Tag Archives: elections

Guest blog from Nicholas Turner – Brexit, The Right Way To Leave

I have mostly stayed out of the Brexit debate because, as someone who has lived in Italy, France and Hungary and as someone who absolutely loves all the different European cultures, I have never been in any doubt we should Brexit – so there is no debate for me. I have lots of reasons why I feel this and mostly because I feel we aren’t just losing our ability to run our own Country, we and the rest of Europe risk losing our cultural identity – which is, I think, a terrifying prospect.

However, this blog isn’t about my views. Neither is this guest post a blog – it’s a seriously considered essay written by my step son, Nicholas Turner (yes, Nick & Nikki Turner does cause confusion in the Turner household).  Not for the feint hearted because it’s not a short document and it’s certainly nothing like my blogs which tend to be about immediate reaction – “this is what has happened today.” Nick has considered long and hard all aspects of the ‘In or Out’ debate and this essay documents his conclusion.

I hope those people who really do have concerns about staying in Europe, will read this. Equally I hope those people who are sure we should stay will read it and consider the content. Any comments gratefully received and I will pass them on to Nick.

Please click on the link below to read the document

Brexit The Right Way To Leave

When justice is delayed too long the Devil is dancing.

It’s very hard to write a rational, unemotional blog about the state of our financial system when I’ve just been to see a friend, who is a victim of bank fraud, who has been waiting for justice for over 10 years, and who is now dying of terminal cancer. But I’m going to try because too many people now are dying without ever seeing justice done. Perhaps just as bad, those they leave behind see little benefit to justice in the future because no amount of money or even bankers being jailed, can never bring back someone you love. There are some things money can’t buy.

I should add straight away that I’m not saying a bank caused my friend’s cancer – it didn’t. But years of stress, anguish, eviction hearings and trying to make ends meet will not have helped the situation. I’m not a doctor but it seems logical to me that the energy and willpower you need to try and fight of an evil disease like cancer and which should be your primary concern, is not aided when you have bailiffs at the door and a banks top lawyers trying to grind your chances of justice into the ground with legal technicalities and the ever promoted ‘costs’ threat.

That is a reality. When victims of bank misconduct are put with their backs against the wall, no one in authority says “hang on a minute, there’s a reason they can’t pay their Council tax or their bills”, they just go for the throat – which is why we have obscene programmes like ‘Can’t Pay We’ll Take It Away.” Bankers on the other hand, faced with serious allegations that may see them facing fines or, God forbid, criminal charges, can rely on their fail safe – money. Shareholders money (in some cases tax payers money) to bail them out of difficult situations.

It’s only a month since the wife of one of the SME Alliance members died of a heart attack – and in that case I suspect the conduct of a bank was the root cause. When that happened it reminded me of an article I found years ago which was written as a result of research by Cambridge University academics, entitled “Can a Bank Crisis Break Your Heart?”: http://www.cam.ac.uk/news/can-a-bank-crisis-break-your-heart

Obviously a bank crisis and I would add bank policy, can break your heart but business, economic climate and political policy doesn’t seem very interested in the human cost of unethical or even criminal bankers conduct. I say bankers because, as always, I would remind everyone that despite legal terminology, a ‘bank’ is the sum of the people who run it. So I’m feeling pretty heart broken even although I’m not the person dying. Neither am I going to be the person most affected by living without my friend. Her husband and children are and even her parents (who can bear the thought of burying their child?).

Anyway, all this has just hammered me. I’ve found it hard to function in the last few days thinking my friend has a couple of weeks to live and there is no way I can do anything about it or even guarantee justice will be served when she’s gone.

I know it’s very non PC of me to talk about human tragedy and banking in the same breath – but tough. It’s about time we stopped pussy footing around what is happening. Above all else, I believe that as a society we should not let the interests of economics or globalisation over take our ability or even our wish to be decent human beings. Sadly, some people, whether because they are genuinely socio-paths or whether their terms of employment push them into that position, are losing site of their responsibilities as human beings.

Maybe they just don’t realise the consequences of their actions? Certainly many bankers and regulators seem willing to turn a blind eye to the reality of bad banking conduct – and this cavalier attitude to individuals is, ironically, doing good banking a huge disservice. Whereas it seemed totally unreasonable up until 2008 to suggest bankers were anything other than professional people and an essential part of society, in general the opposite applies now and the collective name for bankers is often derogatory regardless of whether they are perfectly good people or one of the acknowledged egomaniacs who have hit the headlines in recent years. No one bats an eye to “yet another banking scandal.” We have even become immune to them – right up to the moment they affect us personally. Right up to the moment a bank deliberately targets our business or repossesses our house. Right up to the moment we realise there is no defence against this immoral conduct.

I have been fighting for justice since 2007. I thought it would be easy and that, having identified a massive bank fraud, I could write to senior management of the bank concerned and they would be keen to investigate the matter and make sure any victims of the fraud were compensated and the villains persecuted. I couldn’t have been more wrong. Since then successive senior managements have gone out of their way to bury the fraud I identified and even persecute the victims – presumably in the belief attack is the best defence. But why would you attack your own clients for things your own staff did? I don’t know why but I do know at Board level that has been the banks’ preferred choice.

Nine years on I am still waiting for justice – and so is my friend. Except now justice will come too late. When she dies and she knows she will very soon, she will be the sixth victim to have died without seeing justice for this particular bank fraud.

