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  • Another election, another round of Nigel Farage hype, with no lessons learned

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    Image of Nigel Farage
    Image of Nigel Farage

    Aurelien Mondon, University of Bath

    Nigel Farage, a man who has never been elected to the House of Commons despite years of trying, has again been allowed to set the agenda in the UK.

    Ten years after Ukip won the European parliament elections, throwing the Conservative party into turmoil and leading David Cameron to promise a referendum on the UK’s membership of the European Union, Farage is at it again. Or more precisely, he is being allowed to go at it again.

    The mainstream elite in the media and in politics who claim to oppose Farage, and who pretend to stand as a bulwark against far-right politics, are again duly buying into the hype he has created for himself.

    We could already feel that hype bubbling as Farage took over as leader of Reform. He’d seen the party’s fortunes rising and started to think there could be something in it for him to step into the campaign.

    We could see it in the coverage of every move he made thereafter – every milkshake thrown, every inflammatory quip quoted and beer drunk, snapped and plastered all over the news as some kind of morbid excitement set in among the media. Finally, something exciting is happening in this otherwise rather dull campaign, where offers of “change” and pledges to be “bold” are hollow slogans for the sides of battle buses.

    To understand how a party which only received 2% of the registered votes in the 2019 general election, failing to get even one MP elected, can get such attention, we must travel back in time.

    Ukip was a party created by a eurosceptic elite, for a eurosceptic elite, to put pressure on the Conservatives via the EU elections. It all seemed a rather desperate move at the time, as the issue was marginal at best.

    The party received 15.6% of the vote in the 2004 European elections and 16% in 2009. But these are second order elections, prone to low turnout and high protest vote. In these settings, Ukip really only received a mere 6% and 5.6% of the registered vote, once turnout was taken into account. Hardly the voice of the “silent majority”.

    The 2005 and 2010 general elections clearly showed the limits of Ukip’s appeal. In 2005, the party received 1.4% of the vote and in 2010, it took 2%.

    Ukip’s election vote share

    A chart showing the performance of Ukip across general and European elections and what proportion that represented of the overall registered vote.
    Ukip results in general elections (GE) and European elections (EU).
    A Mondon., CC BY-ND

    Still, the first “breakthrough” was in 2014 when Ukip won the EU elections with 26.6%. An “earthquake”, we were told. This was the start of the “left behind” myth which served Farage well as it diverted attention away from his elitist stance. The fantasised “white working class” would come to play a key role in shaping the narrative after the victories of both Donald Trump in the US and Brexit. Proper scrutiny of Ukip’s (and Reform’s) programmes (or Trump’s for that matter) would have also shown that beyond typical far-right measures and other gimmicks, their project was always deeply skewed in favour of the wealthy.

    Yet even though Ukip really only received the support of one out of ten registered voters (9.5%) in 2014, in particularly favourable circumstances, the mainstream elite could not get enough of Farage. Finally, the UK had a “populist” contender worthy of the name. They too could feel the same voyeuristic thrills as their European counterparts, watching the “irresistible” rise of the far right (or “populism” to be politically correct, as we would not want to offend the far right, no matter how clear Farage has made his views).

    What is striking is that it is this election which set in motion the 2016 referendum, even though Ukip was the only party running on a platform demanding that the UK leave the EU. For all the talk of “taking back control” and “sovereignty”, this reactionary experiment was decided based on the support of less than 10% of voters. Even in terms of votes cast, the referendum was forced onto almost three out of four voters who had decided to vote for parties who were not formally demanding the country leave the EU.

    In case you missed it… Alamy/Urban images
    In case you missed it… Alamy/Urban images

     

    All this is to say, Farage has simply never been that popular. This is despite him campaigning in incredibly fertile environments in which parts of the media are dedicated to propping him up, and where even those who seemingly oppose his politics cannot get enough of him – as demonstrated by his record number of appearances on the BBC or the countless articles on “populism” in the Guardian.

