Lib Dems better off with Nick Clegg staying put

Should I stay or should I go now?
Should I stay or should I go now?
If I go there will be trouble
An’ if I stay it will be double
So come on and let me know
– The Clash

The Liberal democrats were a routed army Monday morning. After losing 10 of their 11 MEPs and a chunk of local chancellors the previous week, the mood was gloomy. Despite being continuously battered since entering the coalition pact with the Tories, the party has remained remarkably united always deployed an effective shield wall around their leadership.

Nick Clegg “gutted and heartbroken” after election defeats.

 

 

 

 

 

 

 

 

 

 

 

The Euro election was the straw that broke some camels backs and knives were out when some members called for Cleggs resignation. Then The Guardian got hold a of a poll financed by a party member showing that the Lib Dems is heading for disaster in 2015 and may lose important seats like the one help by Nick Clegg.

The political reporters was on it as bloodhounds to reveal who was behind the poll. The whodunnit chase traced it all back to Lord Oakeshott, a Lib Dem peer with known grudges against Clegg. After being revealed he resigned his party membership and took a leave of absence from the House.

Th question many has been asking is if the Lib Dems would be better off with a new leader in the year leading to the general election in 2015. What we have of published or leaked polling shows that a change of leadership would not do much to change their dire situation.

The party members should instead prepare their local campaigns for reselection in the seats they hold. Extremely well targeted and focused campaigns have resulted in many strong local party branches with several councillors to its name able to challenge the two established parties. With a colossal effort and a bit of luck they will hold on to enough seats in 2015 to be potential king makers again. If Ukip succeeds in splitting the vote for both the Conservatives and Labour a hung parliament is likely and the Lib Dems might find themselves in a new coalition.

Tax avoiding coffee

The coffee shop giant Starbucks has suffered some finger pointing the last couple of days. Stories about how the international company’s UK division has managed to escape the taxman albeit it make good sales.

“A Reuters investigation uncovered apparent discrepancies between what Starbucks was telling US investors on one hand and what it was declaring to HM Revenue and Customs.” The Observer wrote on Sunday. According to the newspapers, Starbucks made almost similar sales last year as their native rival Costa Coffee – £398m and £377m respectively. The costs of the companies however, was another story. Starbucks reported costs of £319m, almost three times as much as Costa. As a result, Costa can show a tax charge of £15m, while Starbucks was charge a cent in tax.

Starbucks officials explains the high costs by the sourcing roasted coffee from a sister company in Holland and how some profits therefore must be reallocate back to Amsterdam. Costa operates their own roastery in south London. The more important factor however is that the payment of £26m in “royalties and licence fees” from the UK branch of Starbucks to other parts of the group. Kris Engskov, the head of Starbucks UK, defends the practice by pointing out that the royalties are levied at the same percentage of revenues anywhere in the world Starbucks operates. What is critical, is that he can nit clarify wether these payments goes straight to a tax haven or finds it’s way back to HQ in Seattle. Pre-tax charges such as these royalties and fees is the main reason why the exchequer has only been able to collect £8.3m since Starbucks established itself in the UK in 1998, despite sales of more than £3bn in that period.

Last Friday, Starbucks chairman Howard Schultz gave his first public comments on the issue after being pressed by Reuters – at the opening of the company’s first branch in India. He said “We will absolutely comply with any government inquiry with transparency and respect.” Surely MPs should demand a clear explanation from Starbucks and other multinational companies that might be loopholing away from the taxman.

Maybe something to take into consideration next time your belly screams for a Cappuccino.