1135 posts • joined Friday 1st June 2012 10:28 GMT
Don't forget the top quality motivational slogans that power North Korea:
Re: Why hasn't the US "brought democracy" to NK yet?
NK has achieved full and complete control over food, water, energy. It will not fall unless pushed or it goes out of its shell and thus opens itself up to "external corruption".
Cobblers. The USSR collapsed because it spent too much on consumption rather than investment (specifically arms and misdirected central planning) and its economy collapsed. Ample resources of energy and water, and a big military didn't help one jot. To an extent Europe and US are perilously close to a similar economic event horizon, where money wasted on unproductive spending causes the economy to collapse. Examples of unproductive spending are excessive welfare spending (Europe), unaffordable social and environmental "obligations" (Europe), endless health spending (now both blocs), imperial militarism (the US), and for both blocs again, bad bank lending that has destroyed billions by funding speculative bubbles in property and leveraged commercial lending.
Coming back to North Korea, not only are they destroying their own economy by spending on militarism and central planning, but they don't have sufficient domestic resources of energy or food, and are dependant upon imports that they can't pay for (hence the sabre rattling). The population are starving and repressed, which certainly could go on for some years, but will fall over sooner or later without any external help. Putting the spotty twerp in charge is most unlikely to prolong matters.
Re: But can you then choose the jurisdiction for a trial?
But if you lose then you keep appealing until you get to an EU court.
Re: But for one reason or another...
They are especially pissed-off that English has become the world's lingua franca, and will refuse any thing being done only in English on a matter of pure reflex.
Then we must fight back. Get the OED to eliminate the term "lingua franca", and replace it with "lingua angla" or something equally silly. And while we're at it, we could paint "AAA" on the white cliffs of Dover in letters two hundred feet high.*
* Better use water colour in preparation for being stripped of our rating next year, mind you.
Re: If they won't pay tax, maybe they should pay for infrastructure
"No, actually. National Insurance is protection from sickness, unemployment and old age."
Cobblers. If they did proper accounting then the huge unfunded liabilities of the National Insurance Fund would have it shut down. At present it operates at a supposed surplus, but that's because so many benefits aren't actually funded from the NIF, but come out Government's main cash hemorrage pit, the Consolidated Fund. And the big clue to all this is the government borrow around £120 billion a year.
NI is a tax, same as any other. It all sloshes into the governments hands, they then waste and mis-spend it. Their lack of honesty and competence is the main reason that we still pretend that NI isn't tax, and that the NIF is somehow different to the Consolidated Fund.
Re: Hmm...@Chad H.
"It's a bit of stretch that noone would be employed in the UK construction industry, I doubt all building would just stop one day."
My point was that any industry that employes a workforce on low wages depends on implied subsidies like tax credits, council housing etc, and any industry that employes its workforce on low pay and intermittently (eg agriculture and construction) depend on the subsididy of welfare - otherwise the workforce starve. My language was certainly a degree of hyperbole, but I hardly think that deserves downvoting.
Re: Hmm...@Chad H.
"Amazon have a whole bunch of low paid warehouse workers in the uk ...Who's employment we're kinda subsidising through tax credits"
Available to everybody, so hardly Amazon's fault. If the building industry weren't able to rely on such subsidies (and the payment of welfare when there's no work) then nobody would be employed in the UK construction industry full stop. Moreover, tax credits are merely part of a deliberate plan to make the tax system progressive (ie higher earners pay higher tax rates).
Personally I don't think that progressive tax regimes deliver, and a simpler flat rate of 35% of all earnings over £10k would be easier to adminster, but that's not the view of politicians.
"I wonder how useful this database might be to our enemy in the next world war?"
None at all. Most government projects cost us peasants money, make our lives irritating in a myriad of new but tiny ways, but fail spectacularly to do what they say they will. On that basis a part-functioning DNA database would be of limited use.
No, the most useful thing to our enemies is the British government and their civil service.
Course we do!
It was that thing Dick Van Dyke sung about in Mary Poppins.
In a recent thread on Amazon, I had a look at what Amazon were paying, and what they were avoiding, and it appeared that Amazon pay about two thirds of the notionally "full" tax bill. In aggregate national terms, one third of tax liability is business rates, one third is corporation tax (the bit you can try and avoid), and one third is employer's NI. So if you can avoid most of your corporation tax, then you'd avoid roughly one third of the taxes you might otherwise incur.
