Swears, lies and videotape: Andrew Mitchell, the police and left-wing hypocrisy

In recently exposing discrepancies (which most of us would call lies) in the police story about Andrew Mitchell and ‘Gategate’, Channel 4 has opened a can of worms. No-one can really be surprised that the police may have lied over this incident, after the examples of rumours and false statements following other infamous incidents, such as those involving Jean-Charles de Menezes, Ian Tomlinson, Mohammed Abdul Kahar (the Forest Gate raid) and Mark Duggan.

What is surprising is that so many ‘left-wingers’, who would normally be sceptical of any pronouncement by the police, were ready to believe a confidential police report leaked to the Sun of all newspapers. Well their chickens have now come home to roost.

It’s not that amazing that deadhead Ed Miliband went to ground after the Dispatches programme, here he is using the pleb reference and calling Mitchell “toast”. Has he apologised to Andrew Mitchell and asked David Cameron to reinstate him yet? I won’t hold my breath.

This is typical of the hypocrisy from Miliband, the Labour party and those on the ‘left’ where any Tory is concerned: spouting their usual class-war hatred and spitting vitriol, showing the real face of socialism – the truth that forever undermines their claims that socialism is a caring doctrine. Just watch Ed’s face in that video to see the concern on it.

UK Uncut, Corporation Tax And The Politics Of Envy

Introduction

On Saturday 8th of December the activist organisation UK Uncut held demonstrations at “more than 40” Starbucks Coffee branches across the UK (44 apparently). UK Uncut have a history of activism against companies it considers to be ‘tax avoiders’. Previous “targets” have included Vodafone, Tesco, Barclays and Boots. UK Uncut has boasted that its goal is to protect the taxpayer-funded public services from cuts that the coalition government have said are necessary to reduce the public deficit. UK Uncut instead states that the shortfall can be met solely by clamping down on ‘tax avoidance’ by large companies.

This article is not going to debate the cuts, nor government claims they are necessary.

The Financial Aspects Of Starbucks ‘Tax Avoidance’

From UKUncut’s downloadable flyer:

“What’s wrong with Starbucks? Plenty. UK Uncut are targeting Starbucks over their tax avoidance, in the last three years they’ve paid no corporation tax at all, despite making sales of £1.2bn.”

Interestingly over four years the Guardian Media Group made comparable revenue (sales) and ‘paid no corporation tax at all’. In fact  the group’s revenue from the four tax years 2009-2012 was £1.1bn. It made a cumulative £237.6m loss over this period and received total tax ‘credits’ of £30.4m (made up of refunds in three of the four years). This is a perfectly legal within UK tax law and would have been approved by Her Majesty’s Revenue and Customs (HMRC).

The flyer continues with this brilliant line: “Because of the way they’ve managed to shift money around inside their global corporate empire…” Empire? Who are they subjegating? Which countries did they invade? Can anyone hear Darth Vader’s theme tune now?

Next they say: “Starbucks has managed to pay no taxes by shifting money around between Starbucks companies in different countries, so that its accounts show it made a loss in the UK. As corporation tax is paid on profits, by recording no profits they weren’t due to pay any tax.”

Firstly: “shifting money around”, that is paying another part of the business for goods or services, in this case coffee beans and brand licensing (intellectual property). I would argue that without the coffee beans or the brand it wouldn’t be Starbucks.

Secondly: “its accounts show that it made a loss”. Correct, it made a loss. “…by recording no profits” – because there were none – “they weren’t due to pay any tax.” Correct – next statement of fact please?

So how do the international business experts at UK Uncut propose to deal with this? “The government can clamp down on tax avoidance by changing the UK’s tax rules to stop companies funnelling millions of pounds of profits out of the UK.” Well, sort of. While the UK government can enact legislation concerning corporation tax profits made here, there exist various tax treaties between countries, including the prevention of ‘double taxation’, that is tax charges being levied on the same profits in two countries of operation.

