Poor families robbed by Chancelor

George Osborne's budget is described as 'clearly regressive' by respected fiscal thinktank Institue for Fiscal Studies.

Britain's leading independent tax experts today flatly rejected the coalition government's claims to have shielded poor families from five years of austerity when they described George Osborne's emergency budget as "clearly regressive".

In a direct challenge to Treasury claims that the package of spending cuts and tax increases announced in June was fair, the Institute for Fiscal Studies (IFS) said in a report that welfare cuts meant working families on the lowest incomes – particularly those with children – were the biggest losers.

The IFS said it had always been sceptical about Osborne's claim that the budget was "progressive" but added that this instant judgment had been reinforced by a study of proposed changes to housing benefit, disability allowances and tax credits due to come in between now and 2015.

Passing judgment that is likely to make uncomfortable reading for the Liberal Democrats, the IFS concluded: "Once all of the benefit cuts are considered, the tax and benefit changes announced in the emergency budget are clearly regressive as, on average, they hit the poorest households more than those in the upper middle of the income distribution in cash, let alone percentage, terms."

Nick Clegg, the Lib Dem leader, has argued that the budget represented "progressive austerity" by sparing the poorest families from the brunt of the attack on the UK's record peacetime deficit.

Yet all the while the rich get richer, and pay no taxes, and the bankers get their bonuses. Same old Tories it seems.

Defence Secretary Attacks.... a Game?

Thats right. At a time when the MoD is facing perhaps our biggest expenditure cuts in history and amidst the Strategic Defence Spending Review, Dr Liam Fox has taken time out from his undoubtedly busy schedule to attack the content of a video game as being "thoroughly un-British".

That the game itself, Medal Of Honor has yet to be released seems to matter not. The game centres of the 2001 invasion of Afghanistan in which players 'go in' with the ISAF forces.

Dr Fox says he is "disgusted" and that "it is shocking that someone would think it acceptable to recreate the acts of the Taliban against British soldiers."

Unfortunately for Dr Fox, the game does not allow for that which he claims. Whilst it is true that in the multi-player game teams can form from the US or opposing Taliban sides, no British troops are included within any of the scenarios.

Hopefully Dr Fox spends more time researching real defence issues and expenditure than he did before attacking this game. Frankly one phone call or a cursory glance at a gaming magazine would have demonstrated the futility of charging up that particular hill!

That said, he has got form for this sort of thing. You might remember Dr Fox extolling the virtues of the Duke of York before the last election. Not Prince Andrew of course, but the Duke who increased the standing army from 50k to half a million to face Napoleon, with the help of 30 odd civil servants! He forgot to mention however, that the housing, feeding, clothing, arming and paying of that massive army was contained within its regimental structures and duplicated endlessly and at vast expense to all the services. It is for most of those functions that the MoD Civil Service side exists. We pay, feed, clothe, arm and house the services at a fraction of the cost of the uniformed equivalent. Furthermore, civillians free up much needed personnel for active service, to march them up hills, and then march them down again.

Nick agrees with us?

Following on from our campaign to expose tax avoidance amongst the super rich, most recently being Sir Philip Green, the Deputy Prime Minister and ConDem'd politician Nick Clegg has finally come around to our way of thinking... while his boss is on holiday!

Liberal Democrat MPs have called for the tax affairs of the government's efficiency advisor Philip Green to be investigated after Nick Clegg pledged to crack down on tax avoidance.

The appointment of the Topshop billionaire last week to head a review of the government's drive to cut public spending was controversial with tax experts and trade unions, who accuse him of avoiding a personal tax bill of nearly £300m.

Green dismissed the criticism as irrelevant, but his role has come under scrutiny again after Clegg said yesterday that clamping down on tax avoidance was on the coalition government's agenda.

Speaking at an event to promote the government's efforts to increase social mobility, the deputy prime minister said: "We are looking at the case for an anti-avoidance rule to ensure that wealthy individuals pay their fair share of tax."

Clegg's comments prompted Liberal Democrat MPs to demand that Green's tax affairs be investigated.

11% error rate on JPA

The Ministry of Defence (MoD) plans to conduct a "major data cleansing exercise" to improve its payroll software, the Joint Personnel Administration system (JPA) following "significant" errors in the payment of allowances and expenses to service personnel.

