The dictionary definition of "rhetoric" is
"language designed to have persuasive effect, often lacking in sincerity", and
we`ve certainly been inundated with bucketloads of that since the last election.
Of the hundreds of examples emanating from government spokespeople, the two
which are possibly most memorable are the description of tax avoidance by
Osborne as "morally repugnant", and Cameron`s instruction to all tax avoiding
companies, back in January 2013, after the news broke about Starbucks paying
next to nothing in corporation tax, despite huge profits, that it was time for
them to "wake up and smell the coffee".
Strange then, that there seems to be little
correlation between their repugnance and their supposed determination, with the
"tax gap" still admitted to be £35bn a year, and reckoned by many to be possibly
double that, and the job cuts still ongoing at HMRC, where so-called "efficiency
savings" of £235m were made last year, with another "cull" now leading to
another 2,000 job losses. Historically, each tax
inspector raises for the Treasury at least two to three times his/her salary in
tax, often many times more, so how can it possibly make sense for a government
intent on increasing revenue, to reduce their number? The number of HMRC staff
in enforcement and compliance fell by 1529 in the years 2010-12, and the trend
still continues.
More recent news hardly inspires confidence
in this Tory-dominated government`s anti-avoidance policies. When the Tory party
accepted £550,000 donation from the CEO of Vitol whose company paid 2.6% global
tax on profits of £846m, the cat was very plainly out of the bag, compounded by
Cameron`s appointment of the ex-head of tax avoiding Google`s European division
to the House of Lords. The internet company famously paid £11.6m to the Treasury
in 2012, despite generating £3.4bn of business in Britain.
Tax avoidance, then, is clearly an area which
Labour should be exploiting before the election, and it does have a policy which
states rules will be tightened and loopholes closed, sensible but hardly
headline grabbing, and certainly not likely to win over the "floating" voters,
or those abandoning ship for Ukip.
A self-funding start could be made by Labour
promising to reinstate a few thousand tax inspectors, and attacking the Tories
and Lib Dems for their abject failure to rid the country of what Margaret Hodge
described as an "industry". Having representatives from the Big Four accounting
firms on Treasury committees drawing up tax rules does not appear overtly
sensible, when the same firms make many of their millions by advising businesses
on their "tax efficiency"; indeed, as with the ongoing Greene King case, the
accountant`s fee was 10% of the taxes successfully avoided!
Policies with popular appeal, likely to grab
attention, are not the result of rocket-science thinking, but they do require a
non-avoidance guarantee from Labour leaders, MPs and election candidates. A
refusal to grant government contracts to known tax-avoiding firms is a
no-brainer, whilst a pledge to award no honours whatsoever, to individuals
either connected to such firms in any way, or avoiding tax on a personal basis,
would be a vote-winner. Indeed, legislation could be promised which prohibited
such contracts and awards; if avoiding tax is not illegal, benefitting from it
in these ways could become so!
Companies which pay their fair share of
corporation tax, on the other hand, could benefit from a government award, with
a logo for publicity purposes, enabling the consumers to make more knowledgeable
choices. FDR used a similar technique to develop "responsible capitalist"
practices in 1930s America. Such an idea could then be extended to companies
paying a living wage!
It stands to reason that no-one working for the
government, or indeed, representing the country in any capacity, should be
allowed to do so if found to be tax-avoiding; that would involve a massive
culture change that will take some time to reach fruition, but Labour have five
years! The BBC may have to bring in some new presenters and programme hosts, and
even reduce its number of sports pundits, new companies might have to be
considered for government work, but it would be all in the national interest.
No-one forces rich individuals to take accountants` advice; they know exactly
why taxation has to be levied in a civilised society, and are quite willing to
utilise the benefits taxation brings, like transport and security, even if
choosing to exclude themselves from state education and health services.
Therefore consequences have to be faced when caught depriving the nation of
valuable assets.
The country is regularly touted as the 7th
richest in the world. In 2013 UK corporations were sitting on a cash mountain of
£750bn cash mountain. Admittedly, tax avoidance and evasion are worldwide
problems, and governments need to co-operate fully if the "industry" is to be
ended, but that does not mean a government determined to limit the sum not paid
into the Treasury`s coffers can make a difference. If a few feathers are ruffled
along the way, so be it; if a few MPs and judges are forced into early
retirement, and a few honours have to be returned, perhaps a few athletes and
sportspeople no longer eligible to represent their country, so what, as long as
there is extra money for the government to spend on much needed services like
the NHS? As the 18th century American rebels nearly said, "No representation
without taxation"!
Culture changes do not happen overnight, and not
in isolation from other major developments, especially in education, social
services and the financial sector, and in this country they don`t happen at all
without the backing of the government. Labour can be that government, and it can
increase its chances of winning the 2015 election by reiterating the fact that
tax avoidance is a crime against society, and declaring war against
it.
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