News Ireland daily BLOG Friday

Friday 17th May 2013

Google accused of using devious techniques to avoid paying corporation taxes

 

GOOGLE stood accused of using “devious” techniques and “unethical behaviour” to avoid paying tax in Britain, adding fuel to a debate on how companies pay corporation tax that could have huge implications for Ireland.

Google’s Northern Europe boss, Matt Brittin, was called back to testify to the British parliament’s powerful Public Accounts Committee (PAC) after reports suggested the company employed staff in sales roles in London, even though he had told the committee in November its British staff were not “selling” to UK clients and most sales were made out of Ireland.

Transfer pricing

Mr Brittin said the firm was being investigated by the UK tax authority in relation to transfer pricing of services traded between Google UK Ltd and other Google companies, but added that he believed Google fully complied with UK tax law.

He also denied misleading parliament in November, when Mr Brittin told the PAC: “Nobody (in the UK) is selling.” He said all UK sales were conducted by Google Ireland and UK staff were only involved in promotional activity.

That arrangement allows Google to shelter most of its income on UK sales from taxation, since Google Ireland sends most of its turnover to an affiliate in Bermuda.

Such a structure is common among multinationals operating here and makes Ireland a very attractive base for them. If this structure is undermined, it would remove a key selling point for Ireland as a destination for overseas investment.

The committee, however, challenged his November testimony and comments yesterday.

Committee chairwoman Margaret Hodge said Google was not living up to its original motto of “don’t be evil”.

“You are a company that says you do no evil, and I think that you do do evil in that you use smoke and mirrors to avoid paying tax,” she said, adding that the company engaged in “devious, calculated and, in my view, unethical behaviour”.

A Reuters report revealed that Google advertised for staff in London to “close” deals and that LinkedIn profiles of dozens of staff claimed they engaged in such work.

Ms Hodge said the PAC had also been approached by whistleblowers who had said they had worked for Google in London, selling advertising.

On Thursday, Mr Brittin said UK staff did offer discounts to customers to encourage them to buy and that the staff were remunerated partly by commission on sales, but he said the fact Google Ireland was the legal counterparty on trades meant his November comments were not inaccurate.

“The UK team are selling, but they are not closing.”

Google’s auditor, Ernst & Young, was also called to give evidence. John Dixon, head of tax policy at the firm, said there was a grey area between promoting products and concluding sales in Britain, which would, most likely, create a taxable presence for a company in London.

He declined to say whether Google’s arrangement was consistent with not having a tax presence in the UK.

Corporate tax avoidance has become a major issue in Britain, where there are concerns over rising government debt and accusations that the UK tax authority has adopted a light-touch to taxing big businesses.

From 2006 to 2011, Google generated $18bn (€13.5bn) in revenues from the UK, according to statutory filings, and paid just $16m in taxes.

Oil boss warns tax hikes will scare off investors

  

One of the Irish oil industry’s most high-profile executives Aidan Heavey has warned the Government it risks losing any investment in the sector in Ireland if it tightens the tax regime for exploration here.

Tullow Oil boss Aidan Heavey said imposing more taxes on firms looking for oil here will scare off companies thinking about investing in Ireland.

Earlier this week energy minister Pat Rabbitte said he would review how the State taxes oil and gas firms. While the oil industry maintains that the tax structure should not be toughened up, lobby groups have warned that the country is giving away its oil wealth.

Mr Heavey believes the riskiness of drilling around Ireland outweighs any suggestion that the country should impose higher taxes.

“It is a competitive market for oil and gas; countries all over the world are trying to get explorers in. There’s been a lot of talk about how the State should use the same regime that Norway does, but that doesn’t explain the Norway terms.

“People don’t understand what the Norway terms are, if you spend money on exploration there it’s the cheapest place in the world.

“If you spend $100m (€77m) on drilling and don’t find anything, the Norwegian state gives you a rebate of $78m. They only hit you with tax if you are able to bring your oil to market,” he added. There has been huge interest in the possibility of successful oil exploration around Ireland, especially since Providence Resources found more than one billion barrels of the stuff off Cork, but Mr Heavey made clear the jury was still out on Ireland as a destination for explorers.

