I listened to the Today programme on BBC Radio 4 this morning as Jim Naughtie interviewed Margaret Hodge MP, the chair of the Public Accounts Committee in parliament, and Bill Dodwell, head of tax policy at Deloitte, one of the ‘Big Four’ audit, tax, consulting and corporate finance service firms, along with PricewaterhouseCoopers (PwC), Ernst & Young, and KPMG.
During the interview, the discussion turned to Starbucks, whose tax and corporate services adviser is Deloitte. The point was made that global companies are driving a coach and horses through tax legislation, allowing them to escape paying their fair share of the tax burden by using ‘transfer pricing’, which refers to internal transactions within global businesses. Prices are charged for goods and services between businesses that are under the same overall ownership but operating in different countries. Clearly different nation states have different tax implications for such businesses. As the prices are set by those within an international corporate structure, it is wholly possible that they do not reflect the price that would be found externally in a competitive market. Clearly this ‘inter-trading’ gives tax authorities an enormous headache: Multi-national corporations have the ability to set costs for goods, known as transfer prices, on cross-border transactions from one jurisdiction to reduce taxable profits in another jurisdiction.
Jim Naughtie broached the subject of Starbucks, citing their record of loss-making and the fact that they paid just £8.6m in corporation tax in the UK over 14 years and made no profit in the last five years. Starbucks had made over £3bn in UK sales since 1998 but had paid less than 1% in corporation tax. The coffee giant had posted losses in each of the last five years and therefore did not have to pay any corporation tax, yet executives told analysts that the UK business was ‘successful’, ‘profitable’ and they were ‘very pleased with the performance’.
Bill Dodwell argued that Starbucks made losses because “their rents are much higher than their competitors and their staff costs.” He was quite serious when he claimed that Starbucks had been a loss-making venture for many years. James Naughtie asked him “Do you think that Starbucks does not make a profit in this country?” to which Dodwell replied “Yes”.
Tax campaigner Richard Murphy from Tax Research UK said: “Starbucks are playing the game here. This is tax avoidance, they’re doing nothing illegal. That doesn’t mean to say it’s right, in my opinion” . He said it showed that the current rules on tax did not work and it was up to politicians to put it right. “When we have a tax system that lets very large companies like Starbucks be on our High Street and pay no tax and are competing with small locally owned businesses who are paying tax on all their profits, then there’s something very clearly wrong with our tax system.”
Starbucks is not alone in legally avoiding its obligations. Facebook was recently criticised for paying just £238,000 in tax last year in the UK despite estimates of making £175m in sales, while earlier this year Google was also criticised for paying just £6m tax on UK revenues of £2.3bn.
You can listen to the interview in an extract from the programme here.
How honest were Francis Maude’s answers about the cost of Thatcher’s funeral?
It is almost a week since Margaret Thatcher’s funeral service, an event organised for the last 5 years by a committee heading ‘Operation True Blue’. The Cabinet Minister, Francis Maude, led the 25 strong committee, but last week he told Jonathan Dimbleby on BBC Radio 4’s ‘Any Questions’ programme that “it’s impossible to say at the moment”. It would seem he could not even estimate the final bill, despite declaring that he didn’t recognise the figures being bandied about after Thatcher’s death. How is it possible for Mr. Maude not to know an estimate of the cost of a funeral that he has been in charge of organising for 5 years?
His answer is more than implausible and I would urge the media and even individuals to challenge his statement by asking for clarification using the Freedom of Information Act. Was Francis Maude aware of the cost of the funeral, or a financial estimate for it, before Margaret Thatcher’s death? The electorate deserves an expedient and honest answer to this question.
With as much division in death as in life, Margaret Thatcher has been laid to rest. The funeral was all that one expected from it, though I missed the wished for presence of the Obamas to give the event a bit of pizzazz. The images of the great and good arriving did little to inspire me and really only served to confirm that modern Britain is not just let down by ‘feckless lefties’. The image to the left doesn’t show Sir Mark Thatcher with the Queen, though you could be forgiven for thinking that Lady Thatcher had had some kind of ‘makeover done before death just to fool the almighty into thinking that he had summoned the wrong one by mistake. One is not amused!
Sir Bernard Ingham arrived, though I am mindful that many young people reading this will be unaware who he is: so I will tell you that he was Margaret Thatcher’s press secretary, a curmudgeonly-looking old fellow who has eyebrows that look like two snow-blown hawthorn bushes. His wife Nancy wasn’t with him, so I can only assume that she was at home sharpening the secateurs ready for another attempt at hacking back the overgrowth upon his return.
David Dimbleby’s commentary on the funeral, which included his comment about Sir Bernard arriving as “the man with the red face”, was subdued and respectful, save one gaffe where he introduced the next part of the service as one of Lady Thatcher’s favourite films and it briefly crossed my mind that we might be shown a clip from Sacha Baron Cohen’s ‘The Dictator’ but sadly that was not to be. The point where I blinked the most was when Mr. Dimbleby commented on the Lord Mayor of London showing Her Majesty into St. Pauls, by announcing “Roger Gifford takes her up the nave.” Dear oh dear, such an unfortunate way to describe the monarch’s passage, but the sadness of the event seemed to render that faux pas unheard by those who I observed listening.