In March 2009, a Defence Select Committee report found thousands of members of the UK armed forces received incorrect salary payments because of a "catastrophic" computerised payroll system. Initiatives were put in place to improve the £245m system, including the correction of data in service personnel records, extended checking of expense claims and improvements in management information.

While the MoD has reduced the level of likely error from £145m last year, 11% of transactions tested by MoD staff still contained an error in allowances and expenses payments, "There remains significant further work to be done to ensure that a robust control environment is established and that processes are sound," said the report.

The JPA was implemented by IT supplier EDS, now HP, which has been linked to several problematic public sector IT projects, such as the Child Support Agency system.

Taking the P, out of PFI!

If an example of how far we have gone in our reckless mad dash towards privitisation of the whole public estate, the image presented here seems to sum it up.

A gents toilet in a privately maintained government building has been awaiting repair of a urinal for the best part of three weeks.

Doubtless the pressure on the the other two has caused a failure of the second urinal...

... and will no doubt hasten the demise of the third.

It seems a fitting reminder about how the push for 'private profit' has impacted upon us all.

Soon we will have barely a pot to Pfi in.

Vince Cable's dig at Sir Philip Green's tax status

Mythical financial genius Vince Cable (against public spending cuts before the election, in favour of Tory spending policies after...) has launched a thinly veiled attack on billionaire Sir Philip Green's tax arrangements.

In a swipe at the new Whitehall adviser on public sector waste, the Business Secretary said: 'I remain of the general view that British businesspeople should pay their taxes in Britain.'

Sir Philip Green you will remember famously has his business billions held by his wifey and kiddies in Monaco... so he doesn't have to pay any tax.

Five years ago his company paid his missus and the sprogs a dividend of £1.2 billion pounds. Thats one thosand and two hundred million pounds by the way. This was tax free. This effectively deprived the nation of around £450 million pounds.

The sad part is that this man is just the tip of the iceberg. There are thousands like him who avoid paying tax and do so by cosying up to whichever party looks like getting power. In this case a Labour supporter before 2010, a Conservative supporter since reading the writing on the wall!

Is it any wonder Cameron targets benefit cheats but lets the real scroungers get off for free!? Not only that, he gives him a responsibility in government.

Thought for the day.

Fox outlines backroom cuts to make MoD 'leaner'

But where will SPVA sit, if at all?

The Defence Secretary set out plans today to reorganise the MoD into three pillars: policy and strategy, the Armed Forces, and procurement and estates.

Frankly, it seems we sit somewhere outside of the MoD according to the plan. We wonder where? DWP? The Private Sector?

Answers on a postcard to....

'Call Me Dave' calls billionaire to help with cuts.

Billionaire retailer and mega tax dodger Sir Philip Green is to advise David Cameron on cutting Government spending. The Monaco resident has been recruited to lead a review scrutinising the past three years in order to identify waste.

His business empire is mostly owned in the name of his wife Tina because she lives in the tax haven of Monaco, where Sir Philip spends his weekends. The couple moved there in 1998.

This arrangement is thought to have saved the couple tens of millions of pounds in tax over the years. He famously paid his family a £1.2billion dividend in 2005. Lady Tina was able to receive the dividend tax-free because she is an official resident of Monaco.

Asked about his wife's tax status he replied: 'My wife's not a tax exile - my family do not live in the United Kingdom, it's somewhat different.'

And questioned over whether Britain would benefit from owners of British businesses paying all their taxes in the country, Sir Philip added: 'We do pay all our tax in Britain, I think we have paid over the last five years some £300-400 million in taxes on profits that have been made on our company." (Note he spins this answer, as the tax is paid by the company on its profits.)

'I'm a UK taxpayer, I work here every week, we employ 45,000 people in the UK and we have got a £500 million payroll.' (Again more spin. Like most of the other multi-millionaires and billionaires he is a 'UK taxpayer ' in a very limited sense...)

MoD JPA system at risk of cyberattacks

The accounting officer for the Ministry of Defence has said that data losses and weaknesses in the department's information infrastructure has left it vulnerable to virtual attacks.

In the MoD's resource accounts for 2009-2010, Bill Jeffrey says that although the department is working to improve awareness of potential online attacks, the risks to its cybersecurity is still a worry.