Last summer one of my colleagues at SME Alliance and I went to a meeting with Head Counsel and Head of Litigation for a major bank. When our conversation turned to Private Criminal Prosecutions, the Head of Litigation became quite outraged and he said that we should realise that when we make criminal allegations we are ruining people’s lives. Even now I remain confused by this comment – does he seriously not realise how many lives his bank is ruining? Not just ruining lives but taking lives? Clearly the man was capable of having empathy towards others because he seemed genuinely concerned we would consider criminal proceedings against bankers. So how comes this same bank is notorious for its lack of empathy to its customers? Are they considered as a different species? Is this why the good old personal bank manager had to go – because he did empathise with his clients? Maybe he even liked them so the idea of selling them  ‘products of mass destruction’ would have have been distasteful to him?

In terms of banking reform I believe we are walking backwards. No one is properly regulating banks and no one is stopping the merry-go-round of greed and corruption which remains rife in our financial sector. On the other side of the fence, public anger is not dissipating and when one person dies one hundred people dig their heels in harder and want to see justice done. In the same way you can only beat a dog so many times before it will bite you, you can only break so many hearts before the consequences become equally dire.

I wish the senior management of banks would wake up to this fact. Justice has a way of being done despite all attempts to stop it and that includes the apparently well known judicial phrase “might over right.”

It is fortunate my friend is deeply religious and she has no doubt she will be going to a better place – neither do I doubt it, she is a good and kind person. The one sure thing we know about life is we we all leave it one day and the departure lounge for that journey doesn’t have a first class section or private jets – just a completely level playing field or “right over might.”

How much more contempt must society swallow from banks?

Interesting few weeks – the election of course with the Conservatives winning a majority – who saw that one coming? And, in the process, the Tories appear to have demolished most of the other parties, not to mention some key names in politics. Of course the SNP helped the Tories enormously – the idea of Labour with the SNP running Westminster had a devastating effect. It’s almost as if we collectively had visions of bearded, kilted Scotsmen rampaging all over England intent on rape and pillage, when we still haven’t recovered from the suited and booted Scotsmen who ran the Government and some of the big banks – so that didn’t help poor Ed. And this just goes to show that while we pat ourselves on the back for being a liberal, accommodating, multi cultural society, the truth is we’re every bit as Nationalistic as Germany, France or Italy. And why not? What’s wrong with being fiercely protective of your Country? And while, in this instance, we conveniently forgot Scotland is part of Britain, I think many of us did reasonably feel that is a tenuous situation which a second referendum could change.

Anyway the Conservatives won and that was certainly a relief to big business who were apparently sure Ed Miliband was anti business. But I wonder if anyone in politics could make a difference to the whims and pleasures of major corporations now – and especially our financial sector?

One thing that has been made abundantly clear (again) in the last week with a US Judge handing out multi billion pounds fines to our big banks, is how much more powerful banks are than Governments. If I was trying to explain to an alien what’s been going on over the last twenty years in the ‘Incredible saga between banks and society’ I would say:

“From the late 90’s, bankers decided they could make more money and bigger bonuses by forgoing traditional banking and behaving recklessly, unethically and with gay, greedy abandon until this conduct nearly brought even the wealthiest of nations to their knees by 2008. So Governments bailed the banks out with the monies they collect in taxes to pay for essential services, even although this caused mass austerity for millions of ordinary people. But we never really got to the bottom of the reckless behaviour and we certainly didn’t blame anyone. So bankers realised very quickly they could carry on with that kind of behaviour and nothing much would happen.

Pardon? Yes we do have laws on this planet and yes bankers did break them but the leaders running the various countries on behalf of the people, decided it wouldn’t be a good idea to apply the laws to the bankers? Why – well apparently it’s complicated (or so we’re told) and, aside from anything else, we, the public, would have felt loath to trust a financial sector where some of the bosses turned out to be convicted felons.

Yes I know some of them may well be ‘criminals in pinstripe’ but that’s not the point. You can’t just go around calling people crooks if our justice system hasn’t confirmed it – so the trick is, don’t prosecute people and then no one can say they’ve done anything criminal.

What happened next? Well obviously, realising they had immunity from the law and could therefore do what the f*ck they liked with no personal consequence, the bankers dreamt up even more blatantly criminal scams to make money because – what did they have to lose? And when they (banks – not bankers) were found guilty of crimes, either their share holders or the tax payer (again) paid massive fines on behalf of the banks to the organisations set up to make sure banks did behave well and didn’t break any laws in the first place.

No I don’t know why these organisations didn’t police the banks properly. But I suppose if they had, they wouldn’t have been able to demand billions of pounds in fines at a later date.

What happened to the bosses running the banks? Well obviously they got huge bonuses even although they were overseeing criminal operations. And let’s be logical – the banks may have been fined billions of pounds but that’s a fraction of the profit they made while acting illegally. So you could say these bosses were doing a good job in terms of making money – which is all banks care about.

Yes, you’ve summed that up beautifully – the people bailed the banks out when they lost everyone’s money; then the banks carried on robbing the countries blind while paying their executives millions of pounds and finally; the public paid the fines for their criminal conduct. It’s a total Catch 22 as far as society is concerned.

I realise it makes no sense to you – it makes no sense to most people on the planet. Don’t we have a say in all this you ask? Well yes we do. We vote for the kind of leadership we think will be best for society and who will stop this kind of thing. So why doesn’t it stop? I don’t know. And yes, I’d say society is deeply offended our elected representatives have given bankers immunity from the laws of the land. Many of us are trying to do something about it. I have written many a letter to various leaders asking for a logical explanation to what’s going on http://www.ianfraser.org/dear-mr-cameron-if-bankers-are-above-the-law-we-need-an-urgent-explanation/

I haven’t had any replies – no doubt our leaders are very busy trying to work out how to balance the scales of a disappointed and furious populace on the one hand and the all powerful and Government empowered banks on the other hand. It can’t be easy forecasting which camp will do the most damage if not appeased. Especially if there’s not much you can do about the situation.

