HMRC tax assurance commissioner Edward Troup should consider his future after claiming that his failure to collect £34 billion in unpaid taxes – and that’s a conservative figure! – is no worse than in other countries.
Doesn’t he know he lives in the United Kingdom? We used to set the standard to which other countries aspired, but not any more. You know why? Because the top jobs started going to people like Edward Troup!
The British and Northern Irish public expect better of their public officials. If Troup can’t deliver, he should make way for somebody who can.
The amount of tax going uncollected in the Britain is no worse than in other countries around the world, a senior official at the tax authority has said.
Edward Troup, HMRC’s tax assurance commissioner, told the House of Commons Treasury Select Committee that the £34 billion tax gap was broadly similar to that in other countries
The figure, which includes tax avoided and evaded, as well as unintentional errors made by the tax authority and taxpayers, represents 6.4 per cent of all tax collected.
“Our long-term economic plan is working!” says Cameron – and the debt keeps rising.
It’s more accurate to say he’ll do nothing right.
David Cameron is warning that another global financial crash is on the way. It’s an accurate warning – others have been forecasting it for a while but, seeing him saying it, didn’t you ask yourself who he’ll be blaming this time?
It can’t be Labour’s fault – Labour has been out of office for a few years and besides, Labour policies were sorting out the fallout left by the last right-wing-precipitated global financial catastrophe until the Tories lied their way into office and then twiddled their thumbs for four long years.
He reckons emerging markets that sustained the recovery (what recovery?) are slowing down but the British economy is growing and needs to be insulated from any crash. He says employment is up massively and new businesses are proliferating – but if you scratch the surface of that claim you’ll see that the number of hours worked is no higher than in 2010 and new businesses are being ‘run’ by people who are claiming tax credits as self-employed because then they won’t be hassled by the DWP while claiming JSA. There are new businesses, of course, but not nearly as many as Cameron wants you to believe.
“When we faced similar problems in recent years, too many politicians offered easy answers, thinking we could spend, borrow and tax our way to prosperity,” he writes. Which politicians? Gordon Brown is the only Chancellor in recent history to manage a surplus, rather than a deficit; his policies brought the UK unexpected prosperity (which, unfortunately, led to the EU surcharge that has so badly embarrassed George Osborne); and his successor Alistair Darling introduced policies that knocked £38 billion off the deficit created by the right-wing bankers’ gambling binge.
Cameron must be referring to Conservative politicians in his own government.
Yes, look, here’s a bit where he writes: “It is more important than ever that we send a clear message to the world that Britain is not going to waver on dealing with its debts.” He could have cut that sentence down to read: “Britain is not dealing with its debts.” The national debt has more than doubled since the Conservatives started running the economy – from around £800 billion to £1.8 trillion by 2015, meaning George Osborne’s pitiful attempts to tackle the national deficit by cutting public services and selling off the country’s assets have achieved less than nothing.
“This stability is vital in attracting the business and international investment that delivers growth and jobs, and which keeps long-term interest rates low.” You couldn’t make this up. Interest rates are low because lenders know the UK has its own sovereign currency and will always be able to pay its debts, one way or another, even if it means printing more money (quantitative easing, anyone?) – remember when the UK’s triple-A credit rating went downriver despite all Osborne’s efforts to keep it? He claimed this meant the cost of borrowing would leap, but the effect has gone unnoticed.
For a more informed opinion, let’s go to Richard Murphy of Tax Research UK, pausing for a moment to wish him well in his recovery from recent surgery.
“His focus is instead on highlighting problems in Europe and on signing TTIP – the trade treaty that will require the privatisation of the NHS whatever he says now,” writes Mr Murphy – possibly from the recovery ward.
“This is a man who can see a crisis coming and who must know that his austerity programme can only make it worse (anyone but a fool can see taking money out of a failing economy, as he plans to do, is bound to make it worse) but who is resolutely refusing to recognise the issues that will cause this next wave of economic collapse.
“The wrong people have the money… The people who spend least of their incomes have had the biggest pay rises and are the only ones to enjoy effective tax decreases over the last few years. These people are the highest income earners in the UK.
“At the same time, cutting benefits for the poorest and increasing VAT (which together with deliberately enforced wage cuts have reduced the net disposable income of most people) and cutting taxes for the wealthiest, this has been the inevitable outcome. And we know this outcome has not happened by chance: this is deliberate.
“When there’s a shortage of spending in the economy to let the wealthiest get wealthier, [it] simply means that the imbalances within it get worse. And it’s imbalances that cause crises.
“Corporation tax cuts and reforms to our corporation tax system that means that multinational corporations based in the UK can, since 2010, find it much easier to make effective use of tax havens to cut their UK tax bills have also made the problem worse. I reckon these cuts are costing at least £10 billion a year. What these cuts do is transfer money that would have belonged to the state to companies in the hope that they will be encouraged to invest it as a result. But they aren’t doing any such thing.
“Companies are taking the tax cuts and banking them. They aren’t even giving them back to their owners. They’re just hoarding it. Like the wealthy (perhaps, unsurprisingly) large companies are simply sitting on their cash.
“The tax gap is another indication of this. What really belongs to the government is in the hands of crooks and cheats, with massive economic consequences.
“What can be done? I’ve always pointed out that there are only four drivers of the economy: consumer spending, investment, net foreign flows and government spending.
“Investment is not happening; business will not do it: that’s why they havecash.
“Net foreign flows are broadly neutral: the trade deficit is dire but hot money still comes to the UK, although we cannot rely on that.
“Consumer spending is poor and may get worse: most people do not have the money.
“And that leaves the government to put matters right. It has to generate new economic activity.”