“Until we see the really big, deep water reserves of the kind that attract the supermajors, we’ll have to wait and see. There is oil here, but it hasn’t come to market yet,” he added.

Police identify new Madeleine McCann suspects

 

Kate and Gerry Mc’Cann have welcomed news that detectives from Scotland Yard had identified a number of suspects who could be responsible for their daughter’s abduction.

Detectives conducting a review of the case have produced a list of people who they say are of “interest to the inquiry” and should be questioned.

Detective Chief Superintendent Hamish Campbell, the head of Scotland Yard’s Homicide and Serious Crime Command, said the Portuguese authorities should now reopen its investigation into Madeleine’s disappearance six years ago.

He said the Met’s review, dubbed Operation Grange, had identified “both investigative and forensic opportunities” and said the people of interest could be explored further, if only to be eliminated.

Kate and Gerry McCann expressed their gratitude to the British police and said they were encouraged by the developments.

Their spokesman Clarence Mitchell said: “Kate and Gerry remain very, very pleased with the work that Scotland Yard are doing and have been encouraged by Operation Grange from the day it began.

“Beyond that, they simply will not comment on what are police operational matters.”

Madeleine went missing from her family’s holiday apartment in Praia da Luz on the Algarve on 3 May 2007.

Her disappearance became the subject of intense international publicity, but no sign of her was ever found and the Portuguese police shelved its investigation amid much criticism in 2008.

In 2011 following a campaign by the McCann family, the Prime Minister, David Cameron, ordered a review of the investigation to be led by Scotland Yard.

A team of 30 officers re-examined thousands of documents, files and other pieces of evidence in a bid to establish some new lines of inquiry.

DCS Campbell praised the progress made by the team and said it had done a “fantastic” job identifying further investigative and forensic opportunities.

He said it was “perfectly probable” that information which could identify the suspect responsible for Madeleine’s disappearance was already within the Portuguese files.

He added: “We have to ask ourselves why are cases unsolved and, on many occasions, we find we passed the suspects by already and the suspect sits within our system.

“The purpose of the review was to look at the case with fresh eyes and there is always real benefit in doing so. The review has further identified both investigative and forensic opportunities to support the Portuguese.

“There is more than a handful of people of interest which could be explored further if only to be eliminated.

“The key things are to investigate the case and our work is happening to support the Portuguese.”

Earlier this month the McCanns said they were encouraged by the news that three women who had been missing in the United States for a decade were found alive and well in Cleveland, Ohio.

In a statement, the couple said: “Their recovery is also further evidence that children are sometimes abducted and kept for long periods. So we ask the public to remain vigilant in the ongoing search for Madeleine.”

DCS Campbell said: “The Portuguese hopefully will pursue some of these investigative opportunities with our assistance. There is room for further work and collaboration to resolve the case.”

He added “You only have to look at the case in Cleveland, Ohio, and the European cases. Of course, there is a possibility she is alive, you cannot exclude it. But the key is to investigate the case and, alive or dead, we should be able to try and discern what happened.”

He added: “The purpose of the review is to look at it with fresh eyes…there has been real benefit in doing it.”

The Scotland Yard review is estimated to have cost around £2 million.

Mobile phones can cause your blood pressure to rise  A new study states

  

Mobile phone calls can cause blood pressure to rise – one of the major causes of heart attacks and strokes, according to a new study.

Researchers found talking on a mobile triggers significant increases in systolic blood pressure that corresponds to the “surge” that occurs with each heartbeat.

This is the higher number in a reading which doctors pay most attention to when assessing a patient’s risk of cardiovascular disease.

The researchers took 12 blood pressure readings at one-minute intervals from 94 patients with mild hypertension.

The participants, whose average age was 53, were seated in a comfortable armchair in a doctor’s consulting room and left alone after the first blood pressure reading was taken using an automatic device.