Obviously the detail is a lot more complicated, but that's how it looks to pan out for Amazon with several thousand UK employees and UK distribution centres. Google and eBay I'd expect to be different because there's no physical delivery, and arguably they'd be proportionately worse in tax evasion (if following the transfer pricing tax avoidance model) than Starbucks or Amazon because these two can't avoid the payroll taxes or rates on its stores, whereas Google and eBay probably don't have much in the way of UK staff or premises.
Taking Google, they are reported as paying £6m of UK tax in 2011. According to their investor presentations they make 10% of global revenues in the UK, making total UK revenues around $3.7bn. Group pre tax margin is around 33%, so that implies UK taxable profit ought to have been around $1bn (after losing say $0.2 or 0.3bn for tax deductibles), and at prevailing tax rates that would have further implied a UK tax liability of $260m, say £170m. So by Google's standards, Starbuck and Amazon are tax saints (although only because they can't avoid the rates and payroll taxes).
IBM and HP do employ more people in the UK and will pay more NI, and more business rates, but they've been critcised for avoiding US taxes, so I'm sure they won't be paying any UK taxes they can avoid. Moreover they encourage their customers to offshore work, so avoiding all UK taxes, and removing jobs from the economy.
So in summary: It's a mess, it loses billions in tax revenues, and motivates all the wrong behaviours. Luckily David Cameron has a finger on the nation's pulse, and is turning his incisive, Sauron-esque attention to the matter of gay marriage.
Re: Why bother putting the relays on vehicles?
Good to see that the boffins spotted that high vehicles got in the way - I wonder how much that nugget of rocket science cost?
But in the unlikely scenario that the costs of this are less than the benefits, surely the obvious solution is surely to go under, not over, and bounce the radio signal off the road, using low mounted antennae?
Re: NOK is toast
Maybe Nokia are toast. But so will Huawei be if they are going to Finland to focus on UI's.
One of the biggest reasons Nokia are in this mess has been that they have systematically and repeatedly fluffed the user interface despite a competent underlying phone OS. On that basis Finland is the last place on Earth that I would choose for a centre to focus on this.
A bit like opting to locate a food technology centre in North Korea. Looking on the bright side, it's a few further years of employment for ex Nokia staff.
Re: What they SHOULD have done
Maybe that's what they did want, but in a form.
That bit about "planting images of a burning US flag" doesn't make for amateurs necessarily, nor even the coding errors. Post Stuxnet, I would guess that both spooks and serious cyber crims are mindful that they don't want the finger of blame pointing at them, and a reasonable way of doing that is the cyber equivalent of growing a beard. But who would waste time hacking into Aramco's network just to plant that image? After all a burning US flag is probably the screen saver for half of the Saudi employees.
Where I think you're missing the trick is that they probably did not want to drive the physical price down or up, as that requires a need to invest in real oil, including non-trivial stuff like having customers, delivery terminals, cash, and such like. I'd have thought the smart cyber crim wants to disrupt the futures market, having secured a short or long position which is inherently leveraged to the expected outcome. And that disruption might be attacking Aramco's network not for the SCADA, but simply to disrupt the trading business, even if only to take the Aramco traders offline for a few days. Throw in a bit of bad SCADA code appropriated from Stuxnet or elsewhere, and world plus dog thinks this is about physical shutdown.
And of course, if that is correct, then you'd need to consider the criminal speculators as the commissioners and potential beneficiaries of the attack, but the perps would likely be a separate bunch of technical guns for hire. Obviously this imples unconstrained crims, technical skills, and money laundering, and whilst I'm inclined to suggest RBS for some cheap laughs, one would guess either fomer USSR criminality, or a country under sanctions looking to raise some much needed cash outside the sanctions ring fence.
Re: A better solution...
Same here. After all the stuff El Reg has published I'm almost disappointed that it hasn't been a disaster (and that's using it as intended as a wireless router as well).
Admittedly the PSU does whistle, but only noticeable if you stick your head within a foot of the PSU (or perhaps if you're operating a slient PC in an anechoic chamber). Still far, far less noisy than the heads seeking on a 3.5 inch hard disk, or the whirr of the fans of a desktop.
Re: A well reasoned and written article
"Parliament to be summarily ignored by ministers and civil servants on Snoopers' Charter"
There, fixed it for you.