Mr Murphy proposes more quantitative easing – printing money and then investing it in a new, sustainable infrastructive (not the kind that Cameron is pushing); rebalancing tax by increasing taxes for those who can pay; and closing the tax gap.
You won’t see any of those under a Conservative government!
Get ready to batten down the hatches for another round of financial catastrophe, and this time, be prepared to put the blame where it really belongs – on Conservative politicians whose supposed reputation for financial competence is a myth and who should never have been allowed near the national economy.
And remember where the blame lies when you vote next May.
In it, she tells us (wrongly), “We are not in an environment where there is more money around,” and says that Labour will be tougher than the Tories when it comes to slashing the benefits bill. She stressed that she wanted to explode the “myth” that Labour is soft on benefit costs.
There are a few myths feeding into these statements. Firstly, the myth that millions upon millions of British citizens are living a life of luxury on benefits, which is, quite frankly, infantile nonsense. Benefits do not pay the ordinary claimant enough to afford huge luxuries and never did. They were always intended to cover the cost of survival while the recipient looked for something better. Anything else is a lie concocted by unscrupulous politicians, that you would be a fool to believe.
Then there’s the myth that the British taxpayer is being defrauded out of a fortune by benefit cheats who are (again) living a life of luxury at our expense. One look at the figures dispels that idea! The fact is that only seven people in every thousand commit benefit fraud – at a consequently small cost to the overall budget – and the amount they receive simply would not support the lifestyle our politicians are suggesting for them.
Let’s move up to a bigger myth – that people prefer to live on benefits than get a job. We’ve now moved from infantile nonsense to dangerous nonsense. The current situation, engineered by the conservatives in both Coalition parties, means there are very few jobs available – around 500,000 at any one time, with 2.5 million people chasing them.
And what kind of jobs are they? How many are zero-hours contracts? How many are part-time? These jobs do not pay more than benefits (“Making Work Pay” – another Tory lie) so anyone taking them will be out-of-pocket.
Meanwhile, the Tories in power have rigged the system so that anyone who does not spend the entire working week pestering local businesses for jobs that they aren’t offering will be sanctioned and will lose their benefit for a period of up to three years! It is entirely disproportionate, considering the state of the economy, and may cost jobseekers a lot more than a few quid a week in the long run.
But this is how the benefits bill will be slashed – by the Conservatives and by Labour, if Rachel Reeves is to be believed. Ministers of any party, living in the la-la land of made-up statistics, will sanction people for failing to work hard enough at securing jobs that don’t exist!
Ms Reeves says Labour’s jobs guarantee will ensure that those jobs do exist but we don’t know that for sure. We do know that she intends to continue Tory policy on sanctions – blindly.
That’s seven times more than the national bill for JSA, and more than 29 times the estimated cost of all benefit fraud. But wait – it gets better! This is only an estimate and it has long been believed that the true cost of the so-called “tax gap” is £120 billion – equal to each year’s national deficit, 24 times the cost of JSA or 100 times the cost of benefit fraud.
Why isn’t our government going after these criminals? Why hasn’t Labour promised to go after them if the Tories won’t?
Simple: Both main parties have been re-writing tax law to make it easier for rich individuals and large corporations to avoid paying tax, and ignoring flaws in tax laws that make avoidance possible.
So for example: In the late 1990s, the then-Labour government removed the tax on dividends that meant companies had to pay tax on profits if they wanted to pay them out to the owners. So for example Arcadia boss Philip Green’s wife Tina, who is technically the owner of the company and lives in Monaco, received a tax-free £1.2 billion dividend in 2005; if this tax had been in place, £300 million of that would have gone to the UK Treasury.
Gordon Brown slashed Capital Gains Tax from 40 per cent to 10 per cent in 2000, meaning income that his friends in private equity managed to engineer into capital gains would be taxed at a lower rate than was paid by their cleaners. Not the finest hour for the Party of the Worker!
And towards the end of its term, New Labour started dismantling the rules that guarded against industrial-scale tax avoidance by British multinationals, meaning profits returned to the UK from overseas subsidiaries would be exempt from tax. This created a substantial incentive for firms to send their income offshore.
Before the 2010 election, our old friend David Gauke made a lot of noise about stopping the limitless tax deductibility of interest payments, that had been used by Boots (the chemist) to slash its tax bill. Six months after the election, when he was in a position to do something about it, he was telling everybody the rules would not be altered because business considered them a competitive advantage.
The Coalition brought in tax exemptions for companies’ tax haven branches and for profits parked in tax haven subsidiary companies. Meanwhile, tax breaks for the cost of funding these offshore set-ups, from the UK, are also provided.
Corporation Tax will drop to 21 per cent by 2014, even though there is no evidence that cutting the rate will make the UK any more competitive in world business.
The Treasury’s mission is now to adjust the framework of tax laws to suit big business. The ‘Big Four’ accountancy firms are now well-entrenched in writing our tax laws for us – and they run the most popular tax avoidance schemes. Consultations have descended into a process of agreeing laws demanded by big businesses.
There are clear and irrefutable arguments that reversing these legislative idiocies and closing every other tax avoidance loophole will do far more for the economy than flogging the unemployed to death, looking for jobs that don’t exist.
But I don’t think former Bank of England economist Rachel Reeves will be interested in that. In 1975, an appalled taxpayer wrote to then-Chancellor Denis Healey, complaining that an employee of the Bank (which is supposed to work on preventing tax avoidance) had been giving advice on how to avoid tax. “I wonder if this is really part of the Bank of England’s duties,” the correspondent wrote.
The behaviour of Ms Reeves, the former Shadow Chief Secretary to the Treasury, suggests that she believes it is.
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