I have published a bog on the need for a motion on tax justice related issues that local councillors can put to the authorities of which they are a member for approval by the members. This is the text of that suggested motion:
Tax Abuse
Motion presented to XYZ Parish / District / County Council
By:
XX xxxxx 2014
_________________________________________________
This Council recognises:
- The growing awareness of tax avoidance and tax evasion (together termed tax abuse in this motion) and their impact in recent years;
- The importance of curtailing and eventually elminating tax abuse in the local economy of XYZ if a sound market economy is to be created in which all traders, whether locally or nationally based, can compete on a level playing field to provide the goods and services that our community needs;
- The wider impact of tax abuse on our national economy, where the gap between tax income collected by our national government and that which would be due if tax law was complied with as parliament intended is not less than £35 billion a year in the estimate of HM Revenue & Customs and may be substantially higher in the estimate of others and that this tax gap does, inevitably impact upon the level of income available to this authority to undertake its work in our local communities;
- The impact of tax abuse internationally and in particular its cost to developing countries (many of which have close relationships with persons living in our communities) who as a result of tax abuse by multinational corporations are estimated to lose sums greater than the total world aid budget to this activity each year with consequent impact on our relationships with those communities;
- That the UK government has taken steps to tackle the issue of tax abuse by companies seeking to secure contracts for the supply of goods or services and has issued ‘Procurement policy note 03/14: promoting tax compliance' about which it says ‘A new policy was announced in the March 2013 Budget on the use of the procurement process to promote tax compliance. This applies with effect from 1 April 2013 to all central government contracts of more than £5 million. Suppliers bidding for these government contracts must self-certify their tax compliance'.
This Council now agrees that:
- Both tax avoidance and tax evasion represent a threat to the operations of this Council, the services that it supplies to the communities that it represents, the effective operation of the local economy, our national economy, the economies of other countries and our relationships with them;
- As a consequence of the noted threats created by tax abuse within and beyond our communities this Council wishes to take action to tackle tax abuse in all its forms and as a result:
- Requires that the Chief Executive of the Council notes ‘Procurement policy note 03/14: promoting tax compliance' and adapts it for use as part of the procurement procedures of this Council excepting that the resulting policy shall apply to all companies bidding for contracts exceeding £xxx,000 in value, and to report back on this issue not later than Xx xxx 2015;
- Requires that the Chief Executive of the Council notes the ‘Fair Tax Mark' and consider the ways in which that certification process may be included in the changes to the tendering process noted in paragraph (a) above;
- Requires that the Chief Executive of the Council prepare a policy proposal for declaring XYZ a Fair Tax Area and shall detail plans for achieving this objective in cooperation with the local business community and the Fair Tax Mark by no later than xx xxx 2015;
- Requires that those who represent this Council when making decisions regarding investments that fund the pensions payable to past and present employees of this authority take tax abuse into consideration when assessing the suitability of those companies in the shares of which such funds might be invested;
- Agrees that this Council will actively support campaigns by HM Revenue & Customs and others, including Non-Governmental Organisations, that encourage tax compliance and an end of tax abuse in the area covered by this Council and beyond.
- Authorises the necessary expenditure to implement these proposals.
- Requires a report back on progress made with regard on each of these proposals not less than once quarterly for the next three years.
- Requires that the Council actively publicise this policy.
A Word version is available here.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Very timely as I have just agreed to help a local campaign.Very succinct and to the point as ever. Much appreciated.
Thanks
Why should my council tax payments find their way into your pocket, Mr Murphy? This is shameless. If your intent is to promote “fair tax” and not your own bank balance, make your resource material and the fair tax mark available for free.
And how would those who work on it get paid?
Have you taken legal advice on this?
If so, could you please share it with us?
It is very unlikely any Council could require bidders to have what is essentially a private (and not particularly transparent) accreditation. Bit of a no-no.
And if it only applies to companies, this creates an uneven playing field with other types of entities.
And we need to have an even playing field between UK bidders and non-UK ones. How does your suggestion meet that?
Apart from the legalities, the mood of the times is to lower the procurement requirements to make it easier for SMEs to win work. There is little appetite (at least in the local authorities I am aware of) to add a further requirement, given the costs.
