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Babies and Bathwater

It is Sunday morning and the world is still asleep. I sit here with my cup of espresso and the Sunday Times, I see an article about train leasing companies, the headline reads - Train owners send millions offshore.

Let me give you a bit of background. These rolling stock companies were set up in 1994 in preparation for the privatisation of British Rail, their function is to own the rolling stock and lease these to the operating companies. Leasing involves commitments of vast amounts of capital for the leasing companies so they were set up originally by some of the banks. Relatively recently these leasing companies were sold off.

You may have wondered how the rail operators can seamlessly take over another franchise when you consider the amount of capital represented by the rolling stock. Simple - they just take over the leasing payments.

Now I don't use the trains very much but I am aware that fares are constantly rising by high percentages. Meanwhile it appears that the leasing companies have, since 2008, paid out at least £700m in dividends through offshore holding companies. Is this yet another case of the British public paying high prices whilst the profits that are made do not benefit the Exchequer to the amount that it should?

No doubt we will hear more about this.

We have heard a great deal about tax avoidance and tax evasion in the last 12 months and most of us know that tax evasion is illegal whist tax avoidance is not. However as in most things there is no clear distinct line between the two and many individuals have been caught and exposed treading the territory on the extreme end of tax avoidance.

It seems that we honest taxpayers have been, and still are, ripped off by well known international companies and unscrupulous tax advisers. At last something seems to be being done about it.

Perhaps this government's period in office will be remembered as a period during which many wrongs were made right. But is it the government that should be thanked for this? I think not. The scandal of extreme tax avoidance was brought to light by investigative journalists and the hard questioning of the transgressors is being done by the Public Accounts Committee, brilliantly chaired by the Labour MP Mrs Margaret Hodge.

So, the huge hole in the nation's accounts through which massive amounts of potential tax revenues have drained away was identified and exposed by the press.

So that brings us to Levenson and his report and the question we should be seriously asking is whether we can trust state sponsored control of the press or whether the press should form their own control.

Yes, the reasons for setting up the Levenson Enquiry were completely justified but ask yourseves very seriously - Do we really want to gag the press? In the larger picture do we benefit from a free press?

The words 'babies' and 'bathwater' spring to mind!




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