'Google is cheating British taxpayers out of millions... what they are doing is just immoral': Web giant accused of running 'scandalous' tax avoidance scheme by whistleblower Read more: http://www.dailymail.co.uk/news/article-2326897/Google-tax-avoidance-row-Internet-giant-accused-scandalous-tax-avoidance-scheme-whistleblower.html#ixzz2TkN0odzA Follow us: @MailOnline on Twitter | DailyMail on Facebook

From - http://www.dailymail.co.uk/news/article-2326897/Google-tax-avoidance-row-Internet-giant-accused-scandalous-tax-avoidance-scheme-whistleblower.html

* Barney Jones said Google diverts British profits through Ireland to Bermuda 
* Former executive said company 'pulled the wool over the eyes' of HMRC
* Adds to mounting pressure on Google over its tax affairs 
* Company says all sales contracts go through its low-tax Ireland office 
* Last year, paid just £7.3million in corporation tax on UK turnover of £3billion

A former Google executive turned whistleblower says he has 100,000 emails that expose the 'immoral' tax avoidance scheme used by his former employer.

Barney Jones, who worked for Google from 2002 until 2006, said the company has 'pulled the wool over the eyes of HMRC and the British population'.

He claims Google has a system in place which diverts British profits through Ireland to the Bermuda tax haven and accused the company of 'cheating' the British taxpayer. 

The internet giant has been under increasing pressure about allegations of tax avoidance.

Prime Minister David Cameron will lead efforts at next month's G8 summit of world leaders to find ways of preventing multinational firms from exploiting tax loopholes.

He is due to meet Google's executive chairman Eric Schmidt tomorrow at the quarterly meeting of the prime minister's Business Advisory Group. 

Last week, Matt Brittin, a vice-president of Google, was aggressively questioned by MPs, who accused the company of 'doing evil' by using 'devious, calculated and unethical' tricks to minimise its liabilities.

It paid just £7.3million in corporation tax last year despite having a UK turnover of £3billion.

Yet, Google assert that all its sales are made in low-tax Ireland, rather than the UK, where corporation tax is just 12.5 per cent compared to 23 per cent in Britain. 

Mr Jones's earlier testimony to the PAC gave MPs such as chair Margaret Hodge further ammunition for the questioning of Mr Brittin last week.

Osborne: G7 agree to target tax evasion and avoidanc

From: http://www.bbc.co.uk/news/business-22476233

The G7 group of industrialised nations have agreed that there must be collective action against tax evasion and avoidance, the UK's finance minister has said.

Chancellor George Osborne said after the talks that it was "incredibly important" that firms and individuals paid the tax they owed.

The members agreed on more policy issues than had been assumed, he added.

The G7 comprises the US, Germany, the UK, Japan, Italy, France and Canada.

In a news conference held jointly with Bank of England governor Sir Mervyn King, Mr Osborne said the finance ministers and central bank governors of the G7, meeting in Aylesbury, Buckinghamshire, had also agreed no bank should be "too big to fail".

Kofi Annan turns up heat on ENRC and Glencore in pursuit of Africa’s lost tax

From: http://www.thetimes.co.uk/tto/business/industries/naturalresources/article3760812.ece

Kofi Annan has called on Britain to use its presidency of the G8 to stamp out the “unconscionable” business practices of companies such as Glencore Xstrata and ENRC in Africa.

The Africa Progress Panel, chaired by the former Secretary-General of the United Nations, wants an international crackdown on tax avoidance with a particular push for transparency in the mining and oil sector, it said in a report.

ENRC and Glencore strongly deny any wrongdoing and said that they were not contacted by the Africa Progress Panel before the publication of its report. The panel estimates that Africa lost $63 billion (£40 billion) in tax revenues through illicit practices between 2008 and 2010 alone.

“It is unconscionable that some companies, often supported by dishonest officials, are using unethical tax avoidance, transfer pricing and anonymous company ownership to maximise their profits, while millions of Africans go without adequate nutrition, health and education,” the report said.

