Brexit: Having Their Cake While Eating Yours

I wasn’t surprised by the Brexit referendum result. I was suspicious.

Brexit is the popular term for the prospective withdrawal of the United Kingdom (UK) from the European Union (EU).

In a referendum on 23 June 2016, 51.9% of the participating UK electorate (the turnout was 72.2% of the electorate) voted to leave the EU.

https://en.wikipedia.org/wiki/Brexit

This was primarily because I’m very suspicious of the changes made by Teflon Tony in 2001 to the laws governing postal voting.

The Representation of the People Act 1985 subsequently made provision for these extensions to the right to apply for an absent vote.

The proposals did not apply to Northern Ireland where there was already widespread concern, shared by the Government, at the extent and nature of electoral abuse, including the abuse of postal voting.

Further amendments were made to the rules governing absent voting in the Representation of the People Act 1989.

Since 2001, any elector has been entitled to request a postal vote (known as postal voting on demand) without giving a reason, apart from in Northern Ireland, where postal voting is available only if it would be unreasonable to expect a voter to go to a polling station on polling day as a result of employment, disability or education restrictions.

Prior to 2001, postal votes had been available since 1948 only to those unable to attend a polling station for reasons of ill health, employment or planned holiday away from home and to some electors living on small islands where they would need to cross water to reach their polling station.

Before 1985, holidays were not a sufficient reason, and the employment criterion allowed only some professions.

https://en.wikipedia.org/wiki/Postal_voting#United_Kingdom_2

My suspicions [and cynicism] increased significantly when Malevolent May rushed to invoke Article 50 after articulating a vacuous strategy consisting of one empty platitude.

On 29 March 2017, the British government invoked Article 50 of the Treaty on the European Union.

The UK is thus on course to leave the EU on 29 March 2019.

https://en.wikipedia.org/wiki/Brexit

Britain’s shock vote to leave the European Union in June propelled May to power and the former interior minister has been under pressure to offer more details on her plan for departure, beyond an often-repeated catchphrase that “Brexit means Brexit”.

May says to trigger EU divorce by end of March, sterling falls
Reuters – Elizabeth Piper and Guy Faulconbridge – 2 Oct 2016

http://www.reuters.com/article/us-britain-eu-may-article-idUSKCN12208C

The rush to invoke Article 50 means the United Kingdom will leave the European Union on 29 March 2019 i.e. just before the beginning of their financial year beginning 1 April 2019.

In the United Kingdom, the financial year runs from 1 April to 31 March for the purposes of government financial statements.

https://en.wikipedia.org/wiki/UK_tax_year#United_Kingdom

This manoeuvre means the United Kingdom will avoid implementing the European Union Anti Tax Avoidance Directive which aims to prevent companies exploiting “national mismatches to avoid taxation”.

The Anti Tax Avoidance Directive

On 28 January 2016 the Commission presented its proposal for an Anti-Tax Avoidance Directive as part of the Anti-Tax Avoidance Package.

On 20 June 2016 the Council adopted the Directive (EU) 2016/1164 laying down rules against tax avoidance practices that directly affect the functioning of the internal market.

In order to provide for a comprehensive framework of anti-abuse measures the Commission presented its proposal on 25th October 2016, to complement the existing rule on hybrid mismatches.

The rule on hybrid mismatches aims to prevent companies from exploiting national mismatches to avoid taxation.

https://ec.europa.eu/taxation_customs/business/company-tax/anti-tax-avoidance-package/anti-tax-avoidance-directive_en

Under the European treaties, direct taxation is the sole preserve of individual EU member states, subject to compliance with the treaties.

EU measures on taxation require the unanimous agreement of all member states
.
ECOFIN will adopt the directive once the European Parliament has given its formal opinion.

Member states then will be obliged to adopt the domestic legislation necessary to comply with the draft directive by 31 December 2019 (with an extension until 31 December 2021 for the reverse hybrids provisions).

