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Government admits it does not know how well benefit cap is working

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http://www.theguardian.com/society/2013/oct/23/effect-benefit-cap-work-pensions-welfare-official-figures

Work and pensions minister condemns report that found cap not working but is unable to offer official figures

A Conservative minister has admitted that the government does not know how many people the benefit cap is forcing into work, after a new study said the flagship welfare policy was not helping the unemployed or saving money.

Mike Penning, a work and pensions minister, condemned the Chartered Institute of Housing (CIH) report as “fundamentally flawed”, after it estimated that only 10% of those hit by the cap in one London borough, Haringey, had secured jobs or increased their working hours.

However, he could not give a government figure for the number of people affected who were working more as a result.

“We don’t know what the percentage is,” he said. “We know 16,500 have gone into work as this was phased in and we gave Jobcentre Plus the funding to do that.

“In Haringey, we knew there would be issues in the London councils, so we gave them £56m extra, so we’re not surprised we’re doing that. And for the 10% of people that have gone into work, we’re thrilled for them. And we’re also thrilled for hardworking people because this is fair.”

The CIH report looked at early results in Haringey in north London. It found only a handful of the 747 households affected by the cap had secured a job or increased working hours since the cap was introduced six months ago, despite intensive and personalised support from councils and local jobcentres.

Although the policy was shaving £60,000 a week from the benefits bill locally, this amounted to only 1% of the council’s total weekly benefit expenditure. Haringey has spent £55,000 a week on short-term discretionary grants to help claimants affected by the cap to meet rent shortfalls, and thousands more on providing extra welfare and employment advice.

The few capped claimants who had so far moved into employment were already “close to the labour market” and were likely to have got a job anyway, or were already working part-time and had increased their hours, according to Haringey jobcentre officials and charity job advisers interviewed by the CIH.

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Eurobonds scandal: The high street giants avoiding millions in tax

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http://www.independent.co.uk/news/uk/politics/eurobonds-scandal-the-high-street-giants-avoiding-millions-in-tax-8897591.html

Many of Britain’s best-known high street chains are avoiding millions of pounds in tax through the controversial Eurobonds scheme.

Food chains including Nando’s, Pizza Express, Café Rouge, Strada and Pret A Manger have cut their taxable profits by borrowing from their owners through the Channel Islands Stock Exchange. High street retailers doing the same include BHS, the electronics retailer Maplin, Office and Pets At Home. The revelations form the third part of an investigation by Corporate Watch and The Independent into major UK companies using the quoted Eurobond exemption, a regulatory loophole the Government knows about but has decided not to close.

David Cameron is expected to be questioned today in Parliament about the scheme and HMRC’s failure to tackle it. Instead of putting their money in the shares of the companies they buy, the owners – mostly private equity funds – lend it instead. The interest on the loans cuts the UK companies’ taxable income each year and the exemption – triggered because the loans are listed on the Channel Islands Stock Exchange – means the interest goes to the owners tax free. Without this loophole, HMRC could deduct a 20 per cent “withholding tax” from payments overseas and the overall tax saving would be greatly reduced. Yesterday The Independent reported how Camelot had avoided tax using this method and how HMRC was lobbied by financial firms to keep the loophole open.

Murray Worthy, a tax campaigner with War on Want, said: “This isn’t just a niche issue that’s being used by a handful of companies. We’ve seen how angry people are about the ease with which these companies can avoid paying their fair share, [and] the only reason this is happening is because of the influence of big business on the Government’s tax rules.” Gondola Group – which owns Pizza Express, Zizzi and Ask – has avoided as much as £77m in UK corporation tax since it was bought by the Cinven private equity fund in 2006. Cinven loaned Gondola more than £300m at a 12.5 per cent interest rate but only invested £8m in equity. Instead of receiving the interest payments on the loans every year, Cinven has allowed it to accrue on the debt, compounding the amount taken off Gondola’s profits every year. When Cinven sells the restaurants, which it is reportedly considering, it can receive the £276.8m it is owed tax free.

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27/11/13 Having received a takedown notice from the Independent newspaper for a different posting, I have reviewed this article which links to an article at the Independent’s website in order to attempt to ensure conformance with copyright laws.

I consider this posting to comply with copyright laws since
a. Only a small portion of the original article has been quoted satisfying the fair use criteria, and / or
b. This posting satisfies the requirements of a derivative work.

Please be assured that this blog is a non-commercial blog (weblog) which does not feature advertising and has not ever produced any income.

dizzy

Continue ReadingEurobonds scandal: The high street giants avoiding millions in tax

Has the UK Signed Up to Build a Faulty Nuclear Power Plant?

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http://www.huffingtonpost.co.uk/katie-mcque/has-the-uk-signedup-to-bu_b_4136299.html?utm_hp_ref=uk-politics&ir=UK+Politics

by Katie McQue

On Monday, the UK woke-up to the news that the government had struck a deal to build our first new nuclear plant in over 18 years. The 3.2GW plant, named Hinkley Point C, has been touted as a job-maker and a boost to our energy security. Worryingly, however, the design of this nuclear reactor may be flawed, potentially exposing the UK to huge financial risks, as well a gravely unsafe nuclear plant.

The group of firms responsible for building Hinkley Point C; EDF, Areva, China General Nuclear Power Group and China National Nuclear Corp, intend to use nuclear reactor technology that has not yet proven to be successful. In fact, it has caused huge time delays and spiralling budgets in other nuclear projects that are yet to become operational.

Even Ed Davey, the Secretary of State for Energy and Climate change has admitted in an interview that the projects using the same nuclear reactor have a track record of mistakes.