It highlights recent deals by ENRC, the miner being investigated by the Serious Fraud Office for “fraud, bribery and corruption”, and Glencore Xstrata in the Democratic Republic of Congo.

The report claims that assets were undervalued, costing the country an estimated $1.4 billion, a figure close to 10 per cent of its GDP.

The panel counts prominent executives and policymakers among its members, including Tidjane Thiam, the chief executive of Prudential, Robert Rubin, the former US Treasury Secretary, and Michel Camdessus, the former managing director of the IMF. Its donors include the UK Department for International Development and the Bill & Melinda Gates Foundation.

The panel’s criticism could focus the spotlight on Britain’s regulatory regime. Kevin Watkins, author of the report, asked why it had taken British authorities so long to investigate ENRC’s dealings in the DRC.

“We call on the G8 and the G20 to step up to the mark to show leadership,” the report read.

Fake bomb detector salesman sentenced to 10 years

From: http://www.guardian.co.uk/world/2013/may/02/iraq-military

An Old Bailey judge sentenced Jim McCormick, 57, to 10 years in jail on Thursday for a fraud he described as the worst he could imagine and "a callous confidence trick".

The survivors of lethal Baghdad truck bombs driven through checkpoints equipped with fake bomb detectors are to lay claim to at least £7m of the assets of the Somerset fraudster who sold them.

Now a list of around 200 people either injured or related to the 95 killed in a double bombing on the Iraqi ministries of justice and foreign affairs in 2009 will be presented to the UK authorities.

McCormick sold 7,000 fake bomb detectors based on useless golf ball finders to the Iraqi government and other international agencies for prices ranging from £1,600 per unit to £19,000.

They cost McCormick less than $50 (£32) and police believe sales toIraq alone were worth more than £55m, buying McCormick a mansion in Bath, holiday homes abroad and a yacht.

Judge Richard Hone told McCormick: "Your fraudulent conduct in selling so many useless devices for simply enormous profit promoted a false sense of security and in all probability materially contributed to causing death and injury to innocent individuals."

An adviser to Nouri al-Maliki, the Iraqi prime minister, said he intends to make a claim on behalf of the victims of the 2009 attack which the Old Bailey heard on Thursday was an example of McCormick's fraud contributing to terrorists' success.

"A list of those who died and were injured and their kin is already available and I will bring that list to London and provide it to the British government," said Saad al-Muttalibi, a city councillor in Baghdad.

"This money should be paid to the people who can prove they were victims of terrorism. These bomb detectors became the main deterrent in Iraq."

Brigadier Simon Marriner, who served in Iraq from 2009-2011, had told the court in a statement that McCormick's ADE-brand machines were used at checkpoints across Baghdad through which truck bombs had to pass before blowing up the ministries of justice and foreign affairs.

"These checkpoints were equipped with the ADE," he said. "The truck bomb attacks were very successful in causing significant loss of life and considerable material damage which remains to this day."

Outside court Iraqi exiles called for compensation from at least £7m in assets that are expected to be confiscated from McCormick, from Langport, Somerset.

"He destroyed Iraqi lives," said Nidhal Ailshbib, an Iraqi activist based in London. "Thousands of Iraqi people are dead and handicapped."

DS Steve Mapp, of Avon and Somerset police, urged people who believe they were victims of the bomb detectors to make a claim for compensation from the confiscation hearing scheduled for May 2014.

"We can invite them to come forward to be considered to be compensated for their loss," he said. "That is something we are considering and it is only right."

Richard Whittam QC, defending, said: 

We pay £6m tax on £2.6bn UK profits, but that's OK because we help start-ups: Google

From the Independent: http://www.independent.co.uk/news/uk/home-news/we-pay-6m-tax-on-26bn-uk-profits-but-thats-ok-because-we-help-startups-google-boss-eric-schmidt-under-fire-over-comments-on-corporate-tax-8582605.html

Senior MPs called on David Cameron to consider stripping the boss of Google from his role as a government adviser tonight after he suggested that his company’s contribution to the British economy was more important than paying its fair share of tax.