The department's Joint Personnel Administration (JPA) system, which provides services including payroll functions and centralised records of service, is also singled out as a problem area by the accounting officer. He says that despite a number of steps being taken to improve the system, "there are still concerns over the quality of elements of the underlying data set".

"This has meant that we still have a number of unresolved issues to do with payments and visibility of data on the numbers of army reservists. As part of plans to address these, the army will be undertaking a major data cleansing exercise," Jeffrey concludes.

NHS facing £65bn 'mortgage' bill for PFI

The NHS in England faces a total bill of £65bn for new hospitals built under the private finance initiative (PFI), six times more than the buildings cost.



Figures obtained by the BBC show that some NHS trusts are spending more than 10 percent of their turnover on the annual ''mortgage'' repayments.

Under PFI, private companies win contracts to build and maintain new hospitals and mental health units and the NHS pays off the ''mortgage'' over around 30 years.

The 103 schemes were valued at a total of £11.3bn when they were built.

But when rising fees and additional costs such as maintenance, cleaning and catering are taken into account, the NHS will have to pay back £65.1bn over the lifetime of the schemes. Some contracts are reportedly so restrictive that trusts are forced to pay hundreds of pounds just to get half a dozen pictures put up.

According to the data, the NHS currently pays back a total of £1.25bn each year but this figure is expected to increase until 2030 when it will hit £2.3bn, the BBC reported.
The final payment will not be made until 2048.


What is even more obscene is that we are paying twice for this, because we have loaned companies in the PFI contracts the money needed to undertake these capital projects at extremely preferential rates. They then not only charge us for what is effectively a self financed 'mortgage', but they also charge us interest on our own money!


You could make it up, but then you wouldn't believe it.

'Call Me Dave' has his priorities...

Writing, rather approriately in the Sun today, on the subject of welfare reform and benefit fraud, the Prime Minister makes the case against himself in a single, revealing, dog-whistling sentence:

That's why benefit fraud is the first and the deepest cut we will make.

Benefit fraud?? Which costs the country £1.5bn a year (or less than 1 per cent of the £155bn budget deficit)?

Not tax evasion or avoidance by the rich, which costs around £25bn?*
Not the £1.6bn lost to the taxpayer in errors and maladministration of the benefits system?
Not the £5bn rail subsidy, which helps fund the multi-million-pound bonuses of fatcat rail bosses?
Not the £2.5bn being wasted by the Ministry of Defence every year?
Not the £4bn prisons budget, which, as the Justice Secretary admits, doesn't cut crime?
Not the £4bn spent annually on a bloody, pointless and catastrophically self-defeating war in Afghanistan?

Nope, cutting benefit fraud. That's Cameron's main mission. I think it speaks volumes about his priorities and his preferences. So much for the veneer of "progressive conservatism".
Mehdi Hasan, New Statesman, 12/08/2010

* It should be noted that Mehdi quotes from a particular set of data that does not include for instance, an even greater slice of tax being lost to the 1000 or so billionaires and multi- millionaires who last year increased their wealth by £77 billion and on which they paid virtually no tax at all... well, perhqaps something like £10 million, but it is hard to tell. Most of them have done deals with the HMRC to pay one-off peppercorn taxes of £10,000 at the beginning of the year to avoid the revenue the problem of actually counting up how much they should really pay.
If one was to look at it coldly, and apply 45% to last years increased wealth alone, that would account for £35 billion pounds for the revenue. That would cover MoD, Afghanistan, Prisons, Network Rail and any welfare cheating!

Who will pay BP spill Bill?

Not only the wildlife and the environment suffer from the BP oil spill. Local residents, fishermaen and the holiday trade have all suffered.

So how about BP? Of course they will suffer too, won't they?

Well, actually... not much. Apart from any fines imposed by the US government for negligence, BP will actually transfer about a third of all costs dealing with the cleanup and compensating businesses directly onto the taxpayers of the UK and the US, deducting all these costs from their taxable profits. This is estimated to be around $10 billion... very nearly the amount 'Call Me Dave' claims benefit cheats are overclaiming by.

What a coincidence!

"Call Me Dave" targets benefit cheats

An "uncompromising" crackdown on benefit cheats will be unveiled in the autumn, "Call Me Dave" Cameron pledged today. The Prime Minister said reducing the £5.2 billion* annual cost of fraud and error would be the "first and deepest" cut in public spending?

