Why UK slid £150m to tax-exempt phone-mast master Arqiva

How does one fairly distribute £150m to extend Blighty's mobile coverage? Give the whole lot to a private company that has paid no corporation tax for four years and effectively holds a monopoly. That company is Arqiva, which owns the vast majority of the UK's TV, radio and mobile phone transmitters. It will get £150m of …

[JMB]

I wonder if Arquiva is one of the wealthy telecom companies who are also being subsidised from the TV LIcence to increase broadband speeds in rural areas - I suspect mainly because of pressure from people with second homes or who have moved to the country to 'get away from it all'.

[LarsG]

I wouldn't mind them being exempt from tax if they stopped hiding their profits by using a system of loans.

Obviously this is not illegal, but it is tax avoidance, underwritten by the Government.

It leave a bad taste in the mouth when you consider the hidden profits the company makes.

[Rampant Spaniel]

It's all good, I'm working on a letter explaining how I have invested significantly in myself (housing, education, food, transport, clothing) and loaned mw wife money whilst on holiday therefore I should be tax exempt! If it's good enough for a multi beeeellion pound company it should be fine for me!

[Anonymous Coward]

The Government needs more players in the market to bring in a bit of competition, unfortunately the Government treads softly around this monopoly in fear of upsetting them.

I thought doffing ones cap was in the past.

[The BigYin]

Typical hypocrisy

On the one hand you have the PAC screaming about tax dodging.

On the other you have a nice dinner wiping £2 billion from your tax bill.

On the third (the one under the table) you stuff £150 million to your pals.

THIS is exactly what it wrong with the Tories and Labour. That right there.

Hypocrites to a person.

[Great Bu]

Re: tax avoidance may be the legal kind but

Who decides on what constitutes 'fair and honest' ?

The government (why not make it a legal requirement) ?

The public (who on the public) ?

The newspapers ?

All these recent cases of tax avoision should be laid squarely at the door of the legislators who have failed to make adequate legislation, not at the door of the companies who do exactly what they are supposed to do - maximise their profits.

[Neil Lewis]

Re: tax avoidance may be the legal kind but

Not wishing to disagree with your underlying principle, but 'paying the minimum tax you can get away with' is exactly what every individual is *expected* to do. That's why you fill in a tax return.

[Red Bren]

Retirement Plan

Looks like Mr Osborne has a nice executive directorship lined up for when the government get the inevitable boot.

I wonder how many MPs (of any party) have shares in Arqiva?

[Anonymous Coward]

Re: Retirement Plan

"I wonder how many MPs (of any party) have shares in Arqiva?"

None. Arqiva are wholly owned by Canadian and Australian pension investors. So what's going on here is that whilst the UK has a broken, unfunded fuck up of a pension system, and a huge public spending deficit, Gormless George is handing Canuck and Aussie pensioners a £150m bung, even though the mobile operators explained carefully that the problems of infrastructure build out were not cash, but rather the public sector's shit headed red tape that stops anybody doing anything in this country.

[Andy Fletcher]

Maybe it's just me

But it feels like we sold all our utilities to private companies, but we continue to fund them with public money.

There's something inherently wrong here. The whole point of privatising is surely that private companies will invest in things that are economically viable and will net them some profits. Public funds shouldn't be used at all. If they don't make money, that's their bloody problem, not mine. If the service they are providing is truly in the national interest, we probably should have hung onto the damn thing in the first place.

[LeeS]

Re: Maybe it's just me

If that were the case we'd probably be sat typing these comments via a 28k modem provided and installed by The Post Office, unless you were a subversive hippie and illegally wired in a dodgy 56k modem you found in the back of a magazine (not on ebay, that would take too long to load)

[Evan Essence]

Re: Maybe it's just me

We should follow South Korea. Government says to install 1Gbps fibre to all homes, and it gets done. Bish bosh.

But no, we dick about with ridiculous dodgy-sounding schemes like this.

[annodomini2]

Re: Maybe it's just me

But how would Gormless George and co keep their useless lazy schoolmates plush with Champagne dinners and hookers.

[Anonymous Coward]

Re: Maybe it's just me

"private companies will invest in things that are economically viable and will net them some profits. Public funds shouldn't be used at all."

Minor corrections/additions needed:

"private investors will invest in things that are economically viable and will net them some profits (or maybe a loss). Customer funds shouldn't be used to fund investment at all."

IE Investment should come from investors, who get the reward when things go well (and should therefore also have the risk of carrying the loss if that happens). Customers should pay for the costs they directly incur when buying [whatever], not for the costs of long term investment.

