Search Result for michael meacher — 98 articles

Oldham honours the memory of Michael Meacher

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The late Michael Meacher MP was a friend of mine with whom I had the honour to work closely on some issues during the last parliament. His death was a shock and a loss and so I was pleased for that reason to see that the people of Oldham honoured his memory by returning a Labour MP - with an increased majority despite all that had been suggested in advance - in yesterday's by-election in his old seat. I have no doubt that Michael would have preferred to still be the local MP, but given the circumstances I am sure he would have been pleased with this outcome.

Politically it is also a significant outcome. Despite the extraordinarily negative reporting - even after the victory - from the likes of the Guardian (who only a day or so ago were suggesting turnout may only be 20% when it was actually 40% and that Labour would struggle, which turned out to be complete nonsense) the actual result repeated the May 2015 trend of delivering the unexpected.

The Labour vote went up, significantly. It is claimed this is because of a strong local candidate and I have no doubt that helped, but so was Michael incredibly well known in May. And it has been claimed that this result was despite, rather than because of, Jeremy Corbyn - a man Michael Meacher had been proud to support. I have to say it just seems to me that this was a strong Labour vote for three reasons.

First, in memory of Michael: there has been a strong tradition of Labour voting. This was, no doubt, reflected in organisation on the ground.

Second, the candidate is reported to be good, and I am sure that is true.

Third, there is national politics. In Oldham a vote to go to war on Wednesday may have been significant. And an anti-austerity message from Labour nationally no doubt resonated. How do we know this is likely? I'd suggest the evidence is in the Conservative vote halving - most going to Labour.

And UKIP? It simply also ran, badly, again. It picked up a few Tory votes but not in any way enough to make a difference.

This then was in many ways a conventional referendum on the government in office and the Conservatives seem to have done badly and Labour surprisingly well.

In that case Labour is definitely a credible opposition. It is, in fact, a winning opposition. And the issue of note is the collapse in the government vote, which has major implications for the Brexit vote to come.

In the meantime, those who have said Labour is over need to think again. That appears not to be the case. And for the sake of democracy in the UK that is good news.

Again, I think Michael would be pleased.

Michael Meacher: a note of appreciation

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Many readers will be aware that Michael Meacher MP died yesterday. 

I had the chance to work with Michael during the last parliament and last saw him just four weeks ago. He was 75, but was re-elected to the Commons in May and had no intention of retiring: politics was his life. He had been in the Commons for more than 40 years.

This is not an obituary: I did not know him well enough to offer any such thing. It is instead more a note of appreciation and thanks. I had known Michael for a number of years when in 2012 he won the chance to present a private member's bill in the Commons and asked me if I would like to draft a bill on a tax justice theme. After discussion the General Anti Tax-Avoidance Principle Bill resulted.

The Bill was lost, of course: it was talked out by government back benchers but it served a useful purpose. By presenting a stronger Bill than the government sponsored General Anti-Abuse Rule (which I was also involved in writing) those opposed to any such idea felt duty bound to back the government rather than Michael's tougher measure. One of its key ideas - that penalties apply if the GAAR is abused - has now also been adopted by George Osborne.

A year later Michael won in the ballot to present another Bill, and we were back in action once more, this time with the United Kingdom Corporate and Individual Tax and Financial Transparency Bill 2013-14. This out forward an amalgam transparency measures including on the record country-by-country reporting as well as automatic information exchange from UK based banks to HMRC on corporate activities to tackle tax evasion.

I well remember Jacob Rees-Mogg talking this Bill out saying he did not want any more tax collected in the UK fir any reason and Michael's indignation at his doing so. But that was Michael: a man who would try on a point of principle and do it again even if he had lost if he thought it the right thing to do.

I liked Michael. He was an unashamed Christian socialist who was not particularly popular with colleagues as a result who thought doing the right thing more important than that popularity.

I will miss him. My condolences to his family, parliamentary staff and friends.

Today’s schedule

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It's budget day, and that means I am busy.

I'm filming at 11 for a documentary.

ThenI am on Radio 2 to comment on the budget - at about 1.30, I expect.