UK Uncut make this solution sound simple; it’s not. Even Paul Lewis, a financial journalist who frequently reports these tax arrangements on Twitter, has said: “The problem about legislating to stop these cunning cross border tax evoidance (sic) schemes is that it involves multinational agreement.”

Corporation Tax Is Confusing

Even worse, UK Uncut admits it has no idea how much tax is ‘the appropriate amount’. Danni Wright, representative of UK Uncut interviewed by the BBC, was unclear on how much tax Starbucks should be paying.

Interviewer: “How much tax do you think Starbucks ought to be paying? I asked your colleague this earlier and she couldn’t tell me. What, what figure do you think they should be paying?”

Danni: “They should be paying, um, you know, the, the appropriate amount. Part of the problem with the tax…”

Interviewer: “Well they’re paying the appropriate amount within the law, they would argue.”

Danni: “Well that’s the problem, you know, it’s about greater transparency of the tax system, stronger regulation and clearer signs from the government as to what the correct amount it.”

So the accusations are based on the fact that Starbucks pays the legally required and approved amount of tax as agreed between itself, its accountants and HMRC, the UK Government’s tax collector; but UK Uncut believes they should pay more. The Guardian, which has paid less tax than Starbucks on comparable revenues, also pays the legally required and approved amount of tax. So why the different approaches to these two ‘tax-avoiding’ companies, as UK Uncut would claim?

The Politics Of Envy

So why target Starbucks, a successful American-owned multinational brand? Is it possibly related to the brand’s inclusion in Naomi Klein’s book on anti-globalisation, No Logo, which criticises Starbucks for aggressive invasion (sic) of a region?

Google, Amazon, Apple and Microsoft, have also come in for criticism for the way they conduct their UK tax affairs, although strangely little has been said about these yet by UK Uncut; maybe they would struggle to survive without these, or is that criticism unfair? (Or should that be UK Unfair?)

Other targets have included the banks that were bailed out by the previous Labour government to the tune of £65bn, Lloyds Banking Group and Royal Bank of Scotland, and, strangely, banks that were not: Barclays and HSBC. The issue UK Uncut appears to have with these banks is that they pay their staff bonuses.

So it’s not just ‘tax avoidance’ – it’s wealth creation in general that upsets these activists. Whether its creators meant it to or not, UK Uncut has become a vehicle for the usual band of ‘anti-globalisation’ (i.e. anti-capitalists), such as Socialist Worker – as can be seen clearly here in this video; watch out for the prominent ‘Tax the rich’ signs at 00:10.

Conclusion

This group no longer has credibility, if it ever did, and its actions at Starbucks are reprehensible. The intimidation of customers and staff (often immigrant baristas) can be seen in this video; chants including “Starbucks: Pay your tax or we will shut you down” demonstrate their attempts at bullying the staff and customers into taking their business and labour elsewhere. It is often wrong on the facts of what has been paid and conversely it demonstrates no concept of what it thinks should be paid. It targets popular businesses but ignores others with similar tax profiles, such as the Guardian (with its similarly dubious approach to reporting corporation tax cases), demonstrating its inherent political bias.

So in summary: a movement that uses implied force, targets a foreign-owned business, but not a comparable organisation that aligns with its politics. Isn’t this how the brownshirts began their brand of revolution?

UK Uncut insists that Starbucks should pay some indeterminate higher amount of tax, not decided by tax legislation enacted by parliament, or enforced with the rule of law, but instead decided and coerced by the baying mob. Witness the politics of envy in action.

Libertarianism, the environment and climate change: the case against conservatism

In their 2010 General Election manifesto the Conservative Party said:

Vote blue, go green. A conservative government will cut carbon emissions and rebuild our energy security. We will make it easier for people to go green , with incentives for people to do the right thing. We will protect our precious habitats and natural resources, and promote a sustainable farming industry. We will fulfil our responsibility to hand on a richer and more sustainable natural environment to future generations.”

It sounds great, doesn’t it? Sadly there has been little evidence on any of these measures, but let us concentrate on climate change for a moment.

