Search This Blog

Sunday, 31 October 2010

Why we must win the fight with Vodafone.

The protests over Vodafone shirking paying what could amount to £6 billion pounds in tax is probably the most important protest that this generation will participate in.
Some may take that statement as little more than hyperbole and throw a multitude of inarguably more important issues about in opposition to it.
I see their point, but I think they miss mine.
Of course poverty and homelessness are far more important than the business practices of a mobile phone provider, but that isn't where the focus should be.
Not at this very moment in time.
This fight is a totemic battle that we cannot lose.
Vodafone is where we make our stand and say no, and the reason that it is so important not to lose is twofold.
Firstly if we lose then we are back to square one.
Nothing we do or say matters as no one is listening will be repeated ad nauseum until it becomes a negative force that enslaves us all. The naysayers will take one step closer to achieving their apathetic self fulfilling prophecy.
Secondly those in power will rub their hands in glee at our failure and with a smirk raise a glass to business as usual, and business is exploitation.
We must not let this happen.
The reason that we must win is that a successful outcome will serve as a catalyst for so much change.
Once we assume the role of giant killer then we are empowered and will fear no business or government that wishes to manipulate society to their ends.
When another company deals in exploitation we can loudly whisper in their ear Vodafone and they will shake in their boots at the thought of lost revenue and the negative pr that they would accrue.
When a government ideologically pushes an agenda that benefits a minority of affluent chums and we say we will not accept it, then they will have to scurry back to their little meetings and consider the Vodafone effect before risking raising our collective ire.
Vodafone can be the stick that we beat them with whenever they step out of line and we need that stick.
This is why we must unite and focus our efforts.
The fight is not about a telephone provider and it isn't even about unpaid revenue.
This battle is one that is about securing a better future for us all, a future that we must not let slip from out grasp.

Saturday, 30 October 2010

Online petition asking for the government to collect tax owed.

From Private Eye.

WHEN Vodafone bought German engineering company Mannesmann a decade ago for €180bn, it desperately wanted to use the mother of all tax avoidance schemes so taxpayers would subsidise what turned out to be a massively over-priced mistake. The plan was to route the acquisition through an offshore company.

This, however, would potentially fall foul of British anti-tax avoidance laws, and when the company asked the then Inland Revenue to clear the arrangement, it duly refused. Vodafone went ahead anyway and bought Mannesmann using a Luxembourg subsidiary company called Vodafone Investments Luxembourg sarl (VIL), in which it would go on to dump vast profits taxed at less than 1 percent.

An epic legal battle began, with Vodafone resisting the taxman’s efforts to get all the information on the deal and arguing through the courts that the British laws striking out the tax benefits of its deal were neutered by European law which granted, Vodafone claimed, the freedom to establish anywhere in the EU (including its dodgiest tax havens) without facing a tax bill.

VIL’s accounts show that, up to March 2009, €15.5bn income was stuffed into the company, suggesting it is now heading to the €18bn mark and resulting in £5bn in lost tax and interest so far. But, armed with strong advice from eminent legal counsel, tax inspectors were confident they could win the cash back, not least because until 2004 the scam was run through the Luxembourg company’s Swiss branch. This of course was not even in the EU (although that year Luxembourg changed its own rules to allow the trick to work without inconveniencing tax avoiders with the need for an Alpine branch).

A less ‘black and white view of the law’
Officials were further emboldened last year when the court of appeal ruled that British laws striking out the avoidance scheme could conform with European laws. But they reckoned without HM Revenue & Customs’ (HMRC) “permanent secretary for tax”, Dave Hartnett, and his customer-friendly approach to big multinationals.

Despite HMRC’s victories, Hartnett moved the case from his specialists and lawyers – dismissed in recent comments to the FT as “very intelligent people” suffering from “a black and white view of the law” – to a dimmer but more amenable group to negotiate with Vodafone’s head of tax, John Connors, who until 2007 was a senior official at HMRC working closely with Hartnett on handling big business.

