Bolitics The New Condem Government

[peterms]

So why did the Torygraph pull it? Did Hodge get some sort of injunction?

How dare you? She would never stoop so low.

And the actual story is still available here, at least for now.

Labour MP Margaret Hodge challenged over family firm’s tax

Margaret Hodge's position as chairman of the Public Accounts Committee has been called into question following embarrassing revelations over the tax affairs of Stemcor - the £6.3bn-turnover business controlled by her family.

Conservative MP Pritti Patel has written to Mrs Hodge demanding she re-assess her position as Chair and explain why the steel trading company founded by her father and run by her brother has paid almost no tax in the UK.

In the letter, seen by The Daily Telegraph, Ms Patel says she has “serious concerns over [Mrs Hodge's] position” and that Mrs Hodge had a duty to “both meet, and be seen to meet, the standards to which [she held] others to account”.

In recent weeks, Mrs Hodge has been one of the fiercest critics of tax avoidance practices employed by large multinationals such as Starbucks, Google and Amazon, reports The Telegraph.

On Monday, London Mayor Boris Johnson added his voice to the debate, calling plans for a mansion tax absurd when global firms such as Google were getting away with paying no tax.

Last week, Mrs Hodge accused Amazon, Google and Starbucks of being “immoral” by funnelling profits out of the UK.

But according to Ms Patel, Stemcor has also been engaging in a series of controversial tax avoidance measures in the UK, including “transfer pricing”.

“Given the very serious accusation you made of Starbucks,” writes Ms Patel “that they were ‘exporting profits to minimise tax’,” it raises serious concerns that “a seemingly similar approach [has been] taken by Stemcor.”

Stemcor, where Mrs Hodge declares a “registrable shareholding” was founded by Mrs Hodge’s father Hans Oppenheimer. It employs 2,000 people in 45 countries with a turnover of more than £6.3bn. In the UK, where Stemcor is based, the company generated £2.1bn of sales with £65.2m of profit in the year ending December 2011.

It paid just £157,000 in tax to the Exchequer last year, equating to just 0.01pc of the revenues it booked. Stemcor’s UK tax contribution makes up only 2.7pc of the tax it pays globally, despite generating about one-third of its revenues in Britain.

In the letter to Mrs Hodge, Ms Patel writes: “As Chair of the PAC, you have to be able to hold people to account for their decisions and judgement. My primary concern is that without answers to these questions, you would not be able to carry out your role. There is legitimate concern that your leadership might detract from the objectivity of the inquiry [into Starbucks, Amazon and Google] and could undermine both the authority and integrity of the Committee.”

On Monday, Mrs Hodge said: “I have never played any role in the running of the company, or in any financial decisions. As a responsible shareholder, I have regularly sought, and received, assurances that Stemcor pays its fair share of taxes in the UK.”

She added her direct holding was 1.26pc while shares are held in trust for her family, children and grandchildren.

Separately, broadcaster BSkyB was reported to have avoided £40m a year in tax through the use of loophole involving the publication of a magazine. Until last year BSkyB ascribed a small element of TV subscription fees to payment for its Sky magazine, which was VAT exempt. The company stopped publishing the magazine shortly after the loophole was closed.

Sky said in a statement: “The TV listing magazine that Sky used to publish was, in common with all newspapers and magazines, zero-rated for VAT. Sky directly contributes more than £1bn a year in tax – a total of 1.4pc of all taxes paid by the 100 largest FTSE companies. We’re proud of the significant – and growing – contribution we make to the British economy.”

[Risso]

Her performance at the PAC was embarrassing. Easy to go after unpopular US brands with simple structures, far less newsworthy to go after a steel trader with a huge structure that she wouldn't have a hope in hell of understanding.

[snowychap]

Thanks, Peter.

If Patel has written to Hodge as an MP writing to the chair of the PAC then the letter should be a matter of public record (possibly covered by parliamentary privilege, too*), shouldn't it?

