Guest blog from GMB, trade union

Posted on Fri 6th Jun 2014, 8:30am
This is a guest blog from Martin Smith, National Organiser, and Eamon O'Hearn Large, National Officer, from the trade union GMB encouraging people to get along to the Vodafone demo near them on the 14th.

GMB is focussed on making work pay, including paying the rent.

Photo credit: Hugo Michiels, Demotix

93% of new Housing Benefit claimants are from people in work as rents soar by 18% a year. Work simply does not pay the rent. Those with mortgages taken out during the height of the bubble live in fear of interest rate rises. Thousands live in fear of eviction through the bedroom tax.

Grasping landlords have exploited rising house prices and put rents up year on year knowing the Housing Benefit fund will pay. The Right to Buy scheme of the 1980s that provided for the cheap sell-off of council houses, the collapse in house building over the last 30 years, the promotion of the buy to let industry and the ending of any controls on rents, have all set the scene for this great rent robbery by landlords. Only landlords can cut rents and only rent controls will make them.

But welfare dependency is not limited to greedy landlords. GMB research confirms the Jospeh Rowntree Foundations calculation that most employers paying less than £10 per hour for a 40 hour week rely on the fact their workers will claim in work benefits to keep body and soul together. A huge subsidy from taxpayers to the profits of poverty wage employers and further proof that £7.65 an hour is a state subsidised wage not a “living wage”.

To add insult to injury many corporations addicted to taxpayer subsidies of their low pay are also those that engage the most in complex tax avoidance schemes. A new business model is emerging - combining tax dodging and wage dodging while holding taxpayers to ransom with threats to cut jobs and relocate abroad. Picking our pockets at work and at home.

Starbucks, Next, Amazon, Vodafone – the list is almost endless and part of building unions in these businesses is exposing their tax affairs to demand they give a greater share of their hidden off-shore profits to their workforce – and back to taxpayers to fund house building and public services.

The reality for many workers In the UK right now is that unemployment is being replaced by state-supported under-employment at a faster rate than ever, trapping millions in a revolving door between unemployment benefits and in work benefits. Jobs that were 40 hours a week and permanent are being split into zero hours or 4 hours a week casual contracts and workers sent to the dole office to claim in work benefits. For the 2.6 million workers who earn less than £6.80 an hour, the minimum wage has become a maximum wage – a ceiling on their aspirations rather than a floor on their wages. For the first time ever, most people classed as living in poverty come from working families.

Food banks and in-work benefits can keep body and soul together when pay packets aren’t enough to make ends meet. But only employers can make work pay and only trade unions can ensure they do.

GMB encourages all members to get active and join their local Vodafone actions on the 14th.

Join the national day of action against Vodafone on June 14th. Find your nearest action here, or organise your own.

See you on the streets.

UK Uncut speak to the Artist Taxi Driver!

Posted on Tue 3rd Jun 2014, 7:45pm
UK Uncut speak to the one and only Chunky Mark, Artist Taxi Driver

Check it out...

Part 1:

Part 2:

Part 3:

Join the national day of action against Vodafone on June 14th. Find your nearest action, or organise your own.

See you on the steets.

The dodgy house of Vodafone

Posted on Wed 28th May 2014, 7:48pm

In this guest blog Richard Brooks, author of The Great Tax Robbery, explains why Vodafone's tax dodge is still so scandalous.

Vodafone epitomises 21st century international corporate tax avoidance.

When the company took over German engineering company Mannesmann in 2000, it structured the deal using a Luxembourg holding company and twice as much internal debt than the whole group had really borrowed. This financial alchemy enabled it to funnel billions of pounds of otherwise taxable profit as interest payments from Mannesmann and other European operations into a Luxembourg company taxed at less than 1%. With tax dodging shaping the business, Luxembourg became (on paper) Vodafone’s most profitable territory without selling a single phone contract.

Under British tax law at the time, the profits of a UK multinational diverted into a tax haven would have been taxed in the UK. Indeed, the Labour government had not long before enacted specific legislation to ensure that the arrangement Vodafone proposed was caught. But after unsuccessfully lobbying for a concession, the company went ahead anyway and argued that European law (never intended to facilitate tax avoidance) overrode UK law.

A decade long legal battle ensued, during which time Vodafone repeated the trick with its investment in US firm Verizon, through another Luxembourg company. Despite holding the upper hand after a 2009 Court of Appeal ruling that Britain’s tax law could be compatible with European law, HM Revenue and Customs boss Dave Hartnett struck a deal with Vodafone and its adviser David Cruickshank (the chairman of Deloitte with whom Hartnett personally negotiated many big cases and who would soon become his employer!) The company would pay just £800m tax and a further £450m over five years (a time-to-pay arrangement that ordinary taxpayers would never be allowed) and have a free pass for the future. At the time I estimated the deal was worth around £6bn to Vodafone, but since this excluded the US transaction that was diverting around $2.5bn a year profits into Luxembourg yearly from 2006, it looks like an under-estimate.

 Multinationals don’t like working this hard for their tax breaks and, while the Vodafone legal wrangle went on, they had set about persuading the government to change the law so that schemes like Vodafone’s automatically work. In 2010 George Osborne’s Treasury created a series of working groups to propose new rules, including one to address offshore financial schemes like those used by Vodafone to shift profits into tax havens. On it sat… Vodafone’s tax director (and former senior HMRC official) John Connors. The group duly produced just what Vodafone wanted and George Osborne obligingly enacted the changes in his 2012 finance bill.

 In an unguarded conversation with City analysts in 2010 Vodafone’s finance director confided that “a reasonable proportion of the group’s free cash flow [around £6bn a year] obviously does come from the tax efficient structuring”. The phenomenal size of the advantage became clear recently when the company brought onto its balance sheet a “tax asset” of £17.4bn. This represents the reduction in future tax bills (over twice the UK’s annual aid budget) that Vodafone will enjoy by diverting profits from around the world into Luxembourg thanks to Britain’s emasculated corporate tax law.

So Vodafone first defied British tax law, then negotiated an escape from its full effect, then helped change the law so its schemes would never be caught again. The result is tens of billions of pounds kept from government budgets. Or, in language the tax accountants wouldn’t understand, millions of people deprived of the education, healthcare and benefits they deserve.

 That’s something worth protesting about.

Join our action VodaHome on 14th June - See you on the Streets!!
Displaying posts 19 - 21 of 278 in total

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