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The Severn Trent takeover – corporate profiteering and tax avoidance on Britain’s water supply | openDemocracy


 

To the people of Ireland please note this is the future direction of your water system. Is this what you want?

Severn Trent is the latest water company to be targeted for takeover by a motley group of investment funds. An analysis of their past deals reveals huge profits, meagre tax bills and a seemingly casual approach to ethical concerns. Once again public assets are turned into wealth for the few.

As more and more people struggle to pay their water bills, the financial world has been getting itself into a lather over the attempted takeover of Severn Trent, the company supplying water across the Midlands and parts of Wales, by an investment consortium called LongRiver Partners. Severn’s board has so far rejected two offers but financial commentators reckon LongRiver will keep coming back until they get what they want (they have until 11 June to make a final offer).

People living in the areas that Severn Trent is ‘serving’ haven’t been asked about any of this, and they’re not going to be. The decision rests with Severn Trent’s board and shareholders, not the eight million people they call “customers”. As the water supply is a captive market (odd, given that privatisation is generally meant to get rid of monopolies and increase competition) they have no choice over who profits from them each time they turn on their taps.

But should they be worried? LongRiver is an unimaginative front name for a grouping of three investment funds: Borealis Infrastructure Management, the Universities Superannuation Scheme  and the Kuwaiti Investment Office. Let’s look at each in turn.

Borealis, with its obscure name, central London office and slick website, at first glance looks like a typical investment fund, run to make some already-very-rich people even richer. But there’s a twist. It is actually owned by the Ontario Municipal Employees Retirement System, the pension fund for over 400,000 municipal workers of the Canadian province. Unfortunately its previous UK investments suggest it doesn’t take a public service ethos into its work.

In the last few years, Borealis has bought three other companies providing important services and infrastructure to various parts of the UK: Scotia Gas, which supplies gas to Scotland and other parts of England, Associated British Ports, which owns and operates 21 ports in England, Scotland, and Wales, and HS1, which operates the rail link between London and the Channel Tunnel. Their accounts show Borealis and its fellow owners (different for each company) are using financial structures that means huge payouts for them, but meagre amounts for the public purse.

All three companies have borrowed huge amounts to finance investment – around £4 billion for each company. The exorbitant debt levels of water companies privately owned by investment funds have been criticised by a range of bodies, coincidentally including Severn Trent, which even wrote a report about it.

However, it is the identity of some of the lenders that should raise eyebrows highest in the case of Borealis’ three companies. Look further into their accounts and it turns out they have borrowed huge amounts from subsidiaries of Borealis and their other owners. Scotia Gas and HS1 each owe around £500 million, while Associated British Ports owes over £2 billion. And the interest rates on these loans are far higher – between 10 and 12% – than they are paying to banks or other third parties for the rest of their debt.

The interest payments – around £70m for Scotia and HS1 in 2012, and £255m for Associated British Ports – on these loans help to slash, and sometimes completely wipe out, the companies’ taxable UK profits. Their corporation tax bills are therefore significantly reduced – and sometimes non-existent – while the interest is accrued annually to Borealis and the other owners whether or not the company has had a good year. This isn’t the only way to invest – Borealis and co could have put the money into the company as equity, and received dividends instead of interest. But dividends are paid after a company has been taxed, so do nothing to reduce that bill.

It gets trickier. If Borealis was lending from its home in Canada, HMRC would keep 10% of the interest payments through what is called “withholding tax”. But the loans have been made through the Channel Islands Stock Exchange. Thanks to a loophole HMRC knows about but refuses to close (called the “quoted Eurobond exemption”), no tax is withheld.

Perhaps unsurprisingly, this type of financing is already popular in the water industry. A Corporate Watch investigation earlier this year found seven companies are using this loophole. It is popular with a range of companies, from private healthcare company Spire to Classic FM owners Global Radio. But the most dispiriting thing about all may be that it is being done to ensure service workers in another part of the world can have as comfortable a retirement as possible.

Which leads us onto the Universities Superannuation Scheme. As its name suggests, it too is a pension fund, for university staff across the UK. The USS describes itself as an “active and responsible” investor that says its will take “material corporate, governance, social, ethical and environmental issues” into account when making investment decisions.

Its track record though, doesn’t provide much hope for the people who may soon be relying on it for their water supply. Its investment portfolio contains a range of companies not generally known for their social, ethical or environmental principles. Oil giants Shell and BP, currently under investigation for oil and petrol price fixing, to add to their other various misdeeds, are both in the top five, as is HSBC, itself being investigated for money laundering. There’s also Vodafone, which could teach even Borealis a thing or two about tax bills, arms company BAE, British American Tobacco and notorious mining giants BHP Billiton and Rio Tinto. The USS has also been criticised for its investments in companies profiting from illegal Israeli settlements in Palestine, for example Astom, a French company involved in the construction of a light railway in occupied East Jerusalem (see here for more details).

And don’t hold out too much hope that the Kuwait Investment Office, a sovereign wealth fund set up with the country’s oil revenues, will be keen to ensure water drinkers get a good deal. The fund’s managers may have first met their USS counterparts at the BP AGM, where they are a major shareholder. The fund also has a hugely valuable property portfolio, especially in the City of London, and bought sizeable stakes in both Citigroup and Merril Lynch when the credit crunch first hit, later selling its Citigroup stock for a tidy profit two years later.

So things aren’t looking good for Severn Trent “customers”. But are they that good anyway? The company’s shares are currently traded ‘publicly’ on the stock exchange, and a lot is being made in the press of the difference between the listed water companies and those owned by consortia like LongRiver, with massive debt and tax avoidance schemes more popular with the latter (download an ownership table here). But the similarities are greater than the differences.

It’s true that Severn Trent’s bills are lower than many of their peers, but they’re still pretty damn high – £311 a year is a lot to be paying for water. Bills have increased by 50% in real terms since privatisation in 1989. A parliamentary briefing produced last month estimated 23% of households across England and Wales “now spend more than 3% of their income on water and sewerage bills” and suggested water bills “might not be affordable for a large number of people”.

Rising bills – approved by the government regulator OFWAT – are justified as necessary for  investment in creaking infrastructure. But the money is also going to satisfy shareholders’ demand for a return. Severn Trent paid out dividends of almost £160m in 2012 and has said they will be higher this year. There’s a reason its current management are holding out for more than a 16% premium on its current share value: they know guaranteed rising prices for monopoly control of a resource everyone needs is a deal they can charge extra for.

Add to this chief executive Tony Wray’s £1 million remuneration in 2012 – the second highest of all the water companies – and the £300 million it paid in interest on its £4bn of borrowings in 2012 and the investment figures start to look less impressive (there are no Borealis-style related party loans, but their banks and bondholders are charging them around 6% on average). And Severn Trent’s public listing hasn’t kept it scandal free. It had to pay a record £36m fine and promise to cut customer bills in 2008 after orchestrating what the Independent newspaper called “one of the largest customer overcharging scandals ever perpetrated in the UK”. It was fined £2m in the same year for falsifying leakage data.

So perhaps the choice we should be talking about is not private or publicly-listed, but private or public. Earlier this year, Corporate Watch calculated that £2 billion a year could be saved – or £80 per household – if the water supply was in public ownership. The government can borrow much cheaper than the companies and there would be no private shareholders demanding their dividends (see here for the full piece).

This isn’t to say that a public supply would automatically work well – the pre-privatisation supply was criticised for under-investing and lack of accountability – but there are many examples from around the world of water supplies being run more efficiently and democratically when public (see a short video on this here). And there’s certainly no shortage of examples from around the world of privatisation failing to provide a decent or equitable service,*. England’s water supply**, currently, is one of the them.

*  See the Public Services International Research Unit website for more information

** Scotland, Northern Ireland and the rest of Wales have public or not-for-profit- supplies.

via The Severn Trent takeover – corporate profiteering and tax avoidance on Britain’s water supply | openDemocracy.

The Irish face of the English Defence League (EDL)


THIS is the controversial Luton Irishman behind the far right English Defence League who have been protesting against ethnic groups on Britain’s streets in the aftermath of last month’s Woolwich terrorist attack in London.

                               Stephen Lennon – aka Tommy Robinson

Founder Stephen Lennon has mobilised EDL members in violent anti-Islamic protests across the country, which has seen mosques and Muslim communities targeted, in the two weeks since Soldier Lee Rigby was killed.

Lennon had taken to Twitter to threaten to take on ‘plastic paddies’ at Wembley’s England verses Ireland football friendly last Wednesday.

However, the threat was not followed through.

Lennon, who goes by the name Tommy Robinson, was born to a Dublin mother and Scottish father in Luton, where he formed the extremist group in 2009.

