Tag: rbs

Housing Benefits The Rich

Figures shared with the Guardian by Generation Rent suggest landlords could be gaining as much as £2
Figures shared with the Guardian by Generation Rent suggest landlords could be gaining as much as £26.7bn a year from the taxpayer. Photograph: Christopher Thomond/Guardian

It’s been clear for a very long time that the main purpose of the tax system is to provide benefits to the wealthy. The minister responsible for cutting income support for the poor, Iain Duncan Smith, lives on an estate owned by his wife’s family. During the last decade it has received €1.5m in income support by way of farm subsidies from taxpayers.

In what has been dubbed the “Great British Sell-Off” and the “Sale of the Century”, the chancellor, George Osborne, intends to sell off public owned stakes in Royal Mail, RBS, the Met Office, Ordnance Survey and air traffic controller, Nats, which will rake in a one-off windfall of around £31.7 billion in 2016/17 – an amount which surpasses all privatisations since 1993, breaking even Thatcher’s record. To put this into a wider context, the money raised which will benefit the minority of Osborne’s elite friends in the city, will be the largest amount of money raised through the disposal of public assets in any 12-month period in modern history.

The ideology underpinning this public asset stripping is part of a strategy to reduce the role of the state that will do nothing to stimulate growth. On the one hand, Osborne announced £12 billion of cuts – the pain of which will be felt by the most vulnerable. On the other, he rushed through the sale of £2 billion worth of the 79 per cent stake the government has in RBS and as a result it was the taxpayers who lost out on a potential £14 billion return. It should also be noted that the Tory aristocrat, who seems set to be next in line to take the reins of PM from his friend David Cameron, had promised action on tax avoidance in spite of the fact that his family business routinely avoids tax.

Meanwhile, the UK version of a Kardashian, the royal parasite Princess Beatrice, who has been spotted taking to the water on Roman Abramovich’s £1 billion super yacht, Eclipse, has racked up seventeen holidays in eight months at our expense.

The real benefit spongers, then, are not those who feature on low brow documentary programmes, but rather they are the elites who occupy the corridors of power. If the richest 1,000 people in Britain that have seen their wealth increase by a massive £155bn since the current economic crisis began in 2008, were to actually pay their fair share of tax, the deficit the government assures us needs reducing, would be wiped out at a stroke.

But there is no priority within government to insist they cough up. Asda, Google, Apple, eBay, Ikea, Starbucks, Vodafone: all pay minimal tax on massive UK revenues, mostly by diverting profits earned in Britain to their parent companies, or lower tax jurisdictions via royalty and service payments or transfer pricing. The £1 billion that Gideon gave away to his pals in the city on August 4 in the RBS share giveaway would have gone a long way to fund the deficit in the NHS, whose trusts’ claim are “unaffordable”.

However, the redistribution of wealth from the poor to the rich doesn’t end there. After dissecting yesterday’s Guardian piece on welfare spending, Craig Murray highlights how housing Benefit represents another form of massive subsidy and wealth transfer, particularly in London and the South East of England where, in the absence of housing benefit or inheritance, it’s impossible for anyone on the average income to live.

As Murray says, the distortion in house prices in this part of the UK has nothing to do with very wealthy foreign buyers concentrated at the top end of the market, but rather, it’s to do with:

the conjunction of buy to let and state housing benefit. The state pays out 18 billion pounds a year in housing benefit, and the vast majority of that goes straight into the pockets of private landlords in the South East of England. State housing benefit underpins the entire system.”

Now the brilliance of the trick is that, as it is labeled a benefit, the left fight to keep housing benefit as though it benefited poor people. In fact this is a great illusion. It does nothing of the sort. What would truly benefit poor people is lower rent or affordable homes. Housing benefit goes straight into the pockets of the landlord class.

The landlord class of course encompasses the political class, many of whom (including Cherie Blair, famously) are also landlords. As housing benefit is paid for from general taxation, the entire system is a massive transfer of wealth from the poor to the rich, and above all from the North and West to the South and East.

The landlord class benefit not only from the taxpayer giving them enormous rents, but from the possession of artificially inflated property on which they can raise further money for more speculation…. The reason that IDS has not made a serious assault on housing benefit is that it puts money straight into the pockets of most of his Tory chums.

The largest benefit recipients in the UK are the great landlords….[P]umping in 18 billion pounds of state money a year to rents adds 288 billion pounds to property values.That explains how you reach the apparently impossible situation of median property at twelve times median income.

Bankers bankrolled by the taxpayer, as well as local authorities that administer housing benefit – both of whom owe their continuing existence to public funds – should be acting in the public interest not frittering away public money into the pockets of the rich.

The Benefit Sponging Elite

Last night another row erupted after it emerged that hedge funds rushed to gamble on RBS shares falling in value after government plans to start selling its stake were leaked last week. (file image)

I was in my local cafe earlier today and nearly choked on my bacon sandwich at the sheer audacity of the banksters. I happened to glance over at the adjacent table at the copy of the Daily Mail somebody had left open. I generally detest this rag, but have to admit that every now and then it does come up with the occasional nugget.

The paper does appear of late to be on a mission to undermine Osborne and the Tories. As I alluded to in post on August 4, it was clear that the Tory Aristocrat had garnered some insider knowledge prior to the part sell off of RBS thus providing the opportunity for his mates in the City to, once again, pillage the public purse- this time to the tune of a cool £1bn (1).

This was money which no doubt could have been better spent on bailing out a non-taxable status charitable organisation like, for example, Kids Company run by Camila Batman (and robber?) ghelidjh. Maybe an extra billion added to the £3 million Cameron nodded through to the bankrupt charity would have saved it?

