Category Archives: Corporate political nexus

Broken Britain 19: poor redress for war veterans damaged by government policy

At last, the case of people whose health has been seriously damaged caused by infected blood bought by a government agency is coming to the fore. But the plight of farmers, whose health suffered because government compelled them to use organophosphate sheep dips, is yet to be addressed – many affected veterans and farmers have died after long suffering.

OP-affected Richard Bruce writes: Dr Davis and Dr Ahmed wrote some informative papers on the subject. One may be read here: https://psychcentral.com/lib/what-is-functional-magnetic-resonance-imaging-fmri/

Allowed to sink into obscurity

In 1996 Defence minister Nicholas Soames confirmed that many of the soldiers returning from the Gulf War reporting fatigue, memory loss, weakness, joint and muscle pain and depression – a condition now known as Gulf War Syndrome, had been exposed to some sort of organophosphate pesticide.

From the archives:

1999: the US Government accepted that their veterans’ illnesses were mostly due to service in the Gulf. Of their 700,000-plus troops deployed there, 88% became eligible for benefits through their equivalent of the Veterans Agency and 45% had by then sought medical care. The US Government also accepted the extremely serious consequences of using organophosphates.

2000-2001: the UK government funded more research into the effects of organophosphate exposure and poisoning. The results of some studies provided support for the poisoning hypothesis but the research was delayed by the FMD outbreak and only completed in 2007.

2004:  A study published in the British Medical Journal: ‘Overcoming apathy in research on organophosphate poisoning, concluded that high rates of pesticide poisoning in developing countries and increasing risk of nerve gas attacks in the West mean effective antidotes for organophosphates should be a worldwide priority.

2008: the American government concluded an intensive study into the cause of “Gulf War Syndrome” Their $400,000 study found that OPs had causal responsibility for the harm inflicted. This finding was reported to the British Government by the Chief of Defence Staff [RAF].

Conflicts of interest: those campaigning for a ban on organophosphate pesticides have to face opposition from the agro-chemical industry, whose representatives sit on expert committees advising governments on pesticide safety.

As the Countess of Mar explained: There seems to be a nucleus of about 25 individuals who advise on a number of committees. The scientific community is very close-knit and because the numbers of individuals in specialties is small, they will all know one another. They are dependent upon one another for support, guidance, praise and recognition. If they wish to succeed, they must run with the prevailing ethos of their group, department or specialism Hansard 24 Jun 1997: Columns 1555-9

The Scotsman reported the findings of the 2004 independent inquiry into illnesses suffered by veterans of the first Gulf War which was headed by the former law lord Lord Lloyd of Berwick, called on the Ministry of Defence finally to recognise the existence of a “Gulf War syndrome”. It said that it was clear the cocktail of health problems suffered by an estimated 6,000 veterans were a direct result of their service in the 1991 conflict and urged the MoD to establish a special fund to make one-off compensation payments to those affected.

Is the long and inhumane delay due to the fact that the establishment of a link between Gulf War Syndrome and organophosphate poisoning would cost the MoD vast sums in compensation?

 

 

 

 

 

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Populus poll: public sensibly ignoring anti-Corbyn headlines

Brexit, Boris and Trump head the Populus poll which asked which news story, political or otherwise, the public have paid most attention to during the course of that week.

Will Clothier, a senior research executive at Populus, reports in The Times that no more than 5% mentioned the antisemitism story at any point in the past month. In fact, it has never been mentioned by more than 5% since hitting the headlines months ago. He comments (ruefully?):

“ . . . right now this simply is not a big story for most people”

Brexit was outdone though in the second week of the month by one of its architects: the former foreign secretary. His comments about the burka made him the most memorable story of the week for 27% of people.

In August, with Trump’s former campaign manager and his personal lawyer both implicated in financial crimes, the president became the British public’s top story of the week for the second time this year on 20%.

The public may well have seen through the barrage of baseless allegation and innuendo in reports permeating mainstream media. Is their ‘hidden agenda’ now so obvious to the 95% – and even counterproductive?

 

 

 

 

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Media 93: MSM downplays Britain’s role in the latest Yemeni killing & the BBC omits UN experts’ charge

Today, the BBC reports that UN Group of Regional and International Eminent Experts on Yemen will present a report to the UN Human Rights Council next month. It says that the experts believe war crimes may have been committed by all parties to the conflict in Yemen.

