polyp’s new book “The Complete if Ordinary People Behaved Like...” is out now, you can order your copy from www.ethicalconsumer.org
– from schnews Friday 17th December 2004 Issue 478 Tel +44 (0)1273 685913 Email [email protected] www.schnews.org.uk