Politicians from all three parties rounded on Google’s executive chairman, Eric Schmidt, after he defended its use of loopholes to minimise its UK tax bill. He insisted that Google would comply only with the letter of the law – despite paying only £6m of taxes on £2.6bn of revenue generated in the  UK in 2011. Google uses anomalies in international law to move profits into low-tax jurisdictions even if they have been generated by business carried out in Britain. Chancellor George Osborne has made tackling the practice a priority for Britain’s chairmanship of the G8.

But in an interview with the BBC, Mr Schmidt defended his company’s practice, suggesting that its contribution to the UK economy was more important than the tax it paid to the Exchequer. “We are investing heavily in Britain,” he said. “We power literally billions of pounds of start-ups through advertising networks and so forth, and we’re a key part of the electronic commerce expansion of Britain, which is driving a lot of economic growth for the country. So from our perspective, I think, you have to look at it in a totality.

“The people we employ in Britain are certainly paying British taxes, and more importantly, they’re British citizens and they’re driving a lot of GDP. I think the most important thing to say about our taxes is that we fully comply with the law, and well, obviously, should the law change we’ll comply with that as well.”

His comments were condemned by MPs, who pointed out that much of the investment in broadband internet infrastructure that had allowed Google to grow had been paid for by taxpayers.

Margaret Hodge, the chairman of the powerful Commons Public Accounts Committee (PAC), which carried out an investigation into the tax practices of multinational companies, said the Government should consider whether Mr Schmidt was an appropriate person to remain on its Business Advisory Group if Google maintained its tax position. “I think we should be careful who we talk to, and I think if people want to have the voice of Government, they have a responsibility to pay their fair share,” she said.

A government source also questioned Mr Schmidt’s position, claiming Google was “not really investing very much in Britain” and that the company had a “disproportionate influence” on Mr Cameron. “It’s a bit like The Wizard of Oz,” the source said. “From the outside, they appear terribly important and powerful but, when you look closely at what they are actually investing in Britain, it is pretty insubstantial.”

France's President Hollande: Eradicate tax havens

From - http://www.bbc.co.uk/news/world-europe-22094194

French President Francois Hollande has called for "eradication" of the world's tax havens and told French banks they must declare all of their subsidiaries.

He was speaking after presenting a draft law aimed at "moralising" French public life - a response to the tax scandal that has shaken his presidency.

France's ex-Budget Minister Jerome Cahuzac has been charged with fraud over a secret Swiss bank account.

Mr Hollande said a new central agency would fight fraud and corruption.

Earlier the French Socialist government set a deadline of 15 April for ministers to declare their assets, as part of the new transparency drive.

Mr Cahuzac admitted last week that he had hidden about 600,000 euros (£509,000; $770,000) in a Swiss bank account, causing shock in France. He has now been expelled from the Socialist Party for lying about his financial affairs.

Addressing a news conference on Wednesday, Mr Hollande said "tax havens must be eradicated in Europe and worldwide".

"I won't hesitate to consider as a tax haven any country that refuses to co-operate fully with France."

He said French banks "will have to publish every year the full list of their subsidiaries in the world, country by country". They will also have to explain their business, he said.

"In other words it won't be possible for a bank to hide transactions carried out in a tax haven."

===============================================================

Will work if only other major countries do the same.  Will they?

Horsemeat scandal: Dutch uncover large-scale meat fraud

From - http://www.bbc.co.uk/news/world-europe-22098763

Some 50,000 tonnes of meat supplied by two Dutch trading companies and sold as beef across Europe since January 2011 may have contained horsemeat.

The meat is being recalled where possible, the Dutch authorities say.

There was no evidence that the meat was a threat to human health, the Netherlands Food and Consumer Product Safety Authority said.