Yemeni government forces, the Saudi-led coalition backing them, and the rebel Houthi movement have made little effort to minimise civilian casualties and there have been attacks on residential areas in which thousands have died. The warring parties are also accused of arbitrary detentions, torture, enforced disappearances and recruiting children.

But the BBC failed to mention that the Group of Experts’ report notes that coalition air strikes have caused most direct civilian casualties. The airstrikes have hit residential areas, markets, funerals, weddings, detention facilities, civilian boats and even medical facilities.

Yemenis dig graves for children in the wake of the latest air strike

Lest we forget, the remote-sounding Saudi-led coalition is supported by UK arms sales (including cluster bombs manufactured in the UK) and technical assistance.  British military personnel are complicit – deployed in the command and control centre responsible for Saudi-led air strikes on Yemen, giving access to lists of targets.

The Saudi-led coalition struck last Wednesday and Thursday. Following the attacks on Wednesday, four families in northwestern Yemen, who had decided to leave their homes to avoid such danger, were in a vehicle when airstrikes hit again.

Though Britain’s mainstream media fully reported the killings of 9th August, a search finds no reference to those on the 24th.

CNN did full justice to this atrocity, recalling also that earlier this month, a Saudi-led airstrike hit a school bus carrying scores of boys in Yemen. The attack killed 51 people, including 40 children, according to the Health Ministry. CNN has established that the bomb used in that attack was a 500-pound (227 kilogram) MK 82 bomb made by Lockheed Martin, one of the top US defence contractors.

CNN adds: “There have been growing calls in the US Congress for Saudi Arabia, a key US ally in the Middle East, to do more to prevent civilian deaths in Yemen, where three years of conflict have taken a terrible toll”.

The latest news: yesterday, Barbara Starr, CNN Pentagon Correspondent, reports that the Pentagon has issued a warning to Saudi Arabia that it is prepared to reduce military and intelligence support for its campaign against rebels in neighbouring Yemen if the Saudis don’t demonstrate they are attempting to limit civilian deaths in airstrikes – adding “It is not clear if President Donald Trump, who views the Saudis as an essential ally, would agree to a reduction of support”.

 

But, like the proverbial three monkeys, the failing British government hears, sees and speaks no evil.

 

 

 

 

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Conservative commentator: ‘Cosying up to big donors’ is not a ‘good look’: many a true word spoken in jest

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In the Times today, Tim Montgomerie,  co-founder of the Centre for Social Justice and creator of the Conservative Home website warns: “Tories must beware cosying up to big donors . . . the dependence of the party on chief executive chequebooks is bad politics and makes it vulnerable to populist entryism”

He cites the persistence of Jeremy Corbyn’s support despite the media onslaught, commenting that voters who are desperate for a new economic settlement seem (bewilderingly) willing to forgive or at least overlook (alleged) weaknesses that would have been electorally fatal until recently.

He points out the surge in revenue from Labour’s half a million or so members, which means that the party is getting almost as much money from individuals as it receives from the unions and continues: “The Tories enjoy no such diverse spread of funding”.

While “Corbyn’s coffers” were filled with £16 million of funds from individual supporters, the 124,000 Tory members contributed less than £1 million to their party’s treasury. Over £7 million came from ‘high-net-worth donors’ and big gifts came from dining clubs, at which rich individuals are able to sit down with Mrs May and other cabinet ministers. Montgomerie continues:

“Chasing high rollers has at times led the party to become entangled with former associates of Vladimir Putin. That is not a good look”.

Mrs May’s successor and the nation’s prime minister will be chosen by party members but Montgomerie sees the danger of ‘entryism’. Arron Banks, the businessman who financed Nigel Farage’s Brexit campaign has launched a drive to recruit 50,000 Ukip-inclined supporters to join the Tories.

The support for capitalism is not what it was and deservedly so

Montgomerie advocates building a broad and diverse membership which understands that things are different from the 1980s, when Margaret Thatcher reaped great political rewards from being close to the nation’s wealth-creators:

  • The banks have paid an estimated £71 billion in fines, legal fees and compensation since the 2008 crash.
  • Inflated house prices owe much to the power of a few major builders to restrict the supply of new homes.
  • The service of some privatised railway companies is poor.
  • The pay awards enjoyed by many leading chief executives are unjustifiable.