The fruits of these talks, conducted without consulting HMRC’s litigators and specialists in the tax law concerned on the chance of success in the courts, was a bill for Vodafone of £800m, with another £450m payable over five years and, remarkably, an agreement that the arrangement can carry on into the future with a promise of no challenge from HMRC. The Eye understands that the settlement also swept up several other Vodafone tax avoidance schemes.

More sweetheart deals to come
The bill for all other taxpayers in lost tax is likely to be at least £6bn. Resentment within the HMRC ranks is high and one former official familiar with the case described it as an “unbelievable cave-in”. But there is no means for the deal to be audited: the National Audit Office refuses to look at specific cases.

Hartnett’s comments to the FT signal more sweetheart deals to come. The “conciliatory” approach can be presented as an urgent cash-gathering exercise, but in practice it encourages tax avoidance and sells other taxpayers well-short. It also masks the fact that staff cuts at HMRC are destroying its abilities to fight tax avoidance. Spending on the activity has already fallen from £3.6bn in 2006/07 to £1.9bn, with more cuts to come, prompting the association of senior Revenue officials to compare the government to “a drowning man who decides to throw off his life jacket, because it weighs too much”. How fortunate then that under HMRC’s reporting practices the Vodafone settlement will count as a £1.25bn success in the fight to close the “tax gap”, rather than a £6bn gift to a large phone company.

PS: The Tories have further cause to thank Mr Hartnett. As Eye 1136 revealed five years ago, government cuts adviser Philip Green had personal discussions with Hartnett over his tax affairs while legal battles raged over schemes for husbands and wives to share their income for tax purposes. Dividends from Green’s businesses continue to be paid to trusts controlled by his Monaco-resident wife Tina, undisturbed by the taxman.

Frock and Cock Halloween party - 13th Note (29/10/10)

That's how I feel.
Dislocated from my surrounding,
Dislocated from people.
I'm an observer and not a participant and I like it.
It helps that I'm wearing a mask for Halloween. It deadens the sound of those around me as if I'm under water and gives everything a surreal quality. There's no periphery vision and everything is sharply eyes front focused.
I could get used to this. It fits in with my isolationist mood.
Safely ensconced within it I don't feel the need to smile or make much effort to socially interact with anyone apart from the bare minimum to get by. It's a pleasant break from wearing the usual mask that takes a considerable effort to maintain.
People swim in and out of my vision and my rubbery countenance remains rigidly impassive.
There is a guy about to do an acoustic set called Bareback Obama aka Psychedelia Smith.
A little earlier he had been telling me that it was his thirtieth birthday and he's pretty drunk from the celebrations. A natural gutter raconteur he also filled me in on how he had picked up a young lady earlier, but blew it when he attempted to break wind and followed through with a more solid delivery.
If it was a one off he could have chalked it up to experience, but it's the third time it has happened and he thinks he may have to address the issue sooner rather than later.
On stage he tells everyone to “shut the fuck up and listen” before breaking into something or other that is a bit country, bit blues and a whole lot pissed.
He introduces the second song of the night by telling us it's the last. It's an equally rambling and shambolic affair and about three quarters of the way through it he stops mid refrain and takes his guitar off and proclaims “I'm fucked. That's it.”
I'm impressed, but I'm also unsure of what I want to do next. Wait around to watch “Bloodlust”, a band who owe a great deal to The Birthday Party? Or slip away to the bar upstairs and occupy a stool and nurse a drink?
The bar stool wins by a country mile.
The Universal horror mask comes off and I slip my usual one on instead, stretch the muscles in my face into a smile and I ask for a beer.
No one bothers me.
There is a blue light below the glass top of the bar and it gives the impression that my pint glass is floating, suspended in front of me waiting to be snatched from the air. There is also a two headed cat looking down at me from the wall behind the barman and I feel like I'm a character in the Naked Lunch. Even more so when the bar staff start passing around a pumpkin-head between them to sniff.
One catches my eye and offers me a hit and I feel compelled to accept.
The candle inside has been gently roasting it and the sugar within the pulp is giving it a slightly sweet caramelised odour.
It's nice.
I feel quite happy with the situation.
I'm sitting at a bar with a beer and alternating between having a sip of it and smelling a lobotomised pumpkin-head
It's not what I had planned for the evening, but I roll with it.
On my return to the basement where the bands are playing I find Bloodlust midway through their set. It's better than the lo-fi bootleg quality live tracks that I heard on myspace, but they jar with my mood and I can't get into it.
Tragic City Thieves are in Halloween mode with Stu dressed as a Jedi Master including light saber and other worldly contacts, Jim's a 50's zombie a la Stephen King's “Sometimes they come back” and Div looks like just about anyone who occupies an accident and emergency unit on a friday night anywhere on the west coast of Scotland. He's basically just battered, bruised and bleeding on the floor. Frontman CJ is Betamax man of the Mighty Boosh, but sheds his costume for the performance.
It's the usual high octane affair with a couple of new songs thrown in for good measure.
I'm still waiting for people to get up to speed with these guys though.
Elsewhere in Glasgow there will be people paying far more to see far less talented bands and I can only say it is their loss so often.
Heads need to be removed from rectums, the coffee needs to be smelt, the writing on the wall needs to be read blah, blah, blah.
People just need to go and see this band, and keep going back to see them.
Tonight it's a poor turnout and there is a lack of atmosphere that contagiously spreads an apathetic vibe throughout the small basement.
The band are fighting it and energetically ripping it up, but the flickering flame they are trying to fan is stubbornly refusing to ignite into anything bigger.
It's heart-rendingly difficult to watch four guys give it their all and receive so little in return.
I firmly believe that if Tragic City Thieves were on the cover of kerrang or NME that they would be headlining a sold out show in one of the bigger venues and be lauded as home town heroes.
It pisses me off that this patronage by mainstream magazines needs to be in place before anyone gives a rats arse.
Lazy fuckin' sheeple pretending to be scene fashionistas bore me to tears.
It's slightly raining when I step outside and it's cold. Very cold.
I wish I was sniffing on pumpkin and wearing my mask.