In total, 132 companies in the Netherlands and some 370 more around Europe are affected by the discovery.

The suspect meat was supplied by Wiljo Import en Export BV and Vleesgroothandel Willy Selten.

The two companies are owned by one man who has already previously been investigated by food safety officials, the BBC's Matthew Price reports.

The latest find was made as part of EU-wide tests to trace horse DNA in processed beef foods and to detect a veterinary drug used on horses.

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Are there no honest people left in the world?

Small, micro firms in China are hungry for long-term loans

From - http://www.chinadaily.com.cn/china/2013-04/07/content_16379110.htm

China's small and micro enterprises are still struggling with lackluster business, and most badly need long-term rather than short-term loans, said a report based on a survey released on Saturday at the Boao Forum for Asia.

Of the 1,000 small and micro enterprises surveyed across China, 56.7 percent said their order numbers declined or stayed flat last year compared with 2011, and 57.7 percent said profit dropped or kept flat in 2012. In addition, 49.9 percent complained about an unstable workforce.

One-third of SMEs need medium- and long-term loans to upgrade their equipment or invest in new products, the survey found, yet 63.3 percent of loans they got were short-term, less than a year.

Zhang Xuyang, general manager of the retail department of China Everbright Bank, is interviewed about the "Report on Small and Micro Business Financing Development". [Huang Yiming / China Daily]

"This stands in conflict with the fact that driven by fiercer competition, 39.3 percent of SME shave considered improving their product quality, 43.9 percent of SMEs have considered extending their product chain and 27.7 percent have considered upgrading their technology,"said Ba Shusong, a banking expert with the Development Research Center under the State Council, who led the research.

A revelation of the report is that though 66.7 percent of SMEs regard bank loans as a primary financing measure, 62.1 percent of them do not now have them.

Yao Wang, executive president of the Research Institute of the Boao Forum for Asia, said SMEs have little expectation of getting bank loans.

"The survey showed most SMEs don't have bank loans. They don't expect to get a loan from big banks. This is pathetic," Yao said.

In consequence, SMEs sought financing from family members and friends - 24.3 percent of micro enterprises and 7.5 percent of small enterprises. They are much less aware of the multiple new financing methods: 38.8 percent of SMEs, for example, do not know about intangible assets mortgages.

==============================================================================

So it's not only British banks who are shy of lending to SMEs!

Documentary: Inside Job

Charles Ferguson’s film – Inside Job – won the Academy Award for Best Documentary in 2011. It narrates the conflicts of interest between the finance industry, politicians, academics and regulators, which eventually led to the trillion-dollar collapse of 2008. Narrated by Matt Damon. From: http://www.theotherschoolofeconomics.org/?p=2499 - which screens the film on-line.

This documentary exposes the facts behind the 2008 global economic disaster. It was triggered by derivatives, primarily based on sub-prime mortgages in the US.  But the roots go back to the Regan deregulation of financial services. What is shocking is that many of the investment banks were betting against their own products and deliberately lying to their own customers. Several lawsuits are still pending.

It is fascinating viewing, but deeply disturbing as many of the key personalities are still in play in various companies and governments and regulatory bodies today.

For a write up see - http://en.wikipedia.org/wiki/Inside_Job_(film)

Horsemeat scandal: EU ministers want faster action on meat labelling

From - http://www.guardian.co.uk/uk/2013/feb/24/horsemeat-scandal-country-origin-labelling

A European Commission report on tougher rules about origins of frozen beef products is expected but not until the end of 2013

Horsemeat found in frozen beef products has destroyed the trust many people placed in their local supermarkets. Photograph: Luke Macgregor/Reuters

Owen Paterson, the environment secretary, will be among ministers from across the EU pressing on Monday for speedier action on introducing country-of-origin labelling for processed beef and other meat products as they struggle to get a grip on the horsemeat scandal.

