Category Archives: Government

Aid, Britain, Government, Politics, Society

Immoral aid rules as restrictions apply to victims of Hurricane Irma

FOREIGN AID

MINISTERS have been frantically trying to change rules that prevent Britain from spending its aid budget to help UK territories hit by Hurricane Irma.

Priti Patel, the International Development Secretary, fired off a letter to the global body which ruled that the UK cannot use its aid cash because the three overseas territories are too wealthy.

She wrote to the Organisation for Economic Cooperation and Development to demand reforms to end the farce.

But other ministers said she should go ahead anyway and use the aid budget to help the victims of Irma even if that means breaking the law.

A senior source within the Conservative Party said: “It’s a waste of time asking the OECD to change its mind. We’ve been asking them to change this stupid definition for years and they are not interested. We should just get on and do it ourselves.”

“Our law says we have got to spend 0.7 per cent of GDP on aid, which is good, but it also says we have to spend it according to a ridiculous definition, which is bad. The rules do not allow development spending on these islands because they are not considered poor enough. It is immoral and a lot of people are saying we should just ignore the rules and spend the money.”

Charlotte Petri Gornitzka, who chairs the OECD’s development assistance committee (DAC), suggested the door was open to change. “The DAC is always open to discussing issues of concern with its member countries,” she said.

Downing Street has made clear that Theresa May is “frustrated” with the OECD rules which excludes British Overseas Territories like Anguilla, the Turks and Caicos islands and the British Virgin Islands from receiving money from the aid pot.

Foreign Secretary Boris Johnson says Whitehall is working furiously to get the rules changed.

As MPs anger grew, one branded the OECD “out-of-touch morons” while a Conservative backbencher pledged to introduce a bill to change the law, whether or not the OECD gives the green light.

Miss Patel’s letter to the DAC has called for the current rules to be torn up. She said she had asked the committee “as a matter of urgency to develop options to ensure the aid rules reflect the needs of those impacted by natural disasters”.

She added: “We believe that the international rules should take into account the vulnerabilities of small island states.

“These rules were first established over 40 years ago. The world has changed dramatically since then, and we will work constructively with international partners to ensure the rules remain relevant and up to date.”

The UK has pledged £57million towards disaster relief and the public has helped to raise £1.3million. This figure would have been significantly higher without the strict international rules governing the allocation of the £13billion aid budget – but the Government disputes this.

A spokesperson for the prime minister insisted the UK’s aid effort had not been hampered by the OECD rules, saying: “The Prime Minister is frustrated with the rules as they stand. We began detailed work after the election to change the rules to prevent precisely this kind of scenario.”

It was indicated that the UK could be prepared to act alone if there was no agreement on changing the international rules.

Mr Johnson said the hurricane was “absolutely catastrophic” and that anybody with an “ounce of compassion” would want to see government spending to “get these people on their feet”.

“We are looking now across Whitehall at ways we can make sure that our aid budget is used in that way,” he said: “Priti Patel, all my colleagues are looking at how we can do that.”

James Duddridge, a former Foreign Office minister and now member of the Commons international development committee, said he would introduce a ten-minute rule bill to rewrite the law on the 0.7 per cent target.

“The Government should change development assistance rules, and if they don’t, they bring forward legislation to change the International Development Act,” he said.

“If they don’t, I will bring a bill to Parliament to redefine what our excellent 0.7 per cent commitment should cover.”

His colleague Philip Davis, who called the OECD “out-of-touch morons”, told the Commons: “It’s bad enough that we have a bloated and wasteful and unaffordable overseas aid budget but it’s even more ridiculous that we now learn that we cannot spend it on our overseas territories.”

Conservative MP Nigel Evans said: “These rules are grotesque if they prevent us from giving the right amount of money that is needed. If we can’t bend the rules then we have to go outside those rules.”

. Why we can’t spend it how we want

BRITAIN is free to spend its aid wherever it wants – what is at issue is whether it counts towards the Government’s 0.7 per cent of national income on international development. But aid money only counts towards the target if it meets rules set by the Organisation for Economic Cooperation and Development.

So under current rules, any money we give to the three overseas territories cannot count towards this total. Cash is only eligible if it goes towards a country on the OECD’s list of states which are deemed poor enough.

Countries are ranked according to need, which is intended to ensure the poorest countries take priority. While some UK territories are on this list, the three affected by Irma are not.

Britain has sent £57million to Turks and Caicos, Anguilla and the British Virgin Islands. But it cannot count towards “official development assistance”, the name for the total eligible under the rules.

COMMENT

AFTER inexorable stories of waste, mismanagement and corruption, it seemed as if there was nothing about Britain’s bloated foreign aid budget which had the capacity to shock.

Now we have learned that not one penny of the £13billion (and rising) which is earmarked for development can be used to help those small island states which were devastated by Hurricane Irma.

The reason? When David Cameron put the target of spending 0.7 per cent of national income into law, he signed Britain up to a Byzantine set of rules laid down by the OECD.

Perversely, this global body has decided that these British Overseas Territories do not qualify as recipients for aid because… they are too rich. To the thousands of people left without power or water, whose communities have been decimated by 180mph winds, will feel that the rules are nothing more than a sick joke.

They might not have been in dire poverty before the storm hit, but surely they are now, after losing everything?

It is bad enough that Britain hurls taxpayers’ money at economic powerhouses such as China, at corrupt regimes where money just disappears, while many public services in the UK are starved of cash.

But it is immeasurably worse that when a truly deserving cause comes along, ministers are forced to scrabble around to raid cash from other budgets or by further inflating our country’s debts.

