Taxes are the price we pay for a civilised society

28 February 2015

What is happening?

Tax-dodging is a massive problem in the UK. It denies the government of revenue to spend, and starves public services of vital funding. Over £100bn has been dodged per year for last 5 years, made up of approximately £80bn for evasion, £20bn for avoidance, and £20bn paid late.

 

How is this happening?

The Conservatives have cut HMRC staff from 92,000 to 60,000 with a view to reducing the staff to 52,000 by 2016, and have closed hundreds of local tax centres.

In 2012 the Conservatives also removed the UK’s controlled foreign companies (CFC) rules, making it easier for multinational companies to dodge taxes through the use of tax havens.   

 

Why is this happening?

The government is influenced more by big businesses than it is by the needs of ordinary people. Our current laws allow ‘legalised corruption’ where politicians regularly hold second jobs or sit on the boards of big companies, and company executives hold government positions, lead government reviews and consultations, hold influential positions in the civil service and are afforded special access to ministers. Lobbyists or company executives also directly assume senior roles within government.   

This situation means introducing any policy to readdress the balance away from the profits of big corporates and towards the wellbeing of ordinary people is incredibly hard to achieve, but that’s not going to stop us trying.

 

What can we do?

Firstly, this is an absolutely huge issue, and nothing short of a wholesale change in regulation, attitudes in parliament and in our corporate culture will bring about the changes that we need and deserve. 

There is a campaign already underway to introduce a Tax Dodging bill within the first 100 days of the next parliament. The details are here: (http://taxdodgingbill.org.uk/). This campaign is being backed by many Green candidates, including Loughborough candidate Matt Sisson and our Green MP Caroline Lucas. 

We need direct approaches, like full country-by-country reporting for all multinational companies, which will allow HMRC to see how much big companies earn in what country, so they can’t shift profits around within the company and can be taxed accurately.

We also need to reverse the cuts to HMRC and allow them to recruit more tax investigators until effectiveness and fairness is re-introduced to our tax system.

We need to introduce a General Anti-Avoidance Principle, which forces companies to obey the spirit of tax law rather than the letter of the law, and which will eliminate dozens of loopholes in a single stroke.

We can end the ‘Non-Dom’ tax concession, which enables wealthy residents to avoid paying many UK taxes, and which Gordon Brown promised to remove (but never did).

We can reform the party funding system, so that giant donations, which completely distort the democratic process by giving richer people a greater say than poorer ones, are eliminated.

We can put much tighter controls on lobbying and conflicts of interest, so that situations such as that which occurred with the NHS privatisation bill (where over two-hundred parliamentarians had financial links to healthcare companies but were still allowed to vote on the Bill, and which subsequently became law) won’t happen again.

 

Loughborough Parliamentary Candidate Matt Sisson says;

“The majority of us pay our taxes, because we recognise that they are the price we pay for living in a civilised society. It is regrettable then that many of the wealthiest individuals and companies try and get away without paying their fair share.”

“However we can’t expect them to change on their own. The government needs to do more to introduce robust legislation and then enforce it effectively, so that there is enough money for the important public services on which our society relies”.

 

Notes:

http://www.pcs.org.uk/en/news_and_events/news_centre/index.cfm/tax-evasion-spirals-to-more-than-80-billion-a-year-new-figures-show

http://www.taxresearch.org.uk/Blog/2014/09/22/new-report-the-tax-gap-is-119-4-billion-and-rising/

http://www.theguardian.com/commentisfree/2012/mar/19/britains-tax-rules-written-by-multinationals