Scottish independence vs food vs a fair corporation tax

Another day, another piece of garbage anti-Scottish indpendence chat, except this time one with broader ramifications; it turns out that besides causing the four horsemen of the apocalypse to rise up and grind the very earth into cinder, Scottish independence would also make your weekly supermarket shop more expensive. Crivens. The “argument” presented for this is as follows:

“in today's FT, which reports that bosses of three of the four biggest supermarket chains are warning that food prices in an independent Scotland might well be higher than in the rest of the UK. ….Scotland has a large dispersed population, so transport costs - logistics - tend to be higher in Scotland than in England.
Scottish people eat relatively less fresh food than the English, and fresh food is much more expensive to transport and store (the logistics of supplying fresh food are highest). So it is relatively more costly to provide fresh food in Scotland….

….. at the moment, the big four supermarket groups - Tesco, Sainsbury, Asda, Wm Morrison - absorb these differential costs in a pan-UK pricing policy. They take on the chin that the intrinsic profitability of doing business in Scotland is less than for England.”

So there. Or not. First off, I don’t know about you, but last time I went anywhere noticeably dispersed in Scotland I didn’t encounter a single major supermarket outlet whatsoever (check what Yell has to say about supermarkets on Arran fer instance). Rather, what I encountered were corner shops that already were charging plenty extra for basic goods.

Second, well lets go to some of Scotland’s more distant locales that aren’t so dispersed then, Inverness for example, the capital of the highlands or as it's also known “Tesco Town” i.e. a far north location with a ridiculous concentration of major supermarket outlets where logistical scale economies are already being achieved to the point where the notion that yer average Inverness punter’s weekly shop is being subsidised is a joke (alternatively and in the interests of fairness try Stonehaven instead give or take what you’d discover there are the joys of living somewhere where the only supermarket on offer is the Co-op what that means in terms of crap fruit and veg).

Dull facts mean I’m not too convinced by the “argument” being made allova sudden. But, what the hey, lets take them at their word regardless, except (a) if transport costs really are all that, then presumably this creates a greater incentive to source local produce i.e. taking away the supposed English food price subsidy could benefit Scottish food producers and/or (b) as supermarkets depend on price and convenience to out-compete smaller, local rivals, if price was less of an option, then Scottish independence could benefit local retailers. Oh and (c) so howcome a pint costs more in London, especially London City-bastard-Airport than anywhere in Scotland then eh? Eh?

Besides not being especially convinced by the anti-independence argument being made, what really struck me was the associated chat about the limited appeal of the SNP’s proposed competitive corporation tax rate; “the supermarket groups tell me that the Scottish government's promise to cut the headline rate of corporation tax by up to three percentage points would be of little benefit to them. The boss of one says the health increment on the rates currently costs them more than four times what that cut in corporation tax would shave off their tax bills….. The biggest Scottish supermarkets, those with a rateable value of more than £300,000, and which sell both cigarettes and alcohol, pay a 28% "health" increment on business rates - which costs them collectively around £30m a year.”

Now just chew on that for a second. And another. And then some more. Yup, that’s right, cutting corporation tax wouldn’t actually matter because these feckers already do so much to avoid it cutting it would be largely immaterial.

Now this strikes me as being what’s actually important here, which is as follows; Scotland already provides a practical example of how big, global PLCs can be more fairly taxed than is currently the case because it operates a tax that uses the rateable value of premises to exclusively target big retailers rather than whatever profits supermarket accountants claim they make in whatever country they happen to be operating in. And have any major supermarkets left Scotland as a result because they’re not subject to this tax in England? No, they haven’t and no they won’t either, because they, like KFC, amazon, google, Multinational-Tax-Dodging Incorporated etc.,  need boots on the ground to ensure they can actually reach consumers as this droog refers to here and here.

So really whether food would cost more in an independent Scotland is besides the point not least because the arguments presented as to why are pants and potentially favour independence. But, do existing Scottish tax arrangements – hit ‘em in their cost base regardless of the declared profits - provide a practical example of how to quickly and easily tax multinational PLCs more fairly without this having any adverse effects whatsoever let alone requiring any grand international agreements to be made that will never actually happen? You utterly betcha.

No wonder the article I’ve heavily quoted from referred to supermarkets being afraid of going on record about what they think, its just the reasons why appear a lot less to do with a supposed fear of Alex Salmond saying nasty things about them and a lot more to do with people actually having a  think about how they're currently taxed.

Hmmmm, flip flops. Nice.