On Saturday the French president, François Hollande, joined the growing calls for more traceability at European level and critics have complained that the UK coalition government had been dragging its feet on the issue before the crisis began last month. Country of origin and slaughter for cattle must already be included on labels for fresh and frozen beef but the European commission is paving the way to extend that to other meats and ingredients in processed food. However, a report on implementing tougher rules is not expected until the end of the year. This month, the Commons environment, food and rural affairs select committee said UK ministers had been caught "flat-footed" by the scandal, which has been blamed on mislabelling and criminal fraud, and criticised them for having sought UK exemption from some EU rules.

This would allow minced meat sold in Britain to have a higher fat and collagen content than permitted in other EU member states and remove the requirement for loose meat products to declare the amount of meat they contained. "This is not the time for the government to be proposing reducing the labelling standards applied to British food", said the committee.

Glenis Willmott, Labour MEP for the East Midlands and the party's leader in the European parliament, said last week that in 2011 UK ministers had opposed plans backed by the parliament for more comprehensive country of origin labelling. This had forced MEPs "into a much weaker compromise" as the coalition tried "to kick the issue into the long grass".

She said: "It is interesting that Mr Paterson, one of the most Eurosceptic of ministers, is now advocating EU legislation as a solution to the current crisis. It is simply common sense that a problem in the meat supply chain … needs EU-wide measures to combat it. But it is precisely this kind of EU regulation that Eurosceptics deem 'red tape from Brussels'. In 2011 the UK government said my plans would be too difficult to put into practice because the meat supply chain was too complex. We have now seen what the complexities of the industry can hide."

British sugar giant caught in global tax scandal

From The Guardian - http://www.guardian.co.uk/business/2013/feb/09/british-sugar-giant-tax-scandal

One of Britain's biggest multinationals, whose brands include Silver Spoon sugar, Twinings Tea and Kingsmill bread, is avoiding paying millions of pounds of tax in an African state blighted by malnutrition, a year-long investigation revealed on Sunday.

The Zambian sugar-producing subsidiary of Associated British Foods, a FTSE100 company, contributed virtually no corporation tax to the state's exchequer between 2007 and 2012, and none at all for two of those years.

The firm, Zambia Sugar, has recently posted record pre-tax profits and its huge plantation is increasing its capacity to produce more sugar for markets in Europe and Africa. Yet it paid less than 0.5% of its $123m pre-tax profits in corporation tax between 2007 and 2012.

The company benefits from generous capital allowance and tax-relief schemes in Zambia, but the investigation also found that it funnels around a third of its pre-tax profits to sister companies in tax havens, including Ireland, Mauritius and the Netherlands. Tax treaties between Zambia and some of those countries mean the state's revenue authorities are unable to charge their normal tax on money leaving their shores.

The revelations are contained in a report published by ActionAid, which exposes how Zambia Sugar has kept its contribution to the state's exchequer so low, although the company says that globally it actually pays a higher rate of tax on its profits than it otherwise would due to its corporate structure.

It is estimated that the tax haven transactions of this one British headquartered multinational deprived Zambia of a sum 14 times larger than the UK aid provided to the country to combat hunger and food insecurity.

ActionAid's findings will heap more pressure on the chancellor, George Osborne, to make progress in closing gaps in international tax standards and tackling avoidance at the G20 meeting of world leaders this week and the G8 in June.

RBS bankers must pay Libor fine, says George Osborne

From - http://www.guardian.co.uk/business/2013/feb/04/royal-bank-scotland-libor-fine-osborne

George Osborne is forcing Royal Bank of Scotland to cut its bankers' pay to ensure that taxpayers are not left to pick up the cost of the upcoming multimillion-pound fine for Libor rigging.

The chancellor said his views had been made clear to the management of the bailed-out bank in an attempt to defuse public anger about the portion of the fine – which could amount to between £400m to £500m in total – that will be paid to the US authorities.

"When it comes to RBS, I am clear that the bill for any US fine related to this investigation should on this occasion be paid for by the bankers, and not the taxpayer," Osborne said.