Re: "Sand is not silicon"
" the silicon is highly purified which I think probably dwarfs the raw material cost"
Undoubtedly true, but there's more. Even allowing for purification, I'd guess the end to end process costs including design, manufacturing plant, operations etc will all dwarf the purified material costs of either.
Re: US or Blighty
What's the difference? He'll end up in the US either way.
You reckon? If he comes back here they'll struggle to hold him, and he'll end up in the Ecuadorean embassy along with another unwanted guest.
Arguably that could be a good thing.
Re: Looks like the civil servants have been rumbled
"I have to agree with you; it's clear that this is not a party political agenda, but one that is being proposed / promoted by the civil servants "
Nothing new in policy being set by half wit civil servants. Energy policy remains the same mix of misguided, expensive tree hugging nonsense and shambolic chaos on proper generating assets under this lot like the last lot, even down to such cobblers as the forthcoming "Green Deal". Transport remains in the hands of numpties who persistently botch the award of rail franchises under all governments, and the nearest DfT have to a roads policy is wet dreams about introducing road pricing. The UK tax system remains a global embarassment under this and the last government. Education and health remain poorly organised money holes, drugs policy continues its epic fail, the wider criminal justice system achieves little other than to establish a sustainble ecosystem of crimes and crimefighters....
All this is possible because of the mediocrity of politicians. If only they would come up with manifestos that have one, perhaps two really big, important ideas, and a promise not to interfere in anything else, or pass any new laws.
You were on the right track, but then missed the turn:
Profit is a motive, but you don't think for one moment that the wifi or picocell connection is going to be gratis, do you? Maybe for the politicians and CEO's in fist class it will be, but for the rest of us peasants I'll wager a whole lot of money that we're talking about the sort of eye watering charges that you thought died out in the last century.
The airlines can't wait for the ban to go, I suspect. All they need to do is put in the picocell equivalent of a 14.4k modem (shared by all 300 passengers), lash up a pay to play wifi registration page, and arrange a premium rate on all voice calls (incoming and outgoing, just like international roaming works).
And the best thing of all for the airlines? That on longer flights passengers won't be in the jurisdiction of any telecoms regulator, and they can charge what they like.
Re: Definition of "technology"
"buying a fleet of 60 Airbus A320s, not something they will be doing on an ongoing basis I wouldn't have thought."
Normally they only need to import one example of a tech product....
Having said, that Airbus recognise this, and have established a local "final assembly" plant in Tinjin. Whether that's enough to stop very similar aircraft appearing from different, non-Airbus factories only time will tell.
Re: Not just technology
Start digging? More like keep digging, and keep your fingers crossed that China's infrastructure growth doesn't slow down. Otherwise it's curtains for the commodity markets, given the global capacity that's come on stream in recent years.
Re: That's a big pile of money
"Route it through a jurisdiction that doesn't ask many questions and doesn't provide much help to law enforcement and that's half the battle won. "
If the European banks weren't such crooked and incompetent arseholes themselves, then there would be a simple solution of blocking all electronic transactions to territories and banks that have lax security standards, poor laundering controls, or uncooperative law enforcement.
This is wishful thinking of course.
Re: Better bargain still...@SkippyBing
You misunderstand. The Graun does these things purely as research into the Wickedness Of CapitalismTM. Let's face it, its profits are so dismal that there's probably no tax to dodge.
Re: Get what you pay for
"Will the energy savings ever justify the cost of the bulb? Impossible to say as that will depend on the lifetime of the bulb."
I take the inference about the unknown lifetime, but if you've replaced a 50W halogen with a 5 or 6W LED, at a cost of a tenner, then you'll recover the capital cost in about 2200 hours of running, so that's well within the expected LED life, around 3 years at two hours a day (and about the same lifetime as a good quality halogen GU10).
In high occupancy areas like kitchens and living rooms you could get payback in half that. And with the government making a mess of energy policy in it's Canute like plans on climate change, electricity costs will increase by about 7% a year over the next few years, thus bring forward the payback on energy efficiency measures.
I suspect it's complexity and cost. If the user really needed more storage they can always put several disks into an array, but for a discrete desktop unit you want the fewest platters possible to keep costs down (and in a data centre, to reduce energy use as well).
Re: good enough
"Computers just don't need replacing any more"
Well, they do, but increasingly on the same sort of timescale as brown goods, so five to seven years, compared with eighteen months to three years previously. And in seven years time a smartphone will have better capabilities than a current midrange desktop or laptop, I'd guess.
