Category Archives: Business and corporations

Tory MP slams Osborne: ‘most of his bloody projects aren’t working!’

A Tory MP has launched a scathing attack on George Osborne and the treasury, accusing the government of failing to listen and having “total incomprehension” of the business world. Brian Binley, who made his fortune in IT services, lambasted the treasury for ploughing on with failing monetary policies.

In an interview with the website LondonLovesBusiness.com, Binley blasted:

“When you look at the Treasury, most of their bloody projects aren’t working! That’s through their total incomprehension of what it takes to be an executive in a big business unit.”

Osborne may have reason to listen to backbencher Binley — who sits on just about every parliamentary business committee in existence:

“This isn’t just about economic facts and figures, it’s about the way humans react as well. I don’t believe that George has taken those factors into account in any sense at all.”

And if you didn’t think he could veer any further off message, he then turns the attack on Cameron: “keeping Nick Clegg sweet is too high a price to pay”, goes for the general coalition: “this is the worst kind of government imaginable” before topping it off with an industry-wide slap in the face: “weasel words come easily to politicians”.

Promotion prospects? Minimal.

Beaker: I’ll name and shame supermarkets (but not tax cheats)

Just when you thought the Lib Dem’s priorities couldn’t get any more skewed, Danny Alexander has told his constituents he backs naming and shaming of supermarkets who give dairy farmers a bad deal — whilst telling the country he won’t do the same for companies who avoid millions in tax.

In a local press release, Beaker backed the introduction of a watchdog with the power to name and shame supermarkets who pass on unexpected risk and costs to dairy farmers. Unveiling the plans, Alexander boasted:

“Farmers, in the Highlands and across the country, will now be able to enter into contracts with confidence, knowing they will get a fair deal from retailers. I am extremely proud that we are delivering on this in Government.”

But faced with seething public outrage that companies such as Starbucks and Google have paid less than 3.2% tax, he told this morning’s Today programme there would be no naming and shaming of the corporate giants:

Ironically evading the question, Danny told Radio 4:

“I’m not sure that naming and shaming is a good idea by the tax authorities. I think taxpayer confidentiality is a very important part of our tax system”

It looks like large corporations are exempt from more than just tax.

Tax avoidance: Starbucks caught out by shareholder briefings

Historic claims made by Starbucks executives in little-scrutinised briefings to analysts and shareholders laid the way for the company to be slammed in a report by MPs today. The multinational is accused by the Public Accounts Committee of conniving to avoid corporation tax by pretending to be unprofitable in the UK — ‘exporting’ the real profits to jurisdictions with lower tax rates:

“Starbucks told us that it has made a loss for 14 of the 15 years it has been operating in the UK, but in 2006 it made a small profit.”

Starbucks claimed to the committee that “it has been difficult for us to make a profit in the UK”. Indeed, 2007 was ninth year in ten that the company filed losses in the UK. Strange, then, given that annual reports singled out the UK as one of the company’s cash cows:

“In particular, our Canada, Japan, UK, and China MBUs account for a significant portion of the net revenue and earnings” — Annual Report 2011

“Revenues from countries other than the US consist primarily of revenues from Canada and the UK, which together account for approximately 66% of net revenues” — Annual report 2009

But it was phonecall briefings to analysts from this period in which Starbucks really screwed themselves over:

  • On the release of quarterly earnings figures in 2007, then Chief Operating Officer Martin Coles told analysts that the profits from the UK were being used to pay for expansion in foreign markets
  • CEO Howard Schultz claimed that Starbucks’ UK arm was so successful that he would adapt lessons learned here for the American market
  • Again in 2007, then-Chief Financial Officer Peter Bocian claimed Starbucks UK had pulled in profits margins of nearly 15 percent — almost £50m

Despite that impressive roster of duplicitous statements, it would take something to top claims made in respect of 2011, where Starbucks’ accounts department would have us believe the UK business made losses of £33m. At the time, executive John Culver told investors:

“We are very pleased with the performance in the UK.”

But CFO Troy Alstead told the select committee:

“We are not at all pleased about our financial performance [in the UK].”

Errr … so which is it?

Boris at CBI: We’ve got to stop vilifying bankers

Today, Boris Johnson, leapt to the defense of the bankers at the annual conference of the business lobbying organisation, CBI. Along with the rest of the political elite, Boris cropped up at the conference to do a bit of subtle soft-soaping. But in what can only be described as an obvious attempt to cosy up to his rich City backers, Boris claimed:

“Not only have we got to stop vilifying bankers we need to make the moral case for banking.”