And no, I don’t know how much more contempt society can swallow before it all turns very nasty.

What, you’re off to find a more logical, ethical planet for your holiday? I don’t blame you. At least you managed to catch the Eurovision Song Contest while you were here. Do you know, that used to be considered one of the most bizarre, hilarious and illogical things on the planet? Now it seems like a welcome break in an even more bizarre reality.”

Apathy International. Does anyone really expect HSBC or wealthy tax evaders to be prosecuted?

I had an interesting conversation on twitter last night with someone I don’t know from Canada – although I think he is British. The very topical subject was “why are wealthy people guilty of tax evasion not prosecuted?” And right from the start of the conversation my twitter friend, let’s call him Bill, made the point that in his view it would cost so much money and take so much time to prosecute them all, it would be counter productive. The cost would be more than the gain.

Bill is probably right. Tracking down the thousands of people identified by the Swiss Whistle blower (and let’s face it, as he says, his list is the tip of the iceberg) would cost a fortune and would probably result in very lengthy criminal trials where the only beneficiaries would be the lawyers. And Bill compared the situation to the gun amnesty used in the US. Hand in your unlicensed gun and we’ll say no more about it. Here the equivalent would be throw the tax man a few thousand pounds voluntarily and we’ll call it a day. I say a few thousand because, in the same way it wouldn’t be cost effective to prosecute these people, I can’t imagine HMRC have the manpower or even the will to do full on investigations into how much is actually owed?

My point was (and is) even considering the logistics of this situation, how can a democratic country ditch the law in the case of one section of society because it’s not cost effective to enforce law? Tax evasion is against the law and nowhere does it say “unless you are part of a rich minority who has been advised by your bank to shunt your money offshore.”

I also made the point HMRC will go through hell and high water to prosecute so called benefit cheats or even people on low incomes who may have been overpaid and then can’t pay it back. Similarly SMEs will be hounded for perceived VAT or tax issues and, if the man in the street doesn’t get all his tax returns in precisely on time and to their satisfaction, HMRC will be very efficient in sending out demands for what they calculate is owed or hefty fines. They also have no compunction about prosecuting for a few hundred pounds if they feel it is due. And that happens to thousands of people.

Bill made the point it doesn’t make any difference whether you cheat the tax man of £50.00 or £5M – it’s still against the law. I agree. So why do I have this horrible feeling you are less likely to be penalised for the £5M than the £50? And the same seems to be true of money laundering or other economic crimes. Big banks money laundering for drug cartels just get hefty fines paid by their shareholders but no one goes to jail. Here’s an extract from my book about HBOS (to be published in the dim and distant future) on these criminal but curiously acceptable transactions:

And by the way, how does that happen? It’s common knowledge now that certain banks have done these totally illegal deals and, yet again, no one in any bank is to blame and instead, the shareholders have paid massive fines as a penalty for bankers conduct. But if no one’s to blame, how do the deals get done? Do the bosses of the drug cartels phone a special ‘money laundering’ call centre and listen to an anonymous voice giving various options: “Please dial 1 for drug deals, 2 for arms deals or 3 for off shore tax evasion. To hear these options again, please dial 4.” Or do the Banks have departments which deal specifically with these ‘dodgy transactions’ and where the staff work in the secure knowledge no one will ever go to jail for criminal deals because bankers are above the law?”

Then there’s other proven fraudulent products like IRHP – another fine. Out and out asset theft from SMEs – another fine. PPI, EFG, SFLG, it’s becoming like a game show – think of an acronym and the contestants get to guess the appropriate meaning and the applicable fine. Winner gets two weeks in the Caymen Islands all expenses (and of course taxes) paid by the FCA. But if you or I were to commit any deliberately fraudulent act to turn a quick profit, you could expect and get the full force of the law to come into force.

However, taxes and financial crime aside, what really disturbed me about my twitter conversation which, by the way, I thoroughly enjoyed because I love a good debate, was the apathy involved. While Bill agreed with me we shouldn’t have a two tier justice system, his very logical approach was, as Tony Soprano would say, wattayagonnado? We are where we are and there’s little we can do about it – apparently.

I am pretty sure the members of SME Alliance would not agree. Most of them (me included) have been victims of the many and varied banking scams which have devastated SMEs. Most of us have been fighting for justice for what seems like a lifetime and sometimes pretty much is and we are, putting it politely, extremely angry at the way banks, who have caused us so much damage, are never penalised except with shareholders fines. Neither are they obliged by the regulators to repair the damage done. So when we hear about people with very healthy off shore bank accounts, organised by their bank, becoming immune from prosecution, we are anything but apathetic, we’re furious. It’s another slap in the face of the British justice system and another reason we are losing faith in it.

But, being honest, I think back to my life before the consequences of fraudulent bankers and their associates kicked in – was I even aware of our two tier justice system? Admittedly inequality has got worse since the so called credit crunch but, if my business hadn’t been sabotaged and had instead fulfilled its full potential and made millions of pounds, would I be seriously concerned about the conduct of the likes of HSBC and its tax dodging clients? Would I be calling for prosecutions? Or would I be taking the rather detached and very logical approach Bill takes?