    Just look at how much coverage a press conference given after one single poll has received, when other parties fail to get issues such as climate change, poverty or social care on the agenda.

    And if you think this is because immigration is people’s key concern, think again. Indeed, as I explored with Lancaster university’s Aaron Winter in a report for the Runnymede Trust, the “immigration issue” is one that is clearly constructed in a top-down manner. Unsurprisingly, when people are asked about the key concerns in their personal lives, immigration doesn’t rate. Ironically, the exaggerated focus on immigration could be argued to be elite manipulation rather than the other way around.

    So, what’s behind the rise of Farage? Well, the same processes which have been at play across much of Europe: the hyping of far-right politics as a diversion. As has become abundantly clear, there is no mainstreaming or rise of far-right politics without the active involvement of mainstream forces who normalise and platform them.


    Want more election coverage from The Conversation’s academic experts? Over the coming weeks, we’ll bring you informed analysis of developments in the campaign and we’ll fact check the claims being made.

    Sign up for our new, weekly election newsletter, delivered every Friday throughout the campaign and beyond.


    The far right then plays a convenient role, serving to scare the electorate at a time when distrust in governing parties is sky high. The message is: “we are bad but they are worse”.

    Yet this strategy is exhausted. Patience has run out and the far right is no longer as repulsive as it once was, now that most mainstream parties mimic its discourse.

    The solution is simple. Stop fighting it on its turf. Instead, turn to issues which are not only core to people’s concerns, but far less amenable to far right hijacking. This takes bold actions and real change though – both being in short supply in our mainstream parties. The Conversation

    Aurelien Mondon, Senior Lecturer in Politics, University of Bath

    This article is republished from The Conversation under a Creative Commons license. Read the original article.

  • Scrap to the two-child benefit cap urge Greens

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    Green Party Co-leader Adrian Ramsay. Wikipedia CC.
    Green Party Co-leader Adrian Ramsay. Wikipedia CC.

    The IFS (The Institute for Fiscal Studies) have today warned that 250,000 children will be hit by the two-child benefit cap next year, rising to an extra half a million by 2029. Green Party Co-Leader, Adrian Ramsay, responded saying, 

    “Greens have unequivocally pledged to scrap the two-child benefit cap in our fully costed manifesto.

    “Today I am urging the Labour Party to show real strength and conviction and join us in making this pledge.

    “This one decision could lift 250,000 children out of poverty.

    “The power to do this will be in Labour’s hands.

    “But I want to be very clear.

    “If they fail to do this, elected Green MPs will not let this rest.

    “We will push them every day of the next parliament demanding that they do what is right.

    “That is what a Green vote will enable – voices in parliament to keep Labour honest on these important issues.”

  • Barclays’ billions of ‘sustainable’ finance for fossil fuel industry is greenwash, says investor

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    Original article by Josephine Moulds , Nimra Shahid republished from TBIJ under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

    The bank has funded the companies behind a controversial pipeline and aggressive oil expansion as part of their commitment to fighting climate change

    Barclays has been branded “totally dishonest” by one of its investors for calling tens of billions of dollars for fossil fuel companies “sustainable finance”.

    The UK high street bank says it is helping to address climate change by raising $1 trillion in sustainable and transition finance by 2030. This includes sustainability-linked loans and bonds, in which a company agrees to meet certain climate-related targets or else face a higher interest rate.

    But these targets can be weak and the penalties for failing to meet them paltry. The company can also use the money raised how it sees fit, meaning supposedly sustainable finance could fund polluting activities.

    Andrew Harper of Epworth, an investment manager owned by the Methodist church that invests in Barclays, said: “We’re concerned because the bank is making such a substantial claim and the public thinks the climate emergency is being worked towards being solved. Meanwhile, the problem is getting worse and worse. We think it’s totally dishonest.

    “If they are calling the financing of any fossil fuel companies sustainable finance, that to me is greenwash.”