For reasons I’ll spare you I found myself in Edinburgh’s Hollister shop recently. What struck me about the place was that the poor sods getting paid to fold stuff were wearing flip flops. In Edinburgh. In winter. Given company policy is to keep the place as dimly lit as possible I felt genuinely sorry for the shop assistants’ toes as all the shoppers crunched past in their winter footwear.

Then I discovered the CEO of the US parent company, the 69 year old plastic-fantastic freakzoid pictured above, has a 40 page plus manual detailing what the male models hired to attend to him (and his dogs) on his private jet have to wear, from  pants, to cologne to flip flops i.e. the poor sods with bruised toes folding jumpers down George Street are actually the embodiment of one pensioner’s sexualised fantasies.  

This is profoundly liberating I guess in that it relegates men to the same eye candy standards traditionally imposed on women so engenders an equality of a sort.  However, rather than gender issues, I reckon it provides a useful warning as to the future direction of British society and British culture. No seriously, it does.

This is because it’s an example of what the super-rich, the ruling class, the 1% even, does when it's free to dictate how others have to behave. Want a job? Getting hassled by the broo to do so? Then put on some flip flops. Why flip flops? Because a very rich old age pensioner thinks attractive young men look cute in flip flops that’s why. And no you’re not a shop assistant (yes you are, you're not even a visual merchandiser) you’re a brand ambassador. So how does that make you feel when you put on the company flip flops, eh?

In Hollister-land the super rich clearly have no sense of let alone concern for the personal dignity of anyone other than themselves and their own. In fact, they don't just lack empathy, they blithely shred the dignity of those they employ on low wages whenever it gets in the way of their personal whims and sexual proclivities. And if challenged, they will readily draw upon free market rhetoric about how making people wear flip flops in winter is good for shareholder value, creates jobs (that would be there regardless cos we all need jumpers, its simply whose jumpers we choose to buy) and confers a competitive advantage in a globalized economy, etc..

The reality of course is more complicated than this; the super rich dodge taxes the rest of us pay and benefit from government policies focused on boosting asset values i.e. wealth and subsidising the low pay that ensures the rich continue to get an even bigger slice of the cake. Except, this would be to imply the super rich aren't 100% wholly responsible for their great fortunes and we apparently can't have that.

This all matters because if there’s one country in the world that’s gallavanting as fast as it can towards the American model of super rich, super poor and fuck all those in between, its Britain. So bring on the flip flops and lets hope - as per Abercrombie & Fitch/Hollister company policy - our photos are judged pretty enough at their monthly review for us to keep our jobs.

Decent and sustainable jobs vs amazon.com

Back in the day the various UK development agencies fixated on, fetishised even manufacturing when they went out chasing foreign direct investment. This reached its apogee with Chunghwa picture tubes, the central belt facility custom made to build cathode ray tubes just as the world discovered flat screen technology. Lessons were presumably learned until now it seems any new job is a job worth having. Except, is this really the case given the companies Britain now bends over backwards to attract?

The contrast between two things are prompting these questions. One was attending the Radical Independence conference on Saturday, the other is the BBC expose of working in an amazon.com fulfilment centre. Ignoring the actual proposals to sort things made at the conference, one of the key demands repeatedly made was for more decent sustainable jobs, a perfectly reasonable request when you consider amazon.com.

Now, the BBC thing is all very well, it will, I’m sure, highlight lots of nasty employment practices just in time for Christmas then be forgotten thereafter give or take some handwringing. Except the global chat about amazon.com has for years now made clear it's a ferociously shite employer.  Here, for instance, is an article about how Amazon set up a fulfilment centre in the US without air conditioning that got so hot emergency medical personnel were on standby to take workers suffering heat injuries to hospital (whether they get their pay docked after passing out from heat exhaustion isn't clear). Here you’ll get a flavour of how amazon.com’s aggressive employment policies are being contested in Germany where trade unions are actually listened to unlike as opposed to here where amazon.com’s anti-union stance is easier to impose. So even without the BBC it was already clear that as an employer amazon.com is bad for your health and your wealth.

Then there’s the wee thing you notice about where amazon.com locates its fulfilment centres. In the US this includes Baltimore - as in The Wire, as in post-industrial urban decay and high unemployment - which was so eager to get the centre it handed over $35m in enterprise zone tax credits, $5.5m in Maryland tax credits, a $1.25m loan on easy terms and discounts from the local utility company. Here, amazon.com has fulfilment centres in Gourock (I think they mean Greenock really) and Swansea i.e. our own hot spots of post-industrial urban decay.