What I could not understand was why the Middletons weren’t invited? Can the circus be called complete without that class-climbing clique? They could have set up a ‘Thatcher dispatched’ gifte shoppe in one of the transepts, perhaps selling blue-edged hankies with a ‘shroud of Turin-like image of Maggie on them. I am sure George Osborne would have snapped up a box, but was he crying about Thatcher at all? Or was it simply the wise words of the Bishop on the fate of individual human destiny that reminded him that he has even less chance of being Prime Minister than Gordon Brown had when he was Chancellor of the Exchequer? Or maybe he was shedding tears at the multi-million cost of the funeral at the Exchequers expense?
Now Francis Maude is telling us that almost every Prime Minister could get a state funeral. I wonder if the Thatcherites will flock to show Tony their respect? How will we cope with Nigel Farage’s ascent up the steps of St. Pauls when it’s his turn?
The Official Chart number two is ‘Ding Dong The Witch Is Dead’ but the BBC played but only seven seconds of the music because, according to Radio One controller Ben Cooper, the BBC “has a duty to inform and educate the young audience”. Once again the BBC shows itself to be patronising and oversteps its duty by not playing a record at the top of the Chart 40. The Director-General of the BBC, Tony Hall is now fully involved in the decision-making process, with the acting director of radio, Graham Ellis, and Ben Cooper, the Radio 1 controller. Imagine that the BBC cut to ribbons material that they considered offensive and then added a patronising explanation. Just think what we might end up with. We would have got this from Chuck Berry: “When I was a little bitty boy, My Grandmother bought me a cute little toy, Silver bells hanging on a string, She said it was my (music ends) – BBC Announcer: “As this record has been manipulated into the charts by people who have a disrespectful objective, we feel we shouldn’t play any more of the music. Sorry.”
John Whittingdale, a Tory MP and chairman of the Commons culture, media and sport select committee, said on the news: “This is an attempt to manipulate the charts by people trying to make a political point. Most people will find that offensive and deeply insensitive.” I am sure people find many songs offensive and, indeed, the BBC play many of those songs, but it is not up to the BBC to censor or redact songs that they play, unless of course the language is profane or indecent. The fact that the charts have been used for protest songs since the early 1960’s seem to have escaped the half-witted Whittingdale, who appears entirely unsuitable to serve on a culture and media committee on our behalf in Westminster. Has he never listened to Bob Dylan’s 1963 song ‘The Times They Are A Changing’?
Redacting this song to a 5 second extract has actually backfired on those who sought to censor it. What is guaranteed is that this song will be remembered as the song that made it to number two in the charts the week that Thatcher died and that it was cut to ribbons by the BBC because of pressure by Thatcher-adulating Conservatives. It might have been better to keep quiet as the resulting publicity and censorship has served only to publicise the matter more than its detractors would have wished. Well done Mr. Whittingdale.
Since the day that Margaret Thatcher died there has been a succession of protests and, equally, a string of establishment figures exhorting protesters to keep within the law. Today that sage advice was jeopardised by an injudicious decision by the BBC.
Those who have downloaded the Wizard of Oz song ‘Ding Dong The Witch Is Dead’ were certainly making a peaceful protest and the fact that this has been frustrated by the BBC may well prove to be an enormous mistake. Many people are disaffected and shocked by the grandiose scale of Thatcher’s funeral. It is as if a great wartime national hero has died. Thatcher was no Churchill, a man who united the country. Thatcher’s strident pursuance of her policies was at the expense of unity, creating a division in British society (Oops! Did I say society?) the like of which had not happened for over three hundred years.
Those who have spoken against Thatcher since her death have been vilified by the press who, with many of the public alike, have officiously demanded that dissenters should show some respect. On the surface that seems a reasonable request, except that many people did not respect Thatcher before her death and want to know why they should respect her simply because she has died? This week has been characterised with abuse being heaped on anyone whose views differ from those perpetuating the insufferable, smug, sanctimonious national eulogy for Margaret Hilda Thatcher.
Alastair Campbell, the communications director for the Blair government, accused the Prime Minister of deliberately politicising the death of Margaret Thatcher: “The Conservatives are supposed to believe in tradition and precedent. Yet Cameron decided to ditch both, tear up his own travel plans, and head back to London effectively to demand a recall of parliament. The break with tradition and precedent, the recall of parliament, and the nature of the funeral arrangements – effectively a State funeral by stealth, without full parliamentary approval – which have politicised the death in a way that was not necessary and risks becoming horribly divisive, that word so often associated with Mrs Thatcher’s style and policies,” he said. When told about Campbell’s accusations, David Cameron arrogantly responded: “Oh, well I think we can discount that.”
The question must be asked: how much would playing this song have affected the Thatcher family: is it really likely that any of them would listening to the Chart 40 show on Radio 1 on Sunday evening? Highly unlikely really, isn’t it? I personally believe that this ding dong, and the protests are much less about Thatcher and more about the absurdity of a near-State Funeral. Cameron and his dimwitted government politicised Thatcher’s funeral and now the BBC have ensured that the peaceful protesters have had their harmless voice silenced.