    Barclays said: “We are committed to being transparent and report separately on the green finance, sustainable finance and the sustainability-linked finance mobilised towards our $1 trillion target, so stakeholders and investors have a clear understanding of what we are reporting.” It said it set out very clear requirements for energy clients’ targets and transition plans in order to access finance.

    ‘Deeply problematic’ deals

    Barclays helped raise $41bn in sustainability-linked finance for fossil fuel companies last year, according to an analysis by the Bureau of Investigative Journalism of data from LSEG, the financial markets group. The $41bn figure covers the total value of the deals Barclays worked on alongside other banks. Barclays itself counts only the funding it is directly responsible for, which it said was $10.9bn across all sectors last year.

    Katharina Lindmeier, responsible investments manager at the publicly owned workplace pension scheme Nest, which also invests in Barclays, said TBIJ’s findings were “very concerning”. She added: “We’ll be raising this research with their management team directly at the next opportunity.

    “Regulators are looking closely at the issue of greenwashing and if there is any uncertainty, it’s better to be cautious than to mislead customers. Any loans which help companies expand oil and gas infrastructure should not be classed as sustainable.”

    The Financial Conduct Authority, the UK regulator, wrote to banks last year highlighting concerns about this type of loan, including weak incentives, potential conflicts of interest, and low ambition. It said that these may lead to accusations of greenwashing.

    Anders Schelde, chief investment officer of AkademikerPension, another Barclays investor, said sustainability-linked finance for oil and gas companies is “in most cases deeply problematic”. He said: “We don’t count sustainability-linked bonds and loans as green investments in our own accounting because we know there are so many problems with them. The penalties are low and the targets often insufficient.”

    Last year, Barclays helped raise $3bn worth of sustainability-linked loans and bonds for Enbridge, a company that is dramatically expanding oil and gas infrastructure across North America.

    Enbridge is behind the construction of a controversial 1,000-mile pipeline that cuts through Indigenous land in the US to pump tar sands oil. It paid US police to crack down on protesters and has been fined millions of dollars for repeated environmental violations.

    Barclays classifies the Enbridge debt as sustainable because the company has set a target to cut emissions from its own operations. In part, it intends to do this by using solar power to pump oil through its pipelines.

    “The real source of emissions from a company like Enbridge will be from the oil and gas its pipelines help transport,” said Jeanne Martin from responsible investment charity ShareAction. “We do not need greener pipelines, we need to stop the reckless expansion of the fossil fuel industry.

    “If the conditions that a bank sets to provide financing to oil and gas transport companies don’t tackle oil and gas, the bank will be accused of greenwashing.”

    Barclays also helped raise a $2.8bn sustainability-linked loan for Harbour Energy, the UK’s largest oil and gas producer. Harbour extracted the equivalent of nearly 70m barrels of oil last year, which if burned would produce the equivalent of eight coal-fired power stations’ annual emissions.

    Scientists agree that developing any new oil and gas fields will derail climate targets and push global heating beyond 1.5 degrees – which the UN says will threaten lives, food sources and economies worldwide.

    It seems that Harbour is aggressively exploring for new oil and gas as it hopes to extract a further 880 million barrels of reserves in the coming decades. It does not appear from Harbour’s public statements that the company has any plans to shift its focus to renewables.

    Yet Barclays’ loan to Harbour Energy is called sustainable because the company has committed to reducing emissions from the process of extracting oil and gas. This, however, takes no account of the vast majority of Harbour’s emissions, which are generated from burning the oil and gas itself.

    Enbridge paid US police to crack down on protesters opposing its Line 3 pipeline
    Nicole Neri/Bloomberg via Getty Images

    The notorious oil trader Trafigura also benefited from more than $5.4bn in loans that Barclays called sustainable finance. Counting its supply chain and all the emissions generated by the oil it trades and transports, Trafigura was responsible for more greenhouse gas emissions last year than Spain.

    Trafigura’s interest payments are linked to certain sustainability targets, including a pledge to cut emissions – but only from its own operations rather than the burning of the fuels it trades and transports. This accounts for about 1% of the company’s total emissions.