This is not an unusual Borisism: during the libor scandal Boris said he would not “run down Barclays bank” and instead declared “I’m going to stand up for financial services”.

Yet another example of Boris feeding the fat cats.

The Sun play dumb over Rebekah Brooks’ Wapping £7m pay-off

A senior Sun editorial source has feigned that the paper’s staff were not aware that former editor Rebekah Brooks was given a whopping £7 million following her resignation from News International — while simultaneously pouring scorn on the BBC for George Entwistle’s payoff.

Brooks’ £7m golden goodbye towers over Entwistle’s £450k. But despite this, The Sun have published no less than 19 scathing articles attacking the BBC, claiming it to be a waste of money. News of Brooks’ payoff merited zero Sun column inches when it broke last month.

Entwistle was entitled to 6 months pay, but he received 12 months, the sum for being fired. The chairman of the BBC Trust, Lord Patten, described Entwistle’s payoff as “justifiable” on the grounds that had he not jumped, he may have been pushed.

As far as Scrapbook is aware, Entwistle hasn’t been arrested or charged either — unlike Brooks.

Advertising watchdog raps A4e over misleading ‘not-for-profit’ promo

A4e, the back-to-work company at the centre of a number of fraud allegations, has been rebuked by the Advertising Standards Agency for using language in an advert which may have caused people to believe it was not-for-profit — despite operating profits of nearly £16million last year.

The offending advert on the company’s website, claimed that it was a “social purpose company” whose only aim was “to improve people’s lives around the world”. A4e claimed that this was true, but the ASA’s conclusion damningly stated:

“…we were concerned that individuals would understand the claim to mean A4e was a not-for-profit organisation.”

A4e, founded by David Cameron’s former families tsar Emma Harrison, already has a chequered history, stained with accusations of fraud, including:

  • that A4e found only 4,000 jobseekers work, despite billing the taxpayer for £45million.
  • that former employees claim many of the jobs it created were fictitious.
  • that Harrison awarded herself an £8.5million payout after quitting in the wake of the fraud.
  • that they even sent one jobseeker to work in a lapdancing club.

Perhaps a better description of A4e’s “sole aim”  would be “to fleece the taxpayer of every last pound it can”.

Homophobic bus tycoon threatens to “take poison” over routes row

The owner of bus company Stagecoach has threatened to “take poison” rather than let councils in Tyne and Wear alter bus routes. Greedy Brian Souter made the bizarre claim despite his firm trousering a share of the whopping £62m in public subsidies doled out to private operators in the region.

Controversially knighted in 2011, Souter famously led the campaign to retain Section 28, the piece of legislation forbidding councils from “promoting homosexuality”. Taking umbrage at proposals to create a democratic body to set fares and routes in the north east, Souter ranted:

“We will take poison before we let [elected councillors] take our business away in Newcastle.”

While he slams proposals for democratic oversight, Souter wouldn’t have a business model if it weren’t for handouts from taxpayers.

‘They only wanted Olympics contract': G4S fail to deliver on kids sport

  • Promised £1m for kids judo ‘to win Olympics contract’
  • 750 places per year, but average 12 participated
  • Hundreds of G4S judo suits remained unused in storage

Security firm G4S have been accused of failing to deliver on a programme which they claimed would provide £1 million in funding for youth judoPolitical Scrapbook can reveal. With their eyes on the massive £284 million contract for the 2012 games, the company decided to burnish its sporting credentials with a “groundbreaking” partnership with the British Judo Association (BJA) which it was claimed in 2008 would:

“plough £1 million into British Judo by way of the G4S Youth Judo Programme.”

Under the scheme, British Judo Association clubs would receive £3 for each session taken by a child of a G4S employee, with a target of 750 participants per year. But documents seen by Scrapbook show that an average of just 12 kids participated in the scheme — with the resultant total investment thought to fall well below the £1m promised in press releases.

While the British Judo Association told Scrapbook today that they were “fully satisfied” with the “significant” support provided by G4S, claims from an individual familiar with the situation seem to undermine the official line. A former senior member of staff at the BJA told our source:

“G4S were only interested in winning the Olympic security contract. We still have hundreds of G4S branded Judo suits in storage … you can have one if you like!”

So even in attempting to win the Olympics contract G4S were incapable of delivering what they claimed.

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