Poverty in Oldham

[skwdenyer]

For those with a knowledge of post-industrial towns, the title's perhaps not a surprise.

However, wondering if anyone has seen this and what they think about it:

http://www.bbc.co.uk/news/av/uk-43507747/mummy-s-n...

Is it an unenlightened view, or have things gone very wrong?

[skwdenyer]

Moonhawk said:

paulrockliffe said:

He was getting 20k of benefits, if it's the same chap that was trailered on the radio earlier in the day, of course he gave up work. That's more money than most take home after tax.

Indeed £20k net income from benefits is only just below the take home pay of somebody on median wage.

That means he's getting given more in benefits than the take home pay of ~50% of the working population.

That's not actually true, I'm sorry to say.

Per ONS, median household disposable income is projected to be £27k pa in 2018. Disposable income in this context is the amount of money that households have available for spending and saving after direct taxes (such as Income Tax and Council Tax) have been accounted for. It includes earnings from employment, private pensions and investments, as well as cash benefits provided by the state.

Estimates of median household salaries are in the £24k or so range. So you can already see the enormous redistributive effects of taxation and benefits.

Somebody on median wage with children will most likely be receiving a range of state benefits - tax credits, income support / housing benefit / universal credit, etc.

That chap with 4 children? The benefit cap has meant that he is something like £4500 per year worse off than he was before. His capped benefits are £20k pa.

Assuming his children are school-age, and that he pays the Local Housing Allowance maximum for housing (£450 pcm or so in Oldham - and bear in mind I can't find any houses at that rent on RightMove) then if he works, say, 30 hours a week at £7 per hour, his take-home income will rise to £2731.05 per month. Because of the way the benefits work, if he manages to earn £15 per hour instead he'll only be better off by a further £101.66. And so on - help tapers off.

So there are a bunch of issues here. First, nobody seems to have managed to communicate to him that working (even paying childcare) would see him *way* better off. Why is this?

Second, there's a bigger problem in that the government is in essence subsidising low-paying businesses to sort out the cost of living problems we have.

Third, why is the BBC not inviting somebody into the film to present a counterbalancing view?

[skwdenyer]

fblm said:

Derek Smith said:

If these people do pay all their taxes then who's keeping all these islands with more banks than people going?

You seem to be stuck in about 1980. Google FATCA/CRS/AEoI. If the world really is as you imagine it did it not seem very strange that the Appleby/Paradise papers turned up a big fat terrabyte of fvck all?

Edited by fblm on Friday 23 March 22:42

Without naming names for all sorts of reasons, I'd say that the Paradise papers in particular turned up "fvck all" because there was not enough global data to run them against.

I happen to know rather a lot about somebody whose affairs appeared in those papers. I also happen to have obtained a great deal of information from other sources (Cyprus, Malta, Jersey, Mauritius, Bahamas, etc). The complete picture is fascinating, most definitely designed to avoid taxes and hide wealth, and *way* too complex to fathom quickly.

Those who intend to hide can hide - they just need to make sure they use a multiplicity of offshore jurisdictions, many different advisors, etc.

I'll give you a specific example of the type of thing I'm talking about. Open a company in Cyprus. Wait until the last minute for reporting, then declare it to be based offshore. Register it as an offshore office in Malta. Get to the filing deadline, apply for a 1 year (!) extension. At the end of that extension, declare the Malta office closed and re-domicile back into Cyprus for 9 months. Then repeat.

Perfectly legally, you can manage to not file any published accounts for years this way. Then sell the company's assets to another company, liquidate your original entity, etc...

That trick is just a very small part of the bigger machine. There's a *lot* more detail.

Every time somebody in authority takes a look, the whole structure will seem legal if convoluted - because it sort of is. But little or no tax will be paid, assets will be kept beyond the reach of creditors, etc.

What the Paradise Papers *did* do for those of us with a particular interest was to validate some of what we thought we knew, and add a few more links into an overall picture. But no smoking gun will be apparent to the casual observer - or even the journalist looking for a scoop without a ton of other legwork.

[skwdenyer]

fblm said:

Very interesting (genuinely not being sarky). It's also notable that both are EU countries and not the much maligned ''islands with more banks than people'' bogeyman.

Indeed. So it all seems more "above board" because of it.

This trick of closing companies before filing is due is used a *lot* in the uk too - and not just for big wealth. I know at least 1 shop that has a different "owner" every 6 months. Never files, never registers for VAT, etc...