    Trafigura said Barclays was one of 54 banks involved in the deal, and said “sustainability-linked loans are an important tool in incentivising reductions in emissions”. It added that its direct emissions were less than 1% of Spain’s. While it reports its indirect emissions, it does not consider all of them “to be within our current sphere of influence”.

    Enbridge said it takes climate change seriously and is committed to reducing its greenhouse gas emissions. It said sustainability-linked finance plays an important role in meeting emission-reduction goals and supporting the transition to a lower carbon economy. The company also said that the 1,000-mile Line 3 pipeline had local and tribal approvals and met the strictest environmental standards, and that payments to law enforcement were made and administered via a third party.

    Harbour did not respond to a request for comment.

    Barclays said: “Sustainability linked loans and bonds are an important sustainable finance tool, incentivising borrowers, particularly in hard to abate sectors, to achieve sustainability objectives over time.”

    Net-zero banking

    Barclays has committed to cut its emissions – including of the companies it finances – to net zero by 2050. To reach this target, it will have to stop providing money to companies that refuse to shift away from fossil fuels.

    Enbridge’s Line 3 project cuts through Indigenous land
    Tim Evans/Bloomberg via Getty Images

    But a report out today shows that the bank’s funding for fossil fuels increased in 2023 from 2022, which troubled shareholders who have been urging it to reduce lending in line with its climate targets. Barclays was Europe’s top funder of the fossil fuel industry last year, according to the report led by the Rainforest Action Network.

    Lindmeier, the Nest investment manager, said: “We want to see Barclays immediately reduce its financing to companies behind new fossil fuel expansion. Any delays could leave the company more exposed to bad loans and potentially cost them millions of pounds.”

    Laura Hillis from the Church of England pensions board, another Barclays investor, said: “We are looking for banks to produce a clear climate plan and to see the commitments carry through into lending decisions. Our concern is that these fossil fuel financing figures show that is not happening at the pace we’d like.”

    Climate-conscious investors have been putting pressure on Barclays to make good on its net-zero pledge and earlier this year the bank committed to stop providing specific project finance for oil and gas expansion and related infrastructure.

    However, less than 2% of Barclays’ funding for oil and gas last year fell under the label of “project finance”. Almost all of it comes in the form of general, unrestricted finance for the companies undertaking those projects.

    “Barclays’ new oil and gas policy is an important step forward for the bank but it should have gone so much further,” said Martin from ShareAction, which brought together Barclays shareholders to urge the bank to restrict lending to oil and gas companies.

    “Ultimately, the bank has kept the right to finance companies that have plans to massively expand the fossil fuel industry with no strings attached, and that’s a real problem.”

    Original article by Josephine Moulds , Nimra Shahid republished from TBIJ under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

  • HMRC fines zero ‘enablers’ of offshore tax evasion in five years

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    Original article by Ed Siddons republished from TBIJ under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

    Experts say authority is failing to punish the architects of tax-dodging schemes

    The UK’s tax authority has not fined a single “enabler” of offshore tax evasion or non-compliance in five years despite landmark powers introduced in 2017, new figures reveal.

    Industry experts criticised HMRC’s approach as “bizarre” and “bloody pointless” in light of the data, which was released under freedom of information laws to the Bureau of Investigative Journalism (TBIJ).

    They say it shows HMRC’s enforcement is failing to target the architects of offshore schemes while it aggressively pursues the clients, some of whom say they are the victims of schemes sold to them as lawful.

    The findings follow revelations by TBIJ and the Observer that prosecutions for tax crimes have plummeted. HMRC has also not charged a single company or partnership for enabling tax evasion since laws introduced in 2017 provided expanded powers to crack down on the “enablers” of tax dodging.

    Tax evasion and avoidance are key battlegrounds in the forthcoming election. Both Labour and the Conservatives have made ambitious pledges to raise billions through targeted pursuit of tax dodgers and the elimination of tax breaks for non-doms, people living in the UK who claim their permanent home is overseas.

