Hacking scandal:Trevor,You don’t have to bribe people to get scoops

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The Sun's Trevor Kavanagh: Defender of the Press? Pic courtesy : digitalhen

Trevor Kavanagh, the Sun’s most vociferous associate editor, has launched an extraordinary attack on the police operations which led to the arrest of a number of very senior Sun journalists. Using language I normally associate with my former employer, The Guardian, he condemns the police for disproportionate action and speaks of a police state and witch hunts against News International. (See http://bit.ly/we4MKo )

 My heart bleeds for him in one sense. Yes, you are right, it doesn’t take dawn raids and 20 police officers to arrest one unfortunate Sun hack. As far as I know they are not the equivalent of armed drugs gang. I am sure you wrote lots of articles in the Sun condemning the tactics of the Scotland Yard’s  former  assistant commissioner, John Yates, when he used the same approach against Lord Levy and Blair’s Downing Street staff in the ” Cash for Honours ” investigation. (this needed investigating but some of the tactics were disproportionate.)

Where I do quarrel with him is his implication that somehow allegations of bribing police officers ( which I gather is the reason for all this) is an essential tool of journalism to expose scandals to save Britain from turning into a corrupt cesspit.

It isn’t. If you think so it sends out all the wrong messages and puts journalism in the dock – and encourages a culture where money is the main motive and moral outrage irrelevant.

Without meaning to be pompous, I have just managed to get by in a long journalist career without paying anyone ( other than professional journalists who are making a living from passing on information) and still produced the odd exclusive.

I may appear to be naive at times but nobody needed paying to expose the ” cash for questions” scandal in the 1990s nor that Peter Mandelson had taken an undeclared £373,000 home loan from a  fellow minister.

Nor did any money change hands in the latest scandal of Ed Lester, the student loans company chief, and his tax affairs – just one  morally outraged source, a few beers, and a well targeted freedom of information request.

Of course, not all leaks are based on moral outrage. Base motives and deadly sins could be involved. By removing money from the equation – it gets rid of one motive and also stops people ” over egging” the information to make more cash.

My main disagreement with you is there has been something wrong in the practice of journalism and it does need cleaning up. I haven’t a clue whether these journalists  are guilty or innocent – or in doing their jobs have been corrupted by a culture that ended up being corrupt itself.

But I think you are being a little too disingenuous to suggest the fabric of investigative journalism is about to collapse because of these actions. There are many other practices  – not least the current financial collapse of newspapers – that are much more deadly.

Victory: Ed Lester now started paying full tax

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Following the exposure by the joint  Exaro News and BBC Newsnight investigation  Ed Lester, head of the Student Loans Company, is  now having  his tax and national insurance deducted at source.

 The deal backdated to February 1 will mean he will be on the pay roll until his contract ends in February 2013. The change will mean that he will have to pay full National Insurance contributions. The SLC – which has avoided paying NI will have to pay £17,000 to the tax authorities  this coming year.  Calculations by accountancy specialists means that on his £182,00o salary (including £14,000 bonus and £28,000 pension ) he will be possibly have to pay £26,000 in tax which he could have avoided by placing the contract through his personal service company, Placepass, based at his home on an island in River  Thames  at Marlow, Buckinghamshire.

He could also be charged benefits in kind on his Glasgow flat which the government is funding as part of a £550 a week expenses package.

This is the statement from the Student Loans Company:

“We are taking forward the changes to Ed Lester’s contract, following the announcement by Universities Minister, David Willetts on 2 February 2012.

“Ed Lester will be a Student Loans Company employee with effect from 1 February 2012 and tax and NI will be deducted at source. His salary and bonus arrangements will be consistent with his previous contract.”

One down, how many more to go, when the investigation by Danny Alexander, chief secretary to the Treasury, starts to bite.

Did the former Cabinet Secretary unwittingly sanction “tax avoidance”?

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Gus O'Donnell: Tax avoiders friend in Whitehall? Pic Courtesy: Daily Telegraph

The huge  row following the disclosure  of the tax  ” avoidance” arrangements for Ed Lester, chief executive of the Students Loans Company, has concentrated on how government ministers approved the arrangement.