Whilst it is true that Downing Street is promising to change these mindless rules, that could take months or years and depends on approval from other countries.

Far better would be for ministers to damn the consequences, tear up the rules and do the right thing: spend the money on our people who are – without doubt – in desperate need. The OECD might not applaud, but the public surely would.

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Britain, Business, European Court, Government, Legal, Politics

The practice of employers spying on staff?

HUMAN RIGHTS LAW

Employers need to take a ‘proportionate approach’ to monitoring their staff.

Last year, significant publicity was given to a European Court of Human Rights (ECHR) decision whereby the rejection of a claim was widely described as a charter for employers to snoop on their employees at work.

Following an appeal, however, a claim by Mr Barbulescu that his right to privacy at work had been violated has been upheld.

The case concerned a Romanian engineer whose employer asked him to set up a Yahoo messenger account. The employer laid down very strict rules against any personal use.

The company monitored Mr Barbulescu’s account and accused him of using it for personal reasons. The defendant disputed this but was then presented with evidence that he made extensive use of it to discuss aspects of his sex life and health with two of his contacts, namely his fiancée and brother. Mr Barbulescu was subsequently dismissed and he brought claims against his employer.

The Grand Chamber of the Court has now decided that Mr Barbulescu’s right to privacy under Article 8 of the European Convention was breached. The key part of the decision was that an employee’s private life at work cannot be reduced to “zero”.

The national courts had not taken account of relevant issues including whether Mr Barbulescu had received prior notice of monitoring or considered its nature and extent. Nor had they determined legitimate reasons justifying the monitoring or considered less intrusive measures. They had accordingly failed to strike the right balance between the employer’s rights to impose discipline and the employee’s right to privacy.

The case highlights the degree of necessity that employers should take when monitoring employees. Whilst that should amount to a proportionate approach, the decision of the Grand Chamber will have limited impact in the UK. This is because legislation and guidance already sets out the parameters of legitimate monitoring by employers.

But there is an overlap. UK workers may be becoming concerned about domestic developments. The EU withdrawal bill, while purporting to preserve all workers’ rights enjoyed by virtue of EU law, controversially excludes the Charter of Fundamental Rights which enshrines in EU law both respect for private and family life and protection of personal data.

While the British Government appear to have sidelined its plans to withdraw the UK from the Convention on Human Rights and from the jurisdiction of the Court which presided in the Barbulescu case, there are indications that these important issues may be revisited after we leave the EU.

Although existing safeguards will continue to apply and be strengthened through implementation of the European General Data Protection Regulation next year, these developments mean, despite UK parliamentary assurances, workers’ rights in the UK look like they are about to be subject (once again) to significant uncertainty.

 

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Business, Economic, Government

HMRC investigating some £25billion in unpaid taxes

TAX AVOIDANCE

BIG businesses could be forced to pay up to £25billion of underpaid tax in a major crackdown on avoidance.

Some of Britain’s largest firms are being investigated by HMRC for potentially dodging £24.8billion of VAT, corporation tax and national insurance payments last year.

It is enough to fund the NHS for nearly three months.

The investigations highlight the scale of efforts by powerful companies to avoid paying their fair share.

HMRC’s probes have snowballed as public anger at fat cat greed grows. The amount of suspected uncollected tax from the year to March is 14 per cent higher than the previous 12 months.

It is 31 per cent more than two years earlier.

Law firm Pinsent Masons, which uncovered the figures, say this means the taxman’s large business directorate is taking a more zealous approach. But tax investigations are the first stage in a tug of war between the exchequer and business and there is no guarantee the money will ever end up in Government coffers.

If HMRC experts have suspicions, they can examine a company’s books and then amass enough evidence to demand it pays up.

But many firms refuse and appeal the decision, leading to lengthy wrangling in the courts. Pinsent Masons said: “HMRC is broadening its horizons and putting in a far wider range of transactions under scrutiny. We are seeing an increasing number of challenges to arrangements that would previously have been regarded as routine and perfectly acceptable.

“The figures represent the amount of tax HMRC considers is underpaid. Not all its investigations will actually result in more tax being paid.” It follows a harder stance on tax from the Treasury after a string of scandals including last year’s Panama Papers debacle, when it was revealed that thousands of well-known figures around the world were stashing their money in offshore havens.

In November, Chancellor Philip Hammond announced plans to raise an extra £2billion by 2020 through a crackdown on tax avoidance.

The law firm said the anti-avoidance efforts were aimed at squeezing employers so ordinary families did not feel the pinch.

“The Treasury faces an unenviable choice – either cut public expenditure and services, or squeeze taxpayers for more money.

“Increasing tax revenue through investigations is often the more politically palatable option, particularly when the focus is on large businesses.

“However, HMRC is putting the affairs of more and more companies under the microscope as a result, increasing the costs for those businesses.”

A so-called “Google tax” was introduced in 2015 to try to stop large firms shifting their cash to overseas havens, and big businesses will soon be ordered to publish their strategies for limiting payments to the revenue.

Around two-thirds of all large companies are under investigation at any one time, and disputes can drag on for decades.

The amount eventually handed to the authorities is typically half of what was initially calculated and asked for.

Big firms handed over a record £49.5billion of corporate tax in the last fiscal year, up 12 per cent on the previous 12 months.

A HMRC spokesman said: “Tax under consideration is not tax owed or unpaid, it’s an estimate of what might be at stake if we didn’t investigate.

“By effectively enforcing the rules, HMRC has since 2010 brought in £53billion that would have otherwise gone unpaid and collected over £8billion from large businesses last year alone.”

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