Then it is to ITN and Channel 4.

And after that I'll be blogging here and at Left Foot Forward, at least.

And at 6.30 I am speaking in the Wilson Room at Portcullis House, Westminster at a meeting on radical alternatives to austerity organised by Michael Meacher MP at which you are welcome.

The PWC employee behind LuxLeaks should not be charged

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The following letter, to which I am a signatory, is in the Guardian this morning. I am not sure I need to add to what it says, but if there was to be justice this Christmas this would be one the cases where it would change the course of events:

We deplore the decision by Luxembourg to bring criminal charges against someone they believe to be the whistleblower responsible for passing to the media confidential rulings awarded by the Luxembourg tax authorities (Report, 20 December). We believe these disclosures were manifestly in the public interest, helping to expose the industrial scale on which Luxembourg has sanctioned aggressive tax-avoidance schemes, draining huge sums from public coffers beyond its borders.

The so-called LuxLeaks papers have already forced senior Luxembourg politicians, past and present, to admit there is an urgent need to reform the way multinationals are taxed. The revelations have also transformed the international tax debate, prompting the finance ministers of France, Germany and Italy to write to the European commission calling for urgent action. In their words: “It is obvious that a turning point has been reached in the discussion on unfair tax competition ... Since certain tax practices of countries and taxpayers have become public recently, the limits of permissible tax competition between member states have shifted. This development is irreversible.”

We believe this development is in large part thanks to the brave, public-spirited actions of an individual who ensured the contents of confidential tax rulings granted in Luxembourg became public. In contrast to his actions, Luxembourg has shown itself reluctant – up to this week – to disclose, even to the European commission, the criteria by which it offered businesses confidential tax rulings. Officials at the commission are tasked with ensuring such rulings do not constitute illegal state aid, and are already investigating whether Luxembourg rulings separately granted to subsidiaries of Amazon and Fiat violate state-aid laws.

Until last Thursday, Luxembourg had been firmly resisting what it told the European court of justice were speculative and disproportionate requests for information on its tax rulings from the commission. But now it has abruptly changed course and is complying with all requests. We believe this change is the result of the LuxLeaks scandal. Meanwhile, Margrethe Vestager, commissioner responsible for competition issues, has made clear that the commission is treating the LuxLeaks papers as “market information” and is actively reviewing these tax rulings to decide whether or not they should be made the subject of further illegal state-aid cases. While we understand and agree the rule of law must be observed, we note that Luxembourg prosecutors are required to have in mind whether or not the public interest is served by pursuing a criminal prosecution. We believe there is no public interest in prosecuting an individual suspected of bringing the LuxLeaks papers to the attention of the world.