Not highlighted was the role of the then Cabinet Secretary, Gus O’Donnell, recently retired on an index linked pension and getting £300 a day for every day he turns up as a newly ennobled peer.

Documents released to me under the Freedom of Information Act reveal that Gus O’Donnell when he heard Lester was not going to be on the pay roll of the Student Loans Company rightly demanded an ” urgent clarification “. He also insisted on an explanation about the ” costs to the Exchequer” of the arrangement. He was then sent a detailed document which showed that if he was paid through an agency it would cost less than if he was on the staff. Details of  the document are published tonight on the Exaronews website (www.exaronews.com)  and also detailed in a story by Rajeev Syal on the Guardian website(http://bit.ly/yWOy7H ).

Basically it is a scam explanation – revealing huge fees (£83,000) to be paid to Penna Consulting, the management firm, who acted as middlemen to pass money on to  his private company – if he was taken on the pay roll. It also suggested that his expenses of £550 a week for a flat and fare would have to be grossed up to cover his personal tax bill if he was on the staff.

Meanwhile the savings side if he was not on the pay roll included a whopping £17,000 to the SLC for avoiding paying the employers national insurance contribution.

 Any cursory glance at these figures by anybody reasonably intelligent would suggest that these were sham calculations and could have been knocked down, particularly the big fee to the agency. Yet the e-mails show Gus was ” content”.

Frankly this is as bad as Danny Alexander, chief secretary to the Treasury, not realising the tax implications of the deal. Here one of the most highly paid people in Whitehall and head of the civil service appears to be oblivious of what he is sanctioning. What does this say of the ability of people at the top or are they so used to paying out such big fees (taxpayers money) that they don’t notice?

I have tried to contact Lord O’Donnell for an explanation but he has not returned my calls. And the Cabinet Office is now sheltering around the fact that Danny Alexander has ordered a review to stop answering questions – even though some of the points I have raised have nothing to do with the review. Senior civil servants seem rather good at covering their tracks – it is probably a key part of their training.

Update: Whitehall tax avoidance – more evidence on the way

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Since this blog  revealing the Exaro News (http://www.exaronews.com) and BBC Newsnight investigation into the tax arrangement ministers approved for  Ed Lester, chief executive of the Student Loans Company, I have received a number of calls and e-mails suggesting this practice is more widespread than  just Whitehall. Danny Alexander, chief secretary to the Treasury, has rightly ordered a Whitehall wide review to find out the scale of the arrangements, which he appears to have unwittingly endorsed. It looks like Mr Lester  will have to pay tax in the way everybody does when they hold down a full-time equivalent job – through PAYE.

Some 2500 people has so far viewed this blog on top of millions who would have seen it on TV, on the radio  and read it  in newspapers from the The Guardian to the Daily Telegraph and Daily Mail.

 I am now gathering more information to continue this investigation and would like to thank a number of people who have already contacted me. However if you know of a similar practice where you work  you can contact me direct on my e-mail david.hencke@gmail.com. All information will be treated in confidence and all sources – like the original tip-off – that led to the exposure – will be protected under the journalist’s code of practice.

Also if you know of consultancy firms  who make big charges for supplying these people  to the government and the public sector and then help them arrange how to avoid paying their full tax, let me know. Their fees are coming out of your taxes.

 Help stamp out people ripping you off by using your taxes from your hard-earned cash – by avoiding pay their fair share of tax – and stop HM Revenue and Customs having one rule for the workers and kid glove treatment for those with the money to exploit every loophole possible.

Exclusive: Whitehall tax avoidance “scam” revealed

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Flashy Student Loan Co HQ where Ed Lester works without being taxed at source. Pic courtesy BBC

Civil servants could be able to avoid legally paying tens of thousands of tax while working in Whitehall. An investigation by Exaro News and BBC Newsnight based on documents obtained by me through a Freedom of Information request has revealed an extraordinary personal tax deal negotiated by the Student Loan Company for its £182,000 a year Whitehall boss, Ed Lester. The deal is £140,000 salary,£14,000  bonus, £28,000 pension and £28,000 expenses for flight and Glasgow flat.

