Monday, 23 November 2015

Morning Star letters on HMRC, and Osborne`s excuses

Friday`s feature on the so-called "modernisation" of HMRC, and the creation of more "efficiency" by the decision to "close 137 tax offices and to concentrate their functions on 13 new regional centres", was right to stress how this can only be good news for the tax avoiders and evaders (Morning Star,13/11/15). What makes the news even more disappointing is that HMRC`s chief executive, Lin Homer, and her associates, were given such an easy ride by parliament`s public accounts committee when they were interrogated this week. Admittedly, there was a gentle ticking off for the lamentable customer service and phone calls not being answered, but what about, not only the committee`s report which had already criticised HMRC for its "woefully inadequate number of prosecutions for offshore tax evasion", but also the subsequent excuse, for the eleven prosecutions for offshore tax evasion in the last five years, that exorbitant court costs prohibited more cases?
The committee was fobbed off with dubious and unfounded claims that the amount of uncollected tax in Britain is "no worse than in many other countries", stating the tax gap to be £34bn. This, of course, does not take into account tax evasion, only avoidance. HMRC has done next to nothing about tax havens where trillions are squirrelled away, rather than paid to the Treasury; the British Overseas Territories, according to War on Want, together "rank as the most significant tax haven in the world", ahead of even Switzerland. The reality is that there is no income tax, corporation tax, sales tax, wealth tax or any other direct tax in the Cayman Islands, the British Virgin Islands account for 40% of the world`s offshore companies, and Bermuda remains Google`s favourite tax haven. Setting an example by taking some individuals to court, and letting them face the consequences, and long jail sentences, even if the costs amounted to hundreds of millions, would be more than worth it, as a deterrent to all evaders!
     Government policy, far from publicly condemning all non-payment of tax as "morally repugnant", now appears to have U-turned. Cameron`s worldwide endorsement of Greene King, whose battle to justify a tax avoidance scheme bought from Ernst and Young for 10% of all the tax saved, suffered two defeats in the lower tax courts, and widespread condemnation from MPs, including from the then chair of the public accounts committee Margaret Hodge, suggests the idea of any businesses "smelling the coffee" no longer suits this government. Well, we are over four years away from an election!

Matt Willgress was right to support Ken Livingstone`s view that the Tories` "chaos over tax credits did not happen by accident" (Morning Star,06/11/15).With over 1200 staff employed at the Treasury, including, according to the Independent, eight special advisers costing the taxpayer over £500,000 a year, it is hard to believe that someone didn`t carry out an "impact assessment". Next they`ll be telling us they didn`t know, not only about the steel industry being under threat because of unfair Chinese competition, but that quantitative easing works elsewhere in the world to stimulate economies, so long as banks are not the direct recipients. I don`t suppose the Tories will acknowledge, either, that the Northern Powerhouse is just a wheeze drummed up just before what was thought was an unwinnable election, and which can`t possibly work anyway, when councils are having their government grants decimated, or that tax avoidance measures are also suffering the consequences of sacking thousands of staff at HMRC! There is so much evidence proving that the chancellor knows exactly what he is doing, that any suggestion otherwise beggars belief. Attacking the poorest and most vulnerable appears to be his default mode; he clearly he has no Plan B. 
       Whilst it is not remotely surprising that our beleaguered chancellor took advantage of a meeting with Tory backbenchers on the 1922 committee, and appealed to them for ideas on how the tax credit proposals could be revised, it does come as a shock to see Osborne not making the most of it. Why didn`t he ask for their ideas on stopping the downward turn our economy is taking, with growth at 0.5% and set, according to the chief economist at the finacial data firm, Markit, Chris Williamson, to slow to 0.3% by the end of the year? Bullingdon boy`s only solution is to enrich his friends in the City! Shouldn`t Osborne also have sought advice on HS2, and how to prevent projected costs going over £50bn? 
       What needs to happen now is for Labour`s propaganda team to start shouting Osborne`s failures from the rooftops, starting with his lamentable industrial policy, which has led to steel`s collapse, economic growth stalling, and privatised railways having "clapped-out and overcrowded trains"(Morning Star,30/10/154). Cameron will be too concerned about his own reputation to allow his friendship with Osborne preventing him from sacking him; he is a Tory after all!

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