UK capitalism is not capitalism at all. It's a quite nasty hybrid of corporatism and kleptocracy.

[Dave 15]

Foreign companies financed by British tax payers

Always has been pointless - doesn't produce jobs, demand or anything for the UK, yet both Labour and Conservatives are full on about sending our money abroad. They do it as 'aid' to China, India et al, or by buying planes from the Americans, cars from the Germans, Army lorries from the French, Uniforms from the Chinese...

Until this stops the UK is doomed to continue shrinking and rely ever more on making it up by pretending that a tax inspector produces 'GDP' and that financial shinnanigans is 'real' money.

[Kubla Cant]

Tax exemption???

I thought the whole point of the rule of law, democracy etc, etc was that laws apply equally to everyone. But it seems that we're still in the 17th Century, where monopolies, subsidies and tax exemptions are handed out on an arbitrary basis by politicians.

Why hasn't Arqiva been broken up as a monopoly? They've invested in infrastructure, but it's not like mobile telephony is a socially valuable service that wouldn't be available without subsidy, is it?

It would be interesting to learn who else is tax-exempt.

[Alan Denman]

So how can the UK suckers blame Europe on this one.

Yep,

we are fiddling while Rome burns. Obviously you can vote UKIP just for the burn.

[Dr_N]

This is Thatcher's real legacy

Everything sold off to foreign "investors" who then trouser massive payoffs in tax rebates and subsidies.

Trebles all round!

HURRAH!

[John Smith 19]

So even when they don't start *out* as defacto monopolies infrastructure systems *become* 1

Simply because it's the best way to maximize profit and minimize costs and improve (or possibly enable) interoperability.

Mr Holmes because IMHO it really is a case of "No s**t Sherlock."

[J.G.Harston]

Arqiva's an odd entity. It used to be the BBC/IBA transmission network and morphed into Castle Holdings and then into Arqiva as a private entity responsible for the monopoly core infrastructure of the UK transmission network. They're sort-of Network Rail or National Grid - it's difficult to apply normal private sector expectations on them. Forcing them to operate as a normal private commercial entity would probably result in the transmission network system collapsing.

[Roland6]

An argument can be made for Acqiva, Network Rail, National Grid and other utilities to be incorporated as CIC's and the government could then offer them (and other CICs) favourable taxation arrangements.

[Hubert Thrunge Jr.]

Arqiva is what's left of the ntl: debacle that was Cabletel who went of a buying spree, buying everything telecoms related, including the IBA sites, all of the old Philips radio sites, DTELS (the privatised Home Office telecoms division), creating a monster that encompassed cable, broadcast, and public safety infrastructure & services. ntl: went into Chaper 11 insolvency when their loans were up, and they hadn't made enough money to pay them back, so it was split up into two sections. One bit (the cable side) became Virgin Media, the other bit was bought by Macquarie (an Australian investment bank) to form Arqiva.

Now the BBC's transmitter sites had been bought by the Americans (Crown Castle), who were also in the doo doo, so they sold them to NGW. Now, NGW was the conglomeration of National Grid and British Gas's communications site business. That left the UK with two big players in the marketplace. There were others also swallowed by Arqiva - including Eastern Group Telecom - who owned many radio sites in the East of England.

Then Arqiva had a good idea (for them, not the market) to merge their business with NGW forming something pretty close to a monopoly in the market.

Because they own pretty much every decent radio site in the country, Private Business Radio has suffered a decline as companies cannot afford either Arqivas high rents, or their restrictive site access practices (which costs even more per year in "accreditation" fees.

The matter of them not paying any tax - well what did you expect - they're owned by a Bank, backed by pension funds from Australia (owned/managed by Macquarie) and Canada. They have no profit because its all used to pay the interest on their loans.

Now don't mention Airwave - the network provider for the Emergency Services - also owned by Macquarie..... they don't make any money either (profit) as all of their money has to go to pay off loans.....

[Sirius Lee]

Stop whining

Ray seems to want to use this example to score political points and its disappointing the Register let him get away with it.

If there is a concern about Arquiva having a monopoly surely the correct thing to do is refer them to the competition commission. If the one in the UK is too cosy with the industry, then the one in Europe.

As that has not been done, presumably there really is no monopoly to whine about or there are no other private companies which believe there is profit to be had installing and maintaining masts in the UK (a prime example of a commodity). So what's a government to do? If providing the operators the cash would result in a bitchfest and there are no other companies that have wanted to invest in infrastructure for the UK how else can the government help get the job done?