There is substantial evidence that the Earth’s climate is changing: the average temperature is increasing, as is carbon dioxide concentration in the atmosphere; these changes are having multiple impacts across the globe, from ice caps melting, ocean acidification and its impact on coral, changes in plankton population etcetera. There are some, mostly educated in unusual sciences, such as English Literature or other subjects particularly useless to this debate, who deny this evidence, or claim there is no correlation to human activity. I am not going to debate with the tinfoil-hat wearing brigade here, as I don’t waste time on other anti-science numpties, such as creationists or the anti-vaccination idiots. I do object to their use of the term libertarian though, as they tar the libertarian movement with their brand of old-fashioned right-wing conservative conspiracy-theorist red-under-every-bed lunacy. But let’s get back on topic.

Whether you agree with anthropogenic climate change or not, we humans dump considerable pollutants into the Earth’s atmosphere, rivers, seas and soil. Anybody claiming to be a libertarian or anarcho-capitalist must recognise that this is in contradiction to our belief in property rights; that humans can dump our waste, whether it be garbage, faeces, DDT or carbon dioxide, into the common areas of the planet without consideration of property rights is socialistic not libertarian. The issue here is two-fold: firstly, that ‘common areas’ exist at all; secondly, that governments have ownership of (effectively ‘control over’) common areas and misuse that ownership. This issue has been identified by many libertarian authors in the past, from David Friedman in Machinery of Freedom (see his chapter on Pollution) and Murray Rothbard in For A New Liberty (see his chapter on Conservation, Ecology and Growth).

As David Friedman states:

“The pollution problem exists because certain things, such as the air or the ocean, are not property. Anyone who wishes to use them as garbage dumps is free to do so. If the pollution were done to something that belonged to someone, the owner would permit it only if the polluter were willing to pay him more than the damage done. If the polluters themselves owned the property they were polluting, it would pay them to stop if the damage they did were greater than the cost of avoiding it; few of us want to dump our garbage on our own front lawns. If all the things polluted were private property, pollution still would not stop entirely. Nor should it; the only way to completely stop producing pollution is for all of us to drop dead, and even that would create at least a short-run pollution problem. The proper objective in controlling pollution is to make sure that it occurs if, and only if, the damage it does is less than the cost of avoiding it. The ideal solution is to convert unowned resources into property. One could, for instance, adopt the principle that people living along a river have a property right in the river itself and that anyone who lowers the value of the river to them by polluting it, without first getting their consent, is liable to suit.”

Friedman goes on to put the blame squarely at the door of government for its lack of responsibility:

“At present, pollution is ‘controlled’ by governments. The governments—federal, state, or local—decide who has enough pull to have his pollution considered necessary. This reduces control to a multitude of separate cases and makes it almost impossible for the victims of pollution to tell what is really going on or to impose effective political pressure.”

Rothbard makes a similar case using the government-owned ranges in the western US as an example. These common lands weren’t allowed to be homesteaded in economically viable units of more than 160 acres and so the commons were over-grazed and destroyed. Similar activities are happening in our oceans currently, as Rothbard goes on to discuss.

As a brief aside, a simple comparison I use here is the question: why have whales, a mammalian species that many people of the Earth have traditionally hunted for meat, oil, bones etc., been driven to the edge of extinction, whereas cows, sheep and pigs are plentiful throughout the planet? The answer is obvious: one category is ‘unowned’ and lives in a public space, the oceans; the other category is ‘owned’ and farmed on private land. The lack of ownership is the problem here. Imagine if we farmed whales – would they now be nearing extinction? We have the technology to do this now – is it any different from other mammalian food sources? [This argument is discussed elsewhere by many, such as Jeremiah Dyke here and Bill Walker here.]