Although he classes himself as an Englishman, he has publicly claimed to be ‘proud’ of his Irish heritage, but messages on his Twitter feed reveal the opposite.

Posts found on Lennon’s social networking account, show the second-generation Irishman regularly refutes his heritage and abuses those who claim he is Irish.

He has also posted a string of anti-Irish slurs and remarks.

In one message he claims his parents would be “in Ireland picking potatoes and eating cabbages”, if they hadn’t moved to England.

Elsewhere those tweeting him are branded ‘fools’ and ‘wronguns’ for claiming he is Irish.

Another post is used to inform his followers that “cos of all this abuse from plastic paddys we are taking a tidy mob to England Ireland on 29th.”

More than 1,500 EDL supporters marched through central London and protested at Downing Street last Monday.

The group congregated in Trafalgar Square before marching to Westminster and descending on a ‘Support our Troops’ demonstration being held in response to the Woolwich killing.

Thirsty-year-old Lennon, who co-founded the EDL in Luton with fellow second generation Irishman Kevin O’Carroll – whose parents also hail from Dublin – was among a masked group of EDL members in Woolwich two weeks ago on the night after Drummer Rigby’s death.

That protest saw violent clashes with police as more than a hundred EDL members hurled bottles and anti-Muslim abuse while demonstrating close to the scene of the attack.

Violence erupted as mosques were attacked and police attempted to control the scene, where EDL members chanted “no surrender to Muslim scum’ and ‘rule Britannia’.

The following Saturday the group led a similar protest in Newcastle, before returning to London last Monday (May 27) for the Downing Street demo.

When contacted by The Irish Post the EDL failed to respond.

The EDL protests have increased fears of far right reprisals upon the Muslim community in Britain.

Former London Mayor Ken Livingstone was among politicians and anti-fascist supporters who took a stand against the EDL last week.

He called for British citizens of all communities to condemn their violent protests and unite against fascist movements who may seek to capitalise on fears surrounding the Woolwich killing.

“There will be those who will seek to scapegoat entire communities for this barbaric act,” said Mr Livingstone, Honorary President of United against Fascism group.

“This is what terrorists want, and rely on. For people to feel fear, to turn on each other and to bring down the very essence of London, the most successful melting pot in the history of the world and the city of the free.”

He added: “Already, violent fascists have taken to the streets in Woolwich adding insult to the injury that community is feeling. Already there have been reprisal attacks against Mosques. We must not let this violent minority exploit this crime for their own hateful gains.”

via Revealed: The Irish face of the English Defence League (EDL).

Artane: suffer little children


We have learned in recent years what was not known before, the systematic abuses of tens of thousands of children, mainly poor children, in the religious institutions of Ireland. However, through our independent media we learn that this is not true, as the headline in the Workers Voice (1935) illustrates, abuse was known, was ignored and was wiped from accepted history. Independent media gives a voice to the voiceless.

The following are some short excerpts from the  Child Abuse Commission report on Artane. All these events and reports happened subsequent to the headline above (in which a young boy had been kicked to death in Artane boys’ school and the murder covered up). If Ireland had listened to independent media these children would have been saved:

Brother Cyrano – a broken arm

In the mid-1950s, the mother of a boy in Artane wrote to the Department of Education to ask if she could be allowed to see her son, who had sustained a broken arm and head injuries during the previous week. She also asked if the incident could be investigated. She wrote:

I heard during the week that my boy Thomas Artane School had an arm broken as a result of a blow with a brush by one of the brothers I call to the school yesterday and the superior admitted that one of the brothers had given him a blow and that his arm was broken I did not see the boy but I believe he was attending another hospital for treatment the superior said he had it xrayed and seen the result the arm is in Plaster of Paris I also heard that his head was bandaged during the week Im very worried over it and I called on Sunday to see him and was not allowed If it could be arranged for me to see him to ease my mind. In any case please have the matter investigated and let me no the result.

Delayed pain

A former resident explained:

Another Brother, if you are talking or doing other things in the dormitory that you weren’t supposed to be doing, he would make you go in to the washroom and put your hand into very cold water, because there was no hot water in Artane, and he would make you put your hand in the cold water for about ten [minutes] to quarter of an hour. Then he would call you out and while your hands were still wet, he used to make you put your hand, palm upwards, on the iron bedstead and he had a foot ruler and he used to slice the top of your fingers. It was only afterwards when the blood returned to your hand that you actually got the pain that was involved. Speaking here, it doesn’t seem to imply that being hit at the top of your fingers was a great punishment but it certainly was. The pain afterwards was more than the actual striking of the fingers.

There was no hot water in Artane, nor plumbed toilets

We had only buckets behind the handball alley … I would say there was about 20 to 30 buckets … it was newspaper we used instead of toilet rolls, there was no such thing … They had to be emptied … There was two men, [he thought they were siblings], … at the time it was a horse and cart … They were lay men … I was one of the ones that had to help on that occasion because I was a hefty lump of a lad … You had to put a bit of paper, them buckets could be over full … You have a dirty job there … we were just emptying the buckets … into this barrel. We called it a barrel. It was a horse and cart … it had to be done every day. Imagine there is 800 people were going through toilets … the handball alley was your wee wee, the back of the handball alley. You put them back. They were lovely looking going back … They went back with a kind of coat on them.

A decent man in every other way:

He used have his cloth over him and he kind of took my hand and placed it on top with the cloth covering it in case anybody came in. I touched him like that … He carried on … and then sent me back to my place. That’s all [he] ever done, he was a fondler more than anything. He didn’t ask you to undress or anything like that. He confirmed the statement that he had made to the Commission: All boys liked [him] because he was a gentle kind of man. He said that the teacher looked after the boys and that they put up with him for that reason. He said: We weren’t idiots. Boys at that age were aware, I was anyway, that some of the teachers and some people were like that. He continued: he was good to us … He wasn’t cruel like some of the Brothers. I personally found him very nice and also he always brought a newspaper in every morning. When he was finished the lads would get it. Some of us were avid readers. In that way he was a man’s man, if you like. I know he was a groper but he was a decent man in every other way

Br Ricard, who taught in Artane in the mid-1950s, sexually abused boys in a Christian Brothers’

school in Waterford in the late 1950s.:

A letter sent the following day to the Brother Procurator General, regarding the dispensation from perpetual vows of Br Ricard, reveals the anxiety felt by the Brothers about this case:

This is one of the worst cases we have had in my experience. It is so bad that we have voted unanimously in both Provincial and General Councils that he be granted a dispensation …

The letter discloses how the abuse was detected:

For a whole year he had been “interfering” in a homosexual way with two or three very respectable pupils at [a private secondary college]. One of these came to [a college run by another Order] last August and it was through a letter censored by the [Superiors at that college] that the whole matter came to light. The Brother admitted everything the boy … had stated.

The letter goes on to say:

We fear that the evil ways into which he had fallen may be of some years duration. He leaves immediately for England (on leave of absence). Were he to remain in Ireland and were the parents of the boys to get to know of his behaviour at [the Christian Brothers College] there would be a great danger of a public prosecution. The case is, as I have stated, one of the worst we have had. Do everything you can to secure an immediate Dispensation and forward same as expeditiously as you can.

Br Ricard sought a reference, but was not provided with one as it was felt that ‘there is no knowing what use he might make of it’. According to a letter written by the Provincial Assistant to the Superior General, he was informed that he could not continue teaching and would not be given a reference. However, it appears from records furnished by the Department of Education and Science that the ex-Brother came back to Ireland less than a year later and took up a senior position in a school in Co Kildare and remained there for some years. He was then appointed an assistant teacher at a school in Dublin where he worked for a few years, before moving to a Dublin secondary school where he worked until the late 1980s.

via Artane: suffer little children : rabble.

UK – NHS competition rules to be changed


The government has agreed to re-write controversial rules on contracting out in the NHS in England.

The regulations were published three weeks ago to provide guidance on how the NHS reforms should be implemented.

But critics had argued they would open up many more services to competition from private companies and could disrupt services for patients.

Health Minister Norman Lamb told MPs the wording of the regulations had “inadvertently created confusion”.

He said there would be no privatisation of the NHS and that competition was only a means to improving services not an end in itself.

The regulations were drawn up as previous guidance on the issue was set to be rendered obsolete because it applied to organisations that were being scrapped on 1 April.

But after they were laid before parliament concerns were voiced that they broke previous assurances from ministers about the extent to which competition was going to be used.

Continue reading the main story

Analysis

Nick Triggle

Health correspondent

If you read the 12 pages of regulations 257 governing NHS procurement, the first thing that strikes you is the contradictory nature of the clauses.

On the one hand the document talks about contracts only being awarded without competition for reasons of “extreme urgency” and treating all providers equally particularly on the “basis of ownership”.