*It would appear that only things accepted as evidence by select committees are and I guess the arbiter for acceptance would be the chair.

[Risso]

Thanks, Peter.

If Patel has written to Hodge as an MP writing to the chair of the PAC then the letter should be a matter of public record (possibly covered by parliamentary privilege, too), shouldn't it?

Copy of letter here Snowy:

http://order-order.com/2012/11/20/letter-from-priti-patel-to-margaret-hodge-tory-mp-says-tax-avoiding-firm-threat-to-hodges-position/

edit: stupid new forum software

[snowychap]

Copy of letter here Snowy:

http://order-order.c...odges-position/

edit: stupid new forum software

Thanks a lot.

Edit: Unless I've missed something then the main accusations are that Hodge is a liar and a hypocrite (the first appears to be factually uncontestable and the second pretty standard fare for political criticism) so I can't see why the Torygraph pulled it unless Hodge injuncted them.

[peterms]

Her performance at the PAC was embarrassing. Easy to go after unpopular US brands with simple structures, far less newsworthy to go after a steel trader with a huge structure that she wouldn't have a hope in hell of understanding.

I don't think any of the MPs did very well, apart from a couple of points made by a tory about country-by-country reporting, which was at least groping towards a solution instead of slack-jawed faux outrage.

But the point is not Amazon, Google and Starbucks in themselves. They are simply illustrative of a larger issue. They serve as useful examples because they are household names. And the fact that they are so brazen and contemptuous is helpful as well.

The point is not to pursue each company individually, which is like trying to catch the wind, but first focus attention on the scale of the problem and how endemic it is, and then enact systemic measures to deal with it. If the hearing has helped in that at all, then it will have been worth putting up with the hypocritical Hodge's Miss Marple impersonation.

[peterms]

Oh dear.

Lord Boothby consorted with the Krays. But the best Dave can do is take backhanders off their doorman.

“Desperate" David Cameron slammed for taking MORE cash from Kray's ex-doorman arrested for stalking

The PM accepted more than £42,000 from steel tycoon Bill Ives, arrested and cautioned for stalking his ex-wife Pearl Adams

DAVID Cameron was yesterday branded “desperate and utterly reckless” for taking cash from a donor exposed by the Daily Mirror as a stalker.

The PM accepted more than £42,000 from steel tycoon Bill Ives, once a doorman for the notorious Kray twins.

The donation followed our revelations that Mr Ives had been arrested and cautioned for stalking his ex-wife Pearl Adams.

One of Britain’s richest men with a £266million fortune, Mr Ives, 68, has previously revealed how Tory fundraiser Lord Andrew Feldman joked with him about his ex-wife.

He said: “He rang me up saying, ‘Your wife’s been on the phone saying you’re going to murder her’.

“He was laughing because he knew it was rubbish.”

But the tycoon agreed to a police caution in April and the Tories accepted a £42,450 donation from his firm in August.

Plaid Cymru MP Elfyn Llwyd said: “It appears to me to be an act of desperation and utter recklessness.”

The Tories also took £850,000 in just three months from donors caught up in the “cash-for-Cameron” scandal, records released by the Electoral Commission yesterday showed.

The money came from 10 super-rich backers treated to intimate lunches and dinners hosted by the PM at Downing Street and Chequers.

And a Chinese telecoms company at the heart of a transatlantic spying row has bankrolled both the Conservatives and Liberal Democrats.

Huawei gave Nick Clegg £10,000 in July and Mr Cameron £8,600 in August.

That was after its offer to install mobile coverage on London’s tube system for free was rejected amid suspicions about the firm’s motives.

A Conservative spokesman stressed that all the donations were “fully and transparently declared to the Electoral Commission”.