We have a saying in our house, “you can’t not know what you do know.” And that’s a shame because the things I now know after 7 years of investigating bank fraud and social injustice, very often stop me sleeping at night. I didn’t sleep much last night thinking it’s possible a massive segment of society may be so oblivious to what is happening to democracy or, more likely, just trying to get on with their own reduced circumstances in austerity Britain, they don’t even care about off shore accounts in Switzerland or Monaco. But I think (or should I say I hope) I would have been aware, albeit to a lesser degree, of the increasing dangers our democracy faces even if I hadn’t experienced the consequences personally. I’m a lyricist and a poet and I grew up listening to Bob Dylan and Joan Baez – so the spirit of protest has always been there. But who knows? As long as the comfortable remain comfortable, will they rock the boat? Hmmn. While apathy is, on the one hand a powerful tool for the State, it’s also a powerful tool for the individual conscience.

“If there is nothing I can do about injustice, no one can blame me for doing nothing.” It’s a scary concept but one that has helped permit every shameful human catastrophe.

Anyway, I don’t know what the resolution is to the HSBC tax evaders or the many other tax evaders who were no doubt advised by other banks. Quite frankly, I think those banks must be bricking it in case their own whistle blowers come forward. I agree with Bill, it is impractical to think HMRC can or will prosecute all of these people. But, and remembering this year sees the 800th birthday of the Magna Carta, if we are truly a democratic society, I cannot see how Government, or the appropriate authority, cannot prosecuted them? After all, one person has been prosecuted and surely that has set the precedent? And what was so special about that case? Seems a bit harsh – thousands do it but only one pays the price.

I wouldn’t like to be running this Country. Whatever good intentions any of our politicians have, there seems to be an endless barrage of obstacles in the way of good governance and most of those involve the necessity to compromise and close their eyes to the kind of corruption that is swamping the Country. Hard, I imagine, not to just go with the flow for the 5 years they are in power. And hardest for those in power as opposed to those in opposition where it’s easy to shout foul (especially if you have a short memory)!

If anyone thinks they have the answer to the current problem – is it possible to prosecute every criminal act in the financial system and the associated activities like tax evasion, I’d be happy to hear it and I’m sure many politicians would as well. If we did take this route, we’d have to build a lot more prisons because financial crime, without doubt, is more epidemic or contagious than the flu and we have no jab for it. We seem to have no cure for corruption.

I leave you with a poem I wrote in 2003. I rarely inflict poetry on my blog readers but this one seems entirely appropriate.

Apathy International

I am a member of

Apathy International.

I am working my way up in the company

and should shortly become

a bored member.

Membership was free

and just slipped onto my shoulders

during a raging storm,

like a comfortable old raincoat.

The effects are almost unnoticeable

as is everything else now.

And, as in all such large organisations,

only non members receive active attention,

so I fully expect to disappear completely and painlessly any day now.

(Which I really can’t worry about).

But late at night I wake up

terrified

as a distant but unfiltered image of raw gaping wounds stabs me

and I can hear the hideous cackle of the devil’s favourite shareholders

and I recognise the voice of our beloved CEO crooning

and I think I will implode with panic.

But in the grey reasoned morning light

I think –

what could I do? Nothing.

So I don’t –

except to gently fondle my membership badge.

© Nikki Turner 2003

First the Banks – are EU Regs, MOSS VAT & HMRC also trying to kill off UK SMEs?

This is an unscheduled blog because this afternoon I read an article in the Telegraph about a proposed VAT reform which will literally kill off tens of thousands of SMEs. Here’s a link to the article: http://www.telegraph.co.uk/technology/internet/11295953/How-the-EU-is-throttling-online-business-with-idiotic-VAT-reform.html In short, what it says is every SME will have to pay VAT on every digital transaction to EU Countries as of January next year and this will expand to physical transactions in 2016. Therefore, even an aspiring author or musician or photographer selling their ebooks, digital images or mp3s – and maybe with a turnover of £5-£10,000 per annum will have to register for VAT, charge it to their EU customers and submit a mountain of paperwork to HMRC. They will also have to register for UK VAT even although they are exempt and under the threshold.

This begs the question of why we are part of the EU when the adverse consequences seem to outweigh the benefits? And what benefits? Surely one of the biggest benefits was we are free to trade with all our EU partners? Here’s a blog from Andrus Ansip at the EU Commission: https://ec.europa.eu/commission/2014-2019/ansip/blog/euvat_en

The first thing I noticed in the blog was this comment “The change in VAT rules was decided democratically, and after years of discussion, by EU Member States in 2008.” Democratically by who? Given it will affect SMEs so dramatically, I wonder how many SMEs were asked how they felt about it? And assuming it was a democratic process in EU terms, i.e the MEPs sat down over a nice lunch and agreed on this, how democratic were individual Governments and specifically ours, in asking if SMEs agreed? Personally I had no idea this was due to happen – maybe I just missed it? Admittedly I was very tied up exposing bank fraud in 2008 (another crippling tool to destroy SMEs) so I may have over looked it because I couldn’t trade my SME back then (or now). And, trailing through Goggle today, I have found plenty of news about this – although no front page news, so I have been asleep at the wheel but that doesn’t excuse the lunacy of it.

