Tag Archives: haven

The richest UK citizen doesn’t own any money; it all belongs to the government. Why do some people cheat with it?

This is not a bombshell – it’s (very) simple economics.

As Richard Murphy explains in his video (below), money has no value in and of itself. It used to – when the United States applied the Gold Standard (meaning the Dollar was worth its value in gold) – but when the States had trouble funding the Vietnam War, Richard Nixon put a stop to that.

The Pound was also tied to the Gold Standard, because it had a fixed exchange rate with the Dollar, but that all changed in 1971. The value of our currencies became fluid, attached only to the promise by the Governor of the Bank of England – a government employee – to pay the bearer, on demand, the sum printed on the front of our banknotes and coins.

That promise, in turn, is only worth anything at all because the government refuses to take our taxes in any form other than the Pound. That’s why we do all our trade in the UK using the pound; because if we didn’t, we would have to put our cash through an exchange system – possibly with an adverse exchange rate – before paying our taxes.

And tax is important because it stops our money losing its value. Governments create money (as Mr Murphy explains in the clip). They must also destroy it – otherwise the system fills with too much of it, meaning we have to pay more for the goods it buys, and we get inflation.

It occurs to me that this means certain people are screwing up the system for the rest of us.

I’ll tell you who they are after you see the clip. Skip straight on if you’ve watched it already.

What about people who hoard up their money in tax havens and refuse to pay it back?

I’m referring, of course, to the super-rich.

They seem to think that the cash they have accrued is theirs; it isn’t. It belongs to the government, no matter whose bank account holds it.

And it was created for a purpose. And the government sets tax rates in order to recover it after that purpose is achieved.

So it follows that anybody avoiding tax is deliberately sabotaging the government’s plans.

What can a government do about it?

Well, as we’ve seen with the Tories, the most common choice is to do nothing and let the greedy fatcats keep their ill-gotten gains.

This, in turn, must have an inflationary effect as not as much cash comes back to the government as intended.

And how would a government deal with that?

It would tax the rest of us – those who have no choice but to pay – more.

So it seems to This Writer that you pay taxes for the super-rich who avoid paying theirs.

Do you think that’s fair?

Have YOU donated to my crowdfunding appeal, raising funds to fight false libel claims by TV celebrities who should know better? These court cases cost a lot of money so every penny will help ensure that wealth doesn’t beat justice.

https://www.crowdjustice.com/case/mike-sivier-libel-fight/

Vox Political needs your help!
If you want to support this site
(but don’t want to give your money to advertisers)
you can make a one-off donation here:

Donate Button with Credit Cards

Here are four ways to be sure you’re among the first to know what’s going on.

1) Register with us by clicking on ‘Subscribe’ (in the left margin). You can then receive notifications of every new article that is posted here.

2) Follow VP on Twitter @VoxPolitical

3) Like the Facebook page at https://www.facebook.com/VoxPolitical/

Join the Vox Political Facebook page.

4) You could even make Vox Political your homepage at http://voxpoliticalonline.com

And do share with your family and friends – so they don’t miss out!

If you have appreciated this article, don’t forget to share it using the buttons at the bottom of this page. Politics is about everybody – so let’s try to get everybody involved!

Buy Vox Political books so we can continue
fighting for the facts.

The Livingstone Presumption is now available
in either print or eBook format here:

HWG PrintHWG eBook

Health Warning: Government! is now available
in either print or eBook format here:

HWG PrintHWG eBook

The first collection, Strong Words and Hard Times,
is still available in either print or eBook format here:

SWAHTprint SWAHTeBook

Who will profit from post-Brexit freeports?

A port: How will making them tariff-free bring any money into the UK Treasury?

Let’s see if I’ve got this straight:

The Conservative government wants to create 10 post-Brexit ‘freeports’.

In these ‘freeports’, there will be no import/export tariff in goods if they don’t actually move off-port and into the UK.

If they are re-exported, no duty is payable. And where raw materials are imported and processed to become a consumer product, duty would only be paid on that product – if it came off-port and into the UK.

