Sunday 27 March 2011

UKUncut, unmasked

The actions of that petulant, ill informed, little mob yesterday in London are enough to force Cassius out of retirement.

Having seen a spokesman on Newsnight, Cassius was initially inclined to indulge them - give them the benefit of the doubt we all give to over-eager A-Level economics students. Even the loony left are entitled to a William Hague.

But the real problem with UK Uncut is the danger that their (usually young) followers face when they are taken in by this rubbish. It wouldnt be a problem if they chose to make their case democratically, at the polling booth - open to the scrutiny of their peers - but they dont. Instead of democracy, they stick to publishing innuendo and get their followers to do their dirty work - in the case of Fortnum and Mason by committing aggravated trespass. Getting arrested for a cause you believe in is one thing, honourable even - and to be admired, but getting arrested because you've been taken in by those who would capitalise on your limited understanding of economics is another thing entirely.

UKUncut's modus operandi is subtle, but straightforward. They complain in strident terms about their targets - Boots, Topshop, et. al. - accusing them openly of "tax avoidance" (no taxpayers deliberately pay more than they owe, everyone in the country is guilty), or latterly "tax dodging". This latter label has no meaning at all, but serves to confuse their followers who go on, via twitter, facebook and the rest, to accuse the same companies of "tax evasion" - ie. the deliberate concealment of sovereign liabilities, which is illegal. In doing so the poor protest-fodder are encouraged to commit, or repeat a libel - and one which UKUncut itself, no doubt on advice, has carefully avoided.

To add insult to injury - when you read UKUncut's publications carefully - you will see that despite the headline it is never the shops themselves which are accused of tax avoidance - it is their owners, overseas corporations - or in the case of Fortnum and Mason the charitable Whittington Foundation. UKUncut followers should note well - the shops you are occupying PAY the corporation tax which every company in the UK pays, they PAY the NI contributions of their employees, and they remit their dividends like every other UK company. The only difference is, usually, that they are ultimately owned or part owned by overseas corporations - who account for the dividend stream and pay tax on it in whatever jurisdiction they are resident.

If you want to ban foreign or multi-national ownership of UK companies, come out and say so - explain to your followers that that overseas investors could no longer create factories in the UK, that overseas brands might not have UK shops - and that some British brands might be better leaving UK altogether rather than suffer UK tax on worldwide profits. Explain that the majority of the FTSE100 would be forced to leave London because reciprocal tax arrangements (under which they enjoy the same tax treatment you are complaining about from other countries) would vanish overnight, along with the profits which fund the pensions of the majority of UK taxpayers.

And explain to your followers (if you still have any) that the collapse in tax revenues which would result from your particular brand of protectionism and class war would make the UK the first nation in the world to abandon free trade, and send it into it's own Soviet era. The standard of living in the UK would drop so fast that the current era of austerity would look like a consumer boom.

Come to the ballot box, and use the vote and the freedoms which other, braver, people have fought hard for. Make your case.

But until you do, leave Cassius' grocer alone.



uksceptic said...

It is one thing to disagree with their particular target on Saturday but quite another to compare them to the Kray Twins. (

I think UK Uncut have done some fantastic work just this time they got it wrong. It's important not to lose sight of that.

Pointing out that their supports are usually young and trying to undermine their cause by implying they are just unruly students is patronising to the extreme.

They don't always get it wrong at all. Look at their work done highlighting the £8billion tax bill BRITISH company Vodafone avoided paying by purchasing German engineering company Mannesmann through an off -shore company in Luxembourg. You call them petulant and ill informed but it would appear that you are the only one that is ill informed. Perhaps you should read this simple guide here:

Then defend the cuts to public services the coalition government are making while HMRC are cutting deals with rich multinational companies.

Cassius said...

UKSeptic - Cassius is very well aware indeed of the ruling in the Mannesman case, and (more importantly) of the net tax effect under the Parent / Subsidiary Directive.

The tax you allege that Vodafone avoided is in respect of profits made in Germany, as a result of Germans making calls with German telephones. The basic principal of taxation is that those profits cannot be taxed twice - the EU Parent / Subsidiary directive gives effect to that, and the HMRC settlement properly reflected the correct amount of tax.

What you are saying is that Vodafone should be double taxed as a matter of course, and denied the benefit of the P/S directive available to every other international telephone company. If the UK passed such a law, Vodafone would certainly, and rightly, move it's whole operation to Luxembourg so that it (and the UK pensioners who depend on it) didnt suffer double taxation. The result would be that the UK exchequer would receive much less tax income from Vodafone.

Is this what you and UKUncut are trying to achieve?

Anonymous said...

But Luxembourg is not Germany either? So, what you jabbering on about Cassius?

P.S. Though the F&M currently seems sketchy, we must remain skeptical, as charities are not inherently good despite our obvious assumptions.

Cassius said...

No, Luxembourg is - and has been for many years - a common holding jurisdiction for German (and other European) industrial companies, precisely because it's approach to taxation demonstrates that it will not impose punitive double taxation on an international corporation which is domiciled there.

You might feel that the answer to this problem is to eliminate such "tax havens" - in other words, to eliminate those countries whose own public costs are low enough to permit an internationally competitive tax regime. It's a somewhat different debate, but given unless you are willing and able to impose world government to prevent tax competition, or - in the alternative - to tolerate significant protectionism at each border, this issue will continue and grow bigger.