Sunday, 18 December 2016

A penny saved is a penny earned

Day 19 (Monday 19th December 2016)

19 August 2016 - the day that London Underground (the world's
Oldest subway system) commenced keeping some of its busiest
tube lines running all night at the weekends. It is estimated that 
these Night Tubes will reduce journey times by 20 minutes, on 

average, for the anticipated 200,000 users.

Mark Husband, the Managing Director of Cogence Search and Head of the Commercial Litigation and International Arbitration practice (with a flair for lateral partner moves), is the author of today's post. Mark is a former lawyer (a successful litigator) and hence he has a genuine understanding of the people in and the area in which specialises. 

Mark is based in London but has operations overseas. He is a great guy to sit and have a chat with - not just about the Law, but about the world in general (as perhaps you can tell from his post below). By his own admission, he "loves a good rant"; I like his wry cynicism and down-to-earth attitude. Mark first contributed to the Advent Blog series in 2015 and it is delightful to have him with us for a second year. You can chat with Mark in person on Twitter (his handle is @MarkHusband). As you will surmise from his post, Mark cares about people and society - a responsible and concerned citizen with a sense of humour.


A penny saved is a penny earned


In this festive period we are encouraged to think of others. So, I thought I would write a note for Kate’s excellent Advent blog on the consequences of taking the title concept too far.

Height of umbrage

There was a small feature on the news this morning that mentioned that many of us will experience problems with parcel delivery services this month. Having just had my own issues with UPS claiming to have attempted delivery on a number of occasions when they had made no such attempt; falsifying tracking data to record the fake attempt; and recording the reason for failure as “problems with recipient”, I recognised the issue. After a number of strongly worded emails the item was eventually delivered.

I felt justified in expressing my dissatisfaction with the service and probably was in many respects, but my problems with this service and those many of us will experience in the next few weeks start with the iffy aphorism at the top!

The company from which I ordered this present (not Amazon in this instance) will have taken up a tender from the lowest bidding delivery company. Built into the tender will have been an SLA (Service Level Agreement) that both parties understood would be more honoured in its breach than observance, but would be available to wave around if required in the event of adverse press attention.
That delivery company in turn will employ drivers on terms which contain KPIs (Key Performance Indicators) which are factually impossible to adhere to forcing drivers to take short cuts or, as the excerpt clipped from the BBC website below suggests, risks:

“A BBC investigation has revealed some agency drivers delivering for Amazon drive dangerously because of pressure to finish their rounds on time. An undercover reporter worked long hours for one of the many agencies supplying Amazon with drivers and earned an amount equivalent to less than the minimum wage.”

Heart’s not in it….

I am as responsible for the state of affairs I describe as the organisations concerned - and so are you! We all want bargains. We are participants in market competition that forces companies to trade at margins that do not permit levels of service we or they would consider adequate. We are electing to pay for a poor service that inconveniences us and costs us time, energy and money to remedy. We do this because we think we are saving money!

We use and order things from websites and coffee companies that we know do not pay UK taxes. We know this – we logically know that if these companies do not pay their tax we will have to make up the shortfall out of our own pockets, but it does not stop us!

Hollow words

Admission time: almost all of my presents for friends and family this year were ordered from Amazon. Mea culpa, mea maxima culpa. What am I thinking? The shops I did not attend did not receive my money to pay the staff who did not serve me; and neither UK corporate tax nor income taxes were generated by my shopping.

In 1st 6 months of 2015 14 shops closed per day in the UK

Ultimately my habits and yours’ mean that people are not employed or are under-employed and rely on tax-funded benefits to survive. We work astronomically hard in the UK, mostly to earn enough after tax to live a decent life. Our individual tax burden is huge – there is almost no such thing as after tax because nearly everything we spend our net income on is taxed further.

Why do we cheerfully volunteer to subsidise the profits of Google, Amazon, Apple, Facebook, etc. by paying their taxes for them? 

Clearly we believe we are saving ourselves some money. These little self-deceptions we allow ourselves are not little they are vast, they affect us; our families; our neighbours; and our society. 

I am not about to don a red beret and join the march against globalisation, but having allowed myself to be a part of the problem for a very long time I resolve to think harder about where I spend my money and worry less about whether I am saving a penny and more about the effect of my spending on others.

Source: Office for National Statistics

Now, off to Starbucks….

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