[drat01]

Re the energy ting mentioned a page or so back, totally and utterly ill thought out yet again. No legislation at all to protect the consumer and Cameron in his desire to drop another soundbbite that obviously appeals to his supporters fails to admit that many will actually see their bills rise. Energy companies may well have fewer tariff's but their profits will remain and in some cases may even rise

[tonyh29]

the irony being that the largest private owner of utility companies in the UK ( possibly in Europe) is EDF a nationalised company in it's own country

[Risso]

I don't think any of the MPs did very well, apart from a couple of points made by a tory about country-by-country reporting, which was at least groping towards a solution instead of slack-jawed faux outrage.

But the point is not Amazon, Google and Starbucks in themselves. They are simply illustrative of a larger issue. They serve as useful examples because they are household names. And the fact that they are so brazen and contemptuous is helpful as well.

The point is not to pursue each company individually, which is like trying to catch the wind, but first focus attention on the scale of the problem and how endemic it is, and then enact systemic measures to deal with it. If the hearing has helped in that at all, then it will have been worth putting up with the hypocritical Hodge's Miss Marple impersonation.

Can't argue with any of that Peter. The problem is trying to get international cooperation, as it simply won't happen. There will always be the temptation for smaller countries to offer lower tax rates, as they don't usually have anything else to offer.

[drat01]

Another day another massive cock up by this corrupt and incompetent gvmt. So now ts gove and his mob being shown up for major failings. The ill thought out education policy costing a billion pounds more, maybe maths was not on the agenda.?

[peterms]

Hodge threatens Tory MP Patel with libel writ over family shares

It’s a cracking dispute. Labour and Tory women MPs hammering away at each other hammer and tongs.

Margaret Hodge (pictured), the Labour MP who chairs the Commons Public Accounts Committee (PAC), is threatening the Conservative MP Priti Patel with action for libel. At dispute is Hodge’s substantial shareholding in her family’s multinational steel-trading firm Stemcor, at a time when she is leading a parliamentary inquiry into tax avoidance.

Yesterday Margaret Hodge used Twitter to condemn as “totally false”, allegations in a letter by Priti Patel to Hodge in which the Conservative backbencher suggested that Stemcor’s involvement in transfer pricing conflicts with Hodge’s chairmanship of the PAC, at a time when the committee is investigating tax avoidance by major multinational firms such as Google, Amazon and Starbucks. These firms are accused of avoiding UK tax through their own transfer-pricing policies. Last week, amid considerable publicity, bosses of the three firms were grilled by Margaret Hodge and her PAC colleagues.

Hodge has also tweeted: “Wont be deterred from pursuing tax avoidance by petty politicians seeking publicity.”

I first blogged on this issue eleven days ago, and questioned Stemcor’s apparent involvement in transfer pricing – one of the methods used by multinational firms to avoid tax, and which is being explored by the PAC.

(Above: an extract from Priti Patel’s letter)

“There is legitimate concern,” Priti Patel wrote to Hodge, “that your leadership might detract from the objectivity of the inquiry, and could undermine both the authority and integrity of the committee as it produces its report.”

Patel alleged that nine per cent of Stemcor’s total shareholding is in the name of Margaret Hodge, with an estimated worth of £20m. This seems to contrast with Hodge’s comment to me, as reported in my previous blog, that she is only a “tiny, tiny, tiny shareholder”.

The Conservative MP also claims that whilst Stemcor UK accounts for 33 per cent of the multinational company’s worldwide turnover, only three per cent of its worldwide tax contribution is paid in the UK.

Priti Patel wrote to Margaret Hodge. “My priority is that the PAC inquiry is carried out as thoroughly as possible. As chair of the PAC, you have to be able to hold people to account for their decisions and judgement. My primary concern is that without answers to these questions, you would not be able to carry out your role.

She continues: “In light of these concerns, I am writing to ask for a full explanation of the points above. Until we have this explanation, people will question your role as chair of this inquiry.”

“Ultimately, as chair of the PAC, I believe that you must both meet and be seen to meet the standards to which you hold others to account.”

Margaret Hodge insists that Stemcor have promised her that they do nothing to avoid tax, and that she has sought and received assurances from the company and from her brother, Ralph Oppenheimer, the boss of Stemcor, that they do everything “by the books”.