He adds that the Tory mission today should be the protection of the “little guy” from any concentration of power, whether in commerce, media or the state

He comments “There are some signs that the government gets this”; the apprenticeship levy for example, which is attempting to address “the decades-long failure of British industry to invest in the skills of their workforces”.

Montgomerie concludes that British politics is not corrupt but distorted

By accepting funding and spending so much time with donors from the City and with property developers, the Tories are in danger of being held back from building an agenda that is less southern and more focused on consumer empowerment than producer privilege.

He and his ilk are incapable of understanding the persistence of Jeremy Corbyn’s support despite the media onslaught. Those voters who are ‘desperate for a new economic settlement’ also recognise the character of the man, whose policies are based on justice, not perceived electoral advantage.

The last word is given to Andrew Scattergood (FBU) who sees more clearly than Montomerie: “Jeremy Corbyn has, since first elected as leader, established himself as by far Labour’s best leader, perhaps since Keir Hardie, representing the aims and values of the vast majority of the party membership”.

 

 

 

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Incinerators 7: Cross-party MPs – escalating “incinerator boom” is harmful to public health.

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The Times reports that incineration has grown from 5.5 million tonnes in 2012/13 to over 10 million in 2016/17 according to government data and since 2010 21 incinerators have been built, almost doubling the number in use, with another 18 under construction.

Cross-party MPs warning of an escalating “incinerator boom” releasing harmful particulates, harmful to public health.

UK Without Incineration Network (UKWIN), has launched its report with cross-party support from John Grogan MP (Lab), Philip Davies MP (Con), and Lord Tyler (Lib Dem). They called on the Government to introduce an incineration tax.

The research revealed that harmful particles released by incinerators in England last year were equivalent to the emissions of more than a quarter-of-a-million 40-tonne lorries travelling 75,000 miles per year. This exceeds pollution reporting thresholds for particulates, but the report claimed that “due to a loophole” the public is not informed of the emissions.

A warning about toxic air pollution at a power from waste incineration plant in Billingham, Teeside. 

Despite public resistance, the average incineration rate in the country is rising: about 38%, up from 30% two years earlier.

According to latest figures from the Department for Environment, Food and Rural Affairs, about 342,872 tonnes of rubbish, 69% of all waste, ended up in specialist Energy-from-Waste (EfW) power plants as fuel to generate heat and electricity in 2016-2017.

Many communities have resisted incineration with all the means they had and, for many years, Gloucestershire residents did so, in a saga worth recording in full – see one instance.

Following the disclosure of the full contract and Information Tribunal ruling, Community R4C, a not for profit Community Benefit Society, commissioned two consultants not associated with CR4C, and drew on contributions from other independent experts, to provide evidence on the incinerator contract between GCC and UBB. Main findings:

Construction has started, despite this ongoing investigation by the Competition and Markets Authority into the contract held between the county council and Urbaser Balfour Beattie.

Shlomo Dowen, national coordinator of United Kingdom Without Incineration Network (UKWIN), goes to the heart of the matter: “Many councils are locked into long-term waste contracts that encourage the incineration of recyclable and compostable material.”

An online search supports the observation that some councils have already broken free of waste contracts: on the first page of results Ealing, Lancashire CC/Blackpool, Sheffield, Peterborough were named.

Apologia

Libby Forrest, policy and parliamentary affairs officer at Environmental Services Association, reckons the increase of waste incineration should be celebrated. She said: “Energy from Waste has increased because we are successfully moving away from landfill, which is more damaging to the environment. Energy from Waste saves 200kg of CO₂ per tonne of waste diverted from landfill, and generates low-carbon power far more efficiently than landfill, contributing to renewable energy targets and energy security”.

Jenny Jones (House of Lords) said: “There is a logic to generating energy from the waste that we cannot recycle or reuse, but it is meant to be the last resort option. What we have created instead is a market-driven system of incinerators which constantly need to be fed.”