Yet it also makes it clear that any changes need to ensure services are being provided in an integrated way and not against the best interests of patients.

It is hardly surprising this has caused confusion and concern. In less than a month’s time arguably the biggest overhaul in the history of the NHS will go live.

Ministers claim it is more cock-up than conspiracy. If that is so it begs the question how the regulations managed to make it to parliament drafted in the way they were given the controversy over the reforms as a whole.

Read more from Nick

‘Utter chaos’

Last week more than 1,000 doctors have written to the Daily Telegraph claiming the legislation makes “virtually every part” of the NHS open to private firms.

Then over the weekend the Academy of Royal Medical Colleges said it could cause “dangerous” fragmentation of health services.

Labour had also managed to secure a debate on the issue in the Lords. It was due to take place later in the month.

Mr Lamb acknowledged the concerns, but said it was a matter of the regulations being badly drafted rather than an intention to ramp up the use of competition.

He added: “I have listened to people’s concerns and my department is acting quickly to improve the drafting so that there can be no doubt that the regulations go no further than the previous set of principles and rules inherited from the previous Labour government.”

But shadow health secretary Andy Burnham said the changingof the regulations represented a “humiliating retreat”.

“In less than four weeks’ time new GP commissioners take control and yet today there is complete confusion about the job they are being asked to do.

“Coalition policy on competition in the NHS is in utter chaos.”

If you read the 12 pages of regulations 257 governing NHS procurement, the first thing that strikes you is the contradictory nature of the clauses.

On the one hand the document talks about contracts only being awarded without competition for reasons of “extreme urgency” and treating all providers equally particularly on the “basis of ownership”.

Yet it also makes it clear that any changes need to ensure services are being provided in an integrated way and not against the best interests of patients.

It is hardly surprising this has caused confusion and concern. In less than a month’s time arguably the biggest overhaul in the history of the NHS will go live.

Ministers claim it is more cock-up than conspiracy. If that is so it begs the question how the regulations managed to make it to parliament drafted in the way they were given the controversy over the reforms as a whole.

via BBC News – NHS competition rules to be changed.

via BBC News – NHS competition rules to be changed.

Romanian vagrants accused of defecating on prized London azalea beds


London – “Bloody EU scroungers are sh+++ing all over my ericaceous cultivars,” Bryanston Square baronet Major Sir Reginald Pratts-Bottom complained bitterly this morning as news of the outrage went viral; “God knows that sort of dung heap London will become when millions of these squalid johnny foreigners invade next year.”

Tramps like this are crapping all over prized London shrubs

Most of Sir Reggie’s well heeled neighbors at the beautiful, private garden square are also up in arms after some non-indigenous vagrants – believed to be Romanians – left dozens of human waste lumps all over the square’s precious azalea beds.

Recent balmy weather conditions have brought scores of Southern European rough sleepers into the Capital along with their ‘crappy’ makeshift camping arrangements at landmark London sites.

According to reports on UK lunchtime TV News a lack of plumbing and sanitation is no barrier to rough sleeping out in the open as long as evergreen shrubbery continues to provide a smidgen of privacy when nature calls at 4 o’clock in the morning.

Viewers were treated to scenes of ‘utter depravity’ as cameras panned in on Sir Reggie’s stunning showstoppers, glistening with telltale urine streaks on the lush, verdant foliage.

Elsewhere discarded kebab wrappers, empty White Lightning cider bottles and black plastic bin liners were strewn willy-nilly near the garden’s famous tulip bed.

And half-used toilet paper roll – overstamped ‘Property Of Westminster Council‘- was seen dangling from a hibiscus bush in a corner of the garden strewn with roll-up dog ends.

“It’s fair broken Lady P-B’s heart, this bloody outrage,” Sir Reggie confided to reporters, “not to mention the effect the stench is having on our cosy bridge evenings.

“Time to resurrect the old blunderbuss and let ’em have it where the sun don’t shine.”

via The Spoof : Romanian vagrants accused of defecating on prized London azalea beds funny satire story.

via The Spoof : Romanian vagrants accused of defecating on prized London azalea beds funny satire story.

The police appear to be totally anti cannabis in Ireland yet do nothing to protect the citizens from the banking fraudsters


The police appear to be totally anti cannabis in Ireland yet do nothing to protect the citizens from the banking fraudsters who have brought the country to its knees.

Would the public be better served if more police time were devoted to investigating the crimes of bankers and speculators rather than using up their resources chasing cannabis dealers

How many people in Ireland have had problems with the police for  possession of cannabis. How many have been sent to jail.

Yet the bankers and speculators who have brought the country to its knees still walk the land as free citizens I wonder why!!!

Portadown Times

Published on 26/04/2013 15:00

The back seat of a Mondeo car containing a large amount of cannabis after a major drugs manufacturing operation was uncovered in a Belfast city centre flat as part of a police operation in 2010 INPT17-017

A TANDRAGEE man was among seven members of a crime gang jailed last Friday for their involvement in a £2.5 million drugs smuggling operation in Belfast.

James Turley, 53, of Ballymore Road, Tandragee and 38-year-old Warren Martin, of Windsor Terrace, Coagh – who were described by the judge as “privates” in the operation – were jailed for 15 months and 13 months respectively, with half of the term being custodial.

Gang leader Ryan Joseph Black, 29, received the longest term, seven and a half years, with a man described as his “trusted lieutenant” William Johnston, 35, given six years and nine months at Belfast Crown Court.

A major drugs manufacturing operation was uncovered in a city centre flat as part of a police operation in 2010 to disrupt the gang.

All seven men involved pleaded guilty to charges facing them prior to the start of their trial.

Black, whose address cannot be published for legal reasons, and Johnston, of Windermere Park, Belfast, have to serve half the terms in custody, with the remainder on licence.

Both men have already spent a substantial period of time in prison on remand since their arrests in December 2010. This time served will be deducted from the sentences handed down by Judge David McFarland.

Around 52,000 illicit tablets, 30kg of cannabis resin, 1kg of cocaine and £15,000 in cash were part of the haul found in the Laganview Court apartment near Queen’s Bridge in Belfast.

A hydraulic press for making cocaine, an industrial blender, cutting agent, boards, scales and knives were also seized from inside the property, which was fitted with black-out blinds.

The flat was searched by officers in December 2010 shortly after police intercepted the transfer of 26kg of herbal cannabis between vehicles near the Boucher Road in south Belfast.

Two months earlier in the Duncrue estate in north Belfast police halted another drugs transfer – this time involving around 45 kg of herbal cannabis – linked to the same trafficking operation.

Of the five other gang members, Aiden Joseph McPartland, 32, from Deramore Gardens, Belfast and Mark Mulholland, 27, of Colonsay Park, Ballymena, were described by the judge as “corporals” in the command structure. They received 22 months and 24 months respectively. Again only half the sentences are custodial.

Anthony McStravick, 33, from Ailesbury Road, Belfast, who was said by the judge to have played a “minor role”, was given 10 months. He will be eligible for remission.

The men showed no emotion as the sentences were handed down.

Police believe the drugs were transported from England and were destined for the illicit market in Belfast.

The PSNI said, during a parallel investigation in England conducted by East Midlands Special Operations Unit, 11 people received convictions last year.

After the sentencing hearing, PSNI Organised Crime Branch Detective Superintendent Philip Marshall said: “This was a lengthy and complex proactive investigation into an organised crime gang which was bringing large quantities of controlled drugs into Northern Ireland.

“We have secured convictions against the gang leader and his deputy as well as their couriers and the individual responsible for mixing the cocaine.

“Working with colleagues in East Midlands Special Operations Unit, we have swept away a web of illegal drug supply covering Northern Ireland and part of England.

“The gang leader, Ryan Black, believed he could direct the activities of the gang from a safe distance and escape the reach of the law.

“But the investigation by Organised Crime Branch was of such a comprehensive and forensic nature that his plan failed. Both the gang leader and his associates have been made amenable.

“In Northern Ireland we have dismantled a gang responsible for large-scale drugs importation.

“Organised Crime Branch will continue to work with local communities and colleagues in law enforcement, in this jurisdiction and around the world, to ensure Northern Ireland is a hostile environment for those who seek to make money by manufacturing, importing or distributing controlled drugs.”

http://www.portadowntimes.co.uk/news/local/tandragee-man-was-a-private-in-drug-gang-1-5038458

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kilkenny People

Piltown cannabis bust

Published on 26/04/2013 17:04

THREE Chinese men who pleaded guilty to their involvement in a massive drugs bust at Piltown eleven months ago were jailed for seven and half years, suspended for six years on condition they leave the country immediately and not return during their life-time.

