When will the great British people wake up to the reverse Robin Hood practice they suffer?
It goes like this: An essential, nationally owned industrial concern – travel, oil, electricity, gas, water – is flogged off to the private sector at rock bottom prices. The new executive decide to increase its assets, thereby increasing the value of its shares.
However, to do this they do not borrow money or seek the money from its shareholders by way of a rights issue (remember them?) instead they increase the charges upon their captive customer base.
As a result, with their running costs fairly constant, the increased income causes them concern for the level of profit and the consequent corporation tax even though a compliant government has reduced its level.
To combat this it will assess, on its customer funded assets, a depreciation figure that will be entered into the accounts as a non-cash expense, thereby reducing the profit and the tax thereon without affecting cash levels.
The resultant saving will enable increases in executive salaries, dividends to shareholders and share values thanks to its long suffering customers.
Does anyone think that at the end of the rail exercise, with extra carriages, lines and extended platforms, fares will be reduced? Come on Britain, get a grip on it.
Les Harrington
St Mary’s Drive
Benfleet
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