Why have the EU done this? Well according to Andrus, “ As I understand it, one of the aims was to establish a level-playing field for smaller companies. No more picking of low VAT countries by larger companies to gain a competitive advantage over SMEs.” Riggghht! This is to stop companies like Amazon exploiting tax loop holes by basing their digital content sales in Luxembourg. Fair enough, Amazon et.al will now have to pay millions in extra VAT payments. But does anyone really think they will absorb this cost? No. They will simply pass the cost on to the consumer. Not just the cost of the VAT but also the huge accountancy costs involved.

Andrus goes on to say “Now, some small and micro companies are worried about what the VAT changes coming on January 1 mean for them.” You bet they are. “Given that this change was adopted six years ago, Member States should have helped businesses to prepare.” Even if they had – what would that change?

Consider this: Joe Bloggs writes a book, turns it into an e-book and promotes and sells it via his own website. The e-book costs the buyer £2.00 + VAT for EU buyers. He sells 50 books in the UK – that’s OK he doesn’t have to charge VAT although he still has to be registered for VAT if he wants to sell in the EU. He sells 10 books in France, 15 in Germany, 5 in Italy and and 20 in Spain because his Aunty Mavis who lives in Benidorm persuades her friends to buy it. So that’s 100 books and 4 different VAT rates. There is apparently a “one stop shop” which will help with these varying VAT rates but I’m not sure how this works or, if I was Joe (and to an extent I am) whether I would want to take that route or just not sell to EU Countries.

Joe will have to do quarterly UK VAT returns even if he doesn’t charge VAT in the UK (he can just fill in 0 in all the boxes – so that’s not a waste of any one’s time!) and do separate VAT returns for his EU sales (no idea what happens with the rest of the world – is that still zero rated?). But because he does charge VAT for the EU he can deduct any expense relating to his EU sales from his overall VAT. And all this will be broken down and documented in the records of sales Joe must keep for years.

Now Joe, who is an excellent writer but not much of an accountant, could possibly struggle with the various rules and regulations he has to comply with – starting with, does he have to register at all or is what he does exempt? For example, these new rules don’t apply to: “supplies of goods, where the ordering and processing are electronic.”

But they do apply to: “images or text, such as photos, screensavers, e-books and other digitised documents e.g. pdf files, music, films and games…..”

I find that a bit confusing because ordering or processing an e-book is all done electronically isn’t it? So I looked at the section of the HMRC document entitled, “What is meant by electronically supplied?” and it explains: “This covers e-services which are automatically delivered over the internet, or an electronic network, where there is minimal or no human intervention. In practice, this means: Where the sale of the digital content is entirely automatic – for eg a customer clicks the ‘buy now’ button on a website and the: content downloads onto their device – customer receives an automated e-mail containing the content.”

So what part of a customer clicking “Buy Now” on your website and then receiving your e-book to download, isn’t covered in the above? Equally confusing is the section entitled “Examples of Electronic Supplies and Whether They Are Digital Services.” According to the chart, if Joe e-mails a pdf (his book) to someone, that is an E Service but it’s not covered by the new rules. However, if his pdf document is automatically e-mailed by the sellers (his) system or automatically downloaded from his site, then it is an E-Service and he does have to pay EU VAT to sell it in Europe. Hang on – didn’t it also say the new rules don’t apply to “supplies of goods, where the ordering and processing are electronic” or where the customer clicks the “buy now” and automatically downloads?

I won’t go through the rest of the document because I’m confused enough but here it is: https://www.gov.uk/government/publications/revenue-and-customs-brief-46-2014-vat-rule-change-and-the-vat-mini-one-stop-shop-additional-guidance/revenue-and-customs-brief-46-2014-vat-rule-change-and-the-vat-mini-one-stop-shop-additional-guidance

I have a horrible feeling this EU VAT reform will be an absolute disaster for SMEs and it will either cause a lot to just stop trading or, it will cause them to stop bothering to be independent. What will be the point of Joe doing all this hard work (over and above writing his books) when the easiest option will be to sell it on Amazon in the first place and let them do the accountancy exercise? Yes Joe will get less money so Amazon can have a cut and his book will cost more because Amazon will pass on the EU VAT costs to the customers – but at least Joe won’t have a nervous breakdown doing a mountain of paperwork (which will no doubt result in massive fines if he gets it wrong) in order to sell 50 e-books to Europe. And there are 1000’s of Joe Bloggs in this Country who will do the same. I would even advise them to do so. So Amazon et.al could come out of this quite nicely.

Don’t get me wrong, I have two books on Amazon Kindle and it’s a very convenient site for writers. And ironically, I’ve had an e-mail this evening explaining the new charges anyone in Europe will have to pay for my books. But I am very aware small publishers will really struggle with this new system – the same as I would as a music publisher – which I was and would be but for HBOS.

End result? Whereas the internet gave millions of people and SMEs the opportunity to promote and sell their individual downloads all over the world – MOSS VAT + HMRC will now take that ability away. We will end up with half a dozen global platforms to sell digital or physical products across the Europe – and no doubt the world will follow. Sure they will have lots of subsidiaries but ultimately there will be a few Corporates running sales across the internet or to Europe.

The obvious solution was (and you don’t need to be a rocket scientist to work this out) – those digital traders or physical traders in the UK who sell in excess of the UK VAT exemption figure, should charge and, if applicable, pay VAT to the EU in the same way they do in the UK but at a flat rate agreed by the EU community to avoid unnecessary bureaucracy.

I would say to Mr Ansip, Mr Osborne and Mr Darling (who must have agreed this in the first place) that while MOSS VAT may bring in some cash from the big players avoiding tax, it will do them little harm and they’ll simply put prices up. But your new rules will be a disaster for SMEs, for the economy and for the morale of the Country.

