The economics of the playground – the message from senior tax inspectors to HM Treasury

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I was at a meeting in Westminster this morning organised by the Association of Revenue & Customs - the union representing the senior staff of H M Revenue & Customs, which is affiliated to the Tax Justice Network.

Accountancy Age has reported the comments made by Graham Black, its president who said:

THE TREASURY IS participating in the "economics of the playground" by cutting the budget of HM Revenue & Customs, the head of the tax inspector's trade body has said.

Graham Black, who is the president of the Association of Revenue and Customs, said that there was no rational basis for the Treasury to cut HMRC's budget, which it was only doing to send a message to other government departments. He said that cuts disproportionately affect HMRC's core compliance work, which generates revenue - the only government department to do so.

All present agreed with him, bar the Tory MP, Mark Garnier. He displayed the quite alarmingly extremist position of so many Tory MPs, advocating a Hong Kong style 15% flat tax system and suggesting that tax evasion was a natural, and seemingly justified reaction bypeople to high taxes on items such as cigarettes.

This man is not from the playground: he clearly advocates the destruction of society as we know it and the break down of law and order to achieve it. Unsurprisingly his comments were condemned by others present.

Not me though: I took the chance to refer to my new report 500,000 missing people: £16 billion of lost tax. The reaction to the simple explanation of the data in theta report was one of shock by some present: i suspect that this report will have a long shelf life as the reality of the maladministration behind it sinks in.

But I'd stress - that maladministration is not the fault of HMRC staff or Companies House staff: it is the failure to deliver them with the resources they need to do their job properly. The economics of the playground is behind this and the Treasury is to blame, as Graham Black said.

When will they listen? As Graham also said - work on the tax gap by the likes of ARC shows HMRC could deliver billions extra to the Treasury but they refuse to take the opportunity. It's as if they know the numbers that will win next week's lottery and refuse to buy a ticket, he said.

But it's worse than that.

It's the Tories deliberately supporting tax evaders.

And deliberately supporting tax avoiders.

And deliberately undermining markets.

Now why would they do that?