Re: But what about muh socialism? @Jolyon Smith
"In constructing your argument for a fair amount of taxation on the actual profits, using the stated EBIT margin of the company, you seem to be wilfully ignoring the fact that it's only because of the sharp practices involved in re-structuring their income that results in the low EBIT margin in the first place !!
You are wrong. The tax a company pays is not based on the reported accounts of a company, it is derived from the computation returned to the HMRC, and that is based upon the thousands of pages of tax law, not GAAP (which is the basis of the audited report and published accounts).
The EBIT number is generally far more accurate measure of a company's underlying operating profitability than "the comp". I used the EBIT number as a credible proxy for what their taxable profits ought to be, and that works because the GAAP profit feeds into their cash flow statement where you can trace it through to dividends paid, which is where the money starts to become real for anybody outside the company.
So your starting presumption that GAAP accounts are fiddled to get the tax down is nonsense.
Another interesting observation on German cars is that the Vauxhall Insignia is designed and built in Germany, but as a general rule it does poorly in the UK consumer market, press testing consistently puts it behind the Mondeo, and most of them are bought by fleets where the buyer doesn't have to own or drive them. And the car does relatively poorly in owner surveys like JD Power.
Not all German engineering and mnufacturing is to the same standard.
Re: Standard iFixit drama
"What they first call "incredibly strong adhesive" turns out to be "double sided sticky tape.""
Good quality double sided tape IS incredibly strong when installed on a clean substrate. In fact, all that double sided tape amounts to is a thin layer of a adhesive. Given that we're dealing here with fragile components that aren't amenable to being flexed very much, this may be a convenient manufacturing solution, but it isn't a service solution, and that reflects very poorly on Apple's "design for manufacturing" staff.
Presumably the engineering budget has been cut in order to increase the legal budget.
Re: My experience@James Hughes 1
"LED's GU10 are a bit crap - not really bright enough for the kitchen, so really should buy more expensive ones with higher light output - open to recommendations"
Try the dimmable £10 Tesco LED GU10's - equivalent to 35W, and quite well made as far as I can see. I replaced the bathroom 50W halogen triples with these, and nobody else in the house has noticed, although I know the light output is a little bit down from doing "with and without" comparisons. You may want to avoid the Tesco non-dimmable, because the light output is 20% less, although so is the price.
If you're using them as quasi-flood lighting rather than spot, you could follow my approach and use a pan scourer to gently frost the lens, that usefully widens the beam (how's that for shed-tech?).
Re: Rand Paul
"I concur on the "low flow toilets". Pretty sure that invention resulted in higher water throughput overall. Guess why."
Only if the pan or cistern mechanism is poorly designed. I replaced two old 11 litre flush toilets with modern 6 litre flush units, and the flush of the "low flow" units is far better, reflecting decent design. I also retrofitted an old 11 litre cistern with a flap valve instead of a syphon, and I've got that down to 7 litres and working just fine. If you do something daft like reduce the cistern water level on an older toilet, but then constrain its release through a syphon then you are certainly heading for a blockage.
Put bluntly, even the most fearsome dreadnought is what, 400 grammes maximum? Why should it take almost thirty times that mass of water to achieve an effective flush?
Re: Why Bother?@mwngy
"There is navfree which is free for android - anyone tried it?"
Yep, got it on my phone to see how it worked. It does actually work quite well as an offline navigation service, and directions are very marginally better than Google Nav. Against this the graphics and maps aren't as polished, speed and camera alerts seem to exist but not function for me, and the search facility (eg for postcodes) defaults to an online Google search. If you put in location names by typing them rather than the postcode it works perfectly well offline, but it would be much easier if they'd use an offline postcode search. There's no frilly stuff like satellite imagery or live traffic information. No complaints about routing, which is comparable to Google - so not bad, not faultless. Not used the POI stuff. The database is Open Street Map, so it isn't clear how rigorous or dependable the updating is, but I've not encountered any problems any more frequently as the few I've seen on Google Maps.
I don't think there's much wrong with Navmii, and for offline navigation it is worth trying out, but in a field full of "quite good" solutions it doesn't stand out. If they'd fix the postcode search so that it worked offline, and the speed and camera warnings then it would stand out even against Google Nav, and I'd then use it in preference.