The accused Guotai Lin (60), Lin Lin (41) and Chao Long He (36) of no fixed abode were sentenced by Judge Alice Doyle at Kilkenny Circuit Court on Tuesday last.

Assisted by an interpreter and described by Garda Thomas Gahan as being on the ‘lowest rung of the ladder in relation to this particular operation but caught in time’, the trio pleaded guilty to possession of cannabis for sale or supply and cultivation of cannabis in Kildalton, Piltown on May 2, 2012.

Smuggled into Ireland

They’ve been in custody since May 4 last year and were trafficked into the UK and then smuggled into Ireland using false ID papers.

The court heard they were effectively imprisoned in Piltown, their living conditions were basic but they knew they were dealing with cannabis.

Garda Gahan outlined that 43.5 kilogrammes of cannbis herb valued at €870,000 was seized along with 16 kilos in packages after members of the Garda National Drugs Unit and Gardai from Kilkenny Division and the Regional Support Unit raided the warehouse – two separate industrial units that had been merged – at 6.55pm on May 2 last.

However, media reports at the time estimated the street value of the cannabis find, some harvested and much of it still in pots, to be in the region of €3.5 million.

The two units had been rented out, unknown to the owners and to create optimum conditions for cultivation, the walls were knocked between the units, the roof was lowered, the ESB was bypassed and ventilation systems were installed.

While elaborate heat lamps and thermometers, nutrients and water barrells for feeding the plants, a vacuum packing machine and weighing scales were discovered.

Garda Gahan presented comprehensive photographic evidence of the warehouse and it showed separate areas where cannabis was being dried, two rooms where plants were at an advanced stage of growth and another where plants had flowered and were ready for cultivation.

Garda Gahan explained the three men were located inside and subsequently arrested. None of them had English and with the assistance of an interpreter they were interviewed four times over a period of two days at Kilkenny and Thomastown Garda Stations where they were co-operative and a plea was indicated at an early stage. A photograph of their living quarters was presented in evidence.

None of the three had previous convictions in this jurisdiction, but Lin Lin had a conviction for selling counterfeit DVD’s in England in 2001.

Garda Gahan said they were at the bottom rung of the ladder but when it was put to him by Senior Counsel Paddy McCarthy (representing Guotai Lin) they’d no home comforts living in the warehouse, he countered, “They also had phones and phone credit and a small amount of money was found. Their job was done and we caught them in time.”

Judge Doyle said it was a very serious case with a massive amount of drugs involved. “There was €870,000 of cannabis herb found but there was also a huge amount of uncultivated plants and they probably had a value of twice that figure or a lot more.”

She did take into account that the defendants spent a year in custody already and insisted it would of no benefit to the Irish state to keep them in prison. “They are vulnerable people and were not involved in drugs before and one has attempted serious self harm while in prison.”

Prosecuting barrister Brian O’Shea indicated the maximum prison sentence Judge Alice Doyle could impose was 14 years and she explained the suspension of their sentences only comes into effect when they are in a position to be deported.

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Irish Times Friday  Apr 26, 2013, 08:04

A man in his 30s will be charged this morning in relation to the discovery of a cannabis growhouse in Dublin.

Stolen vehicles and the facility were found by gardaí following the search of a business premises in Ballycoolin Industrial Estate on Wednesday.

He will appear before Blanchardstown District Court. A second arrested man in his 60s was released last night without charge. A file will be prepared for the Director of Public Prosecutions.

http://www.irishtimes.com/news/crime-and-law/man-for-court-over-cannabis-find-1.1373672

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Irish Examiner- Thursday, April 25, 2013

Cannabis growhouse operation goes underground

A drug gang concealed a sophisticated cannabis growhouse in two 40ft containers which they buried under a mobile home in a remote part of Co Cork.

The gang accessed the containers through the floor of a mobile home near the village of Ballyvourney.

Gardaí say it is the first bunker-style growhouse of its type found. They described it as “very sophisticated”, with its own power and water supply.

Armed with a search warrant, members of the Cork West Divisional Drugs Unit, raided the growhouse shortly after 7pm last Tuesday.

They found about 150 plants in various stages of growth, which have an estimated street value of €100,000.

Three men, believed to be in their early to mid-30s and from Eastern Europe, were arrested.

Two were being detained at Bandon Garda Station and the third in Macroom Garda Station under section 2 of the Drug Trafficking Act, 1996.

The growhouse was concealed under the mobile home in a woodland clearing at Derreenaling — about 3km south-west of Ballyvourney, near the Cork/Kerry border.

“This wasn’t done with a spade and shovel. Machinery had to be used to dig out the site for the containers,” said a senior Garda source.

He added it was the first underground growhouse of its type he had seen.

“We were used to mainstream republicans in the past and now dissident republicans using underground bunkers for hiding arms, training purposes, and hiding people. But we haven’t see this type of concealment with growhouses.”

Gardaí cordoned off the growhouse and yesterday morning started a full analysis of its contents. It is the second major growhouse seizure to occur on the Cork/Kerry border in past few days.

Last Thursday night, gardaí from Kanturk seized 204 cannabis plants in various stages of growth and about 1kg of processed cannabis worth in the region of €170,000.

The cannabis plants were found in sheds outside a family home near the village of Rathmore, Co Kerry.

A number of members of a family were in the house when gardaí raided it. There were no arrests at the time.

However, a Garda spokesman confirmed yesterday that a mother and son had since been arrested in connection with that investigation. “They were released without charge and a file is to be prepared for the DPP.”

Meanwhile, in an unrelated drugs seizure, gardaí arrested two men in their 40s following the discovery of cocaine, cannabis resin and cannabis herb worth €20,000 on the northside of Cork City.

Elsewhere, gardaí last night arrested two men, seized a number of stolen vehicles, and uncovered a cannabis growing facility in Ballycoolin, Dublin. The cannabis was worth about €125,000.

via Cannabis growhouse operation goes underground | Irish Examiner.

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Irish Examiner Thursday, April 25, 2013

Builder grew cannabis after losing business

A builder who lost his job after 25 years resorted to growing cannabis at his home because he could see no other way out of his financial problems.

Eamon Hourihan, aged 52, yesterday pleaded guilty to cultivating cannabis at Templeboden, Ballincurrig, Leamlara, Co Cork, on May 17, 2011, and having the drug for sale or supply.

Garda Kieran Glynn testified at Cork Circuit Criminal Court yesterday that Hourihan had not made any money out of growing cannabis but its potential street value when he was caught two years ago amounted to €82,000.

Hourihan, who now lives in Monkstown, faced the possibility of a mandatory minimum jail sentence of 10 years because of the quantity of drugs.

However, Judge Patrick J Moran imposed a sentence of five years suspended.

The judge said: “There have been a number of testimonials handed in and they all speak well of you. You set up your own business which unfortunately collapsed in the current economic climate.

“You have managed to get some employment and are now working on a part-time basis.

“The activity you were involved in is a very easy way of making money of the wrong kind. You obviously thought about this and decided to use this farmhouse and adapted it. You did this with considerable intent and that makes the matter particularly serious.

“However, having said that, Garda Glynn tells me you did not make any profit out of it. Once he appeared with his search warrant you would appear to have pulled yourself together and made that the end of your drug road. I don’t think that sending you to prison would be of any benefit to society.”

Garda Glynn obtained a search warrant on foot of confidential information that cannabis was being grown at the remote farmhouse.

“At 2.30pm on May 17, 2011, I entered the house to conduct a search. Eamon Hourihan was present. The house had been transformed for the growth of cannabis. There were 108 mature plants and 100 saplings.”

James O’Mahony, defending, handed in correspondence that he said contained glowing character references for the accused.

“This whole event has devastated this family. He has done everything he possibly can to rehabilitate himself. He is an exceptional person with an exceptional past.”

http://www.irishexaminer.com/ireland/builder-grew-cannabis-after-losing-business-229350.html

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Irish Examiner

Two held after Lucan cannabis seizure

Tuesday, April 23, 2013 – 10:33 AM

Detectives have seized drugs with an estimated street value of €400,000.

A man and a woman arrested during the operation in Lucan, west Dublin, are being questioned about the cannabis find.

The haul was uncovered in a raid on a house in the Hillcrest Heights area last night.
The cannabis herb has been sent for forensic analysis.

A man in his late 20s and a woman in her early 20s were arrested at the scene.

They are being detained at Ronanstown and Lucan Garda Stations under the Drug Trafficking Act.
The arrests were made as part of an ongoing investigation into the sale and supply of controlled drugs in Dublin.

The operation was carried out by the Lucan Drugs Unit and Garda National Drugs Unit.