Speaking in Bournemouth where he unveiled plans to reform the banking system, Osborne appeared to back the RBS chief executive, Stephen Hester, but indicated he expects heads to roll as a result of the fine for rigging Libor – a key interest rate. It was "well known" that RBS was considering management changes, Osborne said.

The fine from the UK's Financial Services Authority is thought to be just under £90m with US regulators levying fines of around four times that amount. In the furore that followed the £290m Libor fine paid by Barclays last year, £59.5m of which was levied by the FSA, the law was changed to ensure that fines went to the government.

"Those who were doing the supervising must also bear their share of the responsibility," Osborne said. "The RBS board and the RBS senior management are well aware of that and decisions are in hand."

He added that Hester is "taking the action to ensure those responsible are held to account".

It is expected that the departure of John Hourican, the head of the investment bank, will be announced once the Libor fine is revealed, possibly later this week, although he is not thought to be personally implicated in the rigging of Libor. The size of the bonus pool for 2012 at RBS has yet to be disclosed. It was £390m for 2011 and is expected to fall by as much as £150m. But the call by the chancellor to ensure bankers pay for the Libor fine does not preclude bonuses being paid for 2012.

Responding to questions about why senior bankers should receive bonuses after a year of scandal, Osborne acknowledged that Hester and Barclays boss Antony Jenkins have waived their bonuses.

He said there could have been "enormous public anger" if fines levied on RBS by US regulators were paid by the taxpayer, not the bankers.

"That is not on," said Osborne, who has told the bank's management that a fine imposed by international regulators should be paid out of bankers' pay. If the fine is paid by shareholders, led by taxpayers who own 83%of the bank, "that could have been a very great source of public anger this spring," said Osborne.

The chancellor confirmed remarks by Treasury sources over the weekend which had suggested he was concerned about how the Libor fine would be paid. In his speech, Osborne insisted that "everyone should exercise restraint and responsibility" over bonuses.

Osborne was accused of "rhetoric" and a "partial climbdown" by Ed Balls, the shadow chancellor, after he said he would use legislation to threaten banks with being broken up if they attempted to flout rules requiring them to ringfence their high street and investment banking operations.

Andrew Tyrie, the Conservative MP whose banking standards commission helped create the idea of "electrifying" the ringfence, said the chancellor had taken an "important step in the right direction". The ringfence was a key plank in proposals by Sir John Vickers' independent commission but the banking standards commission had been concerned banks would try to "game" the ringfence. "They will always try to do so unless strong disincentives are put in place," said Tyrie.

Chancellor insists Royal Bank of Scotland, not UK taxpayers, must take up estimated £500m fine for Libor rigging

Inequality for All – another Inconvenient Truth?

From The Guardian - http://www.guardian.co.uk/film/2013/feb/02/inequality-for-all-us-economy-robert-reich

The powerful documentary Inequality for All was an unexpected hit at the recent Sundance film festival, arguing that US capitalism has fatally abandoned the middle classes while making the super-rich richer. Can its star, economist Robert Reich, do for economics what Al Gore did for the environment?

 Former US labour secretary Robert Reich at an Occupy Los Angeles rally in 2011. Photograph: David Mcnew/Getty Images

In one sense, Inequality for All is absolutely the film of the moment. We are living through tumultuous times. The economy has tanked. Austerity has cut a swath through the country. We're on the verge of a triple-dip recession. And, in another, parallel universe, a small cohort of alien beings – or as we know them, bankers – are currently engaged in trying to figure out what to spend their multimillion-pound bonuses on. Who wouldn't want to know what's going on? Or how it happened? Or why? Or if it is really true that the next generation down is well and truly shafted?

…

Any synopsis of the film runs the risk of making it seem dry again, but essentially it describes how the middle classes have come to have a smaller and smaller portion of the economic pie. And how, since 70% of the economy is based on the middle classes buying stuff, if they don't have any money to buy this stuff, it cannot grow. Meanwhile, the government has allowed the super-rich, the "one per cent", to take more of the nation's wealth. Half of the US's total assets are now owned by just 400 people – 400! – and, Reich contests that this is not just a threat to the economy, but also to democracy.