Vodafone - Background info

As angry protestors tussled with police in front of Vodafone’s flagship store in London yesterday, friends and passersby held out their mobile phones to take pictures of the spectacle. Some will have sent their photos over Vodafone’s own network to spread the word about the protest – which was against Vodafone.

Irony aside, Vodafone is nursing the mother of all tax headaches both on its home turf (the U.K.) and one of its most promising markets, India. Yesterday’s protestors shut down its store on London’s Oxford Street, after accusing the British mobile network giant of dodging a £6 billion ($9.5 billion) tax bill here in the U.K. at a time when the government is slashing its deficit by roughly $180 billion and trimming its previously-sacred welfare budget.

Both Vodafone and Britain’s Inland Revenue Service (known formally as HM Revenue & Customs or HMRC) deny that the company owes that much. But the campaigners are adamant. Their accusation stems from an article in the British news magazine Private Eye, reporting the figure in September in relation to Vodafone’s 180 billion-euro purchase of German engineering company, Mannesmann in 2000.

You can read Private Eye’s article here, but it essentially says that Vodafone bought Mannesmann via a Luxembourg holding company to avoid tax charges (an arrangement that HMRC at the time did not condone) into which it deposited profits at very low tax rates. Accounts for the holding company show that Vodafone deposited 15.5 billion euros in profit into the Luxembourg company up until March 2009, which, Private Eye says, suggests there must be around 18 billion euros in there today resulting in £5 billion ($7.9 billion) in lost tax revenue and interest for the U.K. The article, written by Richard Brooks, says the bill for lost tax is “likely to be at least £6 billion” and quotes a former official at HMRC as calling it an “unbelievable cave-in” by the tax authority to Vodafone.

Following negotiations with HMRC, Vodafone had agreed in July to pay £1.2 billion ($1.9 billion) to settle the long-running dispute, even though the company had previously said it was putting aside £2.2 billion ($3.5 billion) to cover what it owed the taxman.

Putting aside the £6 billion-figure, why did it end up paying so much less than its provision? Vodafone spokesman Bobby Leach tells me it had put aside £2.2 billion based on audited accounts and this was not a reflection of the maximum risk that Vodafone saw itself as paying out in the settlement.

HMRC has officially said that it rigorously examined the facts and there had been an “intensive process of negotiation” with Vodafone, and adds, “that number [6 billion] is an urban myth.”

