There was good overnight press coverage for my new report on the size of the UK shadow economy.
The FT made it the main UK story in its morning emails:
The Guardian, Mirror and Times all cover it.
The emphasis in all cases is on the massive underestimate by HMRC of the tax gap. There is space given, of course, to HMRC rebuttals: I will deal with those in blogs later this morning as all are just knee jerk reactions without any foundation.
The Guardian quotes Caroline Lucas, the Green Party MP, whose parliamentary questions on this issue, with which she has long had concern, aided my work. She said:
Successive governments have failed to get to grips with the tax gap and this new research highlights anew just what that costs Britain. We urgently need this problem to be taken seriously by ministers, not least to help expel the myth that we need the austerity measures and public spending cuts that continue to impact so severely on the least well off.
This, of course, goes to the very heart of the reason for the work: if the tax gap was tackled then austerity of the sort we have would not be needed. And that's why HMRC's failure to both estimate and tackle it properly is an issue of such political significance.
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Firstly, extremely well done on your part, Richard. I’ve only had a brief opportunity to scan the report but combining many of the points you make on this blog, plus more research, into a report of this kind gives the argument added weight and far more reach and penetration, all of which is warranted, as those of us who read this blog well know.
My second point concerns the statement ‘austerity of the sort we have would not have been needed.’. In terms of there being money to fund all the services and so on that have been butchered, that may be so. But you know as well as I do that lack of money was never the issue (as Cameron’s response to the flooding earlier this year illustrated). So called “austerity” had one main purpose: to provide cover for what was and remains an ideological necessity for the Tories – the mass and rapid shrinking of the state through cuts, privatisation, outsourcing, fire sales of public assets, in fact any means possible.
Note also the consistency and intensity with which that “message” has been maintained (think back a few months to the budget), which was a particularly important thing to do in the run up to the 2015 election. Why? Because the Tories have always known that it was highly likely (based on precedent) they’d only have one term in office. And so they’ve acted accordingly. Consequently the last year before the the election is crucial to the goal of getting so far down the road to the comprehensive privatisation of the state that it’s almost impossible to undo by any future government. Thus, as Polly Toynbee notes:
“This government’s privatisation revolution is accelerating at breakneck speed. In just the first three months of this year, the value of public-sector outsourcing has shot up by 168%, as monitored by the specialist Arvato’s outsourcing index. A quarter of these contracts went to offshore companies — state funds flying abroad, of no benefit to UK employment or tax revenues.’
http://www.theguardian.com/commentisfree/2014/may/20/cameron-weightless-state-public-services-beyond-control
As I’ve mentioned before in comments on this blog, the consequences and impacts of this fundamental and overarching policy of the Tories – of the creation of the “weightless state” as Polly refers to it – have not even been glimpsed yet, so fast, relentless and, in many cases, well camouflaged, have policy developments been. The “impact lag”, as we might call it, that occurs after the implementation of large scale policy changes means that it is only over the past year that we’ve begun to see the impact of the so called “austerity” policies, such as the bedroom tax, student fees, changes to planning laws and so on. The impact of the policies being enacted now, such as the privatisation of the probation service, will likely not be seen until early 2016 and their full impact even later. I’ll predict that in most cases the results will be truly shocking to those whose interest in the purpose and effectiveness of public policy lies beyond the pursuit of some imagined neoliberal nirvana. And for those on the receiving end it will be even worse.
Ivan
I agree
I use that language to take this to those who think those are the terms of reference
But I also agree money has never been the issue and ideology is – and that is even more harmful
Thanks
Richard
Point taken, Richard. Writing appropriately for a particular audience is important.
On a related point. After I commented I got to thinking that this (your report) is another example of the basis of a ready made policy for Labour. Commit to a root and branch reform of HMRC and Companies House within a year of taking office to make them fit for purpose (the purpose being the case you set out in your report).
Do not have a review or consultation as this will simply be captured by vested interests and its work disrupted and subverted. Instead accept that the groundwork as been done (the case made, etc), and on this occasion not by someone working for PwC or suchlike with a vested interest in maintaining the status quo under cover of recommending “incremental change”. The costs of the increase in staffing, training, etc etc, would all be more than covered by the recovered monies, after the initial “impact lag”, of course.
It seems obvious to me that Labour should want to do this
It would probably seem obvious to anyone
But that’s not the way politics works, it seems. Which is why people are alienated from it
It beggars belief that Labour would not want to shout about this 40+ billion tax gap from the rooftops especially given the FT poll showing populist concerns about UK business, growing inequality re-enforced by cuts and low wages and the so called shortage of funding for the people’s NHS. This would be Labour’s way too at this critical political juncture to combat the Neo-Liberalism spouted by the Tories & UKIP ( who propose even bigger cuts). Was any of this covered by the BBC I wonder?
Not one call from the BBC
By this afternoon it will have been in all the broadsheets – Indy coming up