Raymond Baker Global Financial Integrity
Jack A. Blum Tax Justice Network USA
José Bové French MEP (Green)
Franziska Brantner German MP (Green)
Richard Brooks Author
Prof A J Brown Griffith University
Terri Butler Australian MP (Labour)
John Christensen Tax Justice Network UK
Allison Christians McGill University
Frank Clemente Americans for Tax Fairness
Alex Cobham Centre for Global Development
Rosa L. DeLauro US Congresswoman (Democrat)
Karima Delli French MEP (Green)
Anneliese Dodds UK MEP (Labour)
Lloyd Doggett US Congressman (Democrat)
Rev Prof Andrew Dutney Uniting Church in Australia
Bas Eickhout Dutch MEP (Green)
Prof Peter Eigen Transparency International
Sven Giegold German MEP (Green)
Andrew Giles Australian MP (Labour)
Jesse Griffiths Eurodad
Gavin Hayman Global Witness
Nathaniel Heller Global Integrity
John Hilary War on Want
Martin Hojsik ActionAid International
Kelvin Hopkins UK MP (Labour)
Tim Hughes Involve
Yannick Jadot French MEP (Green)
Cathy James Public Concern at Work
Lord (Joel) Joffe UK member of upper house (Labour)
Eva Joly French MEP (Green)
Ged Kearney Australian Council of Trade Unions (ACTU)
Paul Kenny GMB union
Dr Sheila Killian University of Limerick
Philippe Lamberts Belgian MEP (Green)
Archie Law ActionAid Australia
Mauricio Lazala Business & Human Rights Resource Centre
Daniel Lebegue Transparency International
Eric LeCompte Jubilee USA
Laetitia Liebert Sherpa
Caroline Lucas UK MP (Green)
Benoît Majerus University of Luxembourg
Adrienne Margolis Lawyers for Better Business
Sorley McCaughey Christian Aid Ireland
Len McCluskey Unite the union
Porter McConnell Coallition for Financial Transparency
John McDonnell UK MP (Labour)
Katherine McFate Center for Effective Government
Michael Meacher UK MP (Labour)
Austin Mitchell UK MP (Labour)
Richard Murphy Tax Research UK
Melissa Parke Australian MP (Labour)
Cedric Perrin French senator (UMP)
Prof Sol Picciotto Lancaster University
Bernard Pinaud CCFD-Terre Solidaire
Prof Thomas Pogge Yale University
Marc Purcell Australian Council for International Development
David Quentin Tax Justice Network UK
Michèle Rivasi French MEP (Green)
Friederike Roder ONE
Prof Tulio Rosembuj University of Barcelona
Molly Scott Cato UK MEP (Green)
Mark Serwotka PCS union
Nick Shaxon Author
Prof Prem Sikka University of Essex
Nick Smith UK MP (Labour)
Jim Stewart Trinity College, Dublin
Lord (Ben) Stoneham UK member of the upper house (Lib Dem)
Dr Andy Storey University College Dublin
Ernest Urtasun Spanish MEP (Green)
Tom van der Lee Oxfam Novib
Denis Vienot Justice et Paiz
Duncan Wigan Copenhagen Business School
Rebecca Wilkins FACT Coalition
Dan Wootton Uniting Church in Australia
Dr Mark Zirnsak Tax Justice Network Australia

Ed Balls tackles a major General Anti-Abuse Rule deficiency

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I will break my post op silence to note a campaign win this morning. Ed Balls blogged last night that:

Tackling tax avoidance is a key part of our economic plan. A fair and robust tax system is vital if we are to bring down the deficit, safeguard our National Health Service and maintain public support for the dynamic open economy we need.

At the moment, we are going in the wrong direction. The amount of uncollected tax – the so called ‘tax gap’ – rose again to £34 billion in the latest year on HMRC’s own estimates. It’s up by £3 billion under this government and tax campaigners have suggested the true figure could be much higher.

Having then noted Labour's latest corporation tax plans he added:

But this agenda will only be delivered if HMRC has the powers and resources it needs to act. We have supported the introduction of a General Anti-Abuse Rule (GAAR). Those who set up abusive schemes should run the risk of being caught by such a rule.

But it is currently a GAAR without teeth. Those who are caught have to repay the tax they tried to avoid, but they do not face a penalty. There is still no disincentive to try and game the system. That is why Labour will bring in a tough penalty regime for the GAAR, with fines of up to 100 per cent of the value of the tax which was avoided. For the first time this will provide a tough and genuine deterrent to those who try to abuse the system and avoid paying their fair share of tax.

I welcome this. I included a penalty regime in the general anti-avoidance principle I wrote for Michael Meacher that was presented as a Private Member's Bill to the House of Commons  (by, in effect, offering a clearance system for transactions so taking them outside penalty risk)  because without teeth any such provision has little more effect than a polite request to not misbehave in future.

I also highlighted the absence of a penalty regime in my commentary on the GAAR when it was published. And the very limited references to penalties in the GAAR guidance are only there because of what I tried to achieve on this issue when on the GAAR advisory panel that largely wrote this material.

But, and I have to add this but, adding a penalty regime to the GAAR is only step in the right direction for the GAAR. The 'double reasonableness test' and GAAR advisory panel both have to go before it has anything approaching credibility. Curiously Scotland has already achieved those goals in its new GAAR. My hope is Ed Balls will go down that path too.