Documents released by the SLC and the Department of Business,Innovation and Skills reveal that Mr Lester, chief executive,pays no tax or national insurance at source but instead the SLC pay a consulting firm called Penna who pass the gross cash to a personal service company run by Mr Lester and a partner. This arrangement was approved by HM Revenue and Customs and the deal was signed off by David Willetts, the universities minister, and Danny Alexander, chief secretary to the Treasury.

As a result instead of paying tax at the top rate of 50 per cent – the company is likely to only have to pay corporation tax at the government’s new lower small company rate of 21 per cent and minimal national insurance. Mr Lester has declined to discuss the matter with Newsnight or Exaro News.

Full and extensive details are revealed in a series of articles on the Exaro News website (http://www.exaronews.com) – behind a pay wall but if you register  it is free for a week – or you can see the film about it on BBC Newsnight.

The investigation has forced Mr Alexander into ordering a  Whitehall wide inquiry to find out how many civil servants are benefitting from the same secret deals.  The reason is that ministers  DONT’ KNOW  and it looks like in Mr Willetts’ case DON’T CARE.  Alexander personally examined each top pay contract and now admits he missed the tax implications of this particular deal.

Whatever his inquiry reveals this arrangement looks to me on a par with all the recent scandals involving banker’s bonuses and Sir Fred the Shred’s stripped honours. Basically you as a taxpayer are paying the state to negotiate a deal for a very highly paid  official to avoid tax. This can’t be fair, right or decent to millions of low paid public and private sector workers who are paying a big whack in tax and can’t set up personal service companies – effectively to avoid paying tax. It also has the added insult that the man who has got this deal is pursuing every single student in the UK to make sure they pay every penny back of their student loan.

Dole queues – What dole queues? The huge divide among the unemployed

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Dole queues -growing rapidly in Labour, falling in some Tory and Lib seats Pic:courtesy Daily Mail

Ever wondered why with  dole queues at their highest levels since 1996, in many areas pubs and restuarants are heaving, the West End theatres full and motorways crowded with traffic? The answer is provided in an extraordinary analysis by the House of Commons Library of the latest claimant figures released by the government (see http://bit.ly/x6wWxw).

Far from  the picture painted by David Cameron’s infamous slogan ” We are in it together” the United Kingdom is as divided over who is on the dole and who isn’t as it is over bankers’ bonuses and public sector worker pay freezes. And it is not just the differences between the disproportionate numbers of young people-under 24- on the dole and an older generation in work.

It is  the fact that across  the nation the number of people claiming job seekers’ allowance is now dividing area against area and becoming party political. Put it simply the government – whether it intended to or not – is dumping on areas that voted Labour and leaving many coalition seats- Liberal Democrat and Conservative alike – completely unscathed from the grim dole reaper. In fact -taken year on year in some Tory and Lib Dem seats unemployment claims are, believe it or not, actually FALLING.

Am I making this up?  No it is all in the report. The Commons library report looks at dole claimants and breaks them down by constituency -taking as its base the economically active – those aged between 16 and 64 – and working out how many people in the constituency are unemployed.

It then ranks them all. The top 15 dole  constituencies-with the exception of three- are all Labour seats. And the other three are in Northern Ireland. The bottom 15 are all Conservative or Liberal Democrat. And the difference is stark . In Labour held Birmingham,Ladywood, – the Number One seat for dole claims- more than one in five people are claiming. In Liberal Democrat held West Aberdeenshire and Kincardine, the figure is 1 in 100 and falling for the long term unemployed.

Among prominent politicians John Redwood and David Cameron both have miniscule numbers on the dole- and the overall jobless claims are falling in Redwood’sconstituency despite a rise in youth unemployment. While Liam Byrne, the shadow works and pension secretary, and ex union leader Jack Dromey have some of the highest. There is more on this in an article by me and Rajeev Syal on the Guardian Society website (see http://bit.ly/xvUv8M ) and by me in Tribune (http://bit.ly/z3dAhM).

Perhaps it can be best illustrated by comparing Liam Byrne constituency with Chris Grayling, the Secretary of State for Works and Pensions.

Liam Byrne’s Birmingham Hodge Hill  seat has the second highest number of dole claimants in the UK with 7257  claiming benefits – 1750 for over a year – and a rise of 723 – 250 on the long term register.