A Garda spokesman said: “Investigations are ongoing.”

http://www.irishexaminer.com/breakingnews/ireland/two-held-after-lucan-cannabis-seizure-592205.html

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Irish Independent 20th April

Cannabis worth €2.5m seized in Galway

Gardai arrested a 53-year-old man and 43-year-old woman
Gardai arrested a 53-year-old man and 43-year-old woman

GARDAI in the Tuam area of Galway have seized cannabis plants worth an estimated €2.5m.

Two men in their mid 40s and early 50s are being detained in Mill Street Garda station Galway way Garda station(Mill Street) under the provisions of Section 2 of the Criminal Justice (Drug Trafficking) Act 1996.

This is the second seizure in the last 48 hours, with €1.5 million worth of cannabis herb seized from a business premises in Kells, Co Meath earlier. Two people, a man and a woman, were arrested in that operation.

The seizures were part of the Garda on ongoing investigations into the sale and supply of drugs in the west of Ireland, and under the auspices of Operation Nitrogen targeting cannabis growing operations.

Gardai say the latest seizure in Tuam included 3,000 plants at various stages of growth and that drug growing paraphernalia was seized during the operation.

http://www.independent.ie/irish-news/cannabis-worth-25m-seized-in-galway-29209850.html

Should socialists support degrowth?


The question is not should we advocate reducing production within capitalist society but rather: How do we best relate to those struggles that are already occurring?  Activists across the globe are challenging economic expansion which threatens the survival of humanity.  It has never been more urgent to provide a vision of a new society that can pull these efforts together.

Climate change is justifiably the focus of concern in the early 21st century.  The Earth is approaching the level of 450 parts per million (ppm) of atmospheric carbon, a level which must be averted if humans are to avoid a cataclysmic turning point when climate change will loop into itself and increase even without additional industrial activity.

Yet corporate politicians shriek blindly that the only solution to economic crisis is increasing production.  This, despite crises in species extinction, toxins and depletion of oil and other resources. [1]  Even though industrial growth is destroying the biology of existence, progressives often throw up a variety of objections to opposing economic expansion:

Reducing production would supposedly worsen the lives of working people.

The degrowth movement began with bourgeois liberals.

Since degrowth cannot occur within capitalism, discussing it should wait until “after the revolution.”

The concept of producing less is too abstract to build a movement around.

An anti-growth movement would easily be co-opted.

Each of these deserves attention.

1. Does lowering production mean a worse quality of life?

Most economic writers, even socialist ones, still seem to believe that there is a strong connection between production and consumption.  Enormous changes during the twentieth century profoundly weakened the bond between them.

In 1880, Frederick Engels wrote:

“The possibility of securing for every member of society, by socialized production, an existence not only fully sufficient materially, and becoming day by day more full, but an existence guaranteeing to all the free development and exercise of their physical and mental faculties—this possibility is now for the first time here, but it is here.” (Emphasis in original) [2]

But capitalism would not stop expanding merely because it had the potential to meet human needs.  Between 1913 and 2005, America’s GDP grew 300 fold. [3]

How did corporations manage to continue an enormous increase in production well after reaching the ability to meet human needs?  In 1929, President Herbert Hoover’s Committee on Recent Economic Changes announced its conceptual breakthrough: Capitalism could be saved via the manufacture of artificial needs.  The era of planned obsolescence was born.  [4]

Modern Western existence rests atop a mountain of commodities that play no role whatsoever in making our lives better but do threaten the biology of our existence. [5]  Fabricated desires for electronic gadgets and in-style fashions create massive waste.  But consumer choices are barely the tip of the iceberg of unnecessary and destructive production.

No one eats bombs for breakfast, and Americans never get to vote on the unending stream of wars and military bases which pervade the globe.  This accounts for up to 15% of the US GDP. [6]

The vast majority of economic waste occurs during production processes over which workers and consumers have little to no control.  The simultaneous growth of starvation and obesity is the hallmark of a food industry where the production of a speck of nutritious food is dwarfed by the gargantuan resources devoted to chemicalizing, processing, packaging, preserving, transporting, marketing, sugarizing, genetically modifying, discarding from grocery shelves and convincing people that they need to eat meat three times a day.

It is similar with medicine.  Why does Cuba spend 4% of what the US does for each citizen’s health care when both have the same life expectancy of 78.0 years? It is much more than the 30% overhead of insurance companies.  It is also because of the huge amount of over-treatment by a profit-driven industry, under-treating patients whose illnesses get worse, creation of illnesses and treatments, exposure of patients to contagion through over-hospitalization and disease-oriented instead of prevention-oriented research. [7]

Capitalism is now producing an ever greater quantity of things while a decreasing proportion of what is produced is actually useful.  This means that it is now possible to (1) increase the manufacture of necessary goods, and simultaneously (2) decrease the total volume of production.

2. Babies, bathwater and bourgeois liberalism

It is not unusual for the degrowth movement to be rejected because it is based in the liberal ideology of personal life style changes.  But people can make an observation that is brilliant even if their overall world view isn’t.  Pointing to the philosophical weaknesses of those advocating degrowth does not disprove their concept that the economy must shrink.

Fracking, tar sands extraction, and deep sea oil drilling are inherently dangerous — they are not dangerous only when done for profit.  Workers control of production will not prevent the expansion of land use from causing species extinction.  Nor will it render uranium non-deadly.

Hostility towards obvious truths espoused by liberal authors is very different from Marx’s approach to Hegel.  As Engels wrote, “That the Hegelian system did not solve the problem it propounded is here immaterial.  Its epoch-making merit was that it propounded the problem.” [8]  If Marx had refused to learn from Hegel because of his idealism, Marx never would have turned Hegel on his head to conceptualize dialectical materialism.

Even more to the point is Engels’ treatment of “the three great Utopians” (Saint-Simon, Fourier and Owen) in Socialism: Utopian and Scientific.  Engels praises the contributions of each, paying particular homage to Owen:

“Every social movement, every real advance in England on behalf of the workers links itself on to the name of Robert Owen.   He forced through in 1819, after five years’ fighting, the first law limiting the hours of labor of women and children in factories.  He was president of the first Congress at which all the Trade Unions of England united in a single great trade association.”[9]

Before delving into scientific socialism, Engels rakes all three across the coals, explaining that “To all of these socialism is the expression of absolute truth, reason and justice, and has only to be discovered to conquer the world by virtue of its own power.” [10]  Engels held onto their goal of socialism while throwing out their method of utopian idealism.

3. Waiting until “after the revolution”

In contrast to those who fail to recognize the need to reduce the total volume of production, John Bellamy Foster suffers no confusion about the need not merely to slow down but to reverse the trends of capitalism. [11]  His quarrel is not with the goal of reducing the enormous waste of capitalism but with the pathetic inability of “green technology” to accomplish this, and even more so, the failure of “degrowth” theorists to come to grips with the relentless drive for capital to expand.

But Foster could be used to support either of two answers to the critical question: “Should we work to lower production while living in capitalist society?”  On one hand, his title “Capitalism and degrowth: An impossibility theorem” can be interpreted as implying “No, it is diversionary to work for what obviously cannot be obtained” (a sustained decrease in the mass of production over an extended period of time within capitalism).  On the other hand, he advocates a “co-revolutionary movement” which would synthesize struggles of labor, anti-imperialism, social domination and ecology (anti-growth).

Ever since the beginning of the labor movement, capitalists have sought to divide workers by ethnicity and gender.  Despite enormous advances, it is not possible to eliminate either racism or sexism within a mode of production that feeds on maximizing profit.  But it would be hard to find progressives who would abstain from these struggles because they cannot be won until “after the revolution.”  Quite the opposite: A social movement changes consciousness and the new awareness of oppression plants the seeds for fully overcoming it in a post-capitalist society.

Similarly with imperialism.  One of the greatest consciousness-altering epochs in US history was opposition to the Vietnam War.  Though a mass movement forced an end to that war, US imperialism was hardly abolished.  Lenin explained in great detail how capitalism without imperialism would have been an impossibility theorem—imperialism had become the epoch of capitalism when finance capital reigned supreme.  Indeed, Lenin railed against those socialists who saw imperialism as a bad policy of one group of parliamentarians.  He thoroughly denounced Kautsky for suggesting that “imperialism is not modern capitalism.  It is only one of the forms of policy of modern capitalism.” [12]

Imperialism is economic growth uncorked.  Lenin saw that the merging of finance and industrial capital pushed the economic system beyond its national boundaries and forced it into other countries to increase the rate of accumulation:

“The more capitalism develops, the more the need for raw materials arises, the more bitter competition becomes, and the more feverishly the hunt for raw materials proceeds all over the world, the more desperate becomes the struggle for the acquisition of colonies. “[13]

To state the obvious: Lenin did not use his understanding of the inherent link between capitalism and imperialism to conclude that it was pointless to oppose imperialism as long as capitalism existed.  The ravages of wanton growth are leading an entire generation of environmental activists to see the intrinsically destructive nature of capitalism.