But, as the person who fought hardest for this penalty regime I welcome this move: it's emphatically an appropriate step to take and a damning indictment of the current government's lack of willing to really tackle tax abuse that such a regime was not included in its original version - despite my very best efforts to draw the need to its attention.

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Please note that I am out of action for normal work purposes at present as I am recovering from an operation to have my gall bladder removed. I am blogging occasionally but comment moderation may take a while. I hope to be back to normal soon.

Labour’s new tax policy: welcome moves in the right direction

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I have already noted Labour's press release, issued overnight, that might best be seen as the opening salvo in the tax debate that is going to run from now until the next election - and which is bound to be a key element in who might, or might not, form the next government of this country.

There is a lot to welcome in Labour's announcement.  First, and perhaps foremost, the fact that there has been an announcement is in itself significant. It is the clearest indication that Labour is moving on from what, for many, has been a frustrating period when saying precisely what it might be about on such key issues has been hard for many.  There are commitments in this announcement, and that is welcome.

Secondly, and many will be disappointed by this, there is no indication as yet (although there might be on Monday when Ed Balls  makes the speech that this announcement precedes)  on such key issues as tax rates, the approach to redistribution, how fairness will be hardwired into the system, and, perhaps, how tax and benefits will interface.  But if none of those things happen yet, then I have sympathy for Labour. If I was in office I would not want to say them either: announcing budget decisions in advance simply encourages tax evasion, as was seen when the 50p tax rate was announced to early. Caution on these issues is required.   If that is frustrating, so be it: politics is all about the art of timing, and the 2015 budget cannot be announced now.

What we have got today is, however, something which may be at least as significant, which are statements that give a clear indication of how Labour is thinking on tax.  As a tax campaigner I welcome this list.  I should also be candid: in one or two respects, I think I recognise my influence on this list:  it is hard for me to complain about that.

The devil, though, is always in the detail in such announcements but on this occasion I see more to celebrate, than to worry about. Let me give some examples.

The announcement on Eurobonds looks technical, but its more than that. It is aimed at City shenanigans where this abuse is popular and widely used to shift profits offshore.  The message has more in it than the apparent simple desire to close a loophole: it says financial engineering is now considered fair game to be controlled. This has much wider implications.

The commitment on tax transparency is also much deeper than it might appear to be from the announcement made. There is a commitment to a register of beneficial ownership of companies, and a threat to impose this on our tax havens if they do not willingly comply. That's the language many have been looking for. There's a also a demand that company's publish details of what tax they pay. This looks very like a commitment to country-by-country reporting whether other countries demand it or not. That is , something I have long advocated.

The announcement of better regulation of dormant companies is for me particularly welcome. It adopts a proposal I have made most recently in my report 'In the Shade', published last month. It also lifts the idea almost straight from the Private Member's Bill I wrote for Michael Meacher in 2013. I believe that the ease with which these companies can be abused is giving rise to substantial tax losses. This proposal says that Labour is not just willing to talk about tax avoidance, but tax evasion as well. For too long politicians have ducked that issue.

As they have also ducked the Tax Gap until now. Margaret Hodge has done great work picking this issue up, again, I admit, building at least in part on my work. Labour has now said this will become a key issue at the heart of its policy. That's very welcome indeed, as its commitment, also following Margaret Hodge's lead, to look at how tax allowances are being used to help tax avoidance. This is neat thinking: tax abuse is not just offshore, it can happen at home too. This policy is saying that's fair game for review too. When Labour is opposing a government who seems to think tax giveaways for big business are core to its thinking that is a key differentiator.

The commentary on international tax developments is good too. The OECD has to deliver on its Base Erosion and Profits Shifting  project. Labour offers clear support for that process but at the same time says it is not going far enough by highlighting the fact that this is no time to backtrack on any commitment and is instead the time to redouble and extend efforts to create a level playing field on which the multinational corporations of the world can play, with fair competition the goal. The nuance in the announcement is subtle, but important and essential, especially when it comes to developing countries who have always been at the forefront of the tax justice concern.