"Welfare and tax credit fraud and error costs the taxpayer £5.2 billion a year. That's the cost of more than 200 secondary schools or over 150,000 nurses. It's absolutely outrageous and we can not stand for it."

Well, this is all very outrageous, but for all the wrong reasons. How much more outrageous is the fact that £95 to £120 billion a year is lost to the country in avoided and defrauded tax revenue, nearly all of that from the top percentile of earners and corporations. That is 20 times the the very worst estimate of benefit and tax credit fraud. Thats the cost of more than 3 million nurses and 4000 secondary schools. Perhaps 'Call Me Dave' has his priorities wrong? We wonder why?

*Interestingly, fraud and error was estimated at the maximum as being around £700 million just a few months ago. Now, either benefit cheats have found 800% more ways under this Condem government to cheat the system, or something is very wrong, yet again, with 'Call Me Daves' figures.

More private sector job cuts on way

The government's hope that private sector employers will create enough jobs to make up for public sector cuts have been dealt another blow with news that a growing number of businesses are planning to cut staff.

Just under third of employers – 32% – across the state and private sectors said they expected to make some workers redundant during the next three months. It was a rise on the 29% recorded in the previous quarter, according to a survey run jointly by the Chartered Institute of Personnel and Development and accountants KPMG.

Redundancies were more likely in the public sector, where 36% of employers planned to shed jobs, reflecting cuts for government departments and councils announced by the new chancellor George Osborne in June. But the outlook in the private sector was not much brighter with 30% of employers planning staff cuts, up from 24% three months earlier.

HP: Hany Panky?

Hewlett-Packard Co CEO Mark Hurd resigned on Friday after an investigation found that he had falsified expense reports to conceal a "close personal relationship" with what HP claimed was "a female contractor."

We are not sure what HP contract for, as she turns out to be Jodie Fisher, a 50-year-old adult film actress and reality TV contestant who said on Sunday that she was “surprised and saddened” that Mark Hurd, 53, had lost his job following her allegations.

An HP probe cleared Mr Hurd, 53, of sexually harassing the actress but found he had submitted inaccurate expense reports to conceal a “personal relationship” with her. That she claims that they had not had an affair or intimate sexual relationship only deepens the mystery.

Perhaps the full story is somewhere on a missing data drive.

PCS Campaigns Update

As part of our campaign against the government’s planned cuts, we are calling on all members to help protect our public services. Cuts are neither necessary nor inevitable. In fact, we believe there is an alternative. If you are not a member, please consider joining us and being part of a democratic campaigning union, run by our members, for our members.

For more information on our campaigns, visit www.pcs.org.uk/campaigns. You can also join the PCS Facebook group at www.pcs.org.uk/facebook, and follow on Twitter, www.twitter.com/pcs_union.

Thank you for your invaluable support.

Civil Service Compensation Scheme

Support our campaign to defend the civil service compensation scheme by sending an email to your MP asking them to raise our concerns with Cabinet Office minister Francis Maude and participate in the debate in parliament on 7 September. The government has introduced new legislation that caps redundancy payments which will be debated in Parliament, make sure your MP knows how angry you are about there proposals: www.pcs.org.uk/cscseaction

Have the IEA gone bonkers?

The Institute for Economic Affairs has just released the following apparent admission of insanity!

"In a new research paper released today, the Institute of Economic Affairs argues the coalition's proposals on financial reform will do little to improve the quality of financial regulation in the UK.

The coalition is proposing to abolish the FSA and reallocate its functions between a series of new quangos and the Bank of England. Instead "Does Britain need a financial regulator?" (authored by Philip Booth and Terry Arthur) suggests the regulation of investment markets, financial products, insurance companies and other financial institutions, currently carried out by the FSA and the Pensions' Regulator, should be stopped and these sectors should instead be allowed to self-regulate within a framework of limited primary legislation."

Self-regulate? The bankers?? Have the guys and gals at the IEA been in a coma for the past two years? Or are they really the evidence-denying, bank-defending, free-market fanatics that this press release suggests?

How Bankers... Bank!

The commonly-held view that banks merely lend the deposits of their customers, and profit from the difference between the interest paid to depositors and the rate charged to borrowers is probably the most misunderstood aspect of money and banking today. Banks CREATE credit which is merely a book-keeping entry.