Deloitte – International Tax – European Union Tax Alert – 24 February 2017

Click to access dttl-tax-alert-european-union-24-february-2017.pdf

The European Union Anti Tax Avoidance Directive could be very expensive and very embarrassing for those individuals using “offshore” companies.

The Brexiters who put their money offshore
Some of the loudest voices in the debate – many of whom want the UK to be a tax haven – have their own offshore interests

Most have publicly defended their offshore interests.

The Paradise Papers offer new vignettes about them – and how they have benefited, legally, from the kind of practices that are now under more scrutiny than ever before…

The Guardian – Juliette Garside, Hilary Osborne and Ewen MacAskill – 9 Nov 2017
https://www.theguardian.com/news/2017/nov/09/brexiters-put-money-offshore-tax-haven

And it could be very expensive for multinationals wishing to “drive down their tax bill”.

The world’s largest company Apple, whose market cap is approaching $1 trillion, has found a new exotic location to shelter its money from tax authorities. As leaked documents reveal, Apple has docked in Jersey.

The revelation comes at a time when Apple faces a €13 billion ($13.9 billion) fine from the EU for receiving illegal tax benefits in Ireland. The American company hasn’t paid yet, missing the January 3 deadline. The European Commission, on behalf of the EU’s competition watchdog, has taken Ireland to court for failing to collect billions of euros from Apple.

Ireland’s tax system allowed Apple to funnel all its sales outside the United States, about 55 percent of its revenue, through Irish subsidiaries paying hardly any taxes.

Apple finds new offshore haven to stash its cash, avoiding billions in tax
RT.com – 7 Nov 2017

https://www.rt.com/business/409033-apple-jersey-tax-avoidance/

Jersey is ranked as a tax haven by many organisations with the Financial Secrecy Index ranking Jersey as 16th, one rank behind the United Kingdom as of 2015.

https://en.wikipedia.org/wiki/Jersey#Taxation

The tax battle between the oligarchs is heating up.

The European Commission is to investigate a scheme introduced by the British Government that can help multinationals drive down their tax bill.

The crackdown comes after the EU Commission announced earlier this year that it was taking Ireland to the European Court of Justice for failing to recover 13 billion euros (£11.5 billion) in tax from US tech giant Apple.

It also handed Amazon a bill of around 250 million euros (£221 million) in back taxes after stating that the firm’s sweetheart tax deal with Luxembourg broke state aid rules.

EU to probe British tax scheme – Jersey Evening Post – 26 Oct 2017
https://jerseyeveningpost.com/news/uk-news/2017/10/26/eu-to-probe-british-tax-scheme/

The EU is demanding Britain accept that Northern Ireland may need to remain inside the European customs union and single market after Brexit in order to avoid “a hard border on the island of Ireland”.

Financial Times – Alex Barker – 9Nov 2017
https://www.ft.com/content/9e11bdcc-c585-11e7-b2bb-322b2cb39656

The great and the good backing the Malevolent May government are confronting a Marie Antoinette Moment because they want to keep their “offshore” cake whilst eating the “onshore” cake produced by the British and European taxpayers.

Sadly, it’s becoming increasing evident the great and the good consider the British people and the British economy to be inconsequential collateral damage.

But, as Barnier says, the moment of true clarification is approaching, whence these amateurs will no longer be able to fake it. They are going to be hit squarely between the eyes with a dose of reality. It will have them gasping for breath.

In that context, in my piece yesterday, I advanced the idea that the UK could lose in the first year of Brexit close to £400 billion in GDP – a fall of around 20 percent.

By contrast, we see in City AM a report citing Oxford Economics which has a “no deal” Brexit wiping off £16 billion from the UK GDP by 2020.

That is actually less than one percent, although its actual report posits a worst case scenario of 3.9 percent loss of GDP.

That, in itself is substantial, a yearly accumulating loss of £75 billion.