…

And what the film tries to do is thread together evidence that many people know about – the increasing struggle of the middle classes to just get by, the way that the top 1% of society has unshackled itself from the rest of us and has seen its income increase exponentially, and the ever-increasing cost of the traditional avenues of improvement, such as higher education – and weave it into a cohesive and convincing narrative. It is, in some respects, a theory of everything. Reich charts the three decades of increasing median income after the second world war, a period he calls "the great prosperity" and then examines what happened in the late 1970s to put an end to it. The economy didn't falter. It kept on growing. But wages didn't.

The figures that Reich supplies are simply gobsmacking. In 1978, the typical male US worker was making $48,000 a year (adjusted for inflation). Meanwhile the average person in the top 1% was making $390, 000. By 2010, the median wage had plummeted to $33,000, but at the top it had nearly trebled, to $1,100,000.

"Something happened in the late 1970s," we hear him tell his Berkeley class. And much of the rest of the film is working out what happened.

Some inequality is inevitable, he says. Even desirable. It's what makes capitalism tick. But at what point does it become a problem? When the middle classes (in its American sense of the 25% above and below the median wage) have so little of the economic pie that it affects not just their lives but the economy as a whole.

Reich's thesis is that since the 1970s a combination of anti-union legislation and deregulation of the markets contrived to create a situation in which the economy boomed but less of the wealth trickled down. Though for a while, nobody noticed. There were "coping mechanisms". More women entered the workforce, creating dual-income families. Working hours rose. And increasing house prices enabled people to borrow.

And then, in 2007, this all came crashing to a halt. "We have exhausted all the options," he says. There's nowhere else left to go. It's crunch time.

It's crunch time that so many working families understand too well. They may not be familiar with the theory of income inequality but they haven't been able to avoid noticing that they've got less money in their pockets. "I've always thought that kitchen-table economics is the most important topic to most people," says Reich. "Their wages, their jobs, getting by. I've always tried to relate economics to where people live. That's why I was so excited about the film."

…

… In the UK, Royal Bank of Scotland, having covered itself in glory in the Libor interest-rate fixing scandal, is currently contemplating bonuses for its investment banking division of £250m, according to reports last week. This, to put it another way, is the annual wage bill for at least 12,500 of its call-centre workers. Because this isn't just an American problem. It's a British one too.

"If there was upward mobility it would be OK," says Reich in the film. "But 42% of children born in poverty in the USA will stay there. In Denmark it's 24%. Even in Great Britain, where they still have an aristocracy, it's 30%."

It's probably a shocking statistic for Americans to hear. The problem is that by every index you can measure, inequality is worsening in Britain. There are fewer opportunities to overcome the barriers of your birth in the UK than in any other country in Europe. One of the most chilling moments in Inequality for All for a British audience is that how, faced with the same choices that America had in the 70s, we have, in the last year or so, taken the same path.

One of the key moments for Reich was the underinvestment in education, particularly higher education in the 70s. This was when America introduced tuition fees and its workforce started to fall behind the rest of the world's. When opportunities for those from low- and middle-income backgrounds began shrinking: precisely where the UK is today.

It's not just that wages have remained flat in America – as they have in the UK – it's that the expenses of everyday life have soared, in particular education and healthcare.

Last October, an independent commission in the UK led by the Resolution Foundation predicted that in 2020 wages for low- to middle-income families would be the same as they were in 2000. And yet everything else will have gone up. We too are facing the crunch.

In December, the Office for National Statistics found that richest 10% of people in Britain own 40% of the national wealth. In London and the south-east, one in eight households has almost £1m of assets. The bottom half of the country has no net property wealth and only £4,000 in pensions savings. For them, there is just rising prices. And the ever diminishing possibility of things ever being different for them or their children.