But anyway back to the latest banking scandal. With her insider knowledge and connections as a former City banker, it’s highly conceivable that Treasury minister, Harriet Baldwin. who defended the sell-off, would have advised Osborne on the matter.

The Daily Mail’s Banking Correspondent, James Salmon, revealed that hedge funds rushed to gamble on RBS – a ploy known in the market as ‘shorting’ – “may have generated profits of more than £10 million, This is because the bank’s share price fell in the days before the government sell-off.” (2).

Labour MP John Mann, a member of the Treasury select committee, said: “Yet again hedge funds and bankers are making money and the public are losing out.” (3). A few days ago former City trader, Tom Hayes,was given a 14 year sentence for his role in rigging the Libor interest rate. (4). But he is merely the sacrificial lamb for a much wider and systematic corruption that begins at the very top. The fact that these kinds of abuses are allowed to continue in the context in which people struggling on benefits are jailed for stealing food (5), is the scandal of our time.

The former Republican analyst Mike Lofgren, disgusted with what his party had become, said the following about the economic elite in the United States:

“The rich disconnect themselves from the civic life of the nation and from any concern about its well being except as a place to extract loot. Our plutocracy now lives like the British in colonial India: in the place and ruling it, but not of it ” (6).

He might as well of been talking about the UK, which is basically little more than the 51st state. Osborne and Cameron identify more readily with a transnational elite than with the other people of this nation. The proof is in the pudding. On behalf of this elite, the government gives away a staggering £93bn a year in corporate welfare – a sum bigger than the deficit.(7). It champions the Transatlantic Trade and Investment Partnership; a graver threat to the interests of this nation than Islamic extremism.

And yet there is a iron-cast consensus between the Tories and the Labour hierarchy in terms of their unwillingness to tackle the problem. This explains why the latter distance themselves from the populist Jeremy Corbyn who wants to put and end to this kind of revolving door political cronyism.

The real benefit spongers are not those who feature on low brow documentary programmes, but rather they are the elites who occupy the corridors of the plush buildings within the City of London.

Banking Racketeers Set For Another Windfall

A sign is displayed outside of a branch of The Royal Bank of Scotland in central London, Britain May 20, 2015. REUTERS/Neil Hall

The UK Chancellor’s announcement that he plans to sell-off £2 billion worth of the 79 per cent stake the government has in RBS over the coming fortnight is, according to Unite national officer for finance Rob MacGregor, “recklessly irresponsible”(1). RBS shares that stood at £6.88 in 2007, are now valued at £3.30 (2). It should be noted that the shares have not been offered to the people who bailed out RBS, that is us, the taxpayers but to the Tories’ city friends.

The decision by Aristocrat Gideon Osborne, who seems set to be next in line to take the reins of PM from his friend David Cameron (3), and who promised action on tax avoidance (4), despite the fact that his family business has avoided tax (5), is defended by Treasury minister, Harriet Baldwin. Why would she defend the sell-off which will result in a £1bn loss to taxpayers, you may ask?

Well, it could have something to do with her connections within in the banking racket. Having joined investment bank JP Morgan Chase in 1986, she then became managing director and Head of Currency Management at their London office in 1998. She left the bank in 2008, after more than two decades with the bank (6). Maybe she has advised Cameron to get shot of the RBS millstone before his transition to PM.

The chief architects of the RBS collapse, Fred Goodwin and Sir Tom McKillop seemed to have disappeared into the ether.

To sell these shares when business is slow, many are on holiday and the stock market depressed, means its the opportune time for these scoundrels to defraud us for the second time round, which of course is really what this latest scandal is all about.

If, after this latest act by the page boy to his dads banker friends in order to further the interests of the banking racketeers, won’t have awaken the masses from their slumber, then I fear nothing will. There is no clearer illustration we are being taken for a ride than the governments collusion with the bankers as highlighted by this sell-off.  Austerity amounts to the raiding of the public coffers to bolster the pockets of the super-rich (7).

As economist Andrew Fisher alludes, this is clearly an ideological and dogmatic move by Osborne, not a financially pragmatic one:

“Banks that owe their continuing existence to public funds should be acting in the public interest — investing in the productive economy, reducing the margins between their lending rates and savers’ rates, and ending the fat-cat bonus culture at the top, while underpaying and laying off cashiers at the other end.”(8).

The Financial Times reported yesterday (August 3) that Osborne wants to flog off £32bn worth of public assets by the end of the financial year, as part of a strategy to reduce the role of the state that will do nothing to stimulate growth (9). The £32bn worth of public asset stripping that is to include the Met Office, Ordnance Survey and air traffic controller Nats, breaks even Thatcher’s record (10).

We are not in this mess because politicians are stupid but because of the cozy relationship that exists between them and the bankers who the latter lobby on behalf of (11). The Guardian outlines how it all works. A commentator on Craig Murray’s blog argued that:

“The entire RBS saga is a scam from start to finish:

• All banks make huge profits by lending prodigiously.
• Concentrate bad debts in a few banks.
• Instill ‘too big to fail’ meme.
• Order politicians to ‘nationalise’ compromised banks at huge cost to tax-payers.
• Continue injecting billions until ‘nationalised’ banks have paid off the lion’s share of bad debt.
• Sell bank back to bankers at knock-down price” (12).

Another commentator from the same blog makes another apt point:

“Note the bastards didn’t buy voting shares in RBS: the taxpaying sucker didn’t even have the opportunity to reform the bank. Lovely little restructure: the retail arm goes to another retail bank for a knockdown price (W&G may not have been too wise buying it even then), while the crooked division ends up divvied up between hedge funds. And lives to cheat another day” (13).

Don’t forget dear readers, we are all in it with the aim of getting the deficit down.