Researchers phoned the patients at least three times and found that when the patient was on the phone or receiving a call, their blood pressure reading rose from an average of 121/77 on average to

NHS advice is that a blood pressure reading below 130/80 is normal, and anything above 140/90 is considered to be high.

Around one in four people in the UK suffer from high blood pressure, and every day there are about 350 strokes or heart attacks due to high blood pressure.

Wide fluctuations in blood pressure also increase the risks to the heart.

However, the researchers found patients who normally received more than 30 calls a day appeared less likely to undergo spikes in their blood pressure when their phones rang.

Dr Giuseppe Crippa, of William of Saliceto Hospital in Italy, said: “The subset of patients who were more accustomed to phone use were younger, which could show younger people are less prone to be disturbed by telephone intrusions.

“Another possibility is people who make more than thirty calls per day may feel more reassured if the mobile phone is activated since they are not running the risk of missing an opportunity.”

The research, presented to the American Society of Hypertension conference in San Francisco, found that the phone calls did not increase the heart rate, nor the diastolic blood pressure – the lower number in the reading, which measures the force of blood in the arteries when the heart relaxes between beats.

Tackling chronic disease and extending healthy life

 

Chronic disease in older life will increase, unless key changes are made to our healthcare system and early preventative measures are taken in our lifestyles.

Those were some of the key points made at a breakfast meeting in Dublin city centre, hosted in association with the Ageing Well Network.

The event, on October 24, launched the publication of a report by the Economist Intelligence Unit, ‘Never too Early — Tackling Chronic Disease to Extend Healthy Life Years’.

The report was sponsored by leading healthcare company AbbVie and is based on existing research along with new research, including in-depth interviews with 35 experts in chronic disease and healthy ageing.

   Prof Des O’Neill, Professor of Medical Gerontology at Trinity College Dublin and Consultant Geriatrician at Tallaght Hospital, introduced the session and the panellists. They included Aviva Freudmann of the Economist Intelligence Unit, Professor and Senator John Crown and Prof Charles Normand, Edward Kennedy Chair in Health Policy and Management at Trinity College Dublin.

“Ageing is an opportunity but it is also seen as a problem that needs to be tackled,” said Prof O’Neill. “There are two enemies when we approach the issue of ageing — being simplistic and being intuitive, when actually some things happen in ageing that are counter-intuitive.”

Great diversity: He also referred to the fact that there is great diversity among older people and therefore it can be hard to find unity in this diversity.

“Two 80-year-olds may be much more different than two 40-year-olds. We are getting a mix in older generations — there are people who are continuing to improve in their 80s and 90s and have a great richness to their life. But as well as that, there can be age-related disease and disability — and particularly caused by chronic disease.

“They say that ‘80 is the new 60’ but there is a time around 65 or 70 when we see these chronic diseases really starting to pick up.”

Aviva Freudmann, one of the authors of the report and research director of Continental Europe, Middle East and Africa for the Economist Intelligence Unit, spoke about the objectives of the research, the key findings and conclusions.

“The study says that it’s never too early to take preventative steps and to reduce the incidence of chronic disease,” she said. “It’s not about length of life per se, but about healthy life years.

“We looked at the measures to prevent and manage chronic disease in younger age groups and considered the effects of poor co-ordination in this area among healthcare providers, governments and private employers.”

She outlined the fact that chronic disease is a big issue Europe-wide.

“Some 40 per cent of the European population over the age of 15 have a chronic disease,” she said. “Between 70 and 80 per cent of European healthcare costs are spent on chronic care — this is €700 billion in the EU. And chronic diseases currently account for over 86 per cent of deaths in the EU.”

She said that just less than 3 per cent of health expenditure in the EU is directed towards prevention and said this was a dramatically low figure.

Freudmann summarised the key report findings. These included having preventative health measures in the broadest sense and de-medicalising the care of people with chronic conditions.

She said that we need to achieve greater efficiency and effectiveness in this area and referred to Benjamin Franklin’s statement that “an ounce of prevention is worth a pound of cure.”