Imperialism and economic growth are both manifestations of the same phenomenon—the irresistible urge of capitalism to expand after basic needs have been met.  Refusal to oppose growth makes no more sense than refusal to oppose imperialism.  If “attainability” within capitalist society were a litmus test for supporting a movement, then virtually all progressive movements would be a waste of time.

4. Motion against growth is not an abstraction

European fur traders documented some of the first resistance to growth in North Americans.  They were quite annoyed with Native Americans who would trap only the amount needed to purchase goods such as knives and cooking pots.  Then they would stop trapping.

Fast forward several centuries.  The brilliant movie Story of Stuff mirrors the massive awareness that life is not made better by throw-away junk and never-ending style changes.

Hostility is intense toward the extractive industries.  At the core of accumulating capital is ripping trees off the land, minerals from beneath the surface, and water from everywhere.  Recent decades have seen opposition grow as fast as growth itself, whether to save the last 5% of US redwoods or to protect indigenous lands in South America and Asia.

Realization that tar sands extraction may create the tipping point for climate change has led thousands into the streets opposing the Alberta pipelines.  Many more thousands have marched, often fought and not infrequently died in battles in the global South to protect their land and communities from mining gold, silver, diamonds, and coltan, to mention a very few.

Industrial processes require water.  Manufacture of a single car requires 350,000 liters.  Water is now being pumped out of aquifers at 15 times the rate it soaks into them.  Lakes are being drained and/or hopelessly contaminated. [14]

There is indeed a strong connection between imperialism and the growth economy.  Imperialism and wasteful production are two sides of a corporate economy that is compelled to grow, regardless of what individual stockholders and politicians desire.  Global domination is the way that corporations obtain materials to produce mountains of useless and destructive junk.  Marching against endless wars to corner the market on raw materials means marching (consciously or unconsciously) against economic growth.

5. Making the connections

Foster very effectively demonstrates the fallacies of Latouche, who “tries to draw a distinction between the degrowth project and the socialist critique of capitalism.” [15]  Degrowth theory is weakened every time one of its advocates seeks to show that shrinking the economy is compatible with a market economy.  This was certainly true of Herman Daly, a major prophet of the theory of a steady-state economy. [16]

Does this liberalism of many supporters make the concept of shrinking the economy in any way unique?  In fact, capitalism has massive experience corrupting liberation movements.  Twisting idealistic desires to improve the environment into behavior that contributes to environmental destruction is no exception.

Anyone who has ever challenged an incinerator, landfill, toxic manufacture or extraction industry has confronted the danger of stagnating in the NIMBY (Not In My Back Yard) mentality.  Politicians are quick to suggest that victims can save themselves by backing efforts to dump the toxic threat on some other community with less power.  The critical factor becomes consciousness-linking: explaining that the social and ecological destruction dictated by the economics of growth cannot be resolved by pushing the problem off to another location or to future generations.

The struggle for a shorter workday is an integral part of any effort to shrink production.  But capitalism has long since figured out how to transform it into a tool for maintaining or even increasing production.  Liberals often argue that being at the job for fewer hours can invigorate workers to produce the same amount in less time.  Speeding up an assembly line or putting 20 students in a class instead of 15 both increase the rate of exploitation.

Even if bosses were to grant the same pay for fewer hours of work (such as “30 for 40”) they could cut social wages (free parks and roads, education, Social Security, Medicare).  And/or they could increase the rate of inflation, diminishing what workers could buy with that pay.  Most important, they could increase the rate of planned obsolescence, thereby decreasing the durability of goods and forcing more purchases.  Corporate countermeasures illustrate that the same process (fewer hours of work) can have opposite effects, depending on whether it is part of a movement that accepts capitalism or is part of a revolutionary project to replace it.

That capitalism could only grant a reduction of production in the most negative way does not make this demand distinctive.  It verifies the desire of capitalism to transform any movement into its opposite.  The central issue is how to keep a worthwhile goal from being perverted by capitalism.  This can be accomplished only if the movement expands its focus from a particular struggle into a universal struggle for human liberation.

There is nothing that strikes to the heart of capitalism more than confronting its primal urge to grow.  A failure to identify the culprit as capitalist growth is the major limitation of liberal movements to halt climate change, protect biodiversity, guard communities from toxins and preserve natural resources.  Rather than being dismissive toward ongoing struggles against growth, socialists should enthusiastically participate and point to their anti-capitalist essence.

It makes no sense to abstain from ongoing challenges to growth with a claim that anti-growth cannot begin tomorrow.  Today’s anti-extraction (i.e., anti-growth) conflicts are the most intense they have ever been.  If those who stand back from supporting them claim that they wish to build a new society, the society that they would create would be one whose economy grew and grew until it made human existence impossible.

Many who participated in the Occupy Wall Street movement were well aware that the problem is not just opportunities denied the 99% but the active destruction of the planet by the 1%.  The great strength of socialists is their grasp of the unique power of labor to create a new society.  A movement which merged the enthusiasm of Occupy, the workplace strength of labor, and the understanding that reducing production is essential for preserving human life would be a powerful movement indeed.

Don Fitz produces Green Time TV in conjunction with KNLC-TV in St. Louis and is active in the Greens/Green Party USA.  He can be contacted at fitzdon@aol.com

via Should socialists support degrowth?.

via Should socialists support degrowth?.

Leaking away: The financial costs of water privatisation


 

Water:  A future look at what lies ahead for the Irish consumer

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As water bills rise again, an investigation by Corporate Watch into the finances of the 19 water and sewerage companies in England and Wales has found:

Almost one third of the money spent on water bills goes to banks and investors as interest and dividends.

People are paying £2 billion more a year – or around £80 per household – than they would be if the water and sewerage supply was publicly financed.

Six companies are avoiding millions in tax by routing profits through tax havens, using a regulatory loophole the government has chosen to keep open.

The CEOs of the 19 water companies were paid almost £10m in salaries and other bonuses in 2012.

When the water regulator Ofwat announced last week that water bills would rise by 3.5% to an average of £388 a year, it promised to “make sure customers get value for money.”

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But while helplines report that record numbers of people are being forced into debt by their bills, and 3.4 billion litres – almost a quarter of the supply – leak out of water pipes every day, water companies continue to be a huge source of income for banks and financial investors.

Since the water and sewerage service was privatised in England and Wales in 1989, the companies have been bought and sold by a variety of conglomerates, investment funds, banks and pension funds from around the world. Only four companies out of 19 – Severn Trent, United Utilities, South West* and Dee Valley Water – are still publicly listed on the London stock exchange. Increasingly, their owners have looked to raise the money to run the supplies by taking loans from banks, or issuing bonds (essentially IOUs) to be bought by investors and speculators.**

Going through the most recent accounts of all 19 water companies in England and Wales, as well as those of their associated subsidiaries and parent companies, Corporate Watch has found that, between them, they have amassed a staggering £49 billion in total borrowings (

They paid more than £3 billion in interest payments on these borrowings in 2012, in addition to £884 million in dividends to their owners.

The water industry’s total revenue in 2012 was £10 billion, meaning almost one third of the money spent by people on water bills in England and Wales went to paying the interest on the companies’ debts or as dividends.

When asked about this, the companies all said they had to borrow to fund the much-needed improvements in the system. Southern Water, which takes care of water and sewerage in Kent, Sussex, Hampshire and the Isle of Wight, said the ‘right’ combination of debt and equity helps reduce customer bills:

“customers pay for the ongoing financing cost, rather than full construction cost at the time of building a new asset or improving existing assets – similar to the way in which an individual would choose to take out a mortgage to facilitate purchase of their house. Shareholders provide the equity to support the financing, and provide the financial buffer to protect customer bills from cost shocks during a five year regulatory period.”

In the current economic context, borrowing may well be the only way to finance investment. And it is true that some are more indebted than others. The private equity-owned companies such as Thames Water or Anglian Water have more debt in relation to equity than the companies that are publicly listed on the stock market, for example United Utilities or Severn Trent (Thames and Southern are more ‘leveraged’, in financial jargon). Severn Trent told Corporate Watch that companies should be encouraged to raise finance “in a way that incentivises shareholders to invest their own money, where appropriate, and not always to rely solely on increasing already record levels of industry debt.”

But no matter the relative strengths of their balance sheets, just like the companies winning contracts under the Private Finance Initiative, all the water companies are paying far more to borrow this money than the government would if the supply were public. The UK government can borrow much more cheaply than companies because it is regarded a more secure investment.

In other words, if the water and sewerage system was in public ownership, borrowing and financing costs would be much lower. The Public Services International Research Unit at Greenwich University has previously estimated savings of £900 million a year based on industry figures from 2004-5.