Yes, that is literally creating money “out of thin air”.

This is achieved through the practice of Fractional Reserve Banking. It is literally legalised fraud. UK Banks lend out between 33 and 60 TIMES the amount they hold on deposit.

That's not a misprint they “lend” out far and above what they actually have on deposit.97% of our money supply is created as interest-bearing debt. This debt is simply bank credit, created by private commercial banks for PRIVATE PROFITS. The remaining 3% of the money supply is cash. As bank notes and coins are created by the state, they are supplied debt-free. In fact, banks have to purchase cash from the Bank of England and the Royal Mint and pay the face value for them. The difference between the cost of producing cash and the face value is paid directly to the treasury. This profit is called Seigniorage. This money can be used for public services – without resorting to borrowing or taxation.The problem today is that only around 3% of our money is cash.

Whilst banks (nor anyone else) cannot counterfeit notes and coins, banks are legally allowed to CREATE ‘credit’. This means that ALL new bank “loans” are actually CREATED as a book-keeping entry only. Notice how most of us rarely need to convert that ‘bank credit’ into actual legal tender, or cash. (because of cheques, debit cards, bank to bank transfers etc). We’re merely passing around what is called ‘non-cash’ money.It’s because there is very little cash being used today. For you see, if 97% of our money is created as a debt by private companies, can you not see where the REAL source of the problem lies? Address this and the national debt can be paid off, booms and busts can be eliminated, and taxes can be slashed without reducing public services - all because the interest will no longer be payable.Think about it this way: Why does the nation have to borrow 97% of it's money supply from private companies? It doesn't.

For more information visit: BenDyson

Fixed retirement age to be axed: Updated

According to Workplace Law 30th July, the change to the law is unlkikely to affect private firms as, according to Tom Flanagan, an employment law expert at Pinsent Masons.

"An employer can still justify a mandatory retirement age and use justifications like wanting to balance the workforce and provide opportunities for younger employees," said Flanagan. "The Court of Appeal's ruling sets not that difficult a test, it is not particularly stringent."

Therefore the new law is much less than that previously bragged about by the coalition government and falls far short of that currently in the public sector as introduced under the previous government.

Previous article read: The coalition government is planning to scrap the default retirement age in the UK from October 2011. Under the proposal, employers would not be allowed to dismiss staff because they had reached the age of 65.

Activists, who have long campaigned against the rule, welcomed the proposal as a "victory" against ageism. Currently, an employer can force an employee to retire at the age of 65 without paying any financial compensation.

The only obligation on an employer is to hold a meeting with the member of staff to discuss plans at least six months before their 65th birthday. At the end of that meeting it is entirely at the discretion of the employer whether or not to terminate employment.

'Unresolved problems'

The government has launched the start of a consultation process about scrapping the rule.
Given that an employer must give six months' notice before forcing someone to retire on the grounds of age, it means the changes could be felt from 6 April next year. After that date, no new forced retirement notices could be issued.

The CBI business group criticised the speed of the proposed changes saying it left firms "with many unresolved problems". The government's timetable to scrap the default retirement age would give companies little time to prepare, it added.

However Rachel Krys of the Employers Forum on Age was delighted, saying it was "really unfair" that people had been forced out of jobs because of their age. "We have to stop these blunt discriminators," she added. The charity Age UK, which has led the campaign to end the default retirement age, welcomed the government's plan. Last year it challenged the rule in the High Court but was unsuccessful. "We've fought really hard to get government to do this," a spokesman said. "It is a massive win for hundreds of thousand of employees who are at risk of being forced out of their jobs."

Economic benefit

David Yeandle of the Engineering Employers Federation: "It will make it more difficult for workforce planning" Proposals to change the retirement law formed part of the government's Coalition Agreement, and was included in both parties' manifestos, but previously no deadline had been set. The government hopes the change will encourage people to work for longer, against a background of an ageing population. That could ease the strain on public finances as more people continue to pay tax, while at the same time claiming the state pension.
Activists have argued it could inject billions of pounds extra into the economy.
But some employers are worried it will complicate the job of managing a workforce and add to overall costs.

We would be interested in members views.

