No Jail Time for a £400 Million Tax Fraud!

In October 2023, Bernie Ecclestone, who evolved Formula One into a global brand, was found guilty of tax evasion amounting to £400 million. Originating from a 2015 case, the 92-year-old was sentenced to 17 months jail, suspended due to his age, and fined over £650 million. Critics argue this punishment is lenient, underlining the £400 million impact on UK tax revenue and upholding the Marxist perspective that justice is softer on the affluent.

Bernie Ecclestone was found guilty of tax evasion in October 2023. The total amount of tax he evaded paying was around £400 million (1)

The case dates back to 2015 when he had a meeting with UK tax officers from the HMRC. He failed to declare that he was paying into one particular trust in Singapore, money which he should have been paying tax on.

image of headline: Ecclestone tax fraud October 2023

He must have paid in HUGE sums to this trust and made huge profits to have run up a £400M tax bill (which he evaded). The profits would have been at least double that amount!

He plead guilty to this charge and was given a 17th month jail sentence and a fine, meaning he will have to pay just over £650 million to the UK tax authority, and £74 000 in costs to the prosecution.

His sentence was suspended so he won’t spend any time in jail, the judge saying this is because of his age. He is 92.

A massive crime with a weak punishment

This is a clear case of tax evasion (2). Ecclestone knowingly concealed information about his finances from the HMRC to not pay tax. This is illegal and carries a maximum penalty of seven years in jail and a 200% max fine.

Bernie received 17 months suspended and his penalty seems to be around 60%.

I understand suspending the sentence because he is 92, kind of fair enough. But as a symbolic message this hardly seems an appropriate penalty.

The harm Ecclestone caused to British society is £400 million lost tax revenue. That is 1/10th of the entire annual tax gap for tax evasion in the UK (3).

You might remember that a number of schools closed because of crumbling concrete earlier this year. The total estimated cost of repairing all of them is £150 million. That’s just one of the things Bernie’s tax could have prevented, had he paid it.

But no, he preferred to squirrel it away in a trust fund so he could pass it on to his undeserving children. And received no real punishment.

Who is Bernie Ecclestone?

He ran Formula one from the late 1970s until 2017, during which time he grew it into a global brand. Ecclestone essentially made F1 into one of the most valuable global media assets. It sits between the motor industry and a global audience.

According to the The Forbes Billionaires rich list his net worth is around $3 billion. (2). So yes the £600 million fine will hurt, but he’ll still have over $2 billion left.

Sociological analysis

This case study is an excellent example which supports the Marxist perspective on crime. According to Marxists the criminal justice system punishes the rich less than the poor. This is precisely what is happening here.

There’s no real debate about it, it’s just very strong supporting evidence for the continued relevance of Marxism today!

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Sources

(1) The Guardian (October 2023) Bernie Ecclestone given suspended sentence after pleading guilty to fraud.

(2) Wikipedia: Bernie Ecclestone

(3) Patrick Canon: UK Tax Evasion statistics 2020.

Social theories applied to drones over airports

Hundreds of flights were cancelled from Gatwick airport between the 19th-21st of December 2018 after reports of drone sightings nearby. This resulted in around 140 000 people’s flights being disrupted.

More recently, a drone was also sighted flying over Heathrow airport on Tuesday 8th Jan 2019 which led to flights being cancelled for an hour.

Despite ongoing police investigations and the military being involved in the Heathrow incident, we still don’t know who the drone pilots are. Even in 2023 this remains a mystery!

This post simply provides some sociological analysis of drones over airports, applying various sociological perspectives – this is clearly most relevant to the crime and deviance module within A-level sociology, but also relevant to the media, given that these are media events!

applying social theories.

News Values

Firstly, it’s obvious why these events are newsworthy…. They tick lots of ‘news values’ boxes – Major drone disruption is very unusual, given that it’s never happened before, and it affected two of Britain’s best-known landmarks – Gatwick and Heathrow. This is also something most people can relate to, given that most people have used airports, the even at Gatwick at least had emotional appeal, because families were potentially being prevented from getting back together at Christmas.

The media and social reaction suggests support for aspects of Durkheim’s functionalist theory of crime – there was widespread condemnation of whoever the drone pilots in the media and one effect of their deviant act seems to have been an increase in social integration as the nation has come together in solidarity against them, even though no one knows who they are!

Interactionism – labelling and moral panic theory

An interactionist approach to these ‘drones over airports’ is, however, much more interesting…. One might ask why we’re making such a fuss over a few thousand people’s flight’s being delayed by drones, which is really no big deal, when the media fails to cover the use of drones by nation states to kill ‘suspected terrorists’ (and many innocent people) in foreign countries.

One might say this is a ‘moral panic’ over the general public’s use of drones to do ‘minor harms’, while the media ignores the use of powerful state actors to use drones to do ‘major harms’.

You can also apply interactionism to the police reaction…. As they arrested a working-class couple in a relatively poor part of the South East, only later to release them. I can just imagine the conversation…

  • ‘There’s a drone over Gatwick’
  • ‘Quick, go arrest someone’
  • ‘Who’?
  • ‘It’s probably poor people piloting it’
  • ‘But there are no poor people in Surrey?’
  • ‘What about Crawley, that’s nearby?’
  • ‘All units to Crawly, go arrest some poor people who own a drone, we need to be seen to be doing something about this.’

Or in other words, this just seems to be a straightforward example of the police labelling the marginalised.