So why then pick on abuse in the construction industry? I think that here the message is threefold. First, this is joined up thinking. Labour intends to build houses: it does not want the money spent lost on tax abuse. Second, it says it is not just big company abuse that is in the sight lines; so too is common spread mispractice. And lastly, the message is that Labour is aware of such detail. That in itself sends out important messages relating to competence.

So, I welcome the announcement, and the detail, but the question to always be asked on such occasions is what is missing. I have a list, because I'm never going to be entirely happy with all any politician will give me. This was an initial reaction: 

1) Will companies be required to disclose their UK profits and tax paid in their accounts? They had to until 2005. Now it's nigh on impossible to find out. This could and should be clarified because it is key to holding big business to account in this country.The hint is present in the announcement. I really want to know the detail.
2) At the same time Labour should make companies explain their current UK tax bill and why it is not the expected rate. Accounting standards do not require this and companies can hide behind those rules rules and not disclose what is happening. The the onus has to be on them. They know, after all. That data can then be used to find out what reliefs may be abused. This all aids evidence driven policy agendas.
3) Country-by-country reporting on public record has massive support - and we're getting it for banks - so why not a commitment to require it for all public companies? They're going to have to prepare it for tax now because of OECD demands. There is no cost of publishing t now as a result. The world needs to know who abuses tax havens and this data would tell us.
4) There is also no mention of more resource for HMRC. Labour has made this an issue of this in recent tax announcements but it is not explicitly in this one. It can be cost justified by extra revenues targeted which avoids any suggestion of a spending commitment.
5) A GAAR review could also be announced. This would be a simple step towards what we really need - which is a general anti-avoidance principle.
6) In the same vein, Labour could commit to purposive legislation - which says what it is meant to do on the tin. That way Labour people will better understand tax. That's a key part of the simplification agenda.  It also makes it harder for abuse to be ruled out of order by courts and tribunals.
7) I might also hope for more commitments relating to tax evasion I would question why we need a £50 note. I might also hope for a legal limit on the amount that can be paid in cash on any transaction.
8) I  would also want banks to report all people who have erratic deposit patterns in bank accounts as potentially self employed - which is where a massive part of the tax gap is. This is the next step beyond the commitment on dormant companies.
9) Next I would like a commitment to keeping HMRC in market towns - HMRC needs a public face, and eyes and ears locally.
10) Finally I would commit to boost transfer pricing resources at HMRC to tackle big business abuse quite specifically.
But by the end of that list I am moving from policy into detail. At a policy level Labour has hit a lot of the right buttons today. I welcome that. I look forward to seeing the detail, and the delivery.

The government has created a new honesty box for corporate fraudsters to disclose their crimes and I guarantee not one will

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The government has announced today that:

Measures to improve the transparency of who really owns and controls UK companies have been announced by Business Secretary Vince Cable today. Ministers have confirmed that the Government is to proceed with an open, publicly available beneficial ownership register – a G8 commitment announced by the Prime Minister in 2013. This shows that the UK is leading the world in taking forward measures to enhance corporate transparency.

Adding a little more detail they have said:

A central open registry of information on companies’ ultimate controllers and owners maintained by Companies House. The registry would hold information on individuals with an interest in more than 25 per cent of shares or voting rights in a company, or who otherwise control the way a company is run. Companies will need to supply these details to Companies House when starting up and update them at least once every 12 months. This will include details such as the name, date of birth and nationality.

According to the the Department for Business, Innovations and Skills:

This will help tackle tax evasion, money laundering and the financing of terrorism, and improve the investment climate in the UK.

It is hoped greater transparency will mean honest entrepreneurs and investors can do business more securely in the UK and not be disadvantaged by those who don’t play by the rules. This follows the Business Secretary’s announcement earlier this week which seeks to beef up the director disqualification rules.

Well, I'm sorry to dispel the bank holiday mod of optimism that  Vince Cable does, I am sure, want us to feel about his latest best efforts, but  frankly this is all an exercise in window dressing.

Of course I want a register of beneficial ownership of companies in the UK, just as I also want a register of trusts that shows who benefit from those  so that they cannot be used to disguise the ownership of companies.  In principle, therefore, I should welcome this move, but I can't for one very simple reason,  and that is that there is no hope whatsoever of these requirements being fulfilled.