 

 

 

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Media 88: mainstream silent as the Church of England fails to bless the bomb

Survivors of the Nagasaki bomb walk through the destruction as fire rages in the background.

The third clause in the Bishop of Chelmsford’s motion at the General Synod Debate on the UN Treaty to Prohibit Nuclear Weapons:

(c) commit the Church of England to work with its Anglican Communion and ecumenical partners in addressing the regional and international security concerns which drive nations to possess and seek nuclear weapons and to work towards achieving a genuine peace through their elimination.

It was passed 260 for, 26 against, 21 abstentions.

The first six pages of an online search found no reference to this decision in any member of the mainstream media (MSM) secular press. Only one entry – from the Defence Journal – recorded the event.

Will MSM cloak today’s Anglican news with silence?

Political damage is being done by social media’s highlighting of the austerity-excused trials and deprivations of the poorest and most disabled. Today it has been announced that the church is now reaching out ‘primarily to people under 40-years-of-age who have no current connection with a church’ – on pioneering café-style premises in in coastal areas, market towns and outer urban housing estates.

Threatening? If the basic tenets of Christianity are taken to heart, enormous damage will be done to the sales of:

  • armaments,
  • pornography
  • illegal drugs,
  • junk food,
  • many TV programmes,
  • gambling offers
  • and some sections of the film industry.

And the legal profession’s earnings will slump.

President and former General Eisenhower would have approved of the Synod’s decision. He said : “Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together” (farewell address)

 

 

 

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The FT asks: “Has corruption become more common?”

The frequency of exposures and the political impact of corruption scandals appear to be increasing all over the world, says Gideon Rachman in the Financial Times.

Despite their holier-than-thou aura, he notes that bankers, lawyers, real estate agents and PR firms in the US, UK and EU often share in the proceeds of corruption.

As former US vice-president Joe Biden was reported to have said, at a Defend Democracy conference in Copenhagen, globalisation has deepened rifts, divorced productivity from labour and created less demand for low-skilled labour:

“When people see a system dominated by elites and rigged in favour of the powerful they are much less likely to trust democracy can deliver”.

The most recent example of corruption highlighted on this website follows:

After an initial denial (left, Financial Times), Economia confirmed that in an official response to the French government dated 30 March 2017,  a HMRC official noted that Lycamobile is “a large multinational company” with “vast assets at their disposal” and would be “extremely unlikely to agree to having their premises searched”, said the report.

The letter from HMRC to the French government added, “It is of note that they are the biggest corporate donor to the Conservative party led by Prime Minister Theresa May and donated 1.25m Euros to the Prince Charles Trust in 2012”.

This is an ongoing saga: in 2016 Economia noted: “The Tories have come under fire for continuing to accept donations of more than £870,000 from Lycamobile since December, while it was being investigated for tax fraud and money laundering”. 

Many senior British politicians have taken bribes and many ministers and civil servants move to lucrative positions with companies who have benefitted from legislation supported by these new colleagues – through the revolving door.

The unspoken ethic:

Elsewhere:

  • In South Africa president Jacob Zuma was compelled to resign because of corruption scandals.
  • Dilma Rousseff, the President, was impeached in Brazil in 2016.
  • The Atlantic Council, whose largest funders include the United Arab Emirates, the Abu Dhabi National Oil Company, Airbus Group SE, Crescent Petroleum & the Foreign & Commonwealth Office of the United Kingdom describes the ruling United Russia party as the “party of crooks and thieves”.
  • Narendra Modi came to power in India with a pledge to crack down on corruption among the elites. He has since abolished about 80% of the country’s currency, in an effort to ruin the black economy.
  • In China, President Xi Jinping’s anti-corruption drive has seen more than 100,000 officials arrested.
  • Mariano Rajoy has been forced to resign as prime minister of Spain after seven years in office, following a scandal in his political party.
  • Malaysia’s ruling party lost power after allegations that the prime minister, Najib Razak, had embezzled vast sums.

Rachman believes that corruption has become more common and also easier to expose:

“The globalisation of business and finance opened up opportunities to make corrupt profits in fast-growing emerging economies.

“Industries that often need official involvement, such as natural resources and infrastructure, are particularly lucrative targets. There are contracts to be awarded and development projects that need official approval. And the money for bribes can always be deposited offshore.