Re: Why Bother?@mutatedwombat
"If you need speed limit reminders and camera warnings, then maybe you should let someone more responsible drive"
I am merely a fallible mortal, and I expect these capabilities to exist as they do on any decent satnav.
But since I've got nine years no claims, and haven't had an "at fault" accident for twenty nine years, I don't think I need to take advice from sanctimonious twerps like you.
"In other words "we didn't expect the Brit to fight back quite like he did and we need to re-trench and come up with a new strategy of explaining our piss poor performance"
I think they did expect this as one of a range of possible responses. Unless their legal teams are as incompetent as HP's board, they would have run through the options open to Lynch before HP went public with its accusations, and have a strategy to respond accordingly.
Having said that, this is high stakes poker by Whitman. Having herself voted for the Autonomy deal, she doesn't want to rely on her best defence that "it was all Leo's fault". So having decided to brazen it out, she's hoping that the probably quite modest dirt that may be found in Autonomy's accounts will be sufficient to justify the accusation, despite the fact that most "software" companies present similar issues of turnover classification and revenue recognition.
If they can't substantiate the accusations to credible degree, then Meg becomes another one in a now rather long line of shop-soiled CEO's over in Palo Alto. In that case, success for Lynch in a defamation case would probably not result in material losses for HP given their scale, but lawyers supposedly representing HP stockholders would be able to hammer the company with a class action (although suing the company you own doesn't make that much sense).
I seem to recall that Leo's pay packet including golden parachute was around $100m for his few months of chaos at HP. That highlights what the real issue is, and that is the appallingly low standard of corporate governance in major US corporations (not that the UK or Europe are much better).
Re: With the mighty sword of truth @Fred Flintstone
"Having said that, I do wonder why Lynch doesn't hang them (sorry) for defamation.."
Largely because HP can simply outspend him legally. I would guess that HP's legal budget is around about $500m a year. You don't even have to spend that on litigation - friend of mine has a valid claim against a big three headed dog of a private equity house, and a series of top US law firms agreed to take the case, and as soon as they broke cover the PE house "persuaded" them to drop the case in return for the promise of future M&A work. As there's always more money in corporate finance than in litigation, they all took the devil's dollar.
In a related aspect of the same case, a big UK based bank now largely owned by the taxpayer is refusing to do anything unless sued. With a widely distributed £200m+ legal budget every year, virtually every major law firm is conflicted out - and that appears to me to be an intentional policy.
So Lynch may well struggle to get a law firm of the scale and expertise that HP will use to represent them, and HP's annual legal budget is probably about the same as Lynch's entire personal wealth.
Re: No shit, Sherlock
Ahh, but credit where credit's due, and there's a tiny masterpiece in the article:
"Maude highlighted future work on...."
What's "future work" do you reckon, and what is there to highlight? At a guess, "future work" is a bit like "new money" under the last lot, or a manifesto commitment by any of them. In fact it's probably got the same validity as Osborne's claims to be tackling the deficit, Cameron's pledge to get tough with, well, anybody, or Milliband's claim to have a clue on anything.
"LED and Florescent bulbs, IMO, haven't held up to what they proposed. LED testing has shown that the LEDs used in mass production are prone to fail, and florescent bulbs have problems with variation in temperature.
Whilst I agree with your comments, I think the LED issues have been more about quality variation and teething problems. For example, buy a decent LED GU10 and it'll have a reasonable heat sink casing, buy the less well designed stuff and it won't, with inevitable consequences. Then you've got all manner of quality variation in the diode themselves with some makers producing very good devices, and other producing short lived, over driven tat. I also suspect that the commonest cause of failure in consumer LED lighting is poor quality driver electronics.
In terms of reliability and quality, we've had no problems with entire office building replacement of lighting with LED's - staff much happier with light quality too, about eight thousand hours run time to date on circa 1000 luminaires, our car park is lit with LED's - a big improvement on the sodium vapour, now into year three of operation. The trains I travel on have LED lighting, and that's better quality than the preceeding fluourescent, and I've seen no failures, with the units now probably at 4,000 hours of operation.
Considering the improvement in performance and quality in LED in a few years, and the still woeful performance of CFL's after two decades of being mainstream, I hope that CFL's will soon be consigned to the dusbin of history.
Re: Why Bother?@AndrueC
Well, you've got an Android phone by virtue of the Google Maps, I presume - couldn't you stick in a big micro SD card and put the music on there? Not ideal, perhaps but worth a thought, reduces your device count, and most phones use a 3.5mm socket, so you can use a decent set of ear phones for non-car listening?