The government is happy to invest in infrastructure, construction and machinery in freeports to make it possible for raw materials to be processed into products – and exported offshore.

And it would work to cut costs of processing goods.

No doubt the businesses involved in taking raw materials, processing them and re-exporting them would have their head office based in a tax haven.

So, who benefits? The UK economy won’t!

Source: Government set to announce new post-Brexit freeports – CityAM : CityAM

Have YOU donated to my crowdfunding appeal, raising funds to fight false libel claims by TV celebrities who should know better? These court cases cost a lot of money so every penny will help ensure that wealth doesn’t beat justice.

https://www.crowdjustice.com/case/mike-sivier-libel-fight/

Vox Political needs your help!
If you want to support this site
(but don’t want to give your money to advertisers)
you can make a one-off donation here:

Donate Button with Credit Cards

Here are four ways to be sure you’re among the first to know what’s going on.

1) Register with us by clicking on ‘Subscribe’ (in the left margin). You can then receive notifications of every new article that is posted here.

2) Follow VP on Twitter @VoxPolitical

3) Like the Facebook page at https://www.facebook.com/VoxPolitical/

Join the Vox Political Facebook page.

4) You could even make Vox Political your homepage at http://voxpoliticalonline.com

And do share with your family and friends – so they don’t miss out!

If you have appreciated this article, don’t forget to share it using the buttons at the bottom of this page. Politics is about everybody – so let’s try to get everybody involved!

Buy Vox Political books so we can continue
fighting for the facts.

The Livingstone Presumption is now available
in either print or eBook format here:

HWG PrintHWG eBook

Health Warning: Government! is now available
in either print or eBook format here:

HWG PrintHWG eBook

The first collection, Strong Words and Hard Times,
is still available in either print or eBook format here:

SWAHTprint SWAHTeBook

Evasive Theresa May seems unable to answer any question – especially on Trident

This Writer has been a little unwell over the weekend so I wasn’t actually able to watch Theresa May’s car-crash interview on Andrew Marr’s show this morning (January 22). From the responses on Twitter I missed a classic display of attempted evasion.

From what she didn’t say, she appears to have colluded in hiding the failure of a Trident missile test from MPs before they voted on renewing the rubbish nuclear weapons programme for hundreds of billions of pounds:

Jeremy Corbyn had this to say about it:

And consider this:

It is now clear that she definitely wants to turn the UK into a tax haven – to your (and my) disadvantage:

And she tried to pretend that her party’s ‘divide and conquer’ rhetoric was “bringing the UK together as a country” (we know the Scots and Northern Irish are desperate to leave):

Join the Vox Political Facebook page.

If you have appreciated this article, don’t forget to share it using the buttons at the bottom of this page. Politics is about everybody – so let’s try to get everybody involved!

Vox Political needs your help!
If you want to support this site
(but don’t want to give your money to advertisers)
you can make a one-off donation here:

Donate Button with Credit Cards

Buy Vox Political books so we can continue
fighting for the facts.

The Livingstone Presumption is now available
in either print or eBook format here:

HWG PrintHWG eBook

Health Warning: Government! is now available
in either print or eBook format here:

HWG PrintHWG eBook

The first collection, Strong Words and Hard Times,
is still available in either print or eBook format here:

SWAHTprint SWAHTeBook

Treasury tries to thwart EU plans for tax haven blacklist. Whose side do YOU take?

Crown dependencies such as Guernsey are among the jurisdictions that have a zero rate of corporation tax [Image: Alamy Stock Photo].

Crown dependencies such as Guernsey are among the jurisdictions that have a zero rate of corporation tax [Image: Alamy Stock Photo].

I’m with the EU on this one – tax avoidance harms the UK and the attitude of Conservatives like David Gauke should be judged against that fact.

The UK government is fighting a rearguard action to prevent Guernsey, Jersey and British overseas territories from going on an EU blacklist of tax havens.

At a meeting of EU finance ministers on Tuesday in Brussels, David Gauke, chief secretary to the Treasury, will tell his counterparts that the UK opposes attempts to put territories with a zero rate of corporation tax on an EU list of “non-cooperative” jurisdictions.

