Month: February 2015

Do The Right Thing

The Beatles sang about it, the Rolling Stones left the country and the Who apart from Keith Moon, seemed to hang about and get on with paying them.

What am I talking about?

Tax.

I’m an avid listener of music and reader of rock biographies, many of these about bands from the 60’s and 70’s and in a week when I’ve been reading about the Who, tax avoidance and tax evasion has been hitting the headlines, which all goes to show that taxation has been a long running political issue.

I think it was a couple of years ago at an STUC conference in Edinburgh, about how to create a fairer Scotland that thanks to Stephen Boyd, STUC Assistant Secretary, I learned that UK tax rates in the 70’s reached 83% under Labour and then the top rate was reduced to 60% under the first Thatcher government.

The issue of taxation has come to the fore again as we have learned about HSBC and the extent they may have been involved in facilitating tax avoidance schemes.

With less than 100 days to go to the general election, tax has again become a major political issue. Both the Conservative party’s view on tax avoidance and David Cameron’s judgement on the appointment of Lord Green as a minister have been called into question.

This week we discovered that HMRC had secured 1 conviction and £135 million in unpaid tax, on the face of it this appears to be less than impressive when compared to the performance of the French tax authorities who have reclaimed £200 million from 3,000 named accounts and the Spanish £180 million from 2,900.

I am no expert on how the tax authorities are resourced or staffed in France or Spain, but as a union activist in the public sector I have seen the cuts that the current coalition government have brought about in the UK Civil Service.

Last year my own union, PCS, commissioned a report by Richard Murphy director of Tax Research UK called The Tax Gap Report. Click here to learn more.

This report highlights that in just over a decade staff in HMRC will have been cut from 92,000 in 2005 to an expected 52,000 in 2016, a cut of nearly 43%.

Cuts on such a scale must surely have an impact on the effectiveness of HMRC to be able to discharge its duties.

And whilst we can urge the companies and individuals engaged in such schemes that there is a moral imperative to do the right thing, all the evidence would suggest that this will not be enough.

It was good to see the Labour Party take the initiative on this issue during the past week, making clear that Labour welcomed proposals from charities and campaigning organisations for an “anti-tax dodging bill”, which would make it harder for big companies to use tax havens and clamping down on tax breaks for big companies.

But, fundamental to this debate is making sure that HMRC has the staff and resources to carry out the work that it needs to and we should not lose sight of that.

The dividing lines and differences are becoming clearer in this election as we see Labour looking to bring tax avoiders to account, while the Conservatives talk about withdrawing benefits, if you are deemed to be obese.

It wasn’t any of the bands that I mentioned at the start of this blog that sang ‘the weak get crushed as the strong grow stronger’ but the Jam in Funeral Pyre, their apocalyptic vision of the future.

Increasingly it would appear that the General Election of 2015 is going to be defined as a choice between standing up against vested interest and the Establishment or about whether we make the UK a fairer society.