So how much taxpayer funded aid did amazon.com get then to set up shop in Grerenock/Gourock and Swansea? And where else exactly would they have gone if they hadn’t set up shop there given its not as if their actual customers are moving anytime soon i.e. if amazon.com wants to sell to the West of Scotland and Wales, then amazon.com needs fulfilment centres in the West of Scotland and Wales (or bigger centres employing more people elsewhere i.e. no net gain in employment whatsoever). And hang on a mo, so is amazon.com getting millions of taxpayer moolah to do something it’d have to do anyway at the same time as it dodges paying British corporation tax, like how’d that work then?

Unfortunately, politicians aren’t much of a guide because they still sound like they’re lumbered with a Chungwa Picture Tubes mentality. Like when David Cameron responded to amazon.com opening 3 new fulfilment centres by saying “I am delighted that Amazon will create thousands of new jobs … this shows that the UK has the infrastructure and talent to continue to attract major investments from leading companies such as Amazon,” I think what he actually meant to say was that:

1)      amazon.com wants to maintain and improve its access to and ability to service tens of millions of profitable customers in one of the world’s richest online economies

2)      and to a lesser extent, by doing so it limits the scope for any potential (initially) UK focused rivals to emerge given by definition the amazon.com business model of selling online in itself doesn’t convey a sustainable competitive advantage whereas a logistics infrastructure does.

I think that was what he was meaning anyway, its hard to say other than amazon.com needs access to the British economy far more than Britain needs amazon.com.

So amazon.com, lovely. It dodges taxes, it treats the majority of its employees like shit and - am guessing - it gets big taxpayer handouts to set up warehouses it’d have to set up anyway. I think I;ll be doing my Crimbo online shopping a wee bitty different from now on until amazon.com starts providing “decent sustainable jobs” (with this presumably involving Jeff Bezos spending less on space ships and a wee bitty more on air conditioning and, heaven forfend, wages).

Paraphrasing the news

Despite the BBCs mendacious efforts to stay on message, a quick skek of what they’re currently reporting neatly conveys how things are. I’m paraphrasing here, but as I read it the following appear to be some of the big stories:

Today's headlines; the total cash paid to the rich people in charge of big companies is growing around ten times faster than the actual economy.

This is despite the notable example of the rich person in charge of a big company that may well have systematically defrauded taxpayers for years apologising for potentially systematically defrauding taxpayers for years. Sources report he is set to remain very rich regardless and retain what is likely to be a very big, most likely tacky holiday home somewhere sunny despite his having gotten rich running a company that may well have systematically defrauded taxpayers for years.

Elsewhere, very rich bankers, some of whom went to very expensive private schools, explained why they should be paid lots of money even when they do their jobs really badly. Sources confirm the small print in the contracts signed is such that the taxpayer clients involved don’t have no leg to stand on when it comes to getting any money back. Not a penny. 

When asked if this means the very rich bankers involved will ever be employed on behalf of taxpayers ever again, our sources advised that as the banks employing the very rich bankers are currently on the look out for retired government ministers and senior civil servants to employ as 2 day a week special advisors on what are currently understood to be 6 figure packages, then yes they would receive taxpayer funded gravy in future.

In breaking news the current Tory party fixation with drawing increasingly improbable links between the Labour party and an incompetent, drugged up party boy approved for a job he very obviously wasn't up to by people managed by someone the ConDem government subsequently knighted where judged to be highly successful at drawing attention away from the Tories letting a bloke who owns a chunk of Wonga and gives them money try and rewrite employment law in ways that would make him more money, but were for the most part dismissed as mental *.

And finally, ordinary people continue to be made redundant en masse because this is for the good of us all. Yer average punter didn't give a hoot either way because he or she continues to favour engaging in narcissistic, but ultimately apathetic pursuits instead.


* what's interesting here is that because party boy appears to have been so much of a party boy, the Co-op is now looking at his expenses claims. This, when you think of Al Capone,  has real potential in relation to justice and all the other boys that fucked the economy into a cocked hat. 

 

Mon the deflation!!!!!!!

That the total rewards paid to FTSE company directors grew 14% over the past year was as predictable as it was repugnant,so lets have some fun at the scrounging, subsidised bastards’ expense. Yeah, that’s right, according to the right’s own arguments all these FTSE boys are subsidised scroungers.

Here’s how; reading thru some of the details it turns out the bulk of the gains were from “share-based long-term incentives” i.e. if a company’s share price goes up, the execs get the mega moolah. This is terribly lovely until you realise that for years now monetary policy in Britain, in particular quantitative easing, has been geared to boosting asset values. And shares are an asset i.e. a big swodge of the gains executives creamed off this year are hee haw to do with them and plenty to do with a policy the British Chambers of Commerce says, according to CNBC, is debasing the pound!