“But such malpractice can be exposed. Strong, independent prosecutors and judges such as Brazil’s Sérgio Moro and South Africa’s Thulisile Madonsela have done heroic work in driving forward anti-corruption investigations. Press freedom in Brazil and South Africa has also been critical in keeping up the pressure on corrupt politicians. Even when the national media are muzzled, the internet provides an alternative medium for airing corruption allegations. The “Panama Papers”, which detailed the offshore financial affairs of many prominent politicians, was the result of an international journalistic project and based on hacked documents”.

He adds that new forms of international co-operation and transparency have also made would-be crooks more vulnerable to exposure. Changes in the Swiss laws on banking secrecy — made under pressure from the US — were crucial to allowing Brazilian prosecutors to uncover the proceeds of corruption. International investigations by the Swiss and Americans also kept up the pressure on Malaysia’s Mr Razak.

Lasting progress, Rachman writes, requires strong institutions that can survive changes in the political climate:

  • independent courts and prosecutors with training and resources;
  • a press that cannot easily be bought off, jailed or killed;
  • efficient civil servants who cannot be fired at the whim of a corrupt boss.

He points out that if any of those elements are removed, corruption seeps back into the system.

The “clean hands” investigations in Italy in the early 1990s swept away many powerful figures — and were seen as a watershed. But Rachman cites the case of Silvio Berlusconi, tried 22 times on charges ranging from tax evasion and bribery to corruption and association with the Cosa Nostra. He was  convicted of tax fraud in an Italian court and sentenced to four years’ imprisonment – served as community service – but has now been cleared to stand for election as prime minister once again.#

 

 

 

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Bad decisions by government 37 – third runway at Heathrow

 

UK aviation policy is primarily predicated on the requirements of airport operators, major airlines and the Treasury – the needs of passengers come last says Steve Beauchampé in The Birmingham Press. 

The governments long-awaited – and unsurprising – decision to proceed with construction of a third runway at London Heathrow is fundamentally flawed, supported with redundant arguments and highly questionable financial assessments. If the UK had a comprehensive and comprehensible national aviation strategy Heathrow would not be operating at anything like 95% of capacity.

That it does so is the result of a system that essentially forces millions of UK passengers per annum to travel long distances, often in arduous and stressful conditions, to use both Heathrow and London’s two other main airports (Gatwick and Stansted) at great cost both to themselves and the environment. rather than utilising their local airports, many of which are working to a fraction of their capability.

Birmingham International Airport handled 12.9m passengers in 2017 but could cope with around double that number. Meanwhile, Nottingham East Midlands welcomed a paltry 4.88m whilst major population centres such as in the North East, South West, South Wales and along the south coast are all but bereft of decent flight choices. This is not only down to the London-centric approach which blights so many activities in the UK, but the failure of successive governments to challenge and take on the vested interests of London airports and the major airlines.

Two key arguments put forward in favour of a third runway at Heathrow are particularly fallacious

The first is that Heathrow must continue developing as a ‘hub’ airport, competing for passengers not with Birmingham, Manchester or even Gatwick, Stansted and Luton, but with Amsterdam, Frankfurt and Dublin and increasingly Dubai!

So a third (and later probably fourth and fifth) runway at Heathrow is essentially required to allow the airport’s operator Heathrow Airport Holdings to attract passengers who will never leave the airport environs but whose visit is solely to transfer from one aeroplane to another, Great news for HAH, who enjoy increased landing fees as a result, and good news for the Treasury, who collect airport tax each time that a passenger takes a flight.

But it is hardly good news for UK travellers who are not being provided with flights from their local airports to the locations that they want and at a time when they want to fly. Indeed the hub strategy encourages those in the north of England, Northern Island and Scotland to take domestic flights to Heathrow and then transfer planes to reach their ultimate destination.

Yet hub airports may soon be an outdated concept, with technological improvements meaning that modern aeroplanes will be able to fly further (and faster) without the need to refuel (its already possible to fly non-stop from London to Sydney). Point-to-point flying seems more likely to be the way ahead. 