Chris Grayling in Epsom and Ewell has  1007 on the dole – an increase of 44 in a year – with a rise of just 5 people out of work for a year -to just 135.

No wonder perhaps the dole queues do not have the same resonance for the Tories  as Labour. Tory Mps’ surgeries are hardly going to be packed with desperate people looking for jobs – but Labour Mps are going to be overwhelmed. It also has a political impact and might be one reason why Labour is not capitalising on the recession- simply because in some areas it does not exist.

The most interesting point is that Lord Young’s much criticised statement about people never having it so good – is actually true in some Tory areas.

Labour is going to have try much harder to get the point of the horror of the dole queues across to a wider general public – because as it stands the Tories seem to have manipulated a recession that concentrates almost entirelyon their constituencies and affects mainly their voters.

Brian Coleman: “Human Rights-My Backside!”

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Brian Coleman - no to human rights

Tory councillor Brian Coleman – standing for election again this May as London Assembly Conservative member for Barnet and Camden – is at it again!

 In an interview for a foreign TV station he is making it clear again that he wants stringent controls over everybody who blogs on the internet – after the failed ” complaint” by his local council Barnet to try and get local blogger Derek Dishman fined and registered under the Data Protection Act for publishing public details about the views of Barnet officials on their own websites. If successful Barnet would have prevented bloggers writing anything about anyone except their own family and housemates -without being licenced by the DPA.

In an extraordinary interview – see www.youtube.com/watchv=0uuj1il43xg&feature=youtu.be  the councillor demands censorship and libel action against bloggers- and evidently beleives they don’t have right to criticise him or anyone else without bweing taken to court.

 What is worse it appears after this youtube except was put up on the website t00manycuts.blogspot.com  followed a comment on Twitter Mr Coleman successfully moved to have the authors removed from their Twitter account. I don’t quite know what  the tweet said but it was not flattering and it may to do with the fact that he is living a subsidised Methodist housing charity flat while claiming £128,000 a year council allowances from four authorities and organisations.

Coleman has never responded to the accusations – but always been happy to condemn poorer people who complain about rising rents.

 Curious to know what David Cameron, Grant Shapps ( the local government minister) and Boris Johnson might think of his views on human rights and the internet. But if you are planning to vote for him, he is obviously standing on a platform of removing human rights from all Barnet and Camden citizens. Great platform for a democracy!

 Let him know  your views on this> he is contactable on

toomanycuts.blogspot.com

Blog review 2011: Who came, saw and commented

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The WordPress.com stats helper monkeys prepared a 2011 annual report for this blog.

Here’s an excerpt:

This blog was viewed about 67,000 times in 2011. This compared with 17,000 in 2010 – the year the blog was launched.Click here to see the complete report.

Still Not Quite A Great Swiss Rail Journey

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Wintry Bernina Express Pic: courtesy Daily Mail

Since this blog was written Great Rail Journeys have not used the Ambassador Hotel in Brig. The Swiss private equity company ‘s new brochure shows they plan to use it again for Christmas. I would not recommend staying there -particularly over Xmas to avoid disappointment.

I am also reblogging this following revelations that up to £13 trillion is diverted by wealthy individuals to tax havens. The ultimate owners of Great Rail Journeys are in the Jersey tax haven and are directly connected to a Swiss Luxembourg bank which has links to taxhavens across the world from the Caymans to the Ukraine.

I can’t quite resist  going off piste and writing an evaluation of taking a break this Christmas – going with my wife Margaret on an organised rail trip to Switzerland in search of snow. Run by Great Railway Journeys (more later), a well-known up market travel company, parts of the trip equalled expectations. Going over the Bernina pass by rail and the train journey to Zermatt,  and staying in a quaint  wood panelled hotel in Chur, the Romantik Hotel Stern, in the 16th century old town, were magical.

The tour guide, a Lancashire lass, Sue Fairweather (employed independently by GRJ) was a brilliant people manager, well organised, yet allowing its mainly elderly travellors a lot of freedom, and participating in a particularly raucous Christmas Day gala dinner, where some of the alcohol consumed could have rivalled revellers in Magaluf.