As for the subsidies, well, lets get realistic for a minute and ignore all the annual report and account bollocks about how such and such a thought-leadership-best-in-class business strategy is delivering real gains; the bulk of the business costs being cut in Britain today are to do with labour be it via redundancies, shorter hours, pay freezes or the closure of pension schemes. Now, what happens when pay gets cut or people laid off? That’s right tax credits and unemployment benefits pick up the strain i.e. the government i.e. us, is subsidising all the supposedly best in class business models all these FTSE douchebags claim they’ve successfully implemented ahead of plan.

Then there’s the very, VERY obvious point, which is in an economy still miles away from trend growth of c. 2.5% a year, if the cash all these execs get goes up 14% a year, they’re getting an even bigger slice of the cake.  So yeah, sure, mebbe the UK GDP dead cat is bouncing for a change, but so what given all of the benefits are getting ripped off by the already very rich; as it stands things work for them, but no-one else or to quote the CBI on recent (below inflation i.e. waaaaay below 14% per annum) pay rises “It's clear that pay restraint is continuing to underpin employment growth. We expect wages to pick up next year, but sustained growth must come first to protect jobs” i.e. we’re all expected to endure yet another year of real terms pay cuts for the greater good whilst the subsidised, scroungers in charge get 14% increases for managing mediocre, subsidised growth.

This brings us to the spectre of deflation currently haunting the Eurozone. Now the mechanics of why deflation is typically regarded as a bad thing are clear enough; if prices fall, then consumers and businesses are wracked by uncertainty and likely to postpone spending e.g. why buy a widget making machine today, when (a) it might be cheaper tomorrow and (b) the widgets it makes will sell for less than you thought when you bought it.

But, speaking as an employee and as a consumer so what? In the current environment one thing I’m certain about is that my pay is set to fall further behind prices i.e. its real value is going to keep falling for the forseeable future so to me a dose of deflation, given it would boost the real value of my pay, is a good thing.

Besides, the arguments against deflation looking pretty weak from my perspective. Like, bearing in mind my marginal propensity to consume is much higher than a FTSE executive’s which is an important thing in the consumer driven UK economy, its not as if I can actually postpone the bulk of my spending given it involves things like food and monthly bills. And as for consumer durables, well, what characterised the NICE decade if it wasn’t ever cheaper, ever higher spec Chinese made goods that people kept buying in spades regardless? So actually, falling prices have a very obvious appeal; but ahhh, this would undermine business confidence and investment and ultimately economic growth – except, so what? Right now, as the 14% FTSE subsidy junkie increase makes abundantly clear, any gains, however teeny, will just be creamed off by a swathe of fat, fat fatty cats whilst me and pretty much everyone else in Britain gets less than hee haw, so feck it, lets have some deflation i.e. the hurtling extent of inequality is such, what is and isn't a good thing for the economy is increasingly a matter of where you sit in the class structure *.

* The bigger point here is the growth in economic inequality and all that entails is, besides being unjustifiable in its own terms, very obviously socially and politically corrosive and, increasingly, a threat to the economy. As for the CBI bod quoted above, every employer, the Tories etc., they really should think about Orwell’s chat about Lenin I think it was; “You can’t make an omelette without breaking eggs.”, “Yes, but where is the omelette?

Wonga vs the sovvie ring

Sovvie or soveriegn rings ain’t what they used to be. Growing up I remember them as being obvious markers of the rough-working class. They were flash, they were tacky and if you wore enough you had a ready made knuckle duster (men and women, boys and girls). They also performed the important economic function of being a readily pawnable asset, it being reasonable to assume the wearer was also the owner.

These days you don’t see so so many. Fashion is probably a factor along with the price of gold pushing them out of reach of some whilst encouraging others to cash theirs in for good. And when the only portable valuable an increasing number of people have is a contract mobile phone, pawnshops become less of an option.   

Online payday loans appear a ready alternative to pawnshops then in ways that stem from this and their sheer convenience to an extent those arguing for a credit union alternative appear unwilling to acknowledge.

Another “advantage” payday lenders have is their anonymity. Even though the pawnshop I used had confessional-like booths, the whole experience felt stigmatised and came complete with a readily imagined scope for public humiliation; I still remember how, after sliding my goods through the grill , I walked quickly away clutching my tenners like they were fresh pornography. I reckon the association remains today, only now it favours the online lender just as it does the online pornographer. Equipped with a laptop in the privacy of our own homes, we’re free to indulge our wants regardless of how exhorbitant or explicit they may be.