In one year, that far exceeds the total of £60 billion we may have to pay to the EU for a “soft” exit.

Brexit: Fighting Talk – Eureferendum.com – Richard North – 10 Nov 2017
http://www.eureferendum.com/blogview.aspx?blogno=86664

I hope I’m wrong.

Gallery | This entry was posted in Economics, History. Bookmark the permalink.

7 Responses to Brexit: Having Their Cake While Eating Yours

  1. tom0mason says:

    Had to smile when you mentioned the Guardian. The Guardian is ultimately owned by Scott Trust Limited (https://en.wikipedia.org/wiki/Scott_Trust_Limited), a nominally charitable organization but is a private company with many of it’s assets off-shore (for tax reasons?).

    The Guardian and its parent groups participate in Project Syndicate, established by George Soros, and intervened in 1995 to save the Mail & Guardian in South Africa. However, Guardian Media Group has said that it sold the majority of its shares of the Mail & Guardian in 2002. There is no method to verify this as all these transactions were ‘private’.
    Also of note is that the Guardian has done a deal with New East Network. The New East Network, has connections to some NGO’s, some strange blogoshere sites(see https://off-guardian.org/2015/12/20/new-east-network-who-is-the-guardian-speaking-for-part-1/ ), and an entity called Eurasianet (http://www.eurasianet.org/ ). The managing editor of Eurasianet is Justin Burke. At the time that the Guardian made the announcement of its new partnership, Justin Burke was and still is the chief editor. A link to Eurasianet had Burke’s email address listed at Soros’ Open Society Foundation (https://www.theguardian.com/world/2014/jun/09/post-soviet-states-new-east-network-guardian-welcome).

    All money and influence peddling in MSM — The Guardian is no different.

  2. cadxx says:

    Tax Avoidance
    The redistribution of wealth is a subject neglected by politicians and the world and his wife since the 1940’s. I was watching some lady politician on TV blaming the “ageing population”. She said that in the forties there were four or five people working for every one out of work and compared the situation today as a cop-out for the complete failure of redistribution policies. The reality is that the same money (and more) is being made by companies who, thanks to automation, have a smaller workforce who collectively are paying less tax. (machines don’t pay tax) The failure is down to the politicians, but the Tories are not going to touch this one with a barge-pole.
    There are a small number of European politicians suggesting a “universal payment”, which is putting the problem on its head – the market needs to pay for it.
    Finally, there is the, beloved by the Tories, *stigmatisation* of the sick, the infirm, the old and those out of work for no fault of their own. This has to stop and it has to be admitted that payment to those on the social scrap-heap is not payment of the lazy, but a necessary social engineering project.
    cadxx

  3. johnm33 says:

    Bit of a tangent, but if society took back the ability to create money from the aristocrats then a simple 1-2% transaction tax on commerce would cover almost all government spending. Presently 40% of tax revenues go to pay the interest on government debt, [US + UK] and upstream of every consumer transaction there are interest charges of a similar magnitude. Money is created out of thin air by banks, in exchange for a security, mortgage, gov.bond, signed loan agreement etc., and hardly ever leaves the confines of a banks books, simply moving from one account to another. No doubt that creating money as debt is a brilliant idea but it should simply be lent by the government to each citizen equally, we could start by dividing the national debt by the number of citizens and crediting the accounts of each citizen with a subsistence level wage/debt until that amount has been created.
    http://www.sciencedirect.com/science/article/pii/S1057521914001070
    https://www.sprottmoney.com/blog/the-one-bank-revisited-jeff-nielson.html
    https://ellenbrown.com/2012/11/08/its-the-interest-stupid-why-bankers-rule-the-world/

  4. cadxx says:

    Yes, it always goes back to the banks. But how do you suggest we get shot of them?
    cadxx

  5. malagabay says:

