Alistair Darling has been throwing his toys out of his pram recently

[Thinking Man's Idiot]

Darling urged to target the tax dodgers

(Sunday 23 November 2008)

by LOUISE NOUSRATPOUR





CIVIL Service union PCS urged the government on Sunday night to focus the pre-budget report on tackling the billions lost through tax evasion and uncollected tax rather than tinkering at the margins.



Chancellor Alistair Darling will present the report to the Commons on Monday and is set to deliver a "fiscal stimulus" package in an effort to kick-start the economy.

The centrepiece of his plans is widely expected to be a 2.5 per cent cut in VAT to boost consumer spending this Christmas.


But PCS argued that the British economy would best be helped if the government invested in chasing the £46.5 billion lost every year through tax evasion and uncollected tax.


The first step would be to reverse the "short-sighted" programme of job cuts in Revenue and Customs, which will see over 200 offices close and 25,000 jobs go by 2011, union officials suggested.


A Revenue local compliance report calculated that, while cutting 600 staff would save £74 million, it would lead to a loss of £204 million in tax.
In the Revenue's tax compliance section, over 7,000 jobs have gone in the last three years.


A minimum of 2,000 more are expected to go by 2011.


On average, each member of the compliance staff brings in £640,000 of tax after employment costs each year, leading the union to call on the government to increase resources and jobs in tackling uncollected tax and tax evasion.


PCS general secretary Mark Serwotka said: "The government should be looking at tackling the billions lost through tax evasion and uncollected tax by reversing its short-sighted cuts programme and by cracking down on tax dodgers.


"Any attempt to claw back the billions in lost revenue is being undermined by a lack of staff and resources. In these grim economic times, the lost billions in tax is money that could be ploughed back into public services and into stimulating the economy.


"Increasing resources in tackling uncollected tax and tax evasion, in addition to closing loopholes, will pay for itself and ensure people pay their fair share," he insisted.


Former London mayor Ken Livingstone welcomed government plans to cut VAT to 15 per cent - the lowest level allowed under EU law - arguing that the measure would have the "same effect as a boost in income."


He urged the left to "give the strongest support" to the cut, which "provides a striking contrast to the economically disastrous and socially regressive polices being openly advocated by the Tories.


"One of the most iniquitous features of Tory tax policy, particularly from Thatcher onwards, was the shifting of the tax burden from direct to indirect taxation," said Mr Livingstone.


Other measures could include extending for another year the £120 rebate for low-paid workers who lost out through the abolition of the 10p tax rate, increasing the grace period before lenders repossess homes to three months and scrapping planned rises in vehicle excise duty for another year.

[Thinking Man's Idiot]

A measure of justice

(Sunday 23 November 2008)



IT is quite possible that even the relatively calm Alistair Darling has been throwing his toys out of his pram recently, so many people have been telling him what he absolutely must do in his forthcoming Budget to save the crisis-hit economy of Britain.

Alternatives being given to him have ranged from the frankly self-serving offerings of the Confederation of British Industry, through the manic maunderings of Digby Jones, to the rather more considered positions of UNISON, the Green Party, the STUC and the National Pensioners Convention.

Unfortunately, it is more likely that Mr Darling, who has proved himself to be the personification of new Labour's cowardice when dealing with big business, will hearken more to the supplications of CBI boss and erstwhile Financial Times editor Richard Lambert and Mr Jones than the voices of real people.


Mr Lambert has, unusually, been of almost maidenly modesty, refusing to make clear any great detail about the CBI 10-point plan which he claims would get the economy back on track.


Perhaps more will be revealed at the CBI conference which opens on Monday, but the signs are not good, with hints of improving cash flow to business, reducing employers' National Insurance contributions and freezing business rates being among Mr Lambert's less than helpful suggestions.


And as for Mr Jones, who appears to believe that the flight from Britain of all business leaders to Mumbai is imminent should they not immediately become the recipients of massive tax breaks, the less said about his suggestions the better, although there are hints in the weekend papers that Mr Darling may take at least some of his burblings seriously.


Reports that the Chancellor is contemplating a temporary reduction in VAT to 15 per cent are disturbing, since that would be the least efficient use of resources possible, not to mention the most socially unacceptable.


Despite the fact that VAT does hit poorer people harder than the better-off, there are far more effective and more closely targeted ways of injecting liquidity into the economy.


There are better ideas from other sources that the Chancellor should take on board as a matter of urgency.


As immediate measures, there is much to recommend the suggestions that the poorest members of society are removed from the tax bracket entirely, that pensions are immediately boosted, that unemployment pay is lifted from its present, abysmally low, levels and that the minimum wage is raised to a more realistic level.


These measures have the advantage of feeding the cash directly into the economy, since all of those groups are in desperate need of more disposable income to spend on necessities.


And, to still the worries of Tory leader David Cameron, they could be paid for, not from borrowing but from increased taxation on the rich and, at the suggestion of the PCS union, reclaiming the £40 billion plus of tax avoided, evaded or uncollected at the moment.


Add to this a huge increase in the construction of affordable homes for rent and a real effort to take control of banks which are effectively publicly owned and forcing them to implement a programme of investment in manufacturing and from this crisis could come a real leap forward for Britain, rather than merely a temporary, soon to be reversed, drop in VAT or yet another bonus for the bosses.

Contact Us
Copyright Morning Star, all rights reserved
published by the Peoples Press Printing Society

[Thinking Man's Idiot]

Top earners face income tax rise
The Chancellor is to announce in his pre-Budget report he intends to raise the top rate of income tax in the future, the BBC learns.
VAT 'to be cut in rescue package'
Hugh Pym on Labour's big test
Analysis: Crunch time for Darling

[Thinking Man's Idiot]

!