Friedman and Rothbard, both regarded as gurus of the libertarian and anarcho-capitalist movement, have covered more than adequately in their respective manifestos the issue of pollution. They both rightly see it as a failure of government; it has interfered in private property rights, distorting the market and failing in every aspect. Rothbard notes:

“…factory smoke and many of its bad effects have been known ever since the Industrial Revolution, known to the extent Conservation, Ecology, and Growth that the American courts, during the late—and as far back as the early—nineteenth century made the deliberate decision to allow property rights to be violated by industrial smoke. To do so, the courts had to—and did—systematically change and weaken the defenses of property right embedded in Anglo-Saxon common law. Before the mid and late nineteenth century, any injurious air pollution was considered a tort, a nuisance against which the victim could sue for damages and against which he could take out an injunction to cease and desist from any further invasion of his property rights. But during the nineteenth century, the courts systematically altered the law of negligence and the law of nuisance to permit any air pollution which was not unusually greater than any similar manufacturing firm, one that was not more extensive than the customary practice of fellow polluters. As factories began to arise and emit smoke, blighting the orchards of neighboring farmers, the farmers would take the manufacturers to court, asking for damages and injunctions against further invasion of their property. But the judges said, in effect, “Sorry. We know that industrial smoke (i.e., air pollution) invades and interferes with your property rights. But there is something more important than mere property rights: and that is public policy, the ‘common good.’ And the common good decrees that industry is a good thing, industrial progress is a good thing, and therefore your mere private property rights must be overridden on behalf of the general welfare.” And now all of us are paying the bitter price for this overriding of private property, in the form of lung disease and countless other ailments. And all for the “common good””

The most interesting proponent of private property rights as a remedy for environmental failings is Edwin G. Dolan, author of ‘TANSTAAFL: The Economic Strategy For Environmental Crisis‘. Dolan introduces a concept of ‘spaceship earth’, which he adapts from science fiction author Robert Heinlein’s award-winning 1966 classic novel ‘The Moon Is A Harsh Mistress‘. Dolan correctly points out that while the Earth is huge it does have limited resources and is conceptually a spaceship carrying us all in one single confined environment. He makes the case that any pollution from a transaction must include the ‘external’ cost of cleaning up that pollution, or a recompense for the problems that it introduces. By including the external costs then the market can act to reflect this price information.

Interestingly this example brings us on to another point about pollution. Cattle are a massive source of methane, a greenhouse gas considerably worse than carbon dioxide. We often hear from vegetarians that due to the enormous amount of vegetable matter needed to feed our main meat sources, and their considerable lifetime output in greenhouse gases, that we should abandon eating meat and adopt vegetarianism. Ignoring the other factors, including the morality of meat-eating, and focussing on the gaseous (methane and carbon dioxide) output of cows, sheep, pigs, etc., this brings us back to our original issue of all costs not being included in a transaction. Supposing the pollution costs add 20% to the price of meat then how would the market react? Obviously people would eat less meat as price drives down demand. This negative feedback loop would align meat consumption with the true cost to all on the planet.

After years of ignoring the research governments have had to face the facts of climate change (whether right or wrong) and have implemented some legislation, where politically expedient, to try to address this. Two such measures that have been adopted in the UK are worth consideration. The first is carbon trading: this is an attempt at including all the costs in a transaction as per Dolan’s TANSTAAFL; although imperfect it is a step in the right direction. The second is taxing airline passengers. Yes, I know you are surprised as I am an anarcho-capitalist libertarian and so shouldn’t agree with any tax; in theory I don’t, but until the market principle is established that all costs should be included in transactions then this is a pragmatically useful starting point.

So us libertarians, and especially anarcho-capitalists, should embrace the move towards privatisation of pollution, the allocation of the external cost impact to the consumer. It’s not ideal that it is governments that are implementing these changes, often with taxes, but until a private property framework is in place that eradicates the free-rider problem then this is the least-worst option. Libertarians support private property rights, all private property rights, and so this must include pollutants and their impacts; conversely conservatives embrace the status quo and so are content for government to corrupt this important market. This is not about anthropogenic climate change, whether it exists or not, or whether you believe it or not, it is fundamentally about private property first and foremost: the foundation stone of liberty. So which are you, libertarian or conservative?