Why Indian tax evasion costs the UK

Though increased tax justice could help both developed and developing nations, it is unlikely we can

The UK Uncut protests have put tax justice on the agenda as never before. But, while we tend to see this as a problem of domestic policy -- equating amounts dodged in corporate tax to amounts cut from the public sector -- could it also hold the answer to reducing our aid budget, as well as decreasing developing nations' reliance on charity?

The UK's decision to continue aid to India, recently confirmed in its 2011 bilateral aid review by International Development Secretary Andrew Mitchell, has been controversial to say the least, especially given that other areas face deep spending cuts.

In these straitened financial times, countries across the spectrum are having their aid stopped, from incredibly poor nations such as Burundi, Niger, and Lesotho, to burgeoning economic powerhouses China and Russia. So why will aid continue to India at a cost of around £280m a year to the UK?

India has nuclear and space programmes, and has enjoyed above 8 per cent growth over the last four quarters. However, the argument for continued aid goes that poverty in India is clearly endemic, and is not improving despite the country's continued economic growth. The Multidimensional Poverty Index shows that of its population of roughly 1.1bn, there are still around 645m people living in poverty in India, 421m of whom live in the eight northern states alone.

In a sense, the UK could be seen as morally obliged to continue aid to India as a result of the effects of its colonial legacy. However, at the G20 Finance Ministers summit which took place in Paris on the 18th and 19th of February, the Indian minister Pranab Mukherjee pointed out that if tax evasion could be clamped down on, developing countries could begin to take full responsibility for their own affairs without the need for aid.

The extent of India's tax problem -- and the similarities it bears to that in the UK -- are illustrated by Vodafone. The company, targeted by UK Uncut protestors for dodging up to £4.8bn of taxes here, is also charged with evading £1.7bn of tax in India.

In a recent report entitled Illicit Financial Flows from Developing Countries: 2000-2009, Global Financial Integrity (GFI) estimated that India had lost a reported $104bn in tax evasion between 2000 and 2008. In another report, The Drivers and Dynamics of Illicit Financial Flows from India: 1948-2008, the GFI estimated that India had lost a total of $462 billion in tax evasion from independence in 1948 till 2008.

In an attempt to close this gap, India recently joined the Task Force on Financial Integrity and Economic Development. The Task Force advocates improved transparency and accountability in the global financial system, and the halting of actions like capital flight and transfer mispricing, which are developing countries' main problems with tax. India is now also pushing for a removal of the distinction between 'tax evasion' and 'tax fraud' which facilitates the evasion of tax, and impedes effective exchange of tax information between countries.

Nonetheless, India and many other developing countries still need the help of other G20 members in getting tax information exchange agreements, which would help in countering tax evasion. This would include pressuring the International Accounting Standards Board to act seriously on tax dodging. Such actions could then eventually lead to a reduction in the amount of aid required, halting charity and helping developing nations to become financially independent.

The UK itself seems to be unsure where it stands on tax evasion. Furthermore, with George Monbiot's claims that the government are making obscure changes to tax laws to benefit the rich, and Nicholas Shaxon's exposure of the UK's tax haven in the guise of the City of London Corporation, it is hard to imagine that developing nations, including India, will ever see their tax evasion rates decrease.

Liam McLaughlin is a freelance journalist who has also written for Prospect and the Huffington Post. He tweets irregularly @LiamMc108.

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Anxiety is not cool, funny or fashionable

A charitable initative to encourage sufferers to knit a Christmas jumper signalling their condition is well-intentioned but way off the mark.

The other night, I had one of those teeth-falling-out dreams. I dreamt I was on a bus, and every time it stopped one of my teeth plunked effortlessly out of my skull. “Shit,” I said to myself, in the dream, “this is like one of those teeth-falling out dreams”. Because – without getting too Inception – even in its midst, I realised this style of anxiety dream is a huge cliché.

Were my subconscious a little more creative, maybe it would’ve concocted a situation where I was on a bus (sure, bus, why not?), feeling anxious (because I nearly always feel anxious) and I’m wearing a jumper with the word “ANXIOUS” scrawled across my tits, so I can no longer hyperventilate – in private — about having made a bad impression with the woman who just served me in Tesco. What if, in this jumper, those same men who tell women to “smile, love” start telling me to relax. What if I have to start explaining panic attacks, mid-panic attack? Thanks to mental health charity Anxiety UK, this more original take on the classic teeth-falling-out dream could become a reality. Last week, they introduced an awareness-raising Christmas “anxiety” jumper.

It’s difficult to slate anyone for doing something as objectively important as tackling the stigma around mental health problems. Then again, right now, I’m struggling to think of anything more anxiety-inducing than wearing any item of clothing that advertises my anxiety. Although I’m fully prepared to accept that I’m just not badass enough to wear such a thing. As someone whose personal style is “background lesbian”, the only words I want anywhere near my chest are “north” and “face”.  

It should probably be acknowledged that the anxiety jumper isn’t actually being sold ready to wear, but as a knitting pattern. The idea being that you make your own anxiety jumper, in whichever colours you find least/most stressful. I’m not going to go on about feeling “excluded” – as a non-knitter – from this campaign. At the same time, the “anxiety jumper” demographic is almost definitely twee middle class millennials who can/will knit.

Photo: Anxiety UK

Unintentionally, I’m sure, a jumper embellished with the word “anxious” touts an utterly debilitating condition as a trend. Much like, actually, the “anxiety club” jumper that was unanimously deemed awful earlier this year. Granted, the original anxiety jumper — we now live in a world with at least two anxiety jumpers — wasn’t charitable or ostensibly well intentioned. It had a rainbow on it. Which was either an astute, ironic comment on how un-rainbow-like  anxiety is or, more likely, a poorly judged non sequitur farted into existence by a bored designer. Maybe the same one who thought up the Urban Outfitters “depression” t-shirt of 2014.

From Zayn Malik to Oprah Winfrey, a growing number of celebrities are opening up about what may seem, to someone who has never struggled with anxiety, like the trendiest disorder of the decade. Anxiety, of course, isn’t trendy; it’s just incredibly common. As someone constantly reassured by the fact that, yes, millions of other people have (real life) panic meltdowns on public transport, I could hardly argue that we shouldn’t be discussing our personal experiences of anxiety. But you have to ask whether anyone would be comfortable wearing a jumper that said “schizophrenic” or “bulimic”. Anxiety, it has to be said, has a tendency – as one of the more “socially acceptable” mental illnesses — to steal the limelight.

But I hope we carry on talking anxiety. I’m not sure Movember actually gets us talking about prostates, but it puts them out there at least. If Christmas jumpers can do the same for the range of mental health issues under the “anxiety” umbrella, then move over, Rudolph.

Eleanor Margolis is a freelance journalist, whose "Lez Miserable" column appears weekly on the New Statesman website.