Podcast of the interview with Ed Davey:

http://icisenergy.podomatic.com/entry/2013-06-13T07_38_01-07_00

Hinkley Point C will use Areva’s European Pressurised Reactor (EPR) nuclear technology. It is the same reactor being used in the Flamanville 3 plant in France and two reactors in China, which are all EDF projects. The Olkiluoto plant in Finland, being developed by Finnish utility Teollisuuden Voima, is also using the EPR.

The construction at Flamanville has overrun by four years and costs have doubled. Olkiluoto, meanwhile, has been hit by delays of over six years. Some experts have estimated its budget has tripled. Less is known about the status of the Chinese power plants.

It is probable that Hinkley Point C may meet similar technical difficulties to that of Flamanville and Olkiluoto projects, since these engineering issues have not yet been resolved.

“Nobody is taking bets at the moment. Even EDF are in despair about the EPR reactor,” said Paul Dorfman of the Energy Institute, University College London. “EDF argue that the Chinese projects are going well. But there are rumours that they’re facing similar problems to Flamanville and Olkiluoto.”
http://www.icis.com/heren/articles/2013/05/09/9666925/concerns+over+uks+hinkley+nuclear+technology+could+add+to.html

Moreover, the major issues with this reactor lie with its computerised control system, known and the instrumentation and control system. Experts believe that the computerised back-up system is too similar to the front-end computer. So, if a fault, either technical glitch or cyber-attack damages one of the computers, it will ll likely cause the whole operational system to crash or become uncontrollable.

“If a technical problem occurs with the plant, you need an entirely independent back-up system, which there isn’t. So if you lose the first system, it might take out the second system. This is a problem with the plants being built in Finland and France.” Stephen Thomas, professor of energy policy at the University of Greenwich.

Unlike most reactors, the EPR does not have manual shut-down system, leaving it further vulnerable for malfunction.

The UK government’s Office for Nuclear Regulation (ONR) flagged problems with the instrumentation and control system during its design assessment process. In its quarterly updates on progress, each aspect of the plan was graded by a traffic light-style alert system that represented the difficulty of solving the issues raised.

In August 2012, six issues related to the instrumentation and control system were highlighted. Two were graded as “amber”, meaning that remedying the issue is feasible, but needs prompt attention. Four were given a “red” alert, which, according to the report means the resolving of these issues are “in serious doubt with serious risks apparent”.

But in December 2012 the nuclear regulators approved the EPR design, signing off all of these alerts without much explanation. Many experts have questioned how this is possible, especially since the design faults have not yet been rectified at the Finnish and French nuclear plants. These reports can be found on the ONR’s website.

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Continue ReadingHas the UK Signed Up to Build a Faulty Nuclear Power Plant?

Tax Special Investigation: How Camelot has avoided millions in tax – with help from teachers in Canada

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http://www.independent.co.uk/news/uk/home-news/tax-special-investigation-how-camelot-has-avoidedmillions-in-tax–with-help-from-teachers-in-canada-8895219.html

The great Eurobond tax scandal

Camelot, the company behind the National Lottery, has avoided millions of pounds in corporation tax by exploiting a legal loophole that HMRC failed to close.

The company saved an estimated £10m in tax in the last two years through interest on loans taken from its Canadian owner via the Channel Islands Stock Exchange. Its owner is one of Canada’s largest pension plans, the Ontario Teachers’ Pension Plan board. The revelation comes as the National Lottery has doubled the price of its tickets to £2.

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The Government estimated in 2012 that the loophole was costing the public purse some £200m, but publicly available accounts suggest the true cost could be more than £500m – and probably higher.


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27/11/13 Having received a takedown notice from the Independent newspaper for a different posting, I have reviewed this article which links to an article at the Independent’s website in order to attempt to ensure conformance with copyright laws.

I consider this posting to comply with copyright laws since
a. Only a small portion of the original article has been quoted satisfying the fair use criteria, and / or
b. This posting satisfies the requirements of a derivative work.

Please be assured that this blog is a non-commercial blog (weblog) which does not feature advertising and has not ever produced any income.

dizzy

Continue ReadingTax Special Investigation: How Camelot has avoided millions in tax – with help from teachers in Canada

Tax Special Investigation: HMRC ‘particularly feeble’ over failure to close loophole

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http://www.independent.co.uk/news/uk/politics/tax-special-investigation-hmrc-particularly-feeble-over-failure-to-close-loophole-8895209.html

Despite the tax exemption costing the UK economy at least £500m a year, the  Government bowed to  pressure after intense lobbying from the financial sector to allow companies to use it

The Government chose not to close a tax loophole which costs the UK economy at least £500m a year after intense lobbying from the financial sector, The Independent has learnt.

<snipped>

More than 30 companies are paying more than £2bn in total to their overseas owners every year as interest on borrowings. As these can be deducted from the companies’ taxable UK income, this amounts to a corporation tax saving of around £500m when compared to equivalent investment in shares in the company.

Without the exemption, any tax savings from the interest deductions would be greatly reduced by the 20 per cent withholding tax that HMRC would otherwise take from interest payments going overseas. As many more companies list debt in the Channel Islands, and the loophole also works in other exchanges including Luxembourg and the Cayman Islands, the total tax lost may be significantly higher.

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27/11/13 Having received a takedown notice from the Independent newspaper for a different posting, I have reviewed this article which links to an article at the Independent’s website in order to attempt to ensure conformance with copyright laws.

I consider this posting to comply with copyright laws since
a. Only a small portion of the original article has been quoted satisfying the fair use criteria, and / or
b. This posting satisfies the requirements of a derivative work.

Please be assured that this blog is a non-commercial blog (weblog) which does not feature advertising and has not ever produced any income.

dizzy

Continue ReadingTax Special Investigation: HMRC ‘particularly feeble’ over failure to close loophole