She said experts believed that much of the scourge of chronic disease is preventable, or at least can be delayed.

When it comes to primary prevention measures (preventing chronic disease happening in the first place), there are four key factors.

“Having a healthy diet, being physically active and avoiding tobacco and excessive alcohol can prevent 80 per cent of premature heart disease cases, 80 per cent of type 2 diabetes cases and 40 per cent of cancer cases,” she said.

“Early diagnosis and intervention are important too, as part of secondary and tertiary prevention.”

Secondary prevention focuses on early screening and diagnosis, while tertiary prevention is early intervention to slow the progress of diseases that have been identified. Freudmann said that another element of reform is to introduce incentives for long-term thinking about healthy living.

She referred to former Spanish Minister for Health Bernat Soria’s comment that countries have elections every four years but that medical complications will appear in 15-to-20 years. He surmised that today’s politicians will not pay the future price for poor health prevention measures.

The Economist Intelligence Unit report also focused on the fact that chronic conditions have distinct care needs compared to acute conditions and changes need to be made to direct more resources to wellness, prevention, and disease management programmes.

“Care needs to be patient-centred and the majority of chronic disease sufferers require supported self-care,” said Freudmann. “New technologies allow task-shifting from doctors to nurses and community workers, and for patients to be treated in their homes.”

She referred to telematics, e-health systems and telecommunications as being vital tools in this process. Care also needs to be locally given, including one-on-one interaction and peer group communication, which are very effective in promoting healthy choices.

“This kind of model is being used in areas in Denmark, Finland, Sweden and Spain and the results of this approach are measurable in three ways,” she said. “There are improved levels of functioning, a slowing-down in the progress of diseases and a reduced demand for acute care beds.”

Another key finding was that employers and health insurers have major contributions to make in fighting chronic disease.

Freudmann spoke of how BMW redesigned its car production line to help older employees keep working and remain healthy. She also referred to Unilever, which provides free health checks and nutrition advice to reduce absenteeism due to illness.

To complete her talk, Freudmann presented the main conclusions of the study.

“Chronic diseases are on the rise as populations age and the costs are unsustainable for Europe — particularly if we look at the figures for chronic diseases by 2030.

“Healthcare systems are still focused on treating acute cases and there needs to be a big shift in how we treat chronic conditions. The solutions sound simple but they are difficult to achieve and require radical thinking. We must look for solutions beyond the healthcare sector and seek out new forms of partnerships with employers and health insurers.”

Different perspective

 Prof Charles Normand, Edward Kennedy Chair in Health Policy and Management at Trinity College Dublin, then spoke about how some of the principles in the study related to the population in Ireland.

He said he agreed with most of the points raised in the report and would focus on the areas where he had a slightly different perspective.

“The rates of growth in ageing costs have been typically exaggerated,” he said. “People just panic and think ‘it’s so terrible, there’s nothing that we can do about it’.

“But if we can get away from the panic and think more clearly about the issues, we can get to a really important starting point. I think what is more of a challenge is that older people won’t be fobbed-off with substandard healthcare. The rise in expectations of older people is a much greater driver of increased costs.

“I also think we have to get around the fact that it’s changing patterns more than changing levels. We need to change the way we do things. And this is partly reflected in the suggestion about the de-medicalisation of chronic diseases.

“There is evidence that we are getting healthier as we get older. I’m over 60 and I still run for a bus, whereas my father would have just waited for the next one to come. Chronic diseases are still coming but there is some evidence that disability rates are falling at all ages. There is some evidence of a postponement and compression of morbidity.”

Prof Normand, who is a co-investigator in The Irish Longitudinal Study on Ageing (TILDA), went on to talk about the role that obesity plays.

“These positive trends might reverse with the increases in obesity. There’s no evidence that inactivity levels have increased but certainly, calorie intake has gone up. Yes, there should be more physical activity and it’s a continuing problem. There are low levels of activity but they’re not getting worse. The main focus should be on calorie intake.”