But tax specialist and blogger Richard Murphy thinks the tax man should have done a little more digging, and he points to some oddities in the negotiations and timing of events. Firstly, the man who negotiated on behalf of Vodafone for its tax settlement, John Connors, had previously worked at HMRC as the head of its large business services division, and negotiated on behalf of the tax authority. That is until April 2007, when Vodafone hired him and he moved to the other side of the negotiating table.

“Vodafone managed to poach the guy they were negotiating with, and then they got this [settlement for] less,” says Murphy, adding that when he later met Connors at tax conferences, the former taxman said that former colleagues in the industry weren’t talking to him anymore. “He was clearly seen as having betrayed the Revenue. He was one of their most notable departures.”

Then, he says, there’s the settlement’s timing. Vodafone had reached its agreement with HMRC to pay £1.25 billion on July 22 and announced it in its interim management statement (on page 7) for the quarter the following day. Several days after that, Chancellor of the Exchequer George Osbourne travelled to India to promote Vodafone’s business and discuss the company’s other huge tax problem there, related to back-taxes it owes from its acquisition of Indian assets of telecom giant Hutchison Whampoa in 2007.

Osbourne visited the country India again last month to lobby against Vodafone’s multibillion dollar tax bill. “It just looks odd,” says Murphy. “There was a question about whether the [U.K.] tax settlement was politically motivated… George Osbourne’s visit to India could not have been arranged in a few days notice.” Vodafone’s Leach did not wish to comment on the government minister’s trip to India.

Osbourne’s lobbying efforts in any case, haven’t entirely helped. Last Friday Indian tax authorities told Vodafone in their first formal notice that it owed $2.5 billion in capital gains taxes for the Hutchison takeover. On the back of it being unusual to charge the purchaser of a company with capital gains tax (when it’s the seller gaining capital) this also represents a 50 year-precedent for the taxation of a transaction between two overseas companies in India, according to Leach. (And a worrying precedent at that for companies wishing to make acquisitions in India.)

Yesterday the Bombay High Court deferred hearing Vodafone’s appeal after the company said it needed more time to work out the details of its liability, according to The Hindu. Its tax flaps in India and the U.K., it should be noted, are not connected. But if Vodafone was indeed fortunate to reach the settlement it did with the U.K.—fortunate in that the total sum was less than HMRC had deemed appropriate–its investors and management will be hoping something equally fortuitous will happen in India.

Friday, 29 October 2010

Johann Hari: Protest works. Just look at the proof

In a far more erudite manner Johann Hari has just echoed what I said yesterday.

"Yes, you can choose to do nothing. But you will be choosing to let yourself and your family and your country be ripped off"

There is a ripple of rage spreading across Britain. It is clearer every day that the people of this country have been colossally scammed. The bankers who crashed the economy are richer and fatter than ever, on our cash. The Prime Minister who promised us before the election “we’re not talking about swingeing cuts” just imposed the worst cuts since the 1920s, condemning another million people to the dole queue. Yet the rage is matched by a flailing sense of impotence. We are furious, but we feel there is nothing we can do. There’s a mood that we have been stitched up by forces more powerful and devious than us, and all we can do is sit back and be shafted.

This mood is wrong. It doesn’t have to be this way – if enough of us act to stop it. To explain how, I want to start with a small scandal, a small response – and a big lesson from history.

In my column last week, I mentioned in passing something remarkable and almost unnoticed. For years now, Vodafone has been refusing to pay billions of pounds of taxes to the British people that are outstanding. The company – which has doubled its profits during this recession – engaged in all kinds of accounting twists and turns, but it was eventually ruled this refusal breached anti-tax avoidance rules. They looked set to pay a sum Private Eye calculates to be more than £6bn.

Then, suddenly, the exchequer – run by George Osborne – cancelled almost all of the outstanding tax bill, in a move a senior figure in Revenues and Customs says is “an unbelievable cave-in.” A few days after the decision, Osborne was promoting Vodafone on a tax-payer funded trip to India. He then appointed Andy Halford, the finance director of Vodafone, to the government’s Advisory Board on Business Tax Rates, apparently because he thinks this is a model of how the Tories think it should be done.

