Sunday, 28 June 2015

Letter to Observer on Tories and tax avoidance

Let`s get it straight - this Tory government has no intention of ending tax avoidance. There will, no doubt, be the usual "morally repugnant-smell the coffee" type of rhetoric, plus of course the usual window-dressing popping up in various budgets, like last year`s so-called "google tax" which was predicted to collect a relatively measly £570m by 2019, but efforts "to rein in a poisonous tax avoidance culture", as your Business Leader reported last week, will not be made (Tax laws for big business are badly broken. Britain wants to ensure they stay that way,21/06/15). A government determined to collect in all the revenues due to it does not refuse to participate in the "European commission`s harmonising tax proposals", let alone sack 20,000 staff from its tax collecting agency, HMRC.
         Cameron and Osborne can hardly complain about the "aggressive tax planning among the corporate top flight", advised by the "tax advisers from big accountancy firms" when their government uses advice from those same firms for tax policy. Such advice led to the adoption of the "patent box" device to lure in firms to invest in Britain, as opposed to other EU countries with higher corporation tax, another example of the UK going it alone, when "tax harmonisation" is seen as crucial to reducing the vast amounts of tax being avoided.  
      Judging by the large number of "sweetheart deals" HMRC has made, approved presumably by government, with tax avoiding businesses like Vodaphone and Starbucks, Cameron and Osborne agree with the CEO of advertising group, WPP, that "payment of corporate tax is a  question of judgement"; they have done next to nothing about tax havens where trillions are squirreled away; the British Overseas Territories, according to "War on Want" together "rank as the most significant tax haven in the world".
    The failure of Miliband`s Labour party was not that it was insufficiently pro-business or pro-aspiration, but that it failed miserably to expose the Tories` hypocrisy, and their preference for making £12bn welfare cuts to closing the £40bn tax gap. The fact that Osborne`s "true colours are beginning to show on the international stage", but not realised here, says everything ,really, but is especially informative about the relative effectiveness of Tory and Labour propaganda machines.

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