It does not say they require
That would be impossible
But in the event of two equal bids it can be a tie breaker
And the focus of the motion is to apply the same criteria as government and investigate other issues
There is no way that can be illegal
I did think this through, very carefully for precisely the reasons you note
“It does not say they require”.
Then what criteria are we judging it against? There needs to be some objective fact which the bidder either meets or it doesn’t – such as a conviction of some kind.
Presently we can exclude for a conviction of “cheating the Revenue”. It is a standard question (have you ever been…). I have never known anyone to be answer ‘yes’.
“But in the event of two equal bids it can be a tie breaker”
If we can’t use it in the main part of the competition, it can’t be used as a tie breaker either.
“And the focus of the motion is to apply the same criteria as government and investigate other issues
There is no way that can be illegal”
I have no idea what this means. Can you please explain?
The motion drafted by Action Aid is fine, for what it is. A bit vague, and is likely to find its way into the huge pile of vague motions on a range of very worthy topics that accumulate over the years and get quickly forgotten by officers in their day to day work. There’s plenty of them in that pile. But perfectly legal.
Read the government procurement notice
And read the rest of the motion too
You clearly have not
I have read the Cabinet Office’s Procurement Policy Note some time ago, but didn’t put 2 and 2 together that you were cross-referencing it. Sorry.
But I was a bit confused why you are advocating a motion to get us to start doing something we (pretty much) already do. It would seem a daft thing to advocate, so I didn’t think that’s what you were referring to.
When I say ‘we already do it’, we do a cut down version of the Procurement Policy Note (i.e. a single question — ‘have you been convicted for cheating the Revenue’). Have been doing so before the Note was published.
The Procurement Policy Note only applies to contracts over £5m (rare to get them that big in local authorities) so the cut down version seems appropriate.
I can’t say with hand on heart that every Council asks this question, but I don’t know one that doesn’t.
The other questions you might ask are these:
1. Who checks whether the response to the self-assessment response is correct?
2. What would a contracting authority do if it found out (some time after the contract is awarded and work is under way) that the contractor had responded incorrectly to this question?
3. If a contracting authority excluded anyone before award, or terminated a contract after award, would there be grounds for challenge? A simple ground for challenge would be this: if this applied only to UK bidders and not to non-UK bidders, the UK bidder would have a good argument to say they were not treated equally — not legal!
It’s odd, isn’t it?
I am criticised for suggesting an audit
I am criticised for not suggesting an audit
What the notion I proposed was what the government consider legal
Beyond that i only suggested investigation
I am not sure how I could have been more careful
Ed note: Comment deleted
I have found you commenting under at least four names on this blog
You are in breach of the comments policy
There’s a few reasons why you could be seeing same IP addresses for unrelated users. ISP or company caching servers, TOR exit nodes, re-use of dynamic IPs, proxies and VPN providers, etc.
Maybe
But usually I find it is because one person uses more than on identity
I have read but never commented on this blog before!
Others say you have a habit of deleting comments you have no answer to. I did not believe them but clearly they are right.
It would seem the ‘Courageous State’ was written by the cowardly author.
Your IP address is being shared by a number of people saying remarkably similar things then
And if you’d read a) the government procurement policy and b) the motion you would have anyway found answers to all your questions
“Your IP address is being shared by a number of people saying remarkably similar things then”
Given I emailed from an office of around 300 people in the accountancy profession, I’m not surprised.
Even if I had been one person using a hundred different names it didn’t change my point. You have not taken legal advice on your proposed action and are suggesting Councils enter a legal minefield on procurement.
On this blog you say that the Fair Tax Mark couldn’t be ‘required’ and yet in your speech reported on a previous blog you demand that the Fair Tax Mark be required.
And I explained the difference
Interesting that your office is such a hotbed of apparently similar ideas
Thank you! I submitted the action aid motion to the Mid Devon District Council. It was printed on the agenda and the day before the council meeting the chairamn refused to allow the motion to be moved! I then submitted another motion taking out all references to ‘multinationals and developing countries……the chief executive ruled it out of order…so am very pleased to be able to use this motion which does make the whole issue more relevant to a district council.
Thanks
This was my concern
Can you let me know outcome?
