Margaret Hodge attacks 'voluntary' tax policies for rich

Hodge has led the cross-party committee through a wide-ranging investigation into how multinational firms pay UK tax

The chair of parliament's public accounts committee, Margaret Hodge, has delivered her most outspoken attack to date on the coalition's tax policies, describing the tax system for corporations and the super-rich as "increasingly voluntary".

She also criticised the "growing gap between rhetoric and reality" coming from David Cameron on tax reform.

Speaking at an event organised by tax campaigning charities in London, Hodge said: "They [ministers] believe we should engage fully in the global race to the bottom … I now believe David Cameron doesn't mean what he says when he says multinational companies should 'wake up and smell the coffee'."

Despite tough language on combating tax avoidance, the coalition government has been acknowledged among tax professionals as accelerating the pace of tax competition in a drive to lure in foreign investment. Measures such as new rules for overseas finance subsidiaries, tax breaks for groups owning patents in the UK, and the plunging corporation tax rate, have been cited by critics of Cameron's approach to tax reform.

Hodge's attack on Cameron harked back to a speech he gave at the World Economic Forum in Davos in January, shortly after the use of aggressive tax avoidance strategies at Starbucks' UK operations had been exposed by a Reuters investigation. The coffee chain had taken £3bn of sales in the UK over 14 years, but paid only £8.6m in tax.

Cameron told the audience of business leaders in the luxury Swiss resort: "When some businesses aren't seen to pay their taxes, that's corrosive to the public trust … Some forms of avoidance have become so aggressive that I think it is right to say these are ethical issues and it is time to call for more responsibility."

In a blunt jibe at Starbucks, he urged multinationals to "wake up and smell the coffee".

Hodge has spent the last two years leading the cross-party committee of MPs through a wide-ranging investigation into how multinational firms pay UK tax. Her tough questioning of company executives, big-four accountancy partners and HMRC bosses has played a major role in keeping tax reform high on the political agenda.

After firms such as Google and Amazon were subjected to a barrage of angry questioning from Hodge's committee, George Osborne responded a year ago by issuing a joint statement with his German counterpart Wolfgang Schäuble, calling for urgent reform of the international tax rules. "Some multinational businesses are able to shift the taxation of their profits away from the jurisdictions where they are being generated, thus minimising their tax payments compared to smaller, less international companies," they said. "We want global companies to pay those taxes."

Since then, however, Schäuble has dramatically switched his view of Britain's commitment to shoring up the integrity of international tax regimes, attacking Osborne's "patent box" tax break. "That's no European spirit," he said. "You could get the idea they are doing it just to attract companies."

Behind the scenes, a growing number of fellow G8 nations have also become increasingly irritated at the apparent gap between Cameron's use, on the one hand, of a language of ethics on tax reform, and, on the other, what some see as begger-thy-neighbour measures to poach business activity from rival economies.

Article Source : http://www.guardian.co.uk
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Zero-hours contract workers in UK find their shifts are cancelled at will

Many told shifts cancelled just hours before starting work – but CIPD says survey shows the contracts are unfairly demonised

Almost half of zero-hour contract workers have had their shifts cancelled without any notice, according to the first in-depth study of the way more than 1 million people on the controversial contracts are treated.

Two out of five workers on the contracts said they had been informed only hours before starting work that a shift had been cancelled. A further 6% had been told as their shift was about to begin.

The study also found that 20% are sometimes or always docked wages or penalised in some way if they are not available for work. But the survey of 1,000 zero-hour workers by the Chartered Institute of Personnel and Development (CIPD) found they were happier with their work-life balance than the average worker and equally satisfied with their job. Almost half of zero-hour workers were satisfied with their job against 27% who were dissatisfied.

A CIPD spokesman said the findings showed calls for restrictions on the contracts' use were misplaced and firms using them had been "unfairly demonised".

"The use of zero-hours contracts in the UK economy has been underestimated, oversimplified and, in some cases, unfairly demonised," he said. "Our research shows the majority of people employed on these contracts are satisfied with their jobs."

But the CIPD admitted that employers exploited the contracts to cancel shifts with little or no notice and penalised staff who were unable to attend a shift.

"However, we also recognise that there is a need to improve poor practice in the use of zero-hours contracts, for example the lack of notice many zero-hours staff receive when work is cancelled.

"If this is unavoidable then employers should at least provide some level of compensation. In addition, it seems that many employers and zero-hours staff are unaware of the employment rights people on these types of working arrangements may be entitled to."

In the summer the institute said the initial findings of its employment survey found that 1 million workers were employed on the contracts, at the time quadrupling the official figure.

The contracts, which allow an employer to hire staff without an obligation to provide any minimum working hours, are used widely in the care industry, hotel and leisure sector and by many retailers. In the last two years public sector organisations have transferred staff to zero-hour rotas.

Labour said the findings showed there was still widespread abuse of the contracts and the government needed to act.

Ian Murray, shadow minister for trade and investment, said Labour would ban employers from insisting workers be available when there is no guarantee of work. It would also let workers work for more than one firm without being penalised and force firms to give a minimum hours contract to longstanding zero-hours workers. "While the government has failed to act, Labour would outlaw the exploitative use of zero-hours contracts," he said.

Ian Brinkley, policy director at the Work Foundation, an employment thinktank, said the report showed there was a large minority of affected workers citing significant problems around pay, hours and the fear of being penalised.

Article Source : http://www.guardian.co.uk
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