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Corporate Watch has now found that, given the government does not have to pay dividends to shareholders and is currently paying around 3.5% a year on the 30-year bonds it is issuing (compared to the overall 6.2% rate the companies are paying) it would only pay £1.9 billion in interest payments for the same amount of money currently held by the companies (including their total debt and equity).

Almost £2 billion a year could therefore be saved if the financing for the water supply was raised publicly. This could either be reinvested in the system to address problems like leakage, or help reduce customers’ bills. If it was all taken off bills, the average saving per household would be around £80 a year.

Money from bills is also going on the salaries, bonuses and other benefits going to the water companies’ CEOs. They amounted to £10 million in in 2012 (see table below) after rising for many years previously. All the companies say this is necessary to attract the right people. United Utilities, whose CEO Steve Mogford was the highest paid, earning £1.4 million in 2012, told Corporate Watch:

“The company’s remuneration arrangements are designed so that the overall level of remuneration is sufficient to attract, retain and motivate executives of the quality required to run the company successfully. The company does not pay more than is necessary for this purpose.”

When Corporate Watch showed Ofwat the figures comparing public and private borrowing the regulator did not dispute them but said: “Private investment in the sector since privatisation has led to significant improvements in the supply of water and sewerage services, there has been a significant reduction in the number of pollution incidents and customers receive world class drinking water.”

Others dispute the private sector has been more efficient. A 2007 by the Public Services International Research Unit paper (see here) concluded “The historical evidence on the UK water industry, the actual experience under privatisation in England and Wales, and global experience all indicate that the industry would be at least as efficient under public ownership.” The paper also says much of the investment in the system has been driven by targets set by legislation, which would have been the case whether the supply was public or private.

Channelling profits, leaking taxes

More money that could be re-invested or taken off bills is leaking out through tax avoidance.

All water companies enjoy various tax benefits. They are allowed to defer tax during periods of heavy spending on infrastructure for example, to encourage them to invest. They can also deduct the interest payments on their borrowings from their taxable profit.

However, Corporate Watch has found that six of the water companies – Northumbrian, Yorkshire, Anglian, Thames, South Staffordshire and Sutton and East Surrey Water – are artificially adding to their debts by taking high interest loans from their owners through the Channel Islands stock exchange. The interest payments further reduce their taxable profits in the UK and, thanks to a regulatory loophole, go to the owners tax-free.

In the most brazen case, Northumbrian Water is paying 11% interest on just over £1 billion of loans it has taken from the Cheung Kong group, a Hong Kong-based conglomerate run by Li Ka-Shing, the world’s ninth-richest person.

The loans represented almost half of the £2.4 billion that Cheung Kong paid to buy Northumbrian in October 2011, with most of the rest invested as equity. If the company had invested it all as equity, any dividend payments would not have been deducted from the Northumbrian group’s UK profits.

The companies are borrowing from subsidiaries of their owners based overseas. They can receive the interest payments tax-free because they have issued the loans through the Channel Islands stock exchange as ‘quoted Eurobonds’. Usually, when a UK company pays interest to a non-UK company, it has to ‘withhold’ 20% of the payments and give it to the UK tax authorities. But if the loans are issued as quoted Eurobonds on a ‘recognised’ stock exchange, such as the Channel Islands’ or the Cayman Islands’, they benefit from an exemption that means no withholding tax is taken off.

Northumbrian Water’s loans are described in the company’s annual accounts as “shareholder loans” but Corporate Watch has found they are listed on the Channel Islands stock exchange, and thus benefit from the quoted Eurobond exemption.

Interest payments on the loans were only £50 million in the 2011/12 tax year because Cheung Kong only took over Northumbrian half way through it. Even so, combined with the interest payments on its other debt, the company did not pay any UK tax in 2012, even after it declared an operating profit of £154 million.

Over the next full tax year, more than £100 million will be deducted from Northumbrian’s profits just from the shareholder loans, potentially avoiding around £24 million in UK corporation tax. This money is then leaving the UK through a complex web of subsidiaries ultimately leading to the Cheung Kong group.

At least one of these subsidiaries, Cheung Kong Infrastructure (Holdings) Ltd, is registered in Bermuda, a tax haven. Corporate Watch asked Northumbrian if the others were based in tax havens and why its owners had chosen to invest so much as Eurobonds. The company did not respond to the questions directly but said it “complies stringently with all corporate reporting and regulatory reporting requirements as set out by Ofwat, our primary regulator.”

If the subsidiaries lending the money are based in tax havens, they will not pay any corporation tax on the interest when they receive it there either.

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The Yorkshire Water group, which is owned by investment funds based in the US, UK and Singapore, and HSBC bank, accrued £66 million in interest payments on £844 million of quoted Eurobonds in 2012. This, together with the interest payments on its other debt, helped it pay just £100,000 in corporation tax on an operating profit of £335 million in 2012. Corporate Watch asked the company for a comment but did not receive a reply.

Thames Water, part-owned by the Australian Macquarie investment bank and sovereign wealth funds from China and Abu Dhabi, confirmed the interest payments on its £310 million of quoted Eurobonds from its owners are tax deductible.

Combined with its other debt, these helped the company wipe out an operating profit of £577 million, meaning it received a tax credit in 2012. Thames paid £165 million to its shareholders in 2012.

Anglian Water, which is owned by Canadian and Australian pension and infrastructure funds, confirmed the “loan notes” listed in its accounts are quoted Eurobonds and tax-deductible. A spokesperson for Anglian said this was “typical for private investors into UK infrastructure assets”.

Anglian paid £151 million to its owners in 2012 but just £1 million in tax in 2012 after an operating profit of £363 million.

Sutton and East Surrey said it would be “inappropriate” to answer any questions regarding its finances as it was in the process of being bought up by the Sumitomo Corporation of Japan. South Staffordshire Water confirmed the “loan notes” listed in its accounts were quoted Eurobonds.

Southern Water, which is owned by UBS bank and an investment fund, also owes £566 million to its owners in quoted Eurobonds. The company said at least some of the interest on them is not tax deductible.

HMRC almost closed the quoted Eurobond loophole in October last year, noting some companies were using it “for the purpose of circumventing the requirement to deduct tax at source rather than being directed at the raising of third party finance” but decided against it.

All the companies using the quoted Eurobond exemption have subsidiaries or related parties in tax havens. This makes scrutiny of their finances much more difficult, if not impossible, as countries such as Jersey or Guernsey require far less corporate disclosure than the UK. Kemble Water International Holdings, for example, the majority owner of the Thames Water group, is registered in Guernsey. Corporate Watch asked Thames Water if it would be possible to see its accounts but was told they were not publicly available.

Corporate Watch asked Ofwat if it was concerned that several companies are owned by or have transactions with tax havens, and if it would recommend regulating the water industry so companies cannot use tax havens. The regulator said it “does not have the power to prevent any change of ownership. However, following a change of ownership we consult on the ability of new owners to be the fit and proper owners of a regulated water company. We have made a number of amendments to the regulatory ringfence conditions in companies’ licences to ensure we regulate companies within larger groups effectively and provide reassurance that the companies remain able to finance their regulated activities.”

images (2)

via February 15, 2013 : Leaking away: The financial costs of water privatisation.

via February 15, 2013 : Leaking away: The financial costs of water privatisation.

An Economic Alternative to Exploitative Free Market Capitalism


In 1649, a group of English communists started fighting the notion of private property in what became known as the commons movement. They were using the unstable period in England’s history to introduce a new economy, one that would see land, wells and other means of wealth as shared resources. This group would prevent a small class of people from collecting and consolidating the rights to basic human life, such as water and food. In an annual celebration that doubled as a protest, they would circle the village commons and level or dig up any hedges and fences that designated spots of private ownership. They became known as the “levelers” or “diggers.”

The movement, which was subsequently quelled in 1651 by landowners and the Council of State, has seen a revival in the past decade. It remained dormant for so many years because of its fundamental threat to modern economics, putting community needs at the center of society rather than those of the individual.

The commons protects large resources from privatization, such as the lobster fisheries in Maine or grassland management in Mongolia, and allows collectives to regulate extraction. Exploitation is avoided because no one individual has more of a right to the source than any other.

“[The commons]” is “an intellectually coherent way of talking about inalienable value, which we don’t have a vocabulary for,” David Bollier, author of “The Wealth of the Commons,” said in a conference Tuesday at the Heinrich Böll Foundation in Washington, D.C.

It is a way, Bollier says, of formally introducing the “political, public policy, cultural, social, personal, even spiritual” aspects of life into our economic system, which now, he says, can deal only with monetary value.

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“You could say that it’s a different metaphysics than that of the modern liberal state,” he says, “which looks at the individual as the sole agent.”