The EU vowed to draw up a blacklist of tax havens following the revelations in the Panama Papers, an unprecedented leak of 11.5m files from the database of the world’s fourth-biggest offshore law firm, Mossack Fonseca. Brussels pledged to throw light on the shady “treasure islands” that help multinationals and wealthy clients avoid paying tax.

Crown dependencies Jersey, Guernsey and the Isle of Man, as well as British overseas territories Bermuda and the Cayman Islands, are among the jurisdictions that have a zero rate of corporation tax, according to the EU’s executive arm, the European commission, in a recent analysis of risk factors intended to show whether a jurisdiction may be promoting tax avoidance.

The commission has been leading the charge for greater transparency on tax havens and wants to draw up a list of “non-cooperative jurisdictions” by the end of next year.

Source: Treasury tries to thwart EU plans for tax haven blacklist | World news | The Guardian

Do you want Vox Political to cover a story? Use this form to tell us about it (but NOT to comment on the article above, please):

Join the Vox Political Facebook page.

If you have appreciated this article, don’t forget to share it using the buttons at the bottom of this page. Politics is about everybody – so let’s try to get everybody involved!

Vox Political needs your help!
If you want to support this site
(but don’t want to give your money to advertisers)
you can make a one-off donation here:

Donate Button with Credit Cards

Buy Vox Political books so we can continue
fighting for the facts.

The Livingstone Presumption is now available
in either print or eBook format here:

HWG PrintHWG eBook

Health Warning: Government! is now available
in either print or eBook format here:

HWG PrintHWG eBook

The first collection, Strong Words and Hard Times,
is still available in either print or eBook format here:

SWAHTprint SWAHTeBook

Burnham’s anti-welfare stance will lose him my vote

Will somebody from the Common Sense wing of the Labour Party please stand for the leadership?

Today The Guardian is reporting that leadership favourite Andy Burnham has decided to pander to big business rather than stand up for the common people.

He said he was prepared to support cuts to social security in order to counter claims that Labour gives scroungers an “easy ride”.

What stupidity!

He would do better to counter the claim that all political parties give an easy ride to lazy business bosses who exploit the working classes and hide their massive profits in tax havens – especially as he was making his speech at the HQ of tax avoidance tzars Ernst and Young.

The company, now branded EY, is one of the ‘Big Four’ accountancy firms that have been helping the Tory Government rewrite tax law to make it possible for big business to use tax havens and avoid paying.

Regarding benefits, the simple fact is that the fraud rate is 0.7 per cent – a miniscule amount. People claiming benefits deserve to have them – especially as they have paid into the relevant fund for their whole lives; the money belongs to those people, not any government – Labour or Tory.

If Burnham really wanted to bring down the amount of benefit claims, he would have been telling businesses to buck up their ideas and start paying the living wage, rather than scrounging the rest of the money their employees need from the government.

He would have been telling landlords to start charging reasonable rents, rather than pushing them up and up and expecting the government to pay what tenants cannot afford in housing benefit.

And he would have been proposing a strategic remodelling of the system to prevent people falling into the kind of difficulties that force them to claim benefits – including a revamp of Health and Safety regulation to ensure that people do not fall prey to long-term illness caused by conditions at work.

Most important of all, he would be pledging to roll back the plan initiated by Margaret Thatcher, Keith Joseph and the rest of them back in the 1970s, to impose poverty and insecurity on the working people.

This Writer doesn’t see him doing any of that.

Will somebody step forward who can actually do the job?

Labour leadership favourite Andy Burnham has indicated he would support further welfare cuts, including government plans for a £23,000 cap on benefits if it has adequate safeguards.

At a speech in London, the shadow health secretary said he wanted to counter the perception his party wants to give “an easy ride” to people who do not want to help themselves.

“Labour does need to win back those people who have that feeling about us,” he told business leaders at the headquarters of EY (previously Ernst & Young) on Friday. He added that the party would not be re-elected unless it showed people it was on the side of those who wanted to “get on” and succeed.