By contrast, the Indian government chose to pursue Vodafone through the courts for the billions in tax they have failed to pay there. Yes, the British state is less functional than the Indian state when it comes to collecting revenues from the wealthy. This is not an isolated incident. Richard Murphy, of Tax Research UK, calculates that UK corporations fail to pay a further £12bn a year in taxes they legally owe, while the rich avoid or evade up to £120bn.

Many people emailed me saying they were outraged that while they pay their fair share for running the country, Vodafone doesn’t pay theirs. One of them named Thom Costello decided he wanted to organize a protest, so he appealed on Twitter – and this Wednesday seventy enraged citizens shut down the flagship Vodafone store on Oxford Street in protest. “Vodafone won’t pay as they go,” said one banner. “Make Vodafone pay, not the poor,” said another.

The reaction from members of the public – who were handed leaflets explaining the situation – was startling. Again and again, people said “I’m so glad somebody is doing this” and “there needs to be much more of this.” Lots of them stopped to talk about how frightened they were about the cuts and for their own homes and jobs. The protest became the third most discussed topic in the country on Twitter, meaning millions of people now know about what Vodafone and the government have done. The protesters believe this is just the start of a movement to make the rich pay a much fairer share of taxation, and they urge people to join them: go to to find out what you can do this Saturday.

You might ask – so what? What has been changed? To understand how and why protest like this can work, you need some concrete and proven examples from the past. Let’s start with the most hopeless and wildly idealistic cause – and see how it won. The first ever attempt to hold a Gay Pride rally in Trafalgar Square was in 1965. Two dozen people turned up – and they were mostly beaten by the police and arrested. Gay people were imprisoned for having sex, and even the most compassionate defense of gay people offered in public life was that they should be pitied for being mentally ill.

Imagine if you had stood in Trafalgar Square that day and told those two dozen brave men and women: “Forty-five years from now, they will stop the traffic in Central London for a Gay Pride parade on this very spot, and it will be attended by hundreds of thousands of people. There will be married gay couples, and representatives of every political party, and openly gay soldiers and government ministers and huge numbers of straight supporters – and it will be the homophobes who are regarded as freaks.” It would have seemed like a preposterous statement of science fiction. But it happened. It happened in one lifetime. Why? Not because the people in power spontaneously realized that millennia of persecuting gay people had been wrong, but because determined ordinary citizens banded together and demanded justice.

If that cause can be achieved, through persistent democratic pressure, anything can. But let’s look at a group of protesters who thought they had failed. The protests within the United States against the Vietnam War couldn’t prevent it killing three million Vietnamese and 80,000 Americans. But even in the years it was “failing”, it was achieving more than the protestors could possibly have known. In 1966, the specialists at the Pentagon went to US President Lyndon Johnson – a thug prone to threatening to “crush” entire elected governments – with a plan to end the Vietnam War: nuke the country. They “proved”, using their computer modeling, that a nuclear attack would “save lives.”

It was a plan that might well have appealed to him. But Johnson pointed out the window, towards the hoardes of protesters, and said: “I have one more problem for your computer. Will you feed into it how long it will take 500,000 angry Americans to climb the White House wall out there and lynch their President?” He knew that there would be a cost – in protest and democratic revolt – that made that cruelty too great. In 1970, the same plan was presented to Richard Nixon – and we now know from the declassified documents that the biggest protests ever against the war made him decide he couldn’t do it. Those protesters went home from those protests believing they had failed – but they had succeeded in preventing a nuclear war. They thought they were impotent, just as so many of us do – but they really had power beyond their dreams to stop a nightmare.

Protest raises the political price for governments making bad decisions. It stopped LBJ and Nixon making the most catastrophic decision of all. The same principle can apply to the Conservative desire to kneecap the welfare state while handing out massive baubles to their rich friends. The next time George Osborne has to decide whether to cancel the tax bill of a super-rich corporation and make us all pick up the tab, he will know there is a price. People will find out, and they will be angry. The more protests there are, the higher the price. If enough of us demand it, we can make the rich pay their share for the running of our country, rather than the poor and the middle – to name just one urgent cause that deserves protest.