Re: Why Bother?@AceRimmer
"Android Navigation has had cached maps for a couple of years now."
Yes, but that doesn't give voice directions when offline unless you let the damn thing cache the route directions, and you can't search offline, to judge by my experience. Both respondants are right that it does some of the "offline" bit, but I still maintain that it falls short of the mark, yet could so easily be fixed to be a proper tool.
If you had a dedicated satnav, you wouldn't expect it to refuse to search when there's no mobile signal, and you wouldn't accept the need to dowload trip specific voice directions for the same reason - why can't Google make Navigation work properly, when Nokia had this cracked three years ago?
"At least ID cards have stayed dead."
Only until the next election, when the chances are that the control freaks of the Labour party will have it back on the agenda.
Re: But what about muh socialism? @Naughtyhorse
Now, I'm not wanting to defend Amazon, but they will pay employer's national insurance contributions, a payroll tax that averages about 13% of the total salary bill. They'll also pay rates on their offices and distribution facilities. If you've been paying attention you'll already have read on the Reg that they paid £74m of taxes last year. Maybe your threshold of materiality is rather different to mine, but I call £74m a lot of money. In passing I will note that Amazon will also have collected some £600m annually in VAT for the British government, for which (like all other businesses) they have to swallow the collection and audit costs for.
I accept they are avoiding corporation tax, but what's that worth? Taking £3.35bn of UK sales, apply their group EBIT margin of 4%, and that's a nominal £134m of taxable profit. A typical corporate tax rate ought to be a couple of percent below the "main rate" (currently 24%) by virtue of capital allowances. Say 22% of the £134m, or £30m. Now, that's a whole lot of tax to avoid, but your cretinous claim that Amazon don't pay any tax is rubbish - they actually pay 72% of the taxes that you would deem that they "ought" to pay.
So, capslock on for the hard of thinking:
AMAZON PAY A SHED LOAD OF TAX, JUST NOT QUITE AS MUCH AS YOU EVIDENTLY WANT, HAVING BEEN WHIPPED UP INTO A FRENZY BY A BUNCH OF MP'S WHO CREATED THE LAW AND SIGNED THE TREATIES THAT BROUGHT THIS TO PASS.
Re: Why Bother?
"Having an amplifier for the 'droid would be useful in its own right. I can barely hear the woman unless I turn my music right down."
If you can, run the car stereo with the Aux input taking music off your phone, leave the music player running in the background with Google Nav running in the foreground. Then the music mutes when the voice directions are given (certainly works on my Sammy SGS2).
Not so convenient if you want the radio instead, because you'd have to use the Android radio player, and IME that suffers from poor reception accompanied by lack of a mono switch (to kill the hiss).
Re: Why Bother?@AceRimmer
"Google Navigation is a proper "sat-nav" navigation application"
Only on the weakest definition of "proper". It doesn't offer speed limit reminders, camera warnings, lane guidance is ropey, when on the same road for miles it goes mute for ages, it doesn't work without a mobile network connection, and voice directions drop out if you temporarily lose the network.
Google could make Maps and Navigation a killer app by fixing this handful of flaws, and that would then vapourise one of Nokia's (and thus Microsoft's) trump cards.
A pity then that Google don't listen to users.
Re: Set some simple tarrifs
"Set a maximum 'royalty' for invisible imports such as branding and 'services'. E.g 3% of turnover."
Amazon's EBIT margins are only of the order of 3-5% anyway. Approximating EBIT to taxable profits, your 3% allowance would enable them to shield the majority of their profits anyway, and that's before any tax allowances on capex and the like. As the UK is a significant exporter of services, if other countries set similar limits then you would immediately cause a whole range of major British businesses to relocate elsewhere, probably more than offsetting the extra income from hounding Starbucks and Amazon.
Regarding the "fair value" point, that's a much better one, and the subject is usually referred to as "transfer pricing". Given what the tax avoiders are doing, it may come as a surprise that manipulating your transfer pricing to avoid tax is illegal in almost all jurisdictions. In the UK, it is illegal unless it increases the UK tax take. If you want to check, read through the pages and documents linked off the following:
So the necessary legislation and rules already exist to address this. As usual they are poorly enforced, or not enforced at all, and the instinctive reaction of Porky Hodge is that we need yet more laws and more tax regulations, in addition to the circa 12,000 pages of Tolley's UK tax guide (five volumes, around 8 kg). I'm not sure whether stupidity is a criteria for MP's or it is just picked up as soon as they arrive at Westminster.