Source: Labour’s Andy Burnham suggests he might back further welfare cuts | Politics | The Guardian

Follow me on Twitter: @MidWalesMike

Join the Vox Political Facebook page.

If you have enjoyed this article, don’t forget to share it using the buttons at the bottom of this page. Politics is about everybody – so let’s try to get everybody involved!

Vox Political needs your help!
If you want to support this site
(but don’t want to give your money to advertisers)
you can make a one-off donation here:

Donate Button with Credit Cards

Buy Vox Political books so we can continue
campaigning to straighten out the Labour Party.
Health Warning: Government! is now available
in either print or eBook format here:

HWG PrintHWG eBook

The first collection, Strong Words and Hard Times,
is still available in either print or eBook format here:

SWAHTprint SWAHTeBook

Labour’s ultimatum to tax havens

150207ed-miliband

Ed Miliband has warned the tax havens costing British families and businesses billions of pounds that they will have just six months to put their house in order and open their books – or face being placed on an international blacklist.

He has highlighted figures showing that, despite David Cameron boasting more than 18 months ago that he had forced tax havens to open up, not one of the tax havens linked to Britain as Overseas Territories or Crown Dependencies has yet delivered on Cameron’s promise that they would publish a register showing who owns the companies registered there – and some have explicitly refused to do so.

The lack of leadership shown by the UK government has frustrated and slowed the pace of reform on tax avoidance across the world.

In a letter to heads of government, Mr Miliband served notice on them that that under the next Labour government they will have six months to publish publicly-accessible central registers of beneficial ownership.

If they fail to meet this deadline, the next Labour government will withdraw the protection they get from international scrutiny and ask the Organisation for Economic Co-operation and Development to place them on its tax haven blacklist.

In an interview with the Guardian newspaper, Mr Miliband said: “More than 18 months have passed since David Cameron promised to shine a light on the tax havens in UK overseas territories and Crown Dependencies – and their affairs are still shrouded in darkness. That may be good enough for him, but it will not satisfy me, or the incoming Labour government.

“There is nothing pro-business about defending tax avoidance. The United Kingdom has a responsibility to open up the Overseas Territories and Crown Dependencies which are held responsible for so much tax secrecy and avoidance.

“And it is costing everyone who relies on our schools, our hospitals, our roads and our railways. It is costing everyone who pays their fair share of taxes, including millions of British businesses.

“Billions of pounds are being siphoned off into tax havens where our authorities cannot discover even the true ownership of firms registered there, let alone the scale of wealth hidden away.

“Today, I am putting these tax havens on notice that they will have just six months to open up their books or face international sanction.”

In a speech to the Labour Local Government Conference in Nottingham, Mr Miliband also said: “When you are working every day in your communities to deliver services, you are being let down by a government that operates one rule for those at the top and another rule for everyone else.

“Today, we have a government planning real cuts in spending on schools but one that only postures—and does not act over the scandal of tax avoidance.

“Let me say to the Prime Minister: It is not pro-business to defend tax avoidance.

“Britain is losing billions of pounds in lost revenue that could be invested in our future. It is costing everyone who pays their fair share of taxes, including millions of British businesses.

“Businesses and working people who pay their taxes, do the right thing and play by the rules are affronted by tax avoidance – and they are fed up with a government that has failed to act.”

He said: “The current Conservative leadership have become the political wing of offshore hedge funds.

“Unlike them, we will not stand by.

“We will ensure a country where everyone plays by the rules, from top to bottom – and we need to do so much more to restore the basic bargain of our country.”

This is a brilliant move by Labour. It is a promise to make tax avoiders pay what they owe, and restore balance to a tax system in which the Conservatives have placed too much of the burden on the poor.

With more tax coming in from those who are able to pay more, it follows that there will be less need for cuts – and claims that Labour are a party of austerity will be proved unfounded.

You see, Labour is only planning £7 bn of cuts because it sees that current tax revenue is not enough; the Tories want to make £50 bn of cuts because they don’t want the state to provide any services for people who can’t pay a relative fortune for them. There’s a big difference between them.