That's a claim that needs explaining, and  the explanation is simple.  Research I undertook in 2011, which I am currently in the course of updating,  reveals that approximately one in five of all annual return forms that should be submitted by companies in the UK, which form is the document on which this new information  on beneficial ownership will be  provided, are  never supplied to Companies House by the companies that have legal obligation to  submit them.  Almost invariably no penalties are imposed for failing to supply this form: instead, rather obligingly, Companies House commences arrangements for the company  that has failed to comply with the law to be struck off  the Register of Companies, thereby removing the directors  of that company from all further obligation to make any disclosure  regarding its affairs.

So,  what the government is, effectively, creating with this new law is an honesty box arrangement where it is saying to all criminals using companies for the purposes of commercial fraud, illicit activity such as money-laundering, or tax fraud involving evasion  that the government would be  very grateful if those criminals would be so kind as to leave their names and addresses on public record so that officials might  call on them later but if they are not so disposed, then Companies House will be equally happy  to erase all trace of their misdemeanour from the record instead, without making further enquiry, or imposing  any penalty.

You might think that in saying this I being just a little facetious, but this, in reality is exactly what this new arrangement represents.  To describe this new law as a fig leaf to  hollowly fulfil a promise David Cameron made at the June 2013 G8 summit is being kind, in the extreme.

What really annoys me is that I did, in face-to-face meetings with the government during the course of the consultation process  for this new legislation, make clear that there was a very simple alternative arrangement available to them that would ensure that this new law could be comprehensively enforced.  In Michael Meacher's 2103  Private Members Bill in the House of Commons entitled the United Kingdom Corporate and Individual Tax and Financial Transparency Bill,  which I drafted on his behalf, and which Bill  was vigorously opposed by the government  and Conservative backbenchers ( in the latter case largely because some, like Jacob Rees Mogg, feared it might result in more tax being paid)  I suggested a very simple requirements to ensure that the information to disclose beneficial ownership was verified by third parties, meaning that a reliable register of such ownership could be created in the UK.

My proposal was based on the simple fact that, as a matter of fact, every bank that now opens an account for a UK company is required by law to identify the beneficial owners of that company before they can proceed. Therefore, given that the vast majority of UK companies bank with UK banks, there is already available all the information that is needed to create this register of beneficial ownership and all we need to do is require that banks submit this information, which they already hold, to Companies House once a year to confirm that they are, first of all, running a bank account for the company in question (which then also proves that the company is trading, meaning that they are necessarily going to be required to  submit a corporation tax return as well) and secondly that their ownership has been proven.

Of course there would be a small cost to this, but I stress, the cost would be small. After all, the banks necessarily hold this information in a database already, and to supply that information in bulk on to Companies House would, I suspect,  require minimal spending.   We could even compensate them for that cost: at present the annual return fee for a company is just £13.  If that was increased to something only very slightly more realistic (call it £30)  it is likely that more than £42 million could be raised to cover the cost of securing this essential information that would then verify that the Register of Companies that we have available to us to be used to monitor the affairs of trade in this country would actually contain useful, relevant and reliable information. But note that no such proposal is made in the announcement: this is apparently going to be a totally unresourced change, such is the government's commitment to it.

Candidly, it's very hard to think that this government is not on the side of the criminal, the fraudster and the tax evader on occasion, because that's what their behaviour suggests.

 

Principles not platitudes: 13 months from an election, Labour-leaning thinkers need to be doing (much) better than this

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It would seem that I am not the only person who is concerned about the Compass led letter to the Guardian from left wing think tanks on Labour's policy direction. My friend and occasional co-author shared that concern and sent me the following comment which I offer here as a guest post.

 

Yesterday the left-of-centre umbrella group Compass, whom I have supported and worked with for several years, made the front page of the Guardian with a letter signed by an impressive collection of over 20 thinktanks from across the political spectrum, ranging from CLASS on the left to Progress on the centre-right, calling for the Labour party not to run a ‘safety-first’ 2015 election campaign but instead to adopt a set of new principles aimed at producing a “transformative change in direction”.