The second argument in favour of Heathrow runway expansion is that many airlines do not want to fly out of the UK’s ‘regional’ airports (with the possible exception of Manchester, which handled 27.7m passengers in 2017) and would be unwilling to give up valuable landing slots at Heathrow.

But this argument is unacceptable. We would not tolerate train operators refusing to serve smaller stations nor bus companies running services only on main routes. To combat this attitude the number of slots available at Heathrow needs to be limited rather than endlessly expanded, whilst the national airport strategy that Conservative MP and anti-Heathrow Runway 3 campaigner Justine Greening called for earlier this week should focus on ways to create an environment which encourages airlines to relocate services outside of London and the South East.

This is particularly apposite given that both Birmingham and Manchester airports will be stops on the HS2 network by 2030. And whilst there is a real risk that limiting slots at Heathrow will result in some airlines pulling routes and services out of the UK altogether, the country is a large enough aviation market to offer sufficient paths to profit that most such withdrawals will likely be less than crucial and, in some cases, perhaps temporary.

In agreeing to support Heathrow’s third runway the government have committed to paying £2.6bn in compensation to those communities near to the airport that will be destroyed or significantly affected by the project. To which can be added an estimated £10bn in public funding for the new infrastructure and environmental measures required to support the expansion.

How much better to invest this money throughout the UK to create a national airport infrastructure to meet the needs of the travelling public, and one befitting the worlds fifth largest economy.

 

 

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Broken Britain 18: captured by corporate interests?

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George Monbiot recently pointed out that the Commons report on the Carillion fiasco is one of the most damning assessments of corporate behaviour parliament has ever published. It trounces the company’s executives and board and laments the weakness of the regulators.

But, as Prem Sikka said in his April article, it scarcely touches the structural causes that make gluttony a perennial feature of corporate life.

Both agree that the problem begins with an issue the report does not once mention: the extreme nature of limited liability. Sikka points out that this system, under which executives are only financially accountable for the value of their investment, has also benefited frauds and led to the self-enrichment of executives at the expense of workers, consumers, creditors, pensioners and citizens.

Monbiot adds that the current model of limited liability allowed the directors and executives of Carillion to rack up a pension deficit of £2.6 billion, leaving the 27,000 members of its schemes to be rescued by the state fund (which is financed by a levy on your pension – if you have one). The owners of the company were permitted to walk away from the £2 billion owed to its suppliers and subcontractors. (Left: the former Carillion chief executive Keith Cochrane in Westminster after appearing before the Commons work and pensions select committee)

Monbiot continues: “There is no way that fossil fuel companies could pay for the climate breakdown they cause. There is no way that car companies could meet the health costs of air pollution. Their business models rely on dumping their costs on other people. Were they not protected by the extreme form of limited liability that prevails today, they would be obliged to switch to clean technologies”.

So what is to be done?

Prem Sikka (right) proposes that the bearers of unlimited risks and liabilities should be given rights to control the day-to-day governance and direction of companies.

He advocates including employees and citizen/consumers on company boards – because both ultimately have to bear the financial, health, social and psychological costs associated with environmental damage, pollution, poor products, industrial accidents, loss of jobs, pensions and savings. Through seats on company boards, they could secure a fairer distribution of income, challenge discrimination, curb asset-stripping and influence investment, training and innovation.

Across the 28 European Union countries (plus Norway), most have a statutory requirement for employee representation on company boards – unlike the UK, Belgium, Bulgaria, Cyprus, Estonia, Italy, Latvia, Malta and Romania.

George Monbiot proposes a radical reassessment of limited liability.

He points out that a recent paper by the US law professor Michael Simkovic proposes that companies should pay a fee for this indemnity, calibrated to the level of risk they impose on society. He adds, significantly, that as numerous leaks show, companies tend to be far more aware of the risks they inflict than either governments or the rest of society. Various estimates put the cost that businesses dump on society at somewhere between 4% and 20% of GDP

His own ‘tentative’ and ingenious proposal is that any manager earning more than a certain amount – say £200,000 – would have half their total remuneration placed in an escrow account, which is controlled not by the company but by an external agency. The deferred half of their income would not become payable until the agency judged that the company had met the targets it set on pension provision, workers’ pay, the treatment of suppliers and contractors and wider social and environmental performance. This judgement should draw on mandatory social and environmental reporting, assessed by independent auditors.