Is it too much to hope for a positive Labour announcement on welfare benefits next?

Follow me on Twitter: @MidWalesMike

Join the Vox Political Facebook page.

If you have enjoyed this article, don’t forget to share it using the buttons at the bottom of this page. Politics is about everybody – so let’s try to get everybody involved!

Vox Political needs your help!
If you want to support this site
(but don’t want to give your money to advertisers)
you can make a one-off donation here:

Donate Button with Credit Cards

Buy Vox Political books so we can continue
highlighting positive policy announcements by political parties.
Health Warning: Government! is now available
in either print or eBook format here:

HWG PrintHWG eBook

The first collection, Strong Words and Hard Times,
is still available in either print or eBook format here:

SWAHTprint SWAHTeBook

Why has Osborne let us down over offshore tax evasion, again?

141102taxavoidancememe

Remember back in school, when you were taught that we have laws in place to ensure justice for everybody?

Isn’t it a shame you weren’t taught the facts?

It seems every clearer that laws are written by whoever is rich enough to buy the politicians who enact them – especially in a Conservative, or Conservative-led, government.

So – for example – if you are one of the elite super-rich who, between them, have an alleged £20+ trillion stowed in offshore tax haven bank accounts, you could happily bung a few thousand – or indeed a few hundred thousand – to the Tories to stop their Chancellor from increasing the powers of HM Revenue & Customs to track them down and make them pay their fair share.

That could explain the discrepancy between what Tory Chancellor George Osborne said in April and what he’s saying now.

Back in April, he told us he was consulting on a new criminal offence carrying a possible prison sentence that will ensnare people with undeclared foreign income – even if they did not intend to evade taxes.

Osborne said: “We are changing the balance of the law so the burden of proof falls on those who are hiding their money offshore and we don’t have to prove that they intended to do so.”

“It is totally unacceptable for people not to pay the tax that is due and the message will be clear now with this new criminal offence that if you’re evading tax offshore, there is no safe haven and we will find you.”

What is he saying about it now?

Absolutely nothing.

Instead, the plan to make offshore tax evasion a criminal offence has been quietly dropped from a draft Financial Bill that was published last week.

According to Citywire, Ray McCann, partner at Pinsent Masons, told the Financial Times: “I think that the proposal is now likely to quietly disappear. There is no substance to it [italics mine].”

Perhaps we should be checking for more substantial donations to the Conservative Party, between April and today’s date, instead.

Follow me on Twitter: @MidWalesMike

Join the Vox Political Facebook page.

Vox Political needs your help!
If you want to support this site
(but don’t want to give your money to advertisers)
you can make a one-off donation here:

Donate Button with Credit Cards

Buy Vox Political books so we can continue
pointing out the promises they’d like you to forget.
Health Warning: Government! is now available
in either print or eBook format here:

HWG PrintHWG eBook

The first collection, Strong Words and Hard Times,
is still available in either print or eBook format here:

SWAHTprint SWAHTeBook

Osborne’s tax avoidance failure reveals the facts about Coalition policies

osborne embarrassed

Embarrassed: And so George Osborne should be!

What bad luck for George Osborne to get two sums wrong in the same week!

The first sum was a simple times-table question; a school pupil asked him to multiply seven by eight and he couldn’t do it.

The second sum was more serious because it was a sum of money. Rather a lot of money. £1.9 billion, in fact.

The Boy had claimed that around £3 billion in extra tax had been recovered from “high net worth individuals” – tax avoiders – after investigations by HM Revenue and Customs.

Unfortunately, errors in the way HMRC’s performance targets were set meant that these improvements were… well, “overstated” is how the Huffington Post described them.

This meant that, when HMRC said it exceeded its target for tax compliance in 2010-11 by £1.9 billion, in fact it had only just hit its target. The following year, its claim to have exceeded targets by £2 billion was out by the same amount; in fact it had made gains of just £100 million.

There is around £21 trillion in unclaimed, avoided tax sitting in ‘haven’ bank accounts around the world – many of them British territories – and Osborne has managed to collect just £100 million.