Veterans Welfare Service

In July, branch officers at the invitation of VWS management were able to visit the new Veterans Welfare Centres in Centurion, Imjin, Kentigern and in Kidderminster, and take part in meetings with all the VWS staff in SPVA. Many issues were raised and dealt with during these sessions. However, some issues such as continuing connectivity problems for IT persists and are being pursued.

One problem in particular that is of immediate interest to the visiting welfare managers is that of payment for travelling time. As some of you may know, since the economic crises, MoD like all of Whitehall have put tight restrictions on travel, overtime and travel time. There are though, exceptions to all rules as can be seen in the recently released 20100729 Control of Financial Commitments in CTLB:

"Travelling time

7. As for overtime (below), payment of travelling time will only be allowed if authorised explicitly in advance. HLB and SABU holders should delegate authority to do this as appropriate. In all cases, payment of travelling overtime should be kept to a minimum and scrutinised carefully by line managers, and Time Off In Lieu considered as an alternative wherever possible. However, payment for untaken annual leave will not be made where this results. "

On the basis of this instruction, the branch has written to Director of Veterans Services to request that authority should be extended to VWS management that allows discretion to pay travelling time to those welfare managers travelling on official business.

Greedy Bankers

HSBC posts six month profits of £7 billion pounds, an increase of 121% that is likely to be replicated by the other high street banks.

Meanwhile most small to medium sized business have struggled to get loans or maintain existing arrangements with the banks. Even the 'Boy' George Osborne says, "Every small and medium-sized company that I have visited in recent weeks has had some problem with their bank - either they have found it difficult to renew their overdraft or the bank demanded additional collateral, often someone's house." Read More Here

Lloyds and RBS, which received billions from the taxpayer to keep them afloat, are set to unveil profits of nearly £1billion between them. In total, Britain's five biggest banks are forecast to return half-yearly profits of £8.4billion. The extraordinary return to profit is also likely to lead to a return of the massive bonuses widely blamed for helping spark the credit crunch.

You might ask yourself, how do they make such big profits? Well, we are giving it to them. You see, the Bank of England borrows money from abroad at a fixed interest rate... something like 3.6% (thats what the fuss about our Triple AAA credit rating is about). Then they lend it to the banks at something like a 1.5% interest rate. The banks then lend to us at 5.5 to 19.5% interest and pocket the difference. The differential between the cost of borrowing for banks from BoE, and from banks to us, is the biggest in history. So we pay inflated interest rates to the bankers and then pay again through our taxes to fund the cheap money the BoE lends to them.

Then the bankers get huge bonuses, that we have paid for, and on which they generally pay the lower rate of Capital Gains Tax! Therefore we as the public are in an effective, lose, lose, lose, lose scenario. Ever feel cheated?

Addendum: On Monday nights Newsnight, financial experts actually argued that we cannot force banks to lend to help small to medium size business... but government could do more! You could not make it up.

NHS trusts bid to attract private patients

Elite NHS foundation trusts are gearing up to lure private patients from home and abroad as health budgets are squeezed – a decision made possible after health secretary Andrew Lansley said he would abolish the cap limiting the proportion of total income hospitals can earn from the paying sick, you can read more here.

This news brought this to mind the following:

"I warn you that you will have pain–when healing and relief depend upon payment.
I warn you that you will have ignorance–when talents are untended and wits are wasted, when learning is a privilege and not a right.
I warn you that you will have poverty–when pensions slip and benefits are whittled away by a government that won’t pay in an economy that can’t pay.
I warn you that you will be cold–when fuel charges are used as a tax system that the rich don’t notice and the poor can’t afford.
I warn you that you must not expect work–when many cannot spend, more will not be able to earn. When they don’t earn, they don’t spend. When they don’t spend, work dies.
I warn you not to go into the streets alone after dark or into the streets in large crowds of protest in the light.
I warn you that you will be quiet–when the curfew of fear and the gibbet of unemployment make you obedient.
I warn you that you will have defence of a sort–with a risk and at a price that passes all understanding.
I warn you that you will be home-bound–when fares and transport bills kill leisure and lock you up.
I warn you that you will borrow less–when credit, loans, mortgages and easy payments are refused to people on your melting income.

If Margaret Thatcher wins on Thursday–
- I warn you not to be ordinary
- I warn you not to be young
- I warn you not to fall ill
- I warn you not to get old."

Neil Kinnock, 1983