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27 June 2012

Hypocrites! Tories bash benefits, rich let off the hook

Dave Reid

David Cameron launched a scathing attack on comedian Jimmy Carr's million pound tax-dodging while leaving unscathed the billions of taxes avoided by his posh friends in big business.

Unsurprisingly, Cameron did not mention that he himself has benefited from the millions his father made in offshore tax havens.

And what about big bank Barclays which 'avoided' 3 billion of corporation tax in 2009 using some of its 249 subsidiary companies in offshore tax havens? Or Vodafone which was let off over 5 billion in unpaid taxes by the government? Or Boots which avoids paying 86 million per year so that it only pays 3% of its profits. The amounts are eye-watering.

The Carr episode actually shows that tax avoidance is common practice among the wealthy including many wealthy donors to Cameron's Tory party. Billionaire Philip Green was called in to advise the government on 'efficiency savings' while avoiding paying any tax on a 1.2 billion bonus!

Tory grandee and fundraiser Lord Ashcroft (given a peerage by Tony Blair's government in 2000), was a tax-exempt 'non-dom' who didn't pay a penny on his overseas earnings and holdings estimated at 1.1 billion.

Asked to comment on Ashcroft's tax status, Cameron said: "You have to respect people's privacy and you have to respect the view that someone's tax status is a matter between them and the Revenue."

In this year's budget the government, while slashing benefits and public services to the poorest and most vulnerable people, actually cut taxes on the rich - the top rate of income tax and corporation tax on the profits of big business. That's the Tory way of reducing tax avoidance - cut the taxes on the rich!

And the government is cutting the very department that chases up the tax avoiders. On 25 June tens of thousands of workers at Her Majesty's Revenue and Customs (HMRC) went on strike against cuts to their department, privatisation and the reduction of tax inspectors (see page 4).

Their union, PCS (the Public and Commercial Services union), estimates 120 billion goes missing every year mainly from rich tax dodgers. Yet the government intends to cut 10,000 jobs at HMRC. Jobs axed at HMRC have already resulted in over a billion pounds being lost in tax revenue according to the House of Commons public accounts committee.

Labour's criticisms of the Tories are a bit rich - they allowed billions to be avoided as well. 30,000 jobs went at HMRC as a result of Labour's cutbacks.

Successive governments' policies make the tax regime for the rich leak like a sieve. If you can afford a good accountant there are thousands of ways for the wealthy to avoid tax. The whole financial sector has become a tax avoidance mechanism.

That's why as well as beefing up HMRC and allowing its workers to get on with the job, the way to start ensuring that the rich pay the tax they have been assessed for is through public ownership and control of the banks and finance companies. Then, the pensions and public services we all depend upon can be fully funded.

Make the super-rich pay for the crisis - not the 99%!

On tax the Socialist Party's programme includes: