Translation needed

Posted by Christie Malry on October 12, 2013 at 8:01 am

*

The first is that if Dacre really thinks this then he has such poor ability to appraise the prevailing hegemonic thought of the UK and many of the western democracies that he is unfit to run a newspaper. There is a consensus, but it is that of the neoliberal right that exists to reward the 1% in society – who are not, incidentally, Daily Mail readers, so he is failing them with his thinking.

I just don't get it. How can "the 1%" be "a consensus"?

Daily Mail struggles to differentiate man from woman

Posted by Christie Malry on December 6, 2012 at 11:24 am

Given how much of their website and newspaper is dedicated to women with their baps on display, you'd think the Daily Mail would be able to tell the difference between a man and a woman.

Sir Philip Green's Topshop and Topman business were today valued at a staggering £2 billion after the retail tycoon sold a 25 per cent stake in the fashion brands.

The entrepreneur's Arcadia Group... netted £500 million after agreeing to sell the Topshop stake to American private equity firm Leonard Green & Partners.

Sir Philip... said the cash from the sale will remain in the Arcadia Group.

Er, chaps, the Arcadia Group is owned by Lady Tina Green, not Sir Philip. And the money's staying in the company in any case. So how on earth can you use the headline "Sir Philip Green enjoys £500MILLION payday"?

Gibbering fuckwits.

Also, while I'm not an expert, I would imagine SSE will apply. So expect to see demands from idiotic Ukuncutters demanding that Sir Philip pay his taxes on this windfall. Even though it's not his money.

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Drivel about social mobility

Posted by Christie Malry on May 2, 2012 at 10:20 am

Britain’s failure means a poor child born in 1970 is less likely to have gone to university than one born in 1958, the MPs say.

Eh? That must be total bollocks, given that the number of university home places now is much, much higher than it was then.

Later in the article, they explain:

In 1981, children from the richest fifth of households were three times more likely than those from the poorest fifth to go to university. By the late 1990s, they were five times more likely to go.

But that's not the same thing at all. Because there are more university places, it's meant that more poor people can go than ever before. The fact that richer people are also more likely to go is irrelevant to the opportunities for the poor.

And we can't let this go:

Studies have shown that while only 42 per cent of parents in the poorest fifth of homes read to their children every day, 78 per cent of those in the richest fifth do so.

Wealthier parents are also more likely to send their children to bed at a regular time. It has led to richer children being more likely to be deemed ‘ready’ for school at three.

These both cost nothing. And it's pretty hard to blame the rich for the poor not reading to their kids or putting them to bed on time.

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Newspaper headlines vs articles (a response to @jdc325)

Posted by Christie Malry on February 13, 2012 at 10:52 pm

jdc325 complains, with some justification, about accuracy in the press. Finding and pointing out stupid errors in print and online media represents a very rich vein for bloggers, including me.

Newspapers such as Dacre’s Daily Mail though, and I’m not making this bit up, are allowed to print pretty much any headline they like. As long as they make clear at some point that the headline is untrue. Perhaps in, say, paragraph 19 of the article.

This is problematic. Not everyone will read the whole article. A few will read right to the end, some will look at the pictures and maybe read the first couple of paragraphs. But everyone will have been exposed to the headline.

The Poynter Institute found that online participants read an average of 77 percent of story text they chose to read; broadsheet participants read an average of 62 percent of stories they selected; and tabloid participants read an average of 57 percent. They also note that readers described as ‘scanners’ viewed headlines and other page display elements without reading much text. It’s clear that some people might be influenced by a headline without ever reading the attached article.

His main point is that discrepancies between the semantic content of a headline (and/or its accompanying photo, where applicable) may mislead a casual reader. However, I remain unconvinced that this risk should lead to regulatory intervention:

  1. The newspapers want you to read the full article. They make their money from convincing advertisers that they have a loyal readership who spend their time poring over every single column inch. So they will reel you in via the headline and perhaps a nice photo. Yes, that's indeed precisely what jdc325 did, with deliberate irony, with his own article.
  2. It's simply unreasonable to expect the headline to represent a synopsis of the entire article. It (plus picture, etc etc) is there to entice people towards the article. Necessarily, a headline will contain less information than the full article and, in order to meet the space limitations, will need to take shortcuts to get its point across. A short headline could never encapsulate all the semantic content of the full article. Indeed, in my view, expecting it to do so risks misunderstandings of #twitterjoketrial proportions.
  3. The very idea that newspapers such as the Daily Express and Daily Mail intend to mislead their readership by publishing accurate articles under inaccurate headlines is - and I think I'm being as charitable as I can possibly be here - unproven.
  4. It's unfair to summarise the Press Complaints Commission's judgment as leaving newspapers "free to print headlines which are misleading or inaccurate as long as there’s something in the article itself that contradicts the headline". In fact their judgment says that headlines must be considered in the context of the article as a whole. Unlike the obviously tongue-in-cheek headline and picture, it's not clear that jdc325 realises the bias in his own summary of the PCC's judgement. There are shades of Matthew 7:5 here.
  5. And I'm not sure that we should be seeking regulatory intervention to deal with the risk that some readers might misunderstand an article by failing to read all of it. What sort of regulatory intervention could possibly address possible lack of comprehension of a varied readership?

Instead, I'd say we must stick with what we have. Let the PCC do what it does. It can improve, for sure, and one would expect the independent Lord Hunt to start making his mark. Let bloggers fill the space to clarify those areas that the PCC can't reasonably address. If nothing else, it gives us something to write about. Some day we might even find a way to attract people to read it!

The Daily Mail and misinformation about VAT

Posted by Christie Malry on January 2, 2012 at 9:45 am

The Coalition government raised the VAT rate to 20 per cent in January. However there is an exemption for food, children’s clothes, tap water, passenger travel, books, newspapers and some other products.

No there isn't. These items are all subject to VAT, but at a rate of 0%. Some other goods and services are classified as 'VAT exempt', which means that VAT isn't charged on them at all.

This might look like meaningless sophistry to some, but it really does matter. Because a business that sells zero-rated goods and services can claim back its input VAT from HMRC. A business that sells exempt goods and services cannot, meaning that it must reclaim the VAT on its input costs via higher prices instead. It's for this reason that Ritchie made an idiot of himself last year when he claimed, wrongly, that banks get a tax break because of their VAT exempt status. They don't, because they suffer VAT on all their inputs.

So what the EU is actually proposing is that various country provisions for differential rates should be removed, which is a totally different proposition. Is it really too much to ask that a national newspaper get this sort of thing right?

Delicious irony

Posted by Christie Malry on March 23, 2011 at 7:19 am

Ritchie retweets the following from Jemima Khan:

Call me naive but I didn't realise to what extent The Daily Mail censors its comments to suit its agenda. We are all being blocked.

So, I guess it's true. Ritchie really does do irony.

Daily Mail confusion over slashing public sector pensions

Posted by Christie Malry on February 25, 2011 at 8:39 am

The Daily Mail gets all hot and bothered this morning:

Public sector workers could see their ‘gold-plated’ pensions slashed to make it easier to transfer services to private firms and charities.

The change would mean a nurse with a final salary of £40,000 could see their pension slashed from £20,000 a year after 30 years’ service to £6,000.

Teachers retiring on a final salary of £50,000, who would normally receive a pension of £25,000, would see this whittled down to little more than £7,000.

Doctors can qualify for pensions of around £50,000. But transferring into a new private pension scheme could leave them with just £11,403 a year in retirement.

Those on the lowest salaries, such as refuse collectors, could see their £10,000 pensions cut to £3,249.

I very much doubt this is the case. It's a principle of pensions law that once you've accrued a pension right it can never be taken away from you. So we're not going to see tales of woe as a teacher "just a few months away from retirement" being cynically transferred into a private sector employer and automagically losing half her accrued pension rights.

Instead this is the Tories doing what should have been done many many years ago and taking an axe to one aspect of future public sector pension accruals. Even then they're doing so in a very limited way - this will only affect those who are transferred from the public sector to a private sector employer providing those services to the public sector. In the past their future accrual rights were guaranteed. Now they won't be.

They can still get the pensions they might have been expecting, but now they'll have to contribute a lot more to it. Just as the vast majority of those in the private sector already do. No wonder the unions are up in arms - they don't want lots of people taking responsibility for their own lives.

The cost of raising a child isn't £210,000

Posted by Christie Malry on February 24, 2011 at 10:41 am

"The cost of raising a child is now £210,000," shrieks the Daily Mail, a cost that has apparently doubled in eight years. But, dig beneath the surface and a different picture emerges.

In arriving at their figure they've looked at the amounts parents actually spend and then added up the amounts that look like they're child related. This is silly.
If they want to do it properly, they should work out what you need to spend on essentials. So this would include food for the kid, some clothing, incremental heating and water costs. You would deliberately exclude discretionary outgoings, such as holidays. And while little Johnnie might want an Xbox or Camilla might demand a pony, these aren't a cost of having a child. They're a cost of being a crap, spineless parent.

To the Mail's cost you need to add things that society demands but which parents don't directly pay for. Yep, education and healthcare, because we don't like children dying of treatable ailments or growing up thick. These are direct costs of raising a child, even though those costs are usually borne by central or local taxation, not the parents themselves. I wouldn't lump university costs in here, because they're more discretionary.

And then, having worked out the costs in each of the (approximately) 20 years of childhood, you need to discount them to the present day. This is because you don't have to find all the money now, and money now is worth more than in the future.

The discounted essential outgoings, even with schools and health thrown in, is likely to come to a lot less than the Mail's figure.

There's an interesting aside too. If we truly believe that each child "costs" £200,000, at what point do we say to a family with no current wage earner, "we think you've got enough children already"? After 4 kids (committing taxpayers to £800,000 in Mail money)? Or shall the benefits cheque be permanently blank?

Written on my Android mobile phone. Article may be edited later.