Prof Normand picked up on the report’s critique of how healthcare systems are structured around acute care.

“Almost all healthcare systems are organised around something surprisingly going wrong rather than being preventative,” he said. “Some particular challenges are facing Ireland and we have a very hospital-centric form of care — the training models perpetuate that. We have limited development of primary and community care infrastructure and skills.”

Centuries of implications: Prof John Crown also commented on the report.

“I think a number of policy issues are coming up and we have decisions to make now that I think will have centuries of implications for our citizenry,” he said.

He referred to how when Bismarck introduced the first old-age pension in Germany in the 1880s, very few people lived long enough to be able to avail of it for more than a couple of years.

“It’s all changed now — the person who gets to 65 this year gets an average of 20 more years of life,” said the consultant oncologist.

Prof Crown said that there obviously isn’t a huge inflow to the nation’s income and said there was no point talking about how to fix the health system if we don’t fix the economy and he hoped we would be able to do that.

He said there were clear measures we could take to reduce premature morbidity in the population — primarily, reduce smoking and obesity.

“I think we need to focus on smoking and place it at the top of the national agenda. It’s hard to get a serious policy in place to eradicate smoking but it has the single biggest effect on morbidity and is an obstacle to getting to our golden years in good health.”

When it comes to obesity, he said he was himself 25kg lighter today than he was 12 years ago and he made that change prompted by a well-meaning comment from one patient.

“On the issue of weight, it’s critically important to get education right in the beginning and educate parents on this too. We also need to address the alcohol policy in this country.

“Finally, we’ve got to look at the health service. My own gut feeling is that we need a re-thinking of health economics. The funny thing is that people talk about the importance of spending money in an economy but when they talk about health, there’s this feeling that it’s bad to spend on health.

“We need to invest in healthcare and what we want to look at is the waste in healthcare. It’s not bad to spend money; it’s bad to waste money.

“The key things are to get prevention right, to understand outcomes and to make a serious stab at fixing the healthcare system now.”

The breakfast meeting was opened up to questions and comments from the audience, which included representatives from Government departments, academic institutions, non-government organisations and AbbVie, along with other groups and politicians.

The importance of technology in how people manage their own health was also raised.

“There are a multiplicity of sources and a complexity of information,” said Prof O’Neill. “Patients are certainly coming in to their healthcare provider with sheafs of information they have gathered.”

Freudmann said technology was very much a part of the discussion about chronic conditions. “It’s really about directing access to information so that it isn’t a useless kind of chaos. It’s how that system is set up and incentivising it so people get the best resources.”

Prof Normand said that it was very easy to be negative about technologies in healthcare and one had only to spell out five letters — PPARS — to know that technology sometimes did not help. However, he said there were clear examples where electronic records rather than old-style records could be a real benefit to a healthcare team and to the patient. “It’s really about a change of attitudes more than a change in technology. We must remember that the Internet was around a long time before electronic publishing became popular — for many years we still felt compelled to have everything on paper. People getting their head around technology is very important.”

Prof Crown said when it came to technology, we had only to look at how important genome technology has been to cancer research.

Lack of technology

“One thing that concerns me is that a lack of technology can somehow be blamed for the failings of a healthcare system. To say that the problem is a lack of technology is like saying that in Darfur, a famine comes about because of a lack of food system computers, when it’s actually lack of food.” The topic of incentivising good health behaviour was also raised by Prof O’Neill.

Prof Crown said he was a huge believer in social insurance and said he didn’t think we could discriminate against older people when it came to health insurance. “However, I do think something like a no-claims bonus could be introduced so that people who take care of their health by not smoking, not getting obese, could be incentivised for their behaviour.”

One speaker in the audience raised the fact that people in higher socio-economic groups tended to look after themselves better in health terms, whilst things like smoking rates were greater in lower socio-economic groups. He asked if the panel had any ideas on how to improve this.

Freudmann said that as part of the research, it was clear that public education campaigns play a big role.