Meanwhile unemployed and low-paid working citizens – who have no income apart from state benefits, due to the systematic destruction of the UK’s industrial base by neoliberal politicians who were intent on increasing insecurity among the lower classes – are being starved to death.

Osborne has only himself to blame. When the Coalition government came into office, the Tories insisted that they didn’t need anything like as many public-sector workers as were then on the books – and started laying people off wholesale.

Now the DWP has a claimant assessment backlog of 700,000 for ESA alone (compared with less than 30,000 in May 2010) and the government’s flagship Universal Credit project is hopelessly bogged down, to quote just two examples of the remaining public servants being unable to do their jobs.

Meanwhile, outsourcing of government jobs to private companies has created a disaster: The National Health Service in England is slowly falling over the cliff, with privateers taking so much in profit that the service will go £2 billion into debt next year while waiting times at Accident and Emergency departments continue to increase out-of-control (no matter what lies David Cameron dribbles in Prime Minister’s Questions); a £116 million IT programme arranged with French firm Steria to run staffing, procurement and payroll services for civil servants was scrapped at a cost of £56 million – and then Steria was re-hired to outsource British jobs to India, Poland and Morocco, again at UK taxpayers’ expense.

Does anyone remember the fiasco when G4S was hired to run security at the London Olympics, failed to meet requirements, and the Army had to be called in at the last minute?

Atos and the DWP, anybody?

Andy Hamilton commented on this phenomenon during this week’s News Quiz on BBC Radio 4: “For decades, we have watched governments hand over the utilities and services to companies like G4S and Serco and we have watched as they basically ruined them.

“And then once they’ve ruined them, they get given some more to ruin until they’re running all sorts of services; they’re now huge!

“I still hanker after the good old days when G4S was just Group 4, and its core business was letting prisoners escape from vans.”

Some of us still hanker after the good old days when George Osborne was just a department store employee, and his core business was folding towels.

Follow me on Twitter: @MidWalesMike

Join the Vox Political Facebook page.

Vox Political needs your help!
This independent blog’s only funding comes from readers’ contributions.
 Without YOUR help, we cannot keep going.
You can make a one-off donation here:

Donate Button with Credit Cards

Alternatively, you can buy Vox Political books!
The second – Health Warning: Government! is now available
in either print or eBook format here:

HWG PrintHWG eBook
The first, Strong Words and Hard Times
is still available in either print or eBook format here:

SWAHTprint SWAHTeBook

History is made as Vox Political agrees with David Cameron

 

Jean-Claude Juncker, tax avoidance mastermind and now President of the European Commission.

Jean-Claude Juncker, tax avoidance mastermind and now President of the European Commission.

Believe it or not, David Cameron was right to oppose the appointment of Jean-Claude Juncker as President of the European Commission.

If Private Eye is to be believed, Juncker has a record of wreaking fiscal havoc across the continent, thanks to his behaviour embracing corporate tax dodgers as finance minister and prime minister of Luxembourg.

Anti-EU readers will be interested to note that he was chair of the EU’s council of economic and financial affairs, in which role he played a key part in shaping the economic and monetary aspects of the 1992 Maastricht Treaty.

Eye 1368 (June 13-26) states that Luxembourg has turned itself into a tax haven, “but, crucially, one at the heart of Europe entitled to tax-free flows of money in and out of its borders in a way traditional sunny island havens… could only dream of.

“The Grand Duchy became the member of the economic club that pilfered from the club’s funds.”

Let’s look at examples: “An especially fruitful line has been multi-billion-pound corporate tax avoidance at its neighbours’ expense. In the most infamous case, Vodafone still routes more than £50bn worth of loans through Luxembourg for no purpose other than taking advantage of tax laws and administrative rulings carefully tailored by Juncker’s governments to facilitate large-scale tax avoidance… The company is sitting on a £17.4 billion “tax asset”, ie reduction in future tax bills around the world, courtesy of [Mr] Juncker.

“Hundreds of other multinationals, including the UK’s Glaxo, Tesco and Financial Times publisher Pearson, use Luxembourg in similar ways at enormous cost to Europe’s economies.”