If they miss their targets, the executives would lose part or all of the deferred sum. In other words, they would pay for any disasters they impose on others. To ensure it isn’t captured by corporate interests, the agency would be funded by the income it confiscates.

Monbiot then says “I know that, at best, they address only part of the problem” and asks, “Are these the right solutions?

  • support them,
  • oppose them
  • or suggest better ideas.

He ends: “Should corporations in their current form exist at all? Is capitalism compatible with life on earth?”

 

 

 

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Broken Britain 16: HMRC refuses to investigate money-laundering and tax fraud charges by largest Conservative donor

Three classes of British looting: which is the most culpable?

Professor Prem Sikka, Professor of Accounting at University of Sheffield and Emeritus Professor of Accounting at University of Essex, draws attention to the case of the UK telecoms giant Lycamobile, the biggest donor to the Conservative Party, which has accepted £2.2m in donations since 2011.

Her Majesty’s Revenue and Customs (HMRC) has refused to assist the French authorities and raid Lycamobile’s UK premises in order to investigate suspected money laundering and tax fraud.

Economia, the publication for members of the Institute of Chartered Accountants in England and Wales (ICAEW) which covers news and analysis on the essential issues in business, finance and accountancy, reports:

Following an initial denial (left, Financial Times), Economia confirmed that in an official response to the French government dated 30 March 2017,  a HMRC official noted that Lycamobile is “a large multinational company” with “vast assets at their disposal” and would be “extremely unlikely to agree to having their premises searched”, said the report.

The letter from HMRC to the French government added, “It is of note that they are the biggest corporate donor to the Conservative party led by Prime Minister Theresa May and donated 1.25m Euros to the Prince Charles Trust in 2012”.

This is an ongoing saga: in 2016 Economia noted: “The Tories have come under fire for continuing to accept donations of more than £870,000 from Lycamobile since December, while it was being investigated for tax fraud and money laundering”.

In 2016 In May it emerged that KPMG’s audit of Lycamobile was limited due to the complex nature of the company’s accounts. Later, KPMG resigned saying it was unable to obtain “all the information and explanations from the company that we consider necessary for the purpose of our audit”.

HMRC: “has become a state within a state”.

Prem Sikka (right) continues, “The House of Commons Treasury Committee is demanding answers to the Lycamobile episode – but HMRC is unlikely to prove amenable”.

In recent years, the Public Accounts Committee has conducted hearings into tax avoidance by giant global corporations such as Microsoft, Amazon, Google, Starbucks, Shire and others. The hearings have not been followed by HMRC test cases.

The Public Accounts Committee has also held hearings into the role of the large accountancy firms in designing and marketing avoidance schemes and exposed their predatory culture. In a telling rebuke to PricewaterhouseCoopers, the Committee chair said: “You are offering schemes to your clients—knowingly marketing these schemes—where you have judged there is a 75% risk of it then being deemed unlawful. That is a shocking finding for me to be told by one of your tax officials.”

Despite the above and numerous court judgments declaring the tax avoidance schemes marketed by accountancy firms to be unlawful, not a single firm has been investigated, fined or prosecuted.

There are real concerns that HMRC is too sympathetic to large companies and wealthy elites.

A major reason for that is the ‘revolving door’, the colonisation of HMRC by big business and its discourses: its current board members include non-executive directors connected with British Airways, Mondi, Anglo American, Aviva, PricewaterhouseCoopers and Rolls Royce.

After a stint at HMRC many of the non-execs return to big business. Corporate sympathies are therefore not counterbalanced by the presence of ordinary taxpayers or individuals from SMEs and civil society.

Sikka ends: “In such an environment, it is all too easy to turn a Nelsonian eye on corporate abuses and shower concessions on companies and wealthy individuals”. Read more here.

 

Why should we care?

Because tax revenue pays for the services used by all except the richest, the education health, transport and social services, increasingly impoverished by funding cuts imposed by the last two British governments.

The Shadow Chancellor has twice called for more rigorous examination and tightening of processes at HMRC to ensure that corporations and wealthy individuals are free from political corruption and pay fair rates of taxes.

Will the next government elected be for the many, not the few?

 

 

 

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