 

I share the frustrations of the signatories to this letter. The current Labour policy platform appears to comprise little more than a decision to support most of the reactionary, pernicious and objectionable policies from the ConDem coalition for fear of upsetting far-right media barons. It is difficult to imagine any opposition party winning office in this manner. Why would the public elect an ersatz Tory government under Ed Miliband when David Cameron - propped up securely by Liberal Democrat collaborators - is so good at being the real thing? One of the main problems for Labour is that with little more than 12 months to go before the election, Jon Cruddas’s policy review has still yet to produce firm recommendations; with the result that the Shadow Cabinet has little of substance to say other than that it supports George Osborne’s spending cuts, the welfare cap, Help to Buy and many other ConDem monstronsities. At the same time Ed Miliband tours the country as a messianic figure, making admirably high-minded speeches on the need to reduce inequality and transform capitalism while failing to support any policies which might deliver on these fine aspirations.

 

Against this uninspiring backdrop, it is understandable that many think-tankers feel Labour has lost its way. But an alternative approach needs to be based on principles - not soundbites or platitudes. And it needs to offer a clear economic and political alternative to ConDem policies. Sadly the thinktank letter to the Guardian fails on both these counts.

 

The letter starts well enough: the first paragraph gets most of the challenges right. The financial system still threatens to bring the entire economic system crashing down. Austerity has been a disaster and is wrecking families’ lives across most of the income distribution, but especially for the least well off. Climate change is rapidly heading completely out of control; and the democratic process bypasses huge swathes of the country, with the result being an utter contempt for all mainstream politicians. I’d add a terrifying erosion of civil liberties by the police and the intelligence services to that list but basically most of the diagnosis is all present and correct. I’d also accept - albeit grudgingly - that with the Greens only on 3% maximum in the latest polls, only Labour has the means to deliver a progressive alternative to the ConDems in 2015.

 

But after that things fall apart. Five principles are advanced: (1) accountability of institutions to stakeholders; (2) devolution of state institutions; (3) “prevention of the causes of our social, environmental and mental health problems”; (4) co-production of public services; (5) “empowerment of everybody”. None of these are wrong in themselves, although some certainly raise question marks for the left, as they are entirely compatible with aspects of what the ConDem government is doing. To use an example from the social security system, the replacement of national rules for Council Tax Benefit and the social fund loan system with a patchwork collection of rules set by local councils is both inefficient (as the system has to be designed 400 times rather than once), unfair (as clear entitlements have been replaced with a postcode lottery) and regressive (many local authorities have cut back severely on the funding available for working age families in particular). What this shows is that “devolution of state institutions” is not, in itself, a particularly left-wing or progressive idea. It is possible to devise devolving policies which do deliver on these objectives but the devil is in the detail.

 

Co-production is another area which can be pursued for left-wing or right-wing ends, largely depending on the overall level of resources being made available to public service users. In social care, for example, the language of co-production is currently being used by cash-strapped local authorities to provide a linguistic shield for swingeing cuts in eligibility which leave many vulnerable people to fend for themselves). Accountability of institutions is obviously a necessary condition for a progressive future but not a sufficient condition. After all, the Co-op was formally accountable to its members, but in practice, whatever the organisational statutes promised, the reality was an organisation mimicking the worst excesses of the plc banking boom, with a chairman out of his brain on crystal meth. Delivering on “empowerment” - in the shape of true economic and political democracy - would ensure accountability if done properly, and is one of only two principles that mark this out as a specifically left-of-centre statement. The other is “prevention of the causes of our social, environmental and mental health problems”, which - when one thinks about it for a moment - is basically a thinly coded (and welcome) call for the end of capitalism as we know it.

 

So, in my view only two of the principles suggested in the letter offer an unambiguously left-of-centre perspective; the other three could form part of a coherent left programme if fleshed out, but by themselves they do nothing to mark this agenda out as anything other than business as usual. However, the biggest failing of the letter isn’t to do with what’s in it, but rather what’s not in it. There is a gaping economy-sized hole in this statement; and even though the UK economy is considerably diminished since 2008, the hole is still a very big one! One has to ask the obvious question: given that ConDem austerity has been an unmitigated disaster, shouldn’t one of the key principles of this kind of statement - perhaps the fundamental principle - be that austerity needs to be ended, as in, NOW?