Margaret Hodge tweeted that details of Priti Patel’s letter are inaccurate. “Will be demanding full apology. Everyone should pay full and fair tax. I do.”

How tiny is “tiny, tiny, tiny” as Margaret Hodge put it to me. In a statement Stemcor said that Hodge’s personal shareholding “in her name” in Stemcor is 2,399,600 shares, which is 1.26 per cent of the total share capital. but the company added that “this excludes shares held in trust or in her children’s names.”

In the 2011 Stemcor Holdings Ltd annual accounts, it states that “the company is controlled by RD Oppenheimer, the chairman and his relatives.

“In aggregate they have an interest in 71 per cent of the issued share capital of the company”.

Stemcor also said it was “libellous” to suggest that Stemcor had followed other multinational companies who “may possibly use transfer pricing to avoid or evade tax in high tax jurisdictions”.

On the question of how much tax they pay, Stemcor denied Priti Patel’s allegations, saying: “Over the past five years Stemcor has paid £27m in UK corporation tax, an effective tax rate of 32 per cent based on UK generated profits. This compares to an average corporate tax rate in the UK for the same period of 28 per cent.

“A high turnover gives no indication of profit. Corporate tax is levied against profits, not turnover. As a trading company, Stemcor’s profits tend to be only around 1 per cent of turnover and, in difficult economic conditions, profits are quickly eroded.

“The tough economic environment in the UK squeezed margins during 2011, resulting in a loss of £2.9m on UK operations, which reduced Stemcor’s UK tax payments compared to prior years. In 2009, by contrast, despite the fact that the Stemcor Group globally made an overall loss of £16.5m, a profit was made in the UK and consequently £8.5m was paid in tax that year in the UK.”

In a letter to Priti Patel, Margaret Hodge answers the Conservative MP by referring her to the Stemcor statement, but Hodge also accuses Patel of making a “potentially libelous accusation that my family’s company is engaged in tax avoidance”, and engaging in a “shameless exercise in self publicity”. Hodge also demands that Patel makes a “full and public apology”.

[peterms]

Where should we focus the larger part of our efforts in tackling "leakage"?

[blandy]

It seems obvious....but then Labour and then the tories have been making big cuts in HMRC staff levels and closing offices for the past 8 years.

[peterms]

I can't quite make out the face. Is it Jeremy Hunt?

[drat01]

Another day another example of the scum that litter the political parties

It seems that the Tory party often accused of being racist is fulfilling that accusation quite nicely. The comments from Lynton Crosby, who Cameron wants as his campaigner in chief (Cameron is either very unlucky with his appointments - see Coulson etc -, an idiot or a liar who supports a lot of their views) re Muslims are really quite disgusting. In isolation you would probably say they are the uttering of a fool, but to see that they are agreed with by many in the party shows a big problem that Cameron and Ashcroft prefer to be hidden away so it seems.

Crosby is alleged by the Mail of all people to have said many other things making the "f**ing muslims" comment not just a one off.

[Chindie]

I guess this is kinda the go to domestic politics thread, so what do we make of Rotherham Council taking foster kids off of a UKIP couple?

[tonyh29]

I guess this is kinda the go to domestic politics thread, so what do we make of Rotherham Council taking foster kids off of a UKIP couple?

Bicks mentioned it in another thread that the parents requested their removal from the couple rather than social services .

I've not seen that source yet but if true (not doubting Bicks btw) then it puts a different slant on the story to the one seemingly being peddled out by all the players

But on face value so far it's an appalling and dangerous act by the council

[blandy]

I don't think it was the (elected) council that made the decision, but social services - that's what the radio said, anyway.

[tonyh29]

It seems that the Tory party often accused of being racist

Can't comment on the rest of your post as I've not see the story yet that you at relating to ...

There may be individuals within the party who have questionable views but that doesn't make the whole party racist ... In much the same way that Diane Abbots past "racist" comments don't make the Labour Party racist