Cameron tells Pakistanis tax non-payment is unfair

David Cameron criticises Pakistan’s tax-dodging rich at a press conference in Islamabad.

In a speech at a press conference in Islamabad, David Cameron told Pakistan's elite that:

Many of your richest people are getting away without paying much tax at all – and that's not fair.

When considering Cameron's words, let's remember that the UK facilitates the very same actions through its sovereignty over 13 of the 24 biggest tax havens in the world, including Jersey, Guernsey, the Cayman Islands and the City of London.

First, it is important to note that the vast majority of people considered "rich" in the UK do pay their taxes. According to Her Majesty's Revenue and Customs (HMRC), there are roughly 327,000 people who earn more than £150,000 per year – the rate at which the 50p tax is introduced. HMRC predicts that by the end of this fiscal year, the richest 327,000 will be paying 26.7 per cent of the total tax collected in the country.

Nevertheless, a request filed by the London Evening Standard under the Freedom of Information Act in 2007 revealed that in 2004-2005 only 65 of the roughly 400 UK-based individuals who earn £10m per year or more actually paid income tax. The failure was estimated to have lost HMRC up to £2bn in revenues.

The related issue of companies in the UK not paying tax has been brought to mainstream attention by the recent UK Uncut protests – fingering Vodafone, Topshop and Boots, among others, as having allegedly "dodged" paying billions.

The chairman of Pakistan's Federal Bureau of Revenue (FBR), Salman Siddiqui, recently issued notices to the wealthiest 700,000 of Pakistan's 2.3 million rich to give up withheld taxes. Although the number of non-payers is far higher than estimates in the UK, Cameron would be better advised to clean up the UK's own mess first before preaching to other countries.

Surprisingly, Cameron did not make the distinction between tax evasion and tax avoidance in his speech. Whereas the latter is considered legal – when taxes are not paid, using the help of loopholes – the former is considered illegal: non-payment of taxes that breaks the law.

A committee was set up to investigate the costs and benefits of having a General Anti-Avoidance Rule for the UK earlier this year. It has until 31 October 2011 to come to a conclusion.

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

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The Prevent strategy needs a rethink, not a rebrand

A bad policy by any other name is still a bad policy.

Yesterday the Home Affairs Select Committee published its report on radicalization in the UK. While the focus of the coverage has been on its claim that social media companies like Facebook, Twitter and YouTube are “consciously failing” to combat the promotion of terrorism and extremism, it also reported on Prevent. The report rightly engages with criticism of Prevent, acknowledging how it has affected the Muslim community and calling for it to become more transparent:

“The concerns about Prevent amongst the communities most affected by it must be addressed. Otherwise it will continue to be viewed with suspicion by many, and by some as “toxic”… The government must be more transparent about what it is doing on the Prevent strategy, including by publicising its engagement activities, and providing updates on outcomes, through an easily accessible online portal.”

While this acknowledgement is good news, it is hard to see how real change will occur. As I have written previously, as Prevent has become more entrenched in British society, it has also become more secretive. For example, in August 2013, I lodged FOI requests to designated Prevent priority areas, asking for the most up-to-date Prevent funding information, including what projects received funding and details of any project engaging specifically with far-right extremism. I lodged almost identical requests between 2008 and 2009, all of which were successful. All but one of the 2013 requests were denied.

This denial is significant. Before the 2011 review, the Prevent strategy distributed money to help local authorities fight violent extremism and in doing so identified priority areas based solely on demographics. Any local authority with a Muslim population of at least five per cent was automatically given Prevent funding. The 2011 review pledged to end this. It further promised to expand Prevent to include far-right extremism and stop its use in community cohesion projects. Through these FOI requests I was trying to find out whether or not the 2011 pledges had been met. But with the blanket denial of information, I was left in the dark.

It is telling that the report’s concerns with Prevent are not new and have in fact been highlighted in several reports by the same Home Affairs Select Committee, as well as numerous reports by NGOs. But nothing has changed. In fact, the only change proposed by the report is to give Prevent a new name: Engage. But the problem was never the name. Prevent relies on the premise that terrorism and extremism are inherently connected with Islam, and until this is changed, it will continue to be at best counter-productive, and at worst, deeply discriminatory.

In his evidence to the committee, David Anderson, the independent ombudsman of terrorism legislation, has called for an independent review of the Prevent strategy. This would be a start. However, more is required. What is needed is a radical new approach to counter-terrorism and counter-extremism, one that targets all forms of extremism and that does not stigmatise or stereotype those affected.

Such an approach has been pioneered in the Danish town of Aarhus. Faced with increased numbers of youngsters leaving Aarhus for Syria, police officers made it clear that those who had travelled to Syria were welcome to come home, where they would receive help with going back to school, finding a place to live and whatever else was necessary for them to find their way back to Danish society.  Known as the ‘Aarhus model’, this approach focuses on inclusion, mentorship and non-criminalisation. It is the opposite of Prevent, which has from its very start framed British Muslims as a particularly deviant suspect community.

We need to change the narrative of counter-terrorism in the UK, but a narrative is not changed by a new title. Just as a rose by any other name would smell as sweet, a bad policy by any other name is still a bad policy. While the Home Affairs Select Committee concern about Prevent is welcomed, real action is needed. This will involve actually engaging with the Muslim community, listening to their concerns and not dismissing them as misunderstandings. It will require serious investigation of the damages caused by new Prevent statutory duty, something which the report does acknowledge as a concern.  Finally, real action on Prevent in particular, but extremism in general, will require developing a wide-ranging counter-extremism strategy that directly engages with far-right extremism. This has been notably absent from today’s report, even though far-right extremism is on the rise. After all, far-right extremists make up half of all counter-radicalization referrals in Yorkshire, and 30 per cent of the caseload in the east Midlands.

It will also require changing the way we think about those who are radicalized. The Aarhus model proves that such a change is possible. Radicalization is indeed a real problem, one imagines it will be even more so considering the country’s flagship counter-radicalization strategy remains problematic and ineffective. In the end, Prevent may be renamed a thousand times, but unless real effort is put in actually changing the strategy, it will remain toxic. 

Dr Maria Norris works at London School of Economics and Political Science. She tweets as @MariaWNorris.