For example, I know a young photographer who sells her images digitally and who has already considered the sad fact she will have to put a sign on her site saying – “Apologies, no sales to EU Countries.”

One might almost think our Government’s (present and past) are quite keen to see SMEs throw in the towel. First the banks and now this. What next?

And one last thought, why does Andrus Ansip say “As I understand it….” Surely this is an EU directive drafted in Brussels or Strasbourg wasn’t it? So he should know. Unless it was drafted elsewhere.

p.s If any accountant reading this can clarify what MOSS VAT really means to SMEs, please do post a reply or e-mail smealliance2014@gmail.com . I sincerely hope I have got this all wrong.

Christmas 2014 round up of financial crimes with no one going to jail.

My husband made a very valid point a few days ago and I have been thinking about it every day since. He pointed out that when we (Paul and I) started looking at misconduct in the financial industry and specifically HBOS, we couldn’t get anyone to take our allegations seriously because no one believed us. That was in 2007 and it took until late 2009 to actually get the FSA involved and 2010 before the police got involved – even although we made allegations to the police in November 2007. We’re not a lot further forward now in December 2014 because the criminal trials for that alleged crime won’t start until September 2015 – and even then, I’m not holding my breath.

It was disappointing no one believed us in 2007 but not surprising because the idea banks, or rather bankers, might be crooks, was out of the question back then. Bankers were seen as respectable professionals and your bank manager was so trustworthy, he or she could even sign your passport. The same doesn’t apply now and no one bats an eyelid at the concept of crooked bankers – in fact bad conduct is what we expect from them, to the point even the good guys (yes I do acknowledge there are still many good bankers our there) are tarred with the same brush.

Paul’s point was simple: It was tough back in 2007 because no one believed us, so nothing was done. Now, everyone knows the financial sector is rife with fraud and corruption and still nothing has been done! Not just in the case we reported – right across the board and in thousands of cases. Even more alarming is the fact that, in many instances I know of, where people have tried to report financial crime, the police will not investigate it! In all probability this is because they don’t have the budgets to investigate such a glut of criminality in austerity Britain – but that is of no help to the victims who are frequently told – “it’s a civil matter.” No it’s not – crime is never a ‘civil matter’ and even victims of PPI have a right to report it as a crime, get a crime number and, if applicable, also have it investigated. Of course that might damage crime statistics.

But no. Most financial crime is just swept under the carpet as “mis-selling” or “restructuring” and resolved by bank shareholders’ paying huge fines to the FCA. Think about that for a moment – we all believe bankers have committed criminal acts but nothing has happened. It just beggars belief and is really as scary as hell because, what it actually means is, we can no longer rely on the Law and really do have a two tier criminal justice system. There isn’t another, plausible explanation.

This terrifying thought was brought home again when I read the latest excellent Matt Taibbi article in Rolling Stone magazine: http://www.rollingstone.com/politics/news/the-police-in-america-are-becoming-illegitimate-20141205 where he is talking about the disparities in the US legal system and it reminded me that I still haven’t had a reply to my letter to Mr Cameron of December 2012 when I asked for some clarification about the apparent immunity bankers have from prosecution. In that letter, which I wrote after reading some worrying comments from Andrew Bailey (now head of the PRA), I said:

Mr Cameron, unless I am completely mistaken, Mr Bailey seems to be telling us that banks, and therefore bankers, are now officially considered to be above the law in this country and that, in the interests of confidence in the banking industry (which is already at rock bottom among the British public, and therefore can hardly sink any lower), they cannot be prosecuted.

I am writing to ask you, as Prime Minister, for some clarification.

Does your government endorse the notion that banks and bankers should be given a licence to commit criminal acts without any fear of prosecution? Is this now official government policy? Are the British public now being asked to accept that, despite incontrovertible evidence of multiple criminal acts by banks, including money-laundering, drug-money-laundering, Libor rigging, multiple frauds and assorted Ponzi schemes, bankers are considered to be immune from prosecution? And if so, can I ask on what grounds your government, or indeed the government of any democratic country, can justify such a policy?” Full letter here: http://www.ianfraser.org/dear-mr-cameron-if-bankers-are-above-the-law-we-need-an-urgent-explanation/

I didn’t write the letter to be confrontational – although I must admit I am incredibly disappointed the PM’s strong words in the run up to the last election about what should happen to criminal bankers, turned out to be hot air and no more. This is what he said to Jeff Randall in January 2009:

“I think that we need to look at the behaviour of banks and bankers and, where people have behaved inappropriately, that needs to be identified and if anyone has behaved criminally, in my view, there is a role for the criminal law and I don’t understand why is this country the regulatory authorities seem to be doing so little to investigate it, whereas in America they’re doing quite a lot.”

I wrote the letter because I genuinely wanted some reassurance from the Prime Minister that bankers are not above the law; we don’t have a two tier legal system and; something would be done to redress this inequitable situation.

So what has happened to clarify or allay my concerns since December 2012? Well a few things have happened but not what I was expecting. For example:

  1. I’ve never had a reply.

  2. Several banks have been found guilty of money laundering and even money laundering for drug cartels. And the only penalty has been a huge tax on the bank’s shareholders who have paid massive fines for the conduct of bankers. But no one has gone to jail.

*given that banks (buildings or legal entities) don’t have any physical ability to pick up the phone and negotiate with drug cartels – such deals had to be done by bankers. So why have no bankers been held responsible?

