Polly Toynbee has written this in the last hour or so in the Guardian when discussing the importance of cracking down on tax abuse post the election::
Labour should use one of its great assets — the grand inquisitor Margaret Hodge — to head up a new Office of Tax Responsibility to oversee HMRC's pursuit of tax. Her years in charge of the public accounts committee mean she knows where the tax is hiding — and where public spending is wasted. She wants the loopholes closed right now, without waiting for international negotiations. Labour (like the Tories) isn't over-blessed with politicians who command trust, let alone public admiration, but she is one, and Eds Miliband and Balls should use her to chase avoiders. As the big business beasts come after Labour, announce this now. She'd put up a good pre-election fight-back, with her deep knowledge of tax and spending. The Treasury hates any interference, but if Balls is wise, he'll recognise what she could do to strengthen his hand.
Labour must not be rattled but go hell for leather after the missing billions. Any company threatening Labour had better look its own tax-paying record first: put Margaret Hodge onto them.
I can't imagine where she got the idea from.
And as she also notes:
On Wednesday the Institute of Fiscal Studies (IFS) gave its assessment of the dire effect of George Osborne's £50bn cuts to come, saying his proposals are the most severe of the 32 nations it analysed. Labour, the IFS says, can meet its aim by cutting departmental spending by £5.2bn, but still urgently needs taxes. Tax revenues have been far lower than forecast, says the IFS. Richard Murphy of the Tax Justice Network, says Osborne's gestures towards getting cash back from tax havens have often had the opposite effect. Murphy estimates that cutting corporation tax 28% to 21% has meant £9.4bn less was collected than the Office for Budget Responsibility forecast in 2010. Meanwhile, some £119bn a year goes missing in tax evaded, avoided, unpaid and cheated.
The scale of the task is all too readily apparent. Margaret Hodge would be a great person to head up a new organisation to tackle it.
There's more on the idea here.
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Corporation tax has become optional for “big business” since income can be exported to tax havens through interest charges.The only all-embracing solution that I can see is []a abolish corporation tax [b] abolish tax relief on interest charges [c] tax all sales and activities at the point of occurrence. In theory this might look like a purchase tax on the consumer/customer but in practice in a competitive economy it is a relatively unavoidable sales tax on the supplier.
That’s called raising the VAT rate
No thank you
This problem can be solved
I agree, again, with Richard. We already have VAT of 21% on most things we consume. We can clamp down on tax avoidance with international cooperation and a concerted effort from governments to really address the issue.
Ireland has made tentative steps towards reform and the USA have been unilaterally clamping down for a couple of years now. It’s not impossible.
And in today’s Guardian we also see the extent to which hedge funds are funding the Tory party, and the increasing hostility of big business more generally and the wealthy to a potential Labour government. Consequently, if I were a Labour strategist getting some policy statements out that demonstrate that it is going to get tough on big business is simply a no brainer, as whatever the apologists in the party say (eg. Mandelson) big business simply tolerated New Labour through the Blair years, but clearly sees no merit/profit in doing so now. Continuing to act as if this is not the case simply alienates a large percentage of ordinary people who might/will vote Labour, while actually gaining nothing from big business.
On a related point, beyond the call for an Office for Tax Responsibility Labour also ought to give an explicit commitment to reviewing the membership and affiliations of all the Boards of departments and government agencies and of all regulatory and advisory bodies (which would include Monitor if it isn’t dealt with under other plans for the NHS), and give an explicit commitment that within 18 months of taking office the membership of all such bodies will be genuinely representative all the primary stakeholders within those policy/interest areas.
Packing these bodies and institutions with stakeholders who almost exclusively represent the interests of big business/finance/the 1% is in my opinion one of the seldom recognised scandals of this government (equivalent to gerrymandering) and has and is distorting policy making, implementation and evaluation across the board. And should Labour get into power and attempt to implement any policies that don’t conform to the extreme neoliberalism of the current government they can expect them to be stonewalled and distorted every step of the way by the Tory placemen (which they mostly are) liberally placed in positions of power and influence across government and the public sector more generally (Andy Burnham take particular note in respect of McKinsey people and alumni in the DoH, Monitor, and more generally across the NHS).
Good point
The one thing the Office for Tax Responsibility would not need is the Big 4 on its board
I’m not sure that Margaret Hodge is exactly the right person, as she’s a member of one particular party. This Office should be truly independent, and that means headed by someone who:
1) Loses no time in cherishing the truth
2) Can see off vested interests with brilliant put-downs, without ever losing their poise
3) Is already changing the way tax is discussed across the globe
4) Has invented the tools required for eradicating the avoidance disease
5) Someone who has Courage in the face of the Neo-Liberal forces of oppression. And never flinches.
Just where oh where would we find such a person?
Pass
Don’t be bashful
Richard Brooks
Prem Sikha
Nick Shaxson
??
John Christensen
Now let me think 😉