The five howlers made by The Guardian in reporting tax paid by Barclays

Posted by Christie Malry on February 20, 2011 at 9:33 am

Introduction

On Friday 18 February, The Guardian generated an enormous amount of public interest in the tax affairs of Barclays with an article that suggested that, in 2009, Barclays paid UK corporation tax at a rate of 1% instead of the statutory 28%.  This caused inevitable howls of anguish from their left-wing readership. The timing was particularly unfortunate, as it came on the eve of a mass demonstration against Barclays arranged by UKuncut. It added a considerable amount of fuel to an already tense situation.

Even more unfortunate was the fact that the article was founded on five total howlers that mean virtually the entire content of the article is complete nonsense.

Here's where the article went wrong:

1) Cash paid in 2009 largely relates to earnings from 2008

The article compares the cash paid to HMRC in respect of UK corporation tax in 2009 (£113m) to the profits generated by the consolidated Barclays group in 2009.

In the UK, tax is paid in arrears, subject to a payment on account system. A large company like Barclays would certainly be making a payment on account. But, even so, a large slug of money paid in 2009 would relate to 2008, not 2009.

2) Barclays only pays UK corporation tax on its UK sourced profits

Multinational companies such as Barclays pay tax in a number of jurisdictions. Carving up the profit between the various countries in which it operates isn't a trivial exercise and, in some cases, profits may end up getting taxed twice - a nightmare for any CFO. However, generally speaking, Barclays only pays UK corporation tax on profits it generated in the UK.  Anything earned outside the UK doesn't get taxed here.

So it's a howler to compare the UK corporation tax payment to the global consolidated profit. Most of that profit isn't taxed here in the first place.

3) Barclays 2009 consolidated profits include a significant disposal which is taxed differently under UK law

(HT here to The Pedant-General and Alex, who first commented on this over at Tim Worstall's blog)

In arriving at a profit before tax figure of £11.6bn, The Guardian has added the profit from the ongoing business (£4,585m 1) to profits from a disposed business (£726m 2) and the gain made on disposal of that business (£6,331m 3) to reach a total of £11,642m.

In 2002 (yes, under Gordon Brown), the UK government introduced the Substantial shareholdings exemption, a corporation tax exemption for UK businesses disposing of a substantial shareholding in part of their business.  The idea was that businesses should be more able to restructure their businesses without having to worry about unfortunate chargeable gains implications.

As explained in note 39 to the accounts, this means that the bulk of the gain on disposal isn't chargeable to UK corporation tax at all.

4) Barclays has brought-forward losses which alleviate the income that's taxable in 2009

It's a general principle under UK tax law that companies get much less favourable treatment of tax losses than of profits. At first glance this might be a bit counter-intuitive. When a company makes a profit it must make a tax payment. If it then makes a loss, shouldn't it get a tax refund to help it out?

Not so long ago, companies that made UK taxable losses were allowed to look back up to six years and 'carry back' those losses to a prior period. They could then demand a refund against tax already paid to HMRC. Over time, reflecting perhaps Gordon Brown's desperation for tax revenue, this has been tightened so that there is now only an unlimited carry back for one year.  Losses above that must be carried forward to offset against future tax liabilities.

And that's what Barclays has done. In 2008 it offset global losses worth £859m against its tax bill 4. This isn't tax evasion; it's not even avoidance. It's a company that's made horrific losses being given some relief for those losses by tax authorities around the world. The utilisation of those losses will have reduced the amount of tax it handed over to HMRC in 2009.

5) Chuka Umunna is complaining about tax law introduced by his own party

The campaign of righteous anger being led by Chuka Umunna, a Treasury Select Committee member, is seeking to mobilise public protest against the Coalition.  This rather overlooks the fact that Barclays made these profits in 2008 and paid tax on them in 2009. At this time the Labour party were in power.

Umunna should be writing to Gordon Brown and Alistair Darling to ask them why they did nothing at the time.

Conclusion

It's rare that an apparently reputable broadsheet newspaper such as The Guardian would allow itself to be associated with such a poorly constructed article as this. It's been picked up in the Daily Mail too.  In fact, there are very good reasons why the cash payment to HMRC in 2009 might be substantially smaller than the global profits delivered in that year. In fact, the same is also true of the apparently ethical Co-Op bank.

Even worse, "facts" like those in the article tend to travel faster and more widely than the rebuttals which follow them. However, that's not going to stop me from reinforcing the facts of the UK tax system ahead of the UKuncut rhetoric.

Please comment below if you wish to challenge or reflect on any of the material above.

And please share this article with your friends and enemies. Spread the word!

Notes:

  1. Consolidated income statement
  2. Note 39 to the financial statements, 2009
  3. Note 39 to the financial statements, 2009
  4. Note 10 to the financial statements, 2009

Quote of the day: the dangers of being a ninja in the modern era

Posted by Christie Malry on January 19, 2011 at 6:58 pm

From the must-read Daily Mail

He claims his stalking skills are so honed that he can creep up quietly and touch a deer - although he admits he used to do the same with foxes until one bit him.