 

As it happens, the organisation that compiled the signatures for this letter - Compass - produced a very coherent alternative to austerity a couple of years back. It was called Plan B, and its basic policy recommendation was a flat-out rejection of ConDem austerity economics, instead substituting a programme of reversing most of the cuts in public expenditure since 2010, and massively increased public investment in infrastructure and renewable energy - funded in the short run by green quantitative easing, and in the longer run by a substantial increase in the tax burden on the wealthy and the super-rich (by means of, among other measures, a. financial transactions tax, land value tax, and a General Anti-Avoidance Bill along the lines of the version drafted by Richard which Michael Meacher has tried to introduce). Plan B was a clear and principled vision which involved the clear rejection of neoliberalism and austerity in favour of building a completely different kind of economy. For sure, it was only a starting point, and many of the policy prescriptions within it needed a lot of fleshing out, but it could have - indeed, should have - formed the basis of a truly radical Labour policy review.

 

Whereas instead, the policy presciptions of Plan B have been totally ignored by the Labour leadership, in favour of (it seems) meekly signing up to George Osborne’s economic agenda. Given the total failure of Labour to mount a convincing challenge to “ConDemnomics”, this thinktank statement of principles - although undoubtedly well-intentioned - seems to me a depressingly retrograde step. An election is only thirteen months away, and if Ed Miliband is to achieve anything at all in government rather than being a British version of Francois Hollande - marking time for five years before being turfed out in a right-wing landslide - it will be necessary to spend the next six to nine months translating Ed Miliband’s admirably high-minded speeches into a radical policy agenda. Achieving that would be worth a lot more than abstract principles and statements of purpose, but given that abstract principles seem to be dish of the day at the moment, let me finish by offering my own five-point list, which does have some overlap with the think-tank letter but offers much clearer dividing lines. It would be impossible to imagine the five points below emanating from the Conservatives, or indeed the Liberal Democrats.

 

(1) Austerity has failed and must be compeletely and permanently abandoned. The next Labour government needs to preside over a significant increase in public expenditure (which should be targeted at the least well-off households) and taxation (which should be targeted at the most well-off households).

(2) The current neoliberal institutional apparatus, the rampant growth of finance capital, and the stranglehold of multinational corporate power are a fundamental threat to our well-being. UK Government institutions - and transnational institutions such as the EU - need to be reformed and where necessary strengthened so that they are sufficiently powerful to take on and roll back these neoliberal forces.

(3) Subject to the achievement of point (2), power should be devolved in government and across public, private and voluntary sector institutions to move us towards full economic and political democracy in as many areas as possible.

(4) The economy needs to be re-orientated - at a local, national and global level - so as to address the cause of our present environmental, economic and social problems. In some ways this will mean the end of the current capitalist system as we know it.

(5) Fundamental reforms to the balance between state and citizen - safeguarding freedom of speech and assembly, and the right to privacy - are needed to address the UK’s severe civil liberty deficit.

 

I remain committed to working with Compass, CLASS, the Fabian Society and many of the other thinktanks on this list to make these principles a reality.

I would add I share Howard's final sentiment, as well as his other concerns.

The US had public corporation tax returns 100 years ago. We need them back, now

Posted on

This opening paragraph from a new article  (paywall) by Reuven Avi-Yonah and Ariel Siman will surprise many people:

When the U.S. originally enacted its corporate tax in 1909, corporate tax returns were public.  The rationale was that taxing corporations was a means of controlling their excessive power, and sunshine is the best disinfectant.

By the 1930s corporate lobbying had put an end to that. We've never had such a system, but the question is, why not?

Michael Meacher made a proposal for public corporation tax returns in a Private Member's Bill I wrote for him last year. It would be a powerful disinfectant, especially if that return was combined with country-by-country reporting.