    “The neverending stream of new HMRC powers … are bloody pointless if the powers aren’t then used,” said Dan Neidle, the founder of the independent thinktank Tax Policy Associates and former head of tax at global law firm Clifford Chance.

    He said in primarily penalising the taxpayers, who in some cases believed the schemes were legal because they were misleadingly marketed, HMRC is failing to address “the root source of the problem: the people offshore pimping these schemes”.

    HMRC defines an enabler as “any person who knowingly helps their client to avoid or evade tax”. Targeting them, not just the tax evader, became a central pillar of HMRC’s strategy during the 2010s.

    “Enablers were and still are a big focus for HMRC,” said Michelle Sloane, a tax disputes partner at law firm RPC. “But these figures show their rhetoric on tackling enablers … is clearly not being followed through with action.”

    Before 2014, HMRC struggled to crack down on offshore tax dodging due to limited data on accounts overseas. But that year saw the approval by tax authorities around the world of the Common Reporting Standard, a measure that made financial institutions share information across borders. That allowed HMRC and other tax authorities unprecedented oversight of where taxpayers had stashed money overseas.

    HMRC also began cooperating with other major tax authorities through the J5, a coalition of tax authorities founded to tackle tax evasion and money laundering.

    Meanwhile, the revelations in the Panama Papers in 2016 marked a turning point in HMRC’s pursuit of the middlemen who helped to hide money from tax authorities. The offshore enabler penalty was introduced in 2017, alongside a raft of new powers to make it easier to punish perpetrators.

    The penalty could include a £3,000 fine or 100% of the amount of tax that was dodged, whichever was larger.

    See original article for embedded graphic. Embedded graphic has the title ‘

    Offshore riches

    Money held by UK taxpayers in foreign accounts outstrips a year’s worth of all tax owed in the country’

    But the new figures show compliance enforcement is “not what you’d be expecting, based on their focus on enablers and all the sources of information that they have available to them”, said Sloane. “It’s an area I expect the next government will wish to concentrate on.”

    Stephen Daly, a tax academic at King’s College London, called the lack of any offshore enablers penalties “bizarre”. “Why would the government want to introduce such a power only to leave it sitting idly by?”

    The findings compound pressure on HMRC after revelations that the authority does not know how much is lost to offshore tax dodging each year.

    HMRC estimates that it collects 95% of all the tax owed in the UK, but the remaining 5% accounted for about £36bn in lost revenue in 2021-22.

    And figures HMRC disclosed to Tax Policy Associates in 2021 revealed that UK taxpayers held £850bn in foreign accounts in 2019, of which £570bn was in tax havens.

    ExplainerTax avoidance vs tax evasion: what’s the difference – and which one is illegal?

    However, HMRC said in a freedom of information response to the thinktank that it had not “produced or received any estimates” on how much is being lost to unlawful offshore schemes.

    In June 2022, Lucy Frazer, then financial secretary to the Treasury, said HMRC would produce data on the “offshore tax gap” in 2023. But still no data has been published.

    Whoever wins the election, some experts say they will need to make substantial investments in HMRC’s investigative teams if they want to raise funds for the public purse by closing the tax gap.

    Commenting on the scale of revenue lost offshore, Dan Neidle said, “On the evasion side, we don’t really know, because we’ve got no data – [while] on the avoidance schemes offshore, HMRC seem ineffective at stopping the promoters.

    “If it’s as much as single-figure billions, that’s a good result. But it’s going to take criminal sanctions on promoters to stop this.”

    An HMRC spokesperson said: “We have a strong track record in tackling offshore non-compliance. Since the launch of our No Safe Havens strategy in 2019, we have secured almost £700m from offshore initiatives.”