"And since the EU law was specifically written to encourage this type of behaviour, our European counterparts would reduce their rate within months of the UK"
See the link in my post above. Our effective corporate tax rate is already well above that incurred in almost every other European country, bar Germany. Germany has a booming economy and high levels of employment, so they see no need to reduce their tax rates. Most of the rest of Europe undercuts us by a long chalk, so we'd need to go some before we had a lower tax rate than (say) France.
The varying national tax rates don't support the idea of nations competing with each other (otherwise they'd all be roughly the same), but the behaviour of companies in either moving to, or shifting profits through lower tax jurisdictions does support the idea that companies do react to this.
"I haven't noticed the rest of Europe dropping theirs in a bid to undercut them, so generally I call bollocks on that idea"
The French and Germans in particular have been very anti such things, and have been trying to use the european bailout money to force the Irish to raise their tax rates (they haven't got much leverage against Luxembourg mind you). Depending on where you sit that's a good thing, a bad thing, or just blackmail. Note that the French already have very low corporate taxes (albeit offset by higher personal taxes).
But its interesting to look at the average effective rates of corporation tax, because the UK fares very badly (unless you think tax is a good thing):
Historically, despite high corporate taxes, the UK has been able to sustain its international trade status by virtue of the perception of fair and unbiased courts, the rule of law and ease of doing business. Parliament has been doing its best to undermine that critical ease of doing business with a never ending flood of legislation, and at a guess in trying to sort this tax issue out will make the tax code (already one of the most complex in the world) yet longer and more complex.
Re: I wonder if some economist...
Normally referred to these days as the trade deficit. Which more accurately reflects the situation, since we long ago abandoned any attempt at acheiving a balance.
Put very simply, we now import goods and services costing about £25bn a year more than our exports. In that context, the tax dodging merely inflates the deficit by a trivial amount because they are classing UK economic activity as an import, in order to get the beneficial tax treatment.
The real impact of this is the impact on the public sector's budget deficit, since the overall scale of tax ourism is around £5bn a year, and that's money the government then has to borrow.
But before everybody gets too heavy on the companies involved, they should consider that the UK is the fifth largest trading nation in the world, and we benefit from taxing repatriated profits for major global corporations who are domiciled here. Whilst it does seem reasonable to require some of the more enthusiastic tax avoiders to pay up, MP's and the public should be very careful what they wish for, particularly given that they constructed the current mess.
Re: Look over there - someone else is nicking all the money!!!!
"So - go on Margeret Hodge et al - let's hear it then."
This'll be what you're looking for:
Re: Where do the politicos think this "extra" tax will come from?
"In the end, any higher cost of business will be passed on to the customers (hint: in the country where costs have risen)."
I very much doubt that, because for it to be true these companies would have had to have passed the savings on to you in the first pace. I think you'll find that the laughable ease of dodging certain UK taxes isn't gifted to you in any shape or form, but in fact just becomes a lower foreign tax charge for Starbucks shareholders.
Starbucks charge what they think the local market will sustain - and so do Costa, who aren't in the same basket of big time international tax avoiders. In the case of Starbucks, despite their tax avoidance, their coffee is generally more expensive than both Costa and independants:
Your argument that Starbcks is the dominant player isn't really relevant - businesses charge based on a combination of their own costs and what they think the local market will bear, and if they do price based on competitor pricing, then they are guilty of price fixing,even if they haven't sat in the obligatory smoke filled room. That attracts fines that make corporation tax look small beer (even for those who pay it).
Re: Is the existing laws are so wonderful
For the same reason that many other areas of law and policy are a complete mess (tax being a fine example).
The recipe is as follows:
1) Progressively make the legal system increasingly complex so that few people properly understand it (noting as well that although case law might be a lovely bit of theory, it means that nobody outside the legal profession actually knows what the law is in practice).
2) Have limited and poorly resourced enforcement, and permit wealthy organisations to outspend those who have genuine cases against them.
3) Apply blatantly inadequate civil and criminal penalties even where the statute would permit far more severe penalties.
4) Wring your hands, say how awful the situation is, pass more laws without addressing items 2 or 3
5) GOTO Line 1