  1. Many banks have been found guilty of making billions of pounds with the PPI scam. They’ve had to pay the money back in many cases but, I assure you, not all cases. So again, the shareholders have lost a fortune. But no one has gone to jail.

* I often wonder who invented PPI? Did senior bankers sit down and plan how best to get thousands of their customers to take out insurance policies which cost them a fortune but could never be used? Or did someone in a bank find a recipe for creating and implementing PPI in a fortune cookie?

  1. As a founder member of SME Alliance, I talk every day to people whose businesses have been totally destroyed with various, ridiculously (and I would suggest deliberately) complicated financial products under the collective name of swaps. I’m not a victim of a swap and I know little about them (I’m learning fast) but even their titles smack of more contempt for businesses e.g. vanilla swaps. Can you have chocolate or strawberry? Probably. The FCA have said many of these products should never have been sold to ‘unsophisticated’ clients and in some cases banks have had to give the money back. However, the years it has taken for this to happen and the devastation these products have caused, apparently do not necessitate banks having to pay out billions in compensation. The redress scheme the FCA has come up with has conveniently been limited to peanuts – and no one has gone to jail.

* A journalist was telling me the other day of a case where someone challenged the FCA decision multiple times and was eventually awarded £500k – but of course the bank interest and charges on his account over the time it took to challenge the bank’s conduct meant the victim got nothing and the bank paid themselves £500k. You couldn’t make it up.

  1. The now infamous business recovery units like RBS/GRG have been merrily acquiring, appropriating, stealing their clients’ assets left right and centre and sadly RBS have not been working in isolation. It has caused outrage – it’s been all over the news, MPs have held debates on the subject, Committees have interviewed senior bankers and regulators and even the ever cautious BBC have suggested some bankers are crooks. http://www.bbc.co.uk/programmes/b04t6jy1 But no one has gone to jail.

* As a victim of HBOS Reading (similar model) I have so much to say on this – but am having to keep quiet for now but not forever.

  1. And while the likes of GRG and HBOS Reading have caused many businesses to fail, a separate scandal has specifically targeted farms across the Country for over 20 years. Repeated allegations have been made against a man called Des Phillips and various of the 59 companies he has been or is a director of including UK Farm Finance, UKCC and UK Acorn Finance. And some of our major banks have been heavily implicated in these allegations as have other ‘professionals’. It’s a sickening story which has resulted in many family farms being repossessed and, sadly, farmers committing suicide. You can hear about it here: http://www.bbc.co.uk/programmes/b040hzz5 or read about here: http://www.publications.parliament.uk/pa/cm201415/cmhansrd/cm141111/halltext/141111h0001.htm No one has been prosecuted so no one has gone to jail.

  2. Bankers or traders have been found guilty of rigging LIBOR. Again, massive fines have been levied – another penalty on shareholders. However, in this instance it looks possible some bankers will go to jail and one banker has even pleaded guilty. But let’s not get too excited that justice might be done. Read this: http://www.theguardian.com/business/2014/oct/07/banker-pleads-guilty-libor-rigging-rate-fixing

As you can see the banker concerned could get up to 10 years in jail but we don’t know who he is or what bank he worked for and reporting on this case is heavily restricted. Presumably, after the other three people charged have had their trials, we might know more. But I wouldn’t bet money on it – especially if the banker in question worked for one of the State subsidised banks. But it’s a start.

I could make the list much longer but, to date and looking at the 6 instances above, money laundering, PPI, Swaps, asset theft including farms and LIBOR rigging, it’s certain 1 person in the UK will go to jail and 4 people might. And when you look at the trail of poverty, misery, desperation and devastation these crimes have caused, it is unbelievably disappointing – not to mention scandalous, that our regulators, justice system and worse still, our Government, have let this happen. In fact it is morally and ethically reprehensible.

Of course individual bankers do go to jail quite regularly – they’re usually quite low down in the pecking order and their offences (with a few noticeable exceptions) just about make it into their local newspapers. But the top dogs – the ones who make policy – the ones who instigate and oversee the kind of conduct which allowed all of the above to happen, seem to remain above the law. Which begs the question – why do we have laws?

Meanwhile, the Government have issued the following figures regarding crimes to businesses:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/284818/crime-against-businesses-headlines-2013-pdf.pdf

I haven’t read it in any great detail but I’m pretty sure it doesn’t mention the wholesale destruction of SMEs by banks. I sometimes think we should move the Houses of Parliament to Canary Wharf and have done with it before La La Land spreads across the whole of London.

Here in the real world we are in the run up to what will be another very austere festive season for many people in Britain – and I’m not just talking about people or SMEs who have been defrauded by banks. I’m talking about those families who’ve lost jobs and/or benefits and most of all, those people relying on food banks or who have lost their homes and now live on the street. A lot of people would say – me included – our major banks and therefore our most senior bankers, were very instrumental in causing our national austerity. And, post the so called Credit Crunch, those same banks (especially the part State owned ones) have done little to help the economy and much to damage it further. Unbelievably, the people at the top of those banks continue to be heavily rewarded.

For example, yesterday (13th December) I was reading an article about the top paid European Bank CEO’s. http://www.cityam.com/1415705309/which-ceos-european-bank-have-biggest-pay-checks-two-uk-banks-take-second-and-third-place

Hmmm – £7.4M. Even when you deduct 50% tax, that still leaves approximately £71k a week. I think you could have one hell of a Christmas with that remuneration package!