So in many ways payday lending appears no more than a new way of meeting a longstanding desire for instant access to cash, only now our ability to fulfil it has been reduced to little more than the speed of our internet connection. To be sure, economic factors underpin the growth of payday lending, most obviously the incessant, downward pressure on incomes that's set to continue for the forseeable future. However, I reckon cultural factors, in particular the changed interaction between what technology makes possible and what we're now free to feel comfortable doing also matters.

More leverage, being 2 tips, a story and some observations

Tip 1: You’re summoned to a meeting with HR. Not good. She’s already sitting behind a desk with a note pad and an intimidatingly fat folder when you arrive. During the meeting, the HR person taps the folder, at one point implying it concerns you and the reason for this meeting.

Or it might not. A bog standard HR tactic is to take a  folder into meetings like this to deliberately intimidate people. You're within your rights to ask to see it and if she refuses, inform her you'll be making a subject access request  -as per the data protection act - after the meeting to have a look at all these files she supposedly has on you. Now whose intimidated?

Tip 2: The meeting with HR is almost over or at least she’s said all she’s got to say. You, on the other hand, if you’ve just found out your being made redundant, might have a lot more to say, but are understandably distracted.

However, you're not so distracted you don’t hear the HR person pick up her pad and tap it on the desk, punctuating the meeting with a full stop you instinctively recognise and acknowledge. You look up, then at her as she starts easing out of her chair. Now the meeting is over or at least it is until you realise she is actively exploiting your civility so she can avoid having to contend with what you’re actually thinking or feeling.

A story*: What people leave on printers is great sometimes. The best I’ve heard about minuted the organised shafting of an executive who, for the purposes of this post,  we’ll call Mr Deputy Divisional-CEO. Mr Deputy had been recruited with the stated intention that after a few time he would take over from Mr Actual divisional CEO. Time passed, everyone agreed Mr Deputy was a very good deputy indeed, however, they also agreed he wasn’t quite divisional CEO material.

And so the shafting began; executives across the bank were contacted by HR who explained the situation and what they were going to do. Once all the executives agreed this was the right thing for the business, HR invited Mr Deputy to a meeting and told him his services were no longer required. Mr Deputy was taken aback at this, so much so he asked if he could speak to Executives A, B and C, especially B. HR said of course, but also advised (these were minutes remember) that executives A, B, C, D, E, F, G and H were all fully aware of and in agreement with the purpose of the meeting. To save face Mr Deputy made clear he would definitely be speaking to B, oh yes (unfortunately, the minutes of that meeting weren’t left on the printer).

Observation 1: From what I understand mass office redundancies are a horriible process. Individuals are queued at their desks, summoned into mass booked rooms to be informed of their fate, escorted back to their desk to collect their belongings, stripped of their security passes, then escorted out the building.

Observation 2: The above chat illustrates how decision-makers are institutionally insulated from the consequences of their actions, so much so this “insulation” has been professionalised, resourced and ritualised to the extent where I’m guessing there are flow charts somewhere detailing every step of the way.

So not having a sense of the consequences of your actions is a defining characteristic of both children and executives. This is very obviously a bad thing; if we don’t have the opportunity to learn what the consequences of our actions are, then what’s to stop us repeating what could well be mistakes in future?

Which brings us to the actual subject of this post, the Unite union’s “leverage” tactic, which can involve protesting outside the houses of executives. To the Tories this is a “thuggish” and intimidating tactic, except  its not. Its about people not playing by the decision-makers' rules and confronting them with the consequences of their actions. And if a decision affects a lot of people, then fine, let a lot of people do the confronting. Heck, HR is usually the first to claim work is about more than just pay, so why shouldn’t executives have to actually deal with the human costs their decisions impose?

Besides, from what I’ve personally witnessed (and read and documented above), executives are actively and strategically willing to exploit our politeness, our civility, essentially our passivity to achieve their own ends with as little fuss as possible. They’re also - are you listening ArthurScargill? -  vicious enough to cannibalise their own in the process. To my mind “leverage” is an honest, civil and legal (for now) means of challenging this rude exploitation.

No wonder the Tories are squealing about it, squealing like stuck, shite covered pigs

P.S. Nov 3rd - Andrew Neil's politics show had a wonderfully facile discussion of "leverage". Mr Neil huffed and puffed about it prompting, Diane Abbott to claim Unite hadn't protested outside an executive's house. Except, they very obviously had.

How dare Unite behave with such termerity! How dare people try and defend their not especially well paid jobs by protesting outside the however many hundred thousand pound house of the executive on a six figure salary, with a good pension, the kids at private school, a shiny German car in the garage for him and another for the wife. How dare they! Actually, they did him a favour, now his kids know what he did at work today without having to ask.

* this story is very obviously sheer fantasy. No civil person could ever contemplate being such a c&nt.