The commons movement is a reaction to exploitative free market capitalism. It rejects the notion that resources, spaces and other assets are purely a means to wealth. It condemns the privatization of public works, such as the parking meters in Chicago, which allows the sovereign wealth fund that controls it to increase the rates.

When an economy allocates wealth to private entities, Bollier says, those property rights inevitably get consolidated until a few large institutions control its means.

Instead, he says, we need to protect the commons with rules that bar individual ownership of that property. It is not, however, a space that is left as a free-for-all; it still has regulations and state recognition that prevent private groups from exploiting it.

The commons introduces a “role for organized self-governance as opposed to government,” Bollier says, “although they can be made complimentary.” The community manages the resource and has an involved interest in keeping others from decreasing its supply, he says, because the license belongs to the public.

But the commons is not restricted to natural resources—it extends to the Web, science and other technologies.

The Internet has become the setting for a fierce battle between public advocates that would like to designate forums as open and free, and companies that seek to control more of its content through bills like the Stop Online Piracy Act (SOPA) and the Protect IP Act (PIPA). Many programmers have handed over their copyright ownership to the public in the form of General Public Licenses and Creative Commons licenses, which allow the public to use and contribute to forums without having to pay for usage. It also keeps companies from using personal information, as with Facebook, to target potential consumers.

Additionally, one-fifth of the human genome is privately owned through patents. Salt Lake City-based Myriad Genetics, for example, owns the breast cancer susceptibility gene, which guarantees monopoly control over research into cancer. It discourages many other researchers from exploring treatment, something that could ultimately stunt our capacity for medical advances.

The issue extends further: Monsanto uses Genetically Modified Organisms to displace natural seeds, multinational water bottle companies are privatizing groundwater, and software companies retain copyrights on mathematical algorithms that others then cannot use.

“Enclosure,” Bollier says about patents and private ownership, “is about dispossession. It’s a process by which the powerful convert a shared community resource into a market commodity … This is known as development.

“The strange thing about the commons is that it’s invisible because it’s outside of the market and the state,” Bollier says. “It’s not seen as valuable and isn’t recognized because it has little to do with property rights for markets or geopolitical power … but there’s an estimated 2 billion people around the world whose lives depend upon commons like fisheries, forests, irrigation water and so forth.”

The neoliberal market does not, paradoxically, grasp the purpose behind the commons. Our current system is one-dimensional, Bollier says, and is designed to attach a price to everything.

For years, sustainability experts have sought ways to incorporate moderation and conservation into the neoliberal model through such incentives as cap and trade. But companies, Bollier says, will pay the extra fees until it is no longer economically viable, proving that in a system of privatization, people are willing to shell out penalty payments as long as they do not disrupt their profits.

“There’s an allure in trying to meet microeconomics and neoliberal economics on its own ground,” says Carroll Muffett, moderator of the discussion and president of the Center for International Environmental Law, “to say ‘if you want to put a price on everything, here’s the price for this and look how massive the price is,’ whether it’s access to water or it’s pollination … but for me the danger is: Is meeting them on their own ground what we should be doing? Is there an inherent compromise in there that risks giving up something that ultimately cannot have a value put on it?”

Until recently, Bollier and Muffett say, there has been much wiggle room for the free market to expand. But as the basic needs of fresh water, energy and food are being overproduced or vanishing because of climate change, companies are finding that their only options are to draw from the scant resources of Third World communities to meet their profit margins. It is a test to see what, in the end, neoliberalism holds higher in value: money or life.

Muffett says that question has already been answered in the building of the coal-fired Medupi Power Station in South Africa. An assessment of the power station projected that there wouldn’t be enough water to keep the plant operating and meet the needs of the local community. The watershed adjacent to the plant is already so overtaxed that it doesn’t reach the sea. The company, Eskom, proposed to reroute water from another watershed for its main operation and use the local supply for its filtration system. It would raise the price of water for the community to keep “poachers” from draining the source.

“The water that’s being poached,” Muffett says, “is to give people access to fresh water and to water their crops for subsistence living.

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“Putting a price on that for a community is ultimately missing the point. The water isn’t fungible. If I give you my gallon of water and you give me $1,000, I can’t drink the thousand dollars.”

Both Bollier and Muffett say this is the result of an economy based on the philosophies of Thomas Malthus and John Locke, whose models do not guarantee the right of existence. To exist, one must have money. It becomes the defining characteristic of life.

“That’s the risk in the natural capital approach,” Muffett says. “It’s saying ‘if you give me a thousand dollars, that’s a substitute for my bees, my pollinators, for the land where my ancestors are buried.’ And there is no substitute for that.”

This article was made possible by the Center for Study of Responsive Law.

via An Economic Alternative to Exploitative Free Market Capitalism – Truthdig.

via An Economic Alternative to Exploitative Free Market Capitalism – Truthdig.

Decriminalise drugs before we become embroiled in a drug abuse scandal


members-of-parliament

David Cameron should decriminalise all drug use in England and Wales before sitting MPs from becoming embroiled in further allegations of criminal activity, say a group of MPs.

With crimes committed by MPs already quite numerous, anything which reduces the number of potential crimes for them to be found guilty of must be a good thing, according sources at the House of Commons.

A sitting MP, who wished to remain nameless, told us that reducing the number of crimes available to those representing constituencies across England and Wales was a positive step for British politics.

“Any voter caring to glance at newspaper headlines over the past couple of years will have been truly aghast at the illegal antics of those voted into power,” he began.

“To think that there remains countless opportunities for MP’s to err from the expectations of the British public, places us in an invidious position.”

“So what damage is there in removing one of the most harmful allegations left open to us – drug abuse – from the buffet of crimes we frequently avail of.”

Drug decriminalisation

Proponent of drug decriminalisation, Sheila Mount, dismissed calls for a relaxing of the law to suit politicians.

“Loosening drug regulations for the benefit of MP’s usage?”

“No.”

“Permitting medical trials of potentially life-threatening substances for MP’s?”

“Yes.”

via Decriminalise drugs before we become embroiled in a drug abuse scandal, MPs urge Cameron.

via Decriminalise drugs before we become embroiled in a drug abuse scandal, MPs urge Cameron.

Soviet Childcare Posters 1930


Soviet Childcare Posters 1930

   Protect your child and food from flies

                             Protect your child and food from flies

Creche

Weight and height of children from birth to two years old

Weigh your child every week

Every year thousands of children lose their eyesight due to small objects getting stuck in the nose, ears, and throat

Protect your child and food from flies

I’m bored at home; I’m happy in the creche!

Correct carrying of a 3 month old baby

How to feed a child when the mother has a cough and cold; don’t allow strangers to kiss or touch your child

Bathing the eye; cleaning the nose

The proper way to cut a child’s fingernails

via Soviet Childcare Posters – Retronaut.

via Soviet Childcare Posters – Retronaut.

Bedroom cameras to monitor celibacy of gay bishops


Security cameras are being installed in the bedrooms of Britain’s openly gay bishops to ensure that they adhere to the strict new celibacy rules imposed by the Church of England.The precaution is being taken after it was realised that simply trusting bishops not to have sex just because it was forbidden, has not had a particularly good track record down the centuries.

Cameras will also be installed in the shower, on the big rug by the fireplace and in the local public toilets just in case the couple are feeling like playing up to gay sexual stereotypes.The cameras will also be capable of close-ups and wide shots, to check that any females having sex with bishops are not actually gay men in drag.

‘I am planning to monitor every bedroom myself’ explained the newly appointed Archbishop of Canterbury Justin Welby.‘I have a bank of high definition TV screens in my bedroom, and I am looking forward to sitting up all night with some pizzas, a six pack of lager, and a packet of man-size tissues. Obviously I prefer not to think about what they would do in the privacy of their own bedrooms, but my verger has also volunteered to watch next door and will rush in to wake me up if there’s any action.’

Meanwhile new divisions are emerging within the Church of England over what constitutes ‘gay sex’.Anglican traditionalists say that any physical contact between homosexual bishops is forbidden, while progressives say that only full anal sex is taboo. At a recent meeting of the General Synod, members prayed for guidance from the Lord on his feelings about ‘rimming’, ‘tea-bagging’ and ‘fisting’. ‘I mean personally, I have no problem with seeing the odd hand job’ said the Archbishop. ‘And maybe a bit of oral and the odd chocolate finger. As long as they don’t follow it through as far as spraying cocksnot. Banning gay orgasms is the sensible compromise that the C of E has agreed will prevent us from looking completely ridiculous.’

via Bedroom cameras to monitor celibacy of gay bishops | NewsBiscuit.

via Bedroom cameras to monitor celibacy of gay bishops | NewsBiscuit.

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