But the trip had two jarring features. Despite two firm assurances before we left from the company that the hotels could easily cope with a lactose free diet for my wife – it became obvious that they couldn’t and a hotel in Brig  that left so much to be desired that I think it should  lose its contract.

This led me to do a little journalistic investigation into Great Rail Journeys – particularly after some of the more seasoned travellers pointed out  that each year the company has cut down on what it offered but not what it charged. Examples are dropping the odd inclusive dinner and cutting down a free Swiss rail pass – to a free Swiss half rail pass.

Great Rail Journeys markets itself as a 30-year-old British specialist travel company based in York. It was until 2005. Now it is owned by a private equity group called Primary Capital through the Amber Travel Partnership. Investors in London-based Primary Capital have no  particular interest in rail holidays, the company is merely part of a portfolio which also includes the cafe chain, Coffee Republic, and the seed merchant, Thompson and Morgan.

But the private equity company don’t even own GRJ. The parent company in Primary Capital is EFG Reads Trust Company Ltd, an offshore family trust based in Jersey. It has 400,000 shares to 96,000 held by others. According to its annual accounts Primary Capital paid no corporation tax in Britain in 2009 and 2010 setting previous losses against money due to the UK Treasury and its accounts show that £1m of its income is not subject to British tax. Yet it managed a £1.3m dividend pay out in 2010.

But the trail does not end in Jersey. It turns out the family trust company are advisers to EFG, a Luxembourg and Zurich based bank with a telephone list of subsidiaries from the Cayman Islands to the Ukraine. Unfortunately for investors it is still in Greece, though it has tried to pull back over the Eurozone crisis.

So far from your holiday money going to a British company it eventually lands up going into the pockets of what the late Harold Wilson famously called (probably politically incorrect now) the ” gnomes of Zurich.”

Ambassador Hotel Brig: Not as good as it looks, don’t stay. Pic courtesy venere.com

As for the unhappy experience in the hotel, the Ambassador in Brig,(see http://bit.ly/vJRWTW ) its owner did not live up to the niceties of its name. He undiplomatically warned the 34 people on the tour  during his welcoming speech against putting critical comments on tripadviser in case it damaged the reputation of his hotel. (don’t say this in front  of a journalist!)

Not content with that they were – unless reminded by our tour organiser – hopeless at organising a non dairy diet – to the point of denying there was cheese in a course when it was on the menu in English and German!

The so-called “recently refurbished rooms” would have done credit to a mediocre tatty English b&b, just ticking the boxes on the facilities, but leaving you with not enough room to swing a Swiss cat in the shower. If there were any refurbished rooms, it must have one done up for the brochure!

The food if you weren’t on a non dairy diet was good. If you have a lot of spare cash in Brig  the a la carte menu was mouth-watering but very expensive, easy to spend £100 a head. Whether it deserved its food gold star from GRJ is a different matter.

My advice is that if you want to book a future GRJ holiday that includes this hotel at Brig, don’t go!

But it was the exception. We came across a remarkable atmospheric restaurant in a 1522 inn in Chur, the Hofkellerei, with a  brilliant three course meal including local  meat specialities for £30 a head.

And an amazing world-class art, archaeology, sculpture park and classic car museum created by a Swiss philanthropist, the Foundation Pierre Gianadda, where Henry Moores, Rodins, Cezanne and Picassos rubbed shoulders with unique Roman bronzes and historic Bugattis, all in the tiny town of Martigny in the Valais. see their website at http://www.gianadda.ch .

More Revelations after Christmas

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A seasonal Xmas Picture: courtesy http;//email-junk.com/wallpaper

It is time for a Christmas break. Thanks to all followers  and viewers who have read this blog over the past year.

Normal service will resume after Christmas with fresh investigations in the pipeline  including one on a leading Labour councillor. There may also be further revelations about the life  and wealth of Francis Maude as the government in the season of good cheer ratchets up its campaign to increase pension contributions from teachers, civil servants, firefighters,probation officers, health workers and local government staff while cutting their benefits.

Francis Maude is  the first national figure subject to an armchair audit on this blog – part of the open society which he and David Cameron say they are keen to promote.

Also expect some suprising and fascinating revelations about Whitehall.

In the meantime have a good festive break while you can afford it.