And the buck doesn’t stop rolling with tax, either: “Juncker pursued an aggressive regime of financial deregulation, especially in the area of investment fund administration. So it was no surprise that when Bernard Madoff’s ponzi scheme collapsed in 2008, a large chunk of the money had come through loosely-regulated Luxembourg funds set up by Swiss banks.”

The man responsible for the above is now in charge of the European Union. David Cameron was right to oppose his appointment.

Be afraid.

Follow me on Twitter: @MidWalesMike

Join the Vox Political Facebook page.

Vox Political needs your help!
This independent blog’s only funding comes from readers’ contributions.
 Without YOUR help, we cannot keep going.
You can make a one-off donation here:

Donate Button with Credit Cards

Alternatively, you can buy Vox Political books!
The second – Health Warning: Government! is now available
in either print or eBook format here:

HWG PrintHWG eBook
The first, Strong Words and Hard Times
is still available in either print or eBook format here:

SWAHTprint SWAHTeBook

Labour’s Living Wage tax break exposes the Tories’ ‘making work pay’ lie

Ed Miliband's Living Wage gamble: It's a stop-gap solution while a Labour government works on re-balancing the economy, but will small businesses go for it?[Picture: BBC]

Ed Miliband’s Living Wage gamble: It’s a stop-gap solution while a Labour government works on re-balancing the economy, but will small businesses go for it? [Picture: BBC]

Just one day after the TUC leader said the Coalition has broken the historic link between economic growth and rising household incomes, Labour has proposed a way to restore it.

Since the recovery began, earlier this year, Vox Political has been pointing out its lack of impact on the poorest households in the UK – readily evidenced by the rise and rise of food banks across the country. This is because any profits are being funnelled up to those individuals who are already earning the most and – thanks to our bizarrely-slanted tax (avoidance) system – into tax havens.

According to the BBC, Frances O’Grady told a conference yesterday that “households are being excluded from the benefits of growth. Unless this changes, the recovery will be meaningless to the vast majority of people across Britain.

She said the government was “desperately short of solutions”.

A Treasury spokesperson said the government’s economic plan (wait a minute! The government has an economic plan? When did they come up with that?) was “the only sustainable way to raise living standards” despite all the evidence to the contrary.

This person also said the government’s plan was “slowly but surely working”, even though the economic recovery has nothing to do with any government action.

But today Ed Miliband, the Labour leader, unveiled a plan that made nonsense of the Tory mantra that the government is making work pay because, instead of cutting benefits to make it seem more desirable to have a wage (even though the amount earned is still a pittance), it will actually add cash to working people’s pay packets.

There is a drawback, in that it means a Labour government will offer businesses a 12-month tax break if they agree to pay employees the Living Wage. A tax break is legalised tax avoidance, and we really have enough of that going on already, thanks to the efforts of the Big Four tax avoidance accountancy firms – KPMG, Deloitte, PricewaterhouseCoopers and Ernst & Young – who happen also to write UK tax law for George Osborne (because he doesn’t know how).

But it’s only for a year while the Living Wage gets bedded in. It’s a stop-gap solution to lift workers out of poverty while Labour introduces long-term plans to re-balance an economy that has already been seriously damaged by three and a half years of crazy Conservative ideological pummelling. Who can predict the harm after a full Parliamentary term?

And the Living Wage is becoming even more desperately-needed in the UK than ever, after a study showed the number of workers earning less than its £8.55 per hour (in London) and £7.45 per hour (elsewhere) increased by eight per cent in the last year (from 4.8 million to 5.2 million).

Mr Miliband’s proposal means private firms would be able to claim back about one-third of the cost of raising their staff members’ wages to the Living Wage. This would be good for the government as it would save money on benefit bills and tax revenues would rise.

But costs to businesses would increase. While these could be absorbed by larger companies, smaller firms might struggle to stay afloat.

It is possible, though, that the wage rise would reinvigorate previously-downtrodden workers (as Vox Political has suggested in the past), giving them a sense that they are valued and a reason to invest their energy in the company’s success.