“Schools are a very important part of this — to get them when they’re young.”

Prof Normand said it was a challenge and that educational campaigns did manage to improve health awareness but that it could result in a widening of the gap between socioeconomic groups, when it came to their awareness.

“If we want to make a dent, we have to put more resources in. If not, we are always going to end up targeting the people who are the healthiest.”

The audience also commented on the difficulties of caring for people who had multiple chronic conditions and needed to see several healthcare professionals. The implications of introducing a ‘fat tax’ to reduce obesity levels were also discussed.

With the final comment of the meeting, Freudmann said that the report was clear in highlighting the importance of health promotion and prevention. In a situation where resources were declining in an economy, the idea of switching allocation of resources could be a sticking point for vested interests.

“To move much of the care out of an acute setting, one has to be able to make the case for it and this usually involves having a cost-benefit analysis. You look at the cost going into it and the health outcomes and cost savings coming out of it.

“We don’t have widespread data for this — no country-wide examples. But when you look at individual cases where it has happened, particularly in Scandinavia, you do see beacons of light which show how it could be done on a broader scale.”

The number of older people living in Ireland is set to increase dramatically in the next 30 years. In 2006, there were 460,000 people over the age of 65. By 2041, this is projected to increase to approximately 1.3-to-1.4 million people.

NASA says giant hole after explosion on the moon as boulder crashes at 56,000 mph

      

The moon has a new hole on its surface thanks to a boulder that slammed into it in March, creating the biggest explosion scientists have seen on the moon since they started monitoring it.

The meteorite crashed on March 17, slamming into the lunar surface at a mind-boggling 56,000 mph and creating a new crater 65 feet wide. The crash sparked a bright flash of light that would have been visible to anyone looking at the moon  at the time with the naked eye, NASA scientists say.

‘It exploded in a flash nearly 10 times as bright as anything we’ve ever seen before.’

Bill Cooke of NASA’s Meteoroid Environment Office

“On March 17, 2013, an object about the size of a small boulder hit the lunar surface in Mare Imbrium,” Bill Cooke of NASA’s Meteoroid Environment Office said in a statement. “It exploded in a flash nearly 10 times as bright as anything we’ve ever seen before.” [The Greatest Lunar Crashes Ever ]

NASA astronomers have been monitoring the moon for lunar meteor impacts for the past eight years, and haven’t seen anything this powerful before.

Scientists didn’t see the impact occur in real time. It was only when Ron Suggs, an analyst at NASA’s Marshall Space Flight Center in Huntsville, Ala., reviewed a video of the bright moon crash recorded by one of the moon monitoring program’s 14-inch telescopes that the event was discovered.

“It jumped right out at me, it was so bright,” Suggs said.

Scientists deduced the rock had been roughly 1-foot-wide and weighted about 88 lbs. The explosion it created was as powerful as 5 tons of TNT, NASA scientists said.

When researchers looked back at their records from March, they found that the moon meteor might not have been an isolated event.

“On the night of March 17, NASA and University of Western Ontario all-sky cameras picked up an unusual number of deep-penetrating meteors right here on Earth,” Cooke said. “These fireballs were traveling along nearly identical orbits between Earth and the asteroid belt.”

Though Earth’s atmosphere protected our planet’s surface from being hit by these meteors, the moon has no such luck. Its lack of an atmosphere exposes it to all incoming space rocks, and the NASA monitoring program has spotted more than 300 meteor strikes that reached its surface since 2005.

Part of the motivation for the program is NASA’s eventual intent to send astronauts back to the moon. When they arrive, they’ll need to know how often meteors impact the surface, and whether certain parts of the year, coinciding with the moon’s passage through crowded bits of the solar system, pose special dangers.

“We’ll be keeping an eye out for signs of a repeat performance next year when the Earth-Moon system passes through the same region of space,” Cooke said. “Meanwhile, our analysis of the March 17th event continues.”

The scientists also hope to use NASA’s Lunar Reconnaissance Orbiter to photograph the impact site to learn more about how the crash occurred.