If you need certainty drop references to Fair Tax Mark
Richard
I know you’re Irish, Richard, but do you have to publish a bog?;o)
I’ve got experience of bidding for public sector work. It’s not fun. Rightly or wrongly, it has become a game where the winner is who gets the most points in the process, with points awarded for ticking boxes. There is little room for a bidder to offer, or a tenderer to procure, something that doesn’t tick the right number of pre-assigned boxes… even where that might be the best option. It’s a process that’s grossly biased in favour of those most experienced at playing the game, and with the resources to make sure those boxes get ticked. That’s part of the reason the likes of Capita have become the beasts that they are. Public tender processes are a key weapon in the Corporatist arsenal.
I’m not criticising the tendering bodies themselves for this. Sometimes they are their own worst enemies, but I think they are stuck with a requirement to outsource (which often makes no sense) and over-rigid process rules/guidance that put ‘decision makers’ in fear of repercussions if they cannot ‘prove’ they chose the best option.
So, in that context, your proposal is simple rent-seeking. I’ll grant your the courtesy of assuming (and I do mean this) that this is absolutely not your intention. But that’s what it is. Organisations will feel like they have no choice but to apply because we can’t risk not ticking that box (bear in mind that we need to be ticking 95%+ to have a chance, there’s no wiggle room). Any organisations that can’t tick the box (because they are not covered, as oppose to because they fail) will lose out in the ‘computer says no’ approach that only ever scores a ‘not applicable’ as ‘nil points’. You can ask for common sense to prevail, but that goes entirely against the culture of much modern-day procurement.
Of course you’ll hinder those who can’t get the mark because they don’t comply, but that population will be skewed towards larger corporates who start with a huge advantage. It slightly evens the playing field between them the ‘compliant’ companies who can get the mark, but in the grand scheme of things that’s a very small win.
As an aside, the industry I work in is rife with tax avoidance that the FTM isn’t focused on. A company can be doing everything right for CT, but utilising offshore PAYE schemes, or creative VAT, or other such arrangements that cheat the Revenue out of far greater sums. I understand why FTM can’t immediately be a badge of good practice, but you must accept that those without particular knowledge of the issues will see it as a more comprehensive guide. It would be wrong to give it greater force while that is the case.
We can only start from where we are
And I do not think we are rent seeking, at all
But you can say so. That’s your right
But you should have also noted that the resolution is not binding on the issue in any way
As I said, I don’t think it’s deliberate. Your final line backs that up because you believe that putting this in procurement guidelines would just make it a consideration to be exercised along with everything else, and common sense/discretion would ensure that it was used in the spirit intended.
My contention is that the reality of procurement means that this is naive, and I have current professional experience to back me up – both directly in my own industry, and indirectly though peers going through the same issues elsewhere. Anything that *can* be a tick box, *is* a tick box. No correspondence will be entered into. My criticism is of the procurement processes rather than the FTM or the idea that it (or something with comparable intent) should be adopted as part of formal guidance. My employer would be much better off if there was something to prevent the ‘creative’ practices of others in our industry which, despite me being a neoliberal apologist for kitten-torture (or whatever it is you call me from time-to-time 😉 I have consistently, and successfully, argued against us adopting.
So if an organisation creates and controls a standard, and that standard becomes a de-facto* requirement in public tendering, and obtaining that standard requires a payment to that organisation, then that payment is rent. If you, as a part of that organisation, are recommending a course that leads to that outcome then, whether you intend it or not, you are seeking that rent. The only way for that not to be so is for the mark to be ‘open source’ and/or in the control of an accountable public body.
(* for clarity, I recognise that this is the bit we disagree on)
First FTM is a not for profit company
Second, right now I am not being paid by it
That makes it an interesting rent
Lee T is either just trying to create obstacles, or is just another victim of out-dated thinking.
1) Certainly this is not rent-seeking. As Richard has already explained, there needs to be a fee of the FTM, because otherwise those running it will not otherwise be paid. Companies that refuse to pay will have to consider the possible consequences.
2) We see the usual concern that SME’s will be placed at a disadvantage. Well, good. If only big corporations can spare the time and money to conform to government policy around general regulations and beneficial social engineering, then it is big corporations that we want. The biggest cannot hide, and can be properly controlled by the people’s representatives. (Well, once we have a non-neon-liberal government that is).