    Original article by Ed Siddons republished from TBIJ under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

  • HMRC fraud team’s civil inquiries fall by half over five years

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    Original article by Ed Siddons republished from TBIJ under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

    The number of civil tax avoidance leads looked into by HMRC’s Fraud Investigation Service has fallen by almost half in five years, while the number of civil cases it has formally opened has decreased by more than a quarter.

    These figures, obtained by the Bureau of Investigative Journalism (TBIJ) under Freedom of Information laws, raise questions about the tax authority’s performance since the start of the pandemic.

    The findings follow revelations by TBIJ and the Observer in September that prosecutions following HMRC investigations plummeted by two thirds in five years. TBIJ then revealed in January that HMRC has not charged a single company under a landmark 2017 law to clamp down on corporate tax evasion.

    The new figures suggest that the tax authority’s civil enforcement has also declined alongside its use of criminal powers.

    Margaret Hodge MP called on HMRC to “finally crack down on egregious tax avoidance and collect the revenues we desperately need”.

    In the tax year of 2018/19, HMRC’s Fraud Investigation Service opened 37,273 “risks”, a term used to describe a preliminary inquiry into suspected error or false declaration. In 2022/23, that figure fell to just 21,338 – a 43% decline in five years.

    The number of civil cases that were formally opened fell by 28% in the same period, from 17,424 to 12,585.

    “The new revelations that HMRC is failing to make up for [declining numbers of criminal prosecutions] by undertaking more civil investigations is just disgraceful,” said Hodge. “These consecutive failures mean tax dodgers and their enablers can continue getting away scot-free.”

    Stephen Daly, senior lecturer in corporate law at King’s College London, said: “[The number of] investigations has fallen off a cliff, and that can’t be good … If you don’t enforce the rules, then you create a culture in which people don’t have to worry about their tax returns later being checked.”

    Civil inquiries and investigations declined sharply in 2020, when the Covid-19 pandemic interrupted HMRC’s enforcement activity. But despite a significant rise last year, the number of cases remains well below pre-pandemic levels. “If, in fact, this isn’t explained by Covid, then it’s unacceptable,” said Daly.

    A HMRC spokesperson told TBIJ that figures relating to its Fraud Investigation Service “do not take account of our overall compliance activity”, including 300,000 interventions opened in 2022/23. They said the authority has recouped £136bn from compliance interventions since 2018/19.

    Easy targets?

    As well as the general decline in civil cases opened by HMRC’s fraud unit, the number opened by its team for investigating offshore, corporate and wealthy taxpayers has fallen especially steeply, by 56% in five years.

    “Even when [HMRC is] opening civil cases, they appear to be going after the easier, lower value targets,” said Fiona Fernie, a partner at tax advisory firm Blick Rothenberg.

    Last year, HMRC reached one of its highest ever tax settlements when former F1 mogul Bernie Ecclestone paid £650m after pleading guilty to tax fraud – but that success was “the exception, not the rule”, said Fernie.

    Part of the problem is that the UK has an increasingly complex tax code, which makes enforcement action difficult, she said. “The staff are under considerable pressure, we get an increasingly complicated system every year, [and] it’s very difficult to get anybody to keep up with it.”

    Robert Palmer, executive director of Tax Justice UK, said another issue was lack of resources. “We know HMRC is underfunded and resources have been diverted for work on Covid and Brexit,” he said.

    HMRC estimates that it collects 95% of all the tax owed in the UK, a proportion it says has remained stable in recent years. However, it estimates that the remaining 5% still accounts for about £36bn.

    “Parliamentary research shows that when the government invests in HMRC, the return on investment is significant. Until the department is properly funded, vast sums of money owed, often by the richest people and companies, will go unrecovered,” said Palmer.

    The Public Accounts Committee last year found that for every £1 spent on compliance, HMRC recovers £18 in additional tax revenue. “The government is missing the opportunity to recover billions in lost revenue by not resourcing compliance,” it said.

    Original article by Ed Siddons republished from TBIJ under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

    Lead image: Her Majesty’s Revenue and Customs building, London. Credit: Ian Bottle/Alamy Stock Photo