    The 40 “Hidden Horrors” Of Theresa May’s Brexit Deal
    ZeroHedge.com – Tyler Durden – 17 Nov 2018

    Below is a list of the top 40 draft deal “horrors”
    (courtesy of the Spectator
    https://blogs.spectator.co.uk/2018/11/the-top-40-horrors-lurking-in-the-small-print-of-theresa-mays-brexit-deal/ ):

    1. May says her deal means the UK leaves the EU next March. The Withdrawal Agreement makes a mockery of this. “All references to Member States and competent authorities of Member States…shall be read as including the United Kingdom.” (Art 6).
    2. Not quite what most people understand by Brexit. It goes on to spell out that the UK will be in the EU but without any MEPs, a commissioner or ECJ judges. We are effectively a Member State, but we are excused – or, more accurately, excluded – from attending summits. (Article 7)
    3. The European Court of Justice is decreed to be our highest court, governing the entire Agreement – Art. 4. stipulates that both citizens and resident companies can use it. Art 4.2 orders our courts to recognise this. “If the European Commission considers that the United Kingdom has failed to fulfil an obligation under the Treaties or under Part Four of this Agreement before the end of the transition period, the European Commission may, within 4 years after the end of the transition period, bring the matter before the Court of Justice of the European Union”. (Art. 87)
    4. The jurisdiction of the ECJ will last until eight years after the end of the transition period. (Article 158).
    5. The UK will still be bound by any future changes to EU law in which it will have no say, not to mention having to comply with current law. (Article 6(2))
    6. Any disputes under the Agreement will be decided by EU law only – one of the most dangerous provisions. (Article 168).
    7. This cuts the UK off from International Law, something we’d never do with any foreign body. Arbitration will be governed by the existing procedural rules of the EU law – this is not arbitration as we would commonly understand it (i.e. between two independent parties). (Article 174)
    8. “UNDERLINING that this Agreement is founded on an overall balance of benefits, rights and obligations for the Union and the United Kingdom” No, it should be based upon the binding legal obligations upon the EU contained within Article 50. It is wrong to suggest otherwise.
    9. The tampon tax clause: We obey EU laws on VAT, with no chance of losing the tampon tax even if we agree a better deal in December 2020 because we hereby agree to obey other EU VAT rules for **five years** after the transition period. Current EU rules prohibit 0-rated VAT on products (like tampons) that did not have such exemptions before the country joined the EU.
    10. Several problems with the EU’s definitions: “Union law” is too widely defined and “United Kingdom national” is defined by the Lisbon Treaty: we should given away our right to define our citizens. The “goods” and the term “services” we are promised the deal are not defined – or, rather, will be defined however the EU wishes them to be. Thus far, this a non-defined term so far. This agreement fails to define it.
    11. The Mandelson Pension Clause: The UK must promise never to tax former EU officials based here – such as Peter Mandelson or Neil Kinnock – on their E.U. pensions, or tax any current Brussels bureaucrats on their salaries. The EU and its employees are to be immune to our tax laws. (Article 104)
    12. Furthermore, the UK agrees not to prosecute EU employees who are, or who might be deemed in future, criminals (Art.101)
    13. The GDPR clause. The General Data Protection Regulation – the EU’s stupidest law ever? – is to be bound into UK law (Articles 71 to 73). There had been an expectation in some quarters that the UK could get out of it.
    14. The UK establishes a ‘Joint Committee’ with EU representatives to guarantee ‘the implementation and application of this Agreement’. This does not sound like a withdrawal agreement – if it was, why would it need to be subject to continued monitoring? (Article 164).
    15. This Joint Committee will have subcommittees with jurisdiction over: (a) citizens’ rights; (b) “other separation provisions”; (c) Ireland/Northern Ireland; (d) Sovereign Base Areas in Cyprus; (e) Gibraltar; and (f) financial provisions. (Article 165)