Mind you, every silver lining has its own cloud and I suddenly thought – I bet it’s really tough finding the perfect Christmas gift for these top bankers because, what do you buy for the man or woman who has everything? So maybe La La Land has its own problems at Christmas.

Shame you can’t gift wrap integrity – if we could give some of them that, the whole Country might feel more festive. Still, there’s always the good old standby gift – Monopoly. After all, banks have bought, sold, packaged and mortgaged every property on the board many, many times over – but, to date, they have been very adept at steering clear of the “Go to Jail” square. But then I’m guessing Al Capone thought he would never lose ‘games’ either.

Did the Bank Wreck My Business? Yes – so what happens now?

Did the Bank Wreck My Business? Yes – so what happens now?

I’m pretty sure the ratings for the excellent Panorama programme, ‘Did The Bank Wreck My Business’, were very high last Monday. Certainly most people I know watched it – but then many of them have direct experience of banking abuse at the hands of RBS or Lloyds – so they would. In fact most of them were interviewed by Andy Verity and Jon Coffey although their stories weren’t used in the programme. Some would say (and I would agree) there are many more horrific stories out there that the production team could have used – but it’s not a competition. Every business annihilated by bank misconduct (known to many as fraud), is a tragedy. And, given the Beeb’s generally conservative, establishment stance, I think it’s nothing short of a miracle this programme was as frank and exposing as it was.

As always, when programmes like this are on, I took some notes. I do it mostly to collect quotes for my book (nothing quite like “from the horses mouth”quotes to make points) but I also do it because I’m so staggered at what some people in the banking world say, it has to be captured in black and white for posterity. One day future generations will surely look back and ask “how the hell (being polite there) did a democratic country let that happen?”

I know the transcript of the programme will be available soon (or I hope it will) but here’s some of my favourite quotes from last night:

Jon Pain (RBS) “The whole purpose of GRG is to help customers return to financial health…..”

Vince Cable (BIS) “Well of course I’m very alarmed because good companies appear to have been put at risk or in some cases destroyed by banks behaviour…..”

Stephen Pegge (Lloyds) “our goal is to support businesses (you know) small and medium sized businesses are really important to us….”

Jon Pain (RBS) “(But) I would in no shape or form condone any inappropriate behaviour by anybody acting on behalf of RBS – that’s not part of our agenda in supporting customers.”

Christ Sullivan (RBS) to Andrew Tyrie re GRG “It is absolutely not a profit centre!”

Ross Finch (Lloyds victims) re his meeting with an exec of Cerberus who Lloyds sold his loan to “When I expressed disbelief about their behaviour, um, he said, “what you’ve got to understand is I am a prick” – which I couldn’t believe he would say such a thing!”

I’ve just pulled out those quotes because they are either so absurd or so shocking– and they’ve been broadcast on the BBC, the bastion of British correctness. If even the Beeb is exposing RBS and Lloyds as a bunch of crooks, what can we say? Nine years on from the so called Credit Crunch and where are we? I would say, if anything, we’re walking backwards. As one of the founder members of SME Alliance and a member of Whistleblowers UK ( Paul and I blew the whistle on HBOS Reading – the HBOS equivalent of GRG), I hear horror stories about banks v SMEs every single day. But the exposure of banking atrocities is no longer limited to what banks like to portray as ‘the niche market of poorly performing SMEs’. Everyone knows how bad some of our banks are and Andy Verity’s programme should be one of the final nails in the coffin of bad banking.

But will it be? Big question:

Vince Cable, Andrew Tyrie, the Treasury Select Committee, the FCA, the PRA, Mark Carney, David Cameron, Ed Miliband, Nick Clegg – did you watch “Did The Bank Wreck My Business’? And if you did – what are you going to do about it? They certainly didn’t wreck your businesses so I understand that maybe you don’t understand the consequences of what banks do. However, I do and so do thousands of SME owners, employee’s, shareholders and creditors. We live with the consequences.

I also know Andy Verity and Jon Coffey have done extensive research to make this programme and could have used any number of totally outrageous cases because they interviewed loads of SME owners (or ex SME owners) – and I know some of those stories may have been a step too far for the Beeb. In my own case sub judice was a big problem. But I know they made the programme in the spirit of stopping banks abusing SMEs. So has it worked? Has it helped? Will anything change?

Well the Panorama team have done their bit. David, Ed, Nick, Andrew, Mark – over to you. You are the people who can make the banks behave – or at least you should be. If the reality is you’re not – then wow, we have a serious problem in our democracy.

Best quote of the programme, without doubt, has to be Austin Mitchell MP, talking in Parliament about the Keith Ross case and saying it how it really is:

“What I want to do today is tell the story of the theft of a profitable Yorkshire company and I don’t mean the criminal Mafia we often speak of I mean Britain’s dark suited Mafia which in this case is represented by Lloyd Bank and Price Waterhouse Cooper both acting in collusion….”

Here’s the link from Hansard to Keith Elliot’s case: http://www.theyworkforyou.com/whall/?id=2013-11-12a.212.0

Of course, living in Italy for nearly 20 years, Austin’s comments would strike a chord with me. Well said Austin – there’s not many MP’s who would draw Parliament’s attention to the similarities between the banks and the Mafia but I would just put you straight on one thing – our dark suited Mafiosi are, in many cases, criminal.

I’m posting this on my own blog site because this is my own view – but I believe many people in SME Alliance will appreciate this view and I have to give us a plug because the conduct exposed in the programme is one of the reasons SME Alliance was formed.

#SME Alliance – giving SMEs a voice. #nooneisabovethelaw