Subcultural theory versus neo-Marxism

It’s tempting to think this is a group of lads doing this for status (come on, admit that’s the image in your head, it probably is!) However, this could be a political act…. Maybe climate change activists? IMO leisure flights are the perfect target for the environmentally conscious. Or it could (actually) be one of the bottom 30% by income, one of those people that will probably never be able to afford to fly anywhere, protesting about being marginalised by grounding flights!?!

Post and late modernism

Whether this crime was politically motivated or not, it’s unlikely that the drone pilots wanted to kill anyone…. They’re probably aware of the high levels of risk consciousness that surrounds airports… they were probably well aware of the likely impact of their drone flights… which was the grounding of all flights for a period.

It’s also the perfect postmodern crime in that this is preventing many people from engaging in their leisure pursuits (I imagine most flights are for leisure), it’s targeted at consumers.

Then of course there’s the uncertainty factor…. We still don’t know who did it, or when the next drone is going to appear…

Crime Control….

Given that international airports are so large, and thus the boundaries so big, it’s impossible to have on the ground security along all of the perimeter. It’s difficult enough to get surveillance in place… especially when you have to go beyond the perimeter to cover the total area in which a drone could be operated from.

In other words, it’s difficult to apply target hardening (preferred by right realists). this goes to shows the difficulties of crime control in a postmodern age!

Gatwick aiport
Gatwick airport – a lot ground to police!

Globalisation

Finally, this could be used as an example of how easy it is to put ‘physical globalisation’ in the form of holiday migration into reverse… all it takes is one person in a car with a drone, and you can ground flights for days!

Signposting

This post is just a bit of fun, how you might apply sociology to contemporary news events.

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Is alcohol really that bad for your health?

A recent study in The Lancet contradicts official guidelines, suggesting there is no ‘safe’ level of alcohol consumption. While a single daily drink raises the risk of alcohol-related illness by only 0.5%, two drinks represent a more significant risk increase. The media’s portrayal of these findings varied, possibly influenced by relationships with drinks companies or a perceived duty to promote healthier behavior.

The new ‘safe’ level of alcohol consumption should be none, at least according to a recent study into the health risks of alcohol published by the The Lancet.

This contradicts the current official government guidelines on the ‘safe’ level of drinking: currently around 14 units a week being dubbed low risk drinking for both men and women.

The findings of this research study were widely reported in the mainstream media:

  • The Daily Mail reported that ‘just one glass of wine a day increases your risk of various cancers’.
  • Even The Independent reported that ‘the idea that one or two drinks a day is good for you is a myth’.
alcohol health statistics.png

But what are the actual statistical risks of different levels of alcohol consumption?

The actual risk of developing a drink related alcohol problem for different levels of drinking are as follows:

  • No drinks a day = 914/ 100 000 people
  • One drink a day = 918/ 100 000 people
  • Two drinks a day = 977/ 100 000 people

I took the liberty of putting this into graph form to illustrate the relative risks: blue shows the proportion of people who will develop alcohol related problems!

alcohol health risks

This means that statistically, there is only a 0.5 % greater risk of developing an alcohol related illness if you have one drink a day compared to no drinks, which hardly sounds significant!

Meanwhile, there is a greater increase in risk if you have two compared to 1 drink a day, which suggests the government guidelines have got this about right!

(NB, despite the headlines, The BBC and Sky did a reasonable job of reporting the actual stats!)

So why did some news papers report these findings in a limited way?

This could be a classic example of News Values determining how an event gets reported: it’s much more shocking to report that the government has got its advice wrong and that really there is no safe level of drinking!

Or it could be that these newspapers feel as though they’ve got a social policy duty to the general public… even if there is only a slight increased risk from alcohol consumption, maybe they feel duty bound to report it in such a way to nudge behaviour in a more healthy direction.

In terms of why some newspapers did a better job of reporting the actual findings: it could be that these are the papers who rely on advertising revenue from drinks companies? Maybe the Mail and the Independent don’t get paid by drinks companies, whereas Sky does>?

The legalisation of Pot in California

Sociological perspectives on the legalization of marijuana in California and other states

California has become (in January 2018) the 6th state in America to legalize the sale of marijuana for recreational use, following a 2016 referendum of Californian residents.

legalisation pot

This has clearly been a popular change in the law for some: In Berkeley, queues of people snaked around the block from 6 a.m. (odd time to be buying weed?) to late into the evening as one the first dispensaries to open struggled to cope with demand, suggesting that there are eventually going to be many licensed venues selling legal weed.

However, there are those that are opposed to the legalization of marijuana movement, the most powerful being the entire Trump administration, who are looking for ways to derail those 6 states which have legalized the drug.

Pot in California in 2023

Eight years on from the legalisation of pot in California it seems that the impact has been minimal.

An estimated 90% of weed related business is still illegal, rather than legal. This is is because the regulations for legal growers are too complex and taxes are so high it is hard to make a profit for small businesses.

Small businesses find themselves unable to compete with large legal corporations and illegal drugs cartels.

Many small legal growers still trade in unlicensed illegal pot as a result.

Comments/m relevance to A level Sociology

This material is mainly relevant to the Crime and Deviance module.

This whole issue is a great example of how ‘crime is socially constructed‘ – you can quite literally hope over from California into the state of Arizona while smoking a joint and tada: you’re a criminal!

Given the situation in 2023 this also shows how changing the law can make very little difference to an already established illegal market. It demonstrates the limited capacity of social policy to make social changes.

From a Functionalist point of view, it might be worth thinking about whether this is happening as a sort of ‘safety valve’ mechanism – there’s so much strain in America, and so many people already using drugs to cope with it, we may as well legalise it because it’s easier for the system to cope with it, and focus more on the ‘real criminals’.

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