And protest can have an invisible ripple-effect that lasts for generations. A small group of women from Iowa lost their sons early in the Vietnam war, and they decided to set up an organization of mothers opposing the assault on the country. They called a protest of all mothers of serving soldiers outside the White House – and six turned up in the snow. Even though later in the war they became nationally important voices, they always remembered that protest as an embarrassment and a humiliation.

Until, that is, one day in the 1990s, one of them read the autobiography of Benjamin Spock, the much-loved and trusted celebrity doctor, who was the Oprah of his day. When he came out against the war in 1968, it was a major turning point in American public opinion. And he explained why he did it. One day, he had been called to a meeting at the White House to be told how well the war in Vietnam was going, and he saw six women standing in the snow with placards, alone, chanting. It troubled his conscience and his dreams for years. If these women were brave enough to protest, he asked himself, why aren’t I? It was because of them that he could eventually find the courage to take his stand – and that in turn changed the minds of millions, and ended the war sooner. An event that they thought was a humiliation actually turned the course of history.

You don’t know what the amazing ripple-effect of your protest will be – but wouldn’t Britain be a better place if it replaced the ripple of impotent anger so many of us are feeling? Yes, you can sit back and let yourself be ripped off the bankers and the corporations and their political lackeys if you want. But it’s an indulgent fiction to believe that is all you can do. You can act in your own self-defence. As Margaret Mead, the great democratic campaigner, said: “Never doubt that small group of thoughtful people could change the world. Indeed, it's the only thing that ever has.”

Thursday, 28 October 2010

Dark days

There are some dark days ahead and we can all see the storm clouds gathering.
The wefare state is under attack, the public sector is about to take a beating, the pensioners, the physically disabled and those with mental health issues are all in the cross hairs, and if anyone thinks that they will not feel the impact of the biggest ideologically driven attack on our nation that we have ever seen then they better get a grip and get a grip fast.
Now is the time that we need to unify. Not next week, not next month and definately not next year. NOW.
Cameron and Clegg. The tweedle dumb and tweedle dumber public school boys have been given our future to tinker with and the clueless morons are unable to join the dots and see that the changes they wish to implement are nothing more than the first steps on a downwardly spiralling path to oblivion.
Is it that bad though? I mean c'mon we have lived through hard time before.
These are the comments I hear daily.
The answer is that yes, it is that bad.
Break it down to the simplest form.
Cut employment = loss of earnings = tightening of belts = loss of revenue to businesses = lay offs = loss of earnings = tightening of belts = loss of revenue to businesses = lay offs, etc, etc, until we all hit rock bottom.
This is the future, or this is but one of a million futures.
The thing is that as Strummer said "the future is unwritten", but we have to band together to ensure that this one future is not allowed to become a reality.
Rise up today. Sign a petition, ask questions of your mp, become politicized and protect yourself, your family and your friends.

Tuesday, 26 October 2010

It's been a while

Yeah. It's been a while. Much has happened and I've not really had time to devote to the blog. In fact I'm behind with just about everything.
Apart from the usual crap that we all have to face on a daily basis just to get by there has been a death to deal with and the impact that has had on my kids.
It's not been a good few months. That's all I'll say and leave it at that.So while I will apologize for the lack of updates I'm sure that the regular readers can empathize and cut me some slack.
On the music side of things the Mike Peters gig I had booked was a sell out and everyone seemed to have a ball. It's nice when you get emails thanking you for bringing someone to everyones hometown.
It all seems a bit surreal now.
The Dave Sharp gig that was touted has fallen through. Not sure why as the guy dealing with it has went all incommunicado. He has a good rep and is well liked so until I get a message I'm as much in the dark as anyone else.
I'm just glad I hadn't started punting tickets.
Terms have been agreed for Kirk Brandon to do an acoustic set and there is just the date to nail down, but that will be in february, and I'm currently in the middle of trying to sort out TV Smith visiting with The Valentines and doing the whole of "Crossing the Red Sea with the Adverts".
So busy, busy, busy really.
I hope to up some music real soon to, but that's more the idea for next week.