    16. The Lifetime clause: the agreement will last as long as the country’s youngest baby lives. “the persons covered by this Part shall enjoy the rights provided for in the relevant Titles of this Part for their lifetime”. (Article 39).
    17. The UK is shut out of all EU networks and databases for security – yet no such provision exists to shut the EU out of ours. (Article 8)
    18. The UK will tied to EU foreign policy, “bound by the obligations stemming from the international agreements concluded by the Union” but unable to influence such decisions. (Article 124)
    19. All EU citizens must be given permanent right of residence after five years – but what counts as residence? This will be decided by the EU, rather than UK rules. (Articles 15-16)
    20. Britain is granted the power to send a civil servant to Brussels to watch them pass stupid laws which will hurt our economy. (Article 34)
    21. The UK agrees to spend taxpayers’ money telling everyone how wonderful the agreement is. (Article 37)
    22. Art 40 defines Goods. It seems to includes Services and Agriculture. We may come to discover that actually ‘goods’ means everything.
    23. Articles 40-49 practically mandate the UK’s ongoing membership of the Customs Union in all but name.
    24. The UK will be charged to receive the data/information we need in order to comply with EU law. (Article 50). The EU will continue to set rules for UK intellectual property law (Article 54 to 61). The UK will effectively be bound by a non-disclosure agreement swearing us to secrecy regarding any EU developments we have paid to be part. This is not mutual. The EU is not bound by such measures. (Article 74)
    25. The UK is bound by EU rules on procurement rules – which effectively forbids us from seeking better deals elsewhere. (Articles 75 to 78)
    26. We give up all rights to any data the EU made with our money (Art. 103)
    27. The EU decide capital projects (too broadly defined) the UK is liable for. (Art. 144)
    28. The UK is bound by EU state aid laws until future agreement – even in the event of an agreement, this must wait four years to be valid. (Article 93)
    29. Similar advantages and immunities are extended to all former MEPs and to former EU official more generally. (Articles 106-116)
    30. The UK is forbidden from revealing anything the EU told us or tells us about the finer points of deal and its operation. (Article 105).
    31. Any powers the UK parliament might have had to mitigate EU law are officially removed. (Article 128)
    32. The UK shall be liable for any “outstanding commitments” after 2022 (Article 142(2) expressly mentions pensions, which gives us an idea as to who probably negotiated this). The amount owed will be calculated by the EU. (Articles 140-142)
    33. The UK will be liable for future EU lending. As anyone familiar with the EU’s financials knows, this is not good. (Article143)
    34. The UK will remain liable for capital projects approved by the European Investment Bank. (Article 150).
    35. The UK will remain a ‘party’ (i.e. cough up money) for the European Development Fund. (Articles 152-154)
    36. And the EU continues to calculate how much money the UK should pay it. So thank goodness Brussels does not have any accountancy issues.
    37. The UK will remain bound (i.e coughing up money) to the European Union Emergency Trust Fund – which deals with irregular migration (i.e. refugees) and displaced persons heading to Europe. (Article 155)
    38. The agreement will be policed by ‘the Authority’ – a new UK-based body with ‘powers equivalent to those of the European Commission’. (Article 159)
    39. The EU admits, in Art. 184, that it is in breach of Article 50 of the Lisbon Treaty which oblige it to “conclude an agreement” of the terms of UK leaving the EU. We must now, it seems, “negotiate expeditiously the agreements governing their future relationship.” And if the EU does not? We settle down to this Agreement.
    40. And, of course, the UK will agree to pay £40bn to receive all of these ‘privileges’. (Article 138)

    https://www.zerohedge.com/news/2018-11-17/40-hidden-horrors-theresa-mays-brexit-deal

  6. malagabay says:

    David Starkey: the elite is guilty of treason — The Brendan O’Neill Show
    Published on Sep 15, 2019

    Historian and broadcaster David Starkey speaks to Brendan O’Neill about the ‘lying, deceiving shits’ in the establishment.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.