Tax avoidance costs UK economy £69.9 billion a year

New report from the Tax Justice Network highlights the staggering extent of global tax evasion.

In March earlier this year The Spectator published an article 'Debunking UK Uncut' over their campaign against tax avoidance. The author -- Nick Hayns from the Institute for Economic Affairs -- pleaded with readers not to let "UK Uncut get away with throwing all logic out of the window." But as nations across Europe feel the sting of reduced living standards, the true extent of global tax avoidance -- as revealed today by the Tax Justice Network -- will act to bolster feelings that such injustice can no longer be swept aside with the kind of insouciance Hayn displays.

The research, based on data from 145 countries, shows that tax evasion costs those nations $3.1 trillion annually. In the UK's case £69.9 billion is lost on a yearly basis in what the Tax Justice Network call the "shadow economy." That figure, they point out, "represents 56% of the country's total healthcare spend."

On the back of this report the Tax Justice Network has launched its campaign to Tackle Tax Havens. An initiative aimed at propelling tax avoidance up the political agenda by highlighting, in simple terms, the sheer scale of the sums involved and how they translate into increased cuts in public services for the rest of us.

But is tax avoidance immoral? Toby Young wrote for The Telegraph back in February that "Tax avoidance isn't morally wrong. It's perfectly sensible behaviour." While it might be true from a purely business point of view that tax avoidance is a great way to boost profits, Young conflates what is logical for a business to do, with what is the right thing to do from a societal or moral point of view.

Curiously while parts of the rightwing commentariat insist that deficit reduction is the number one task, they seem little interested in measures that might actually reduce the deficit, namely ensuring companies pay the tax they owe.

"Tax evasion is morally repugnant...It's stealing from law-abiding people, who face higher taxes to make good the lost revenue." This quote could well come from one of the much derided Occupy LSX group, but no, it's our very own Conservative chancellor. The Institute of Directors' have also supported proposals from QC Graham Aaronson to implement a general anti-avoidance rule that would "deter egregious tax-avoidance".

So could the tide finally be turning for those who cheat the system? Richard Murphy of Tax Research UK, that undertook the research for the Tax Justice Network, says: "If only more had been done to tackle rampant tax evasion, Europe would not be facing a crisis today." Adding that to compel both business and the tax havens themselves to be transparent in their dealings would "shatter the secrecy of tax havens for good." Nothing, he goes on, "could make a bigger contribution than this to solving the world's financial crisis".

In response in this article, Chief Executive of Jersey Finance Ltd, Geoff Cook, submitted the following letter:

"Tax evasion" is the illegal concealment of a taxable activity and, to be clear, is a criminal offence in Jersey. "Tax avoidance", on the other hand, is legal and refers to the prudent management of tax affairs to legitimately minimise a company or individual's tax liability within the law. Wide-reaching and thorough regulatory and compliance procedures are fundamental components of how a world-class International Financial Centre (IFC) like Jersey operates.

While the concept of tax avoidance, or perhaps as it may be better described, tax planning, is often discussed in relation to business, the exact same principle applies to individuals from all walks of life. Anyone who chooses to invest in an ISA or a pension could be accused of seeking to "avoid tax"; yet it is plain that such activity is not only legal, but also prudent and sensible.

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Let's seize our chance of a progressive alliance in Richmond - or we'll all be losers

Labour MPs have been brave to talk about standing aside. 

Earlier this week something quite remarkable happened. Three Labour MPs, from across the party’s political spectrum, came together to urge their party to consider not fielding a candidate in the Richmond Park by-election. In the face of a powerful central party machine, it was extremely brave of them to do what was, until very recently, almost unthinkable: suggest that people vote for a party that wasn’t their own.
Just after the piece from Lisa Nandy, Clive Lewis and Jonathan Reynolds was published, I headed down to the Richmond Park constituency to meet local Green members. It felt like a big moment – an opportunity to be part of something truly ground-breaking – and we had a healthy discussion about the options on the table. Rightly, the decision about whether to stand in elections is always down to local parties, and ultimately the sense from the local members present was that it would be difficult  not to field a candidate unless Labour did the same. Sadly, even as we spoke, the Labour party hierarchy was busily pouring cold water on the idea of working together to beat the Conservatives. The old politics dies hard - and it will not die unless and until all parties are prepared to balance local priorities with the bigger picture.
A pact of any kind would not simply be about some parties standing down or aside. It would be about us all, collectively, standing together and stepping forward in a united bid to be better than what is currently on offer. And it would be a chance to show that building trust now, not just banking it for the future, can cement a better deal for local residents. There could be reciprocal commitments for local elections, for example, creating further opportunities for progressive voices to come to the fore.
While we’ve been debating the merits of this progressive pact in public, the Conservatives and Ukip have, quietly, formed an alliance of their own around Zac Goldsmith. In this regressive alliance, the right is rallying around a candidate who voted to pull Britain out of Europe against the wishes of his constituency, a man who shocked many by running a divisive and nasty campaign to be mayor of London. There’s a sad irony in the fact it’s the voices of division that are proving so effective at advancing their shared goals, while proponents of co-operation cannot get off the starting line.
Leadership is as much about listening as anything else. What I heard on Wednesday was a local party that is passionate about talking to people and sharing what the Greens have to offer. They are proud members of our party for a reason – because they know we stand for something unique, and they have high hopes of winning local elections in the area.  No doubt the leaders of the other progressive parties are hearing the same.
Forming a progressive alliance would be the start of something big. At the core of any such agreement must be a commitment to electoral reform - and breaking open politics for good. No longer could parties choose to listen only to a handful of swing voters in key constituencies, to the exclusion of everyone else. Not many people enjoy talking about the voting system – for most, it’s boring – but as people increasingly clamour for more power in their hands, this could really have been a moment to seize.
Time is running out to select a genuine "unity" candidate through an open primary process. I admit that the most likely alternative - uniting behind a Liberal Democrat candidate in Richmond Park - doesn’t sit easily with me, especially after their role in the vindictive Coalition government.  But politics is about making difficult choices at the right moment, and this is one I wanted to actively explore, because the situation we’re in is just so dire. There is a difference between the Conservatives and the Lib Dems. Failing to realise that plays into the hands of Theresa May more than anyone else.
And, to be frank, I'm deeply worried. Just look at one very specific, very local issue and you’ll perhaps understand where I'm coming from. It’s the state of the NHS in Brighton and Hove – it’s a system that’s been so cut up by marketisation and so woefully underfunded that it’s at breaking point. Our hospital is in special measures, six GP surgeries have shut down and private firms have been operating ambulances without a license. Just imagine what that health service will look like in ten years, with a Conservative party still in charge after beating a divided left at another general election.
And then there is Brexit. We’re hurtling down a very dangerous road – which could see us out of the EU, with closed borders and an economy in tatters. It’s my belief that a vote for a non-Brexiteer in Richmond Park would be a hammer blow to Conservatives at a time when they’re trying to remould the country in their own image after a narrow win for the Leave side in the referendum.
The Green party will fight a passionate and organised campaign in Richmond Park – I was blown away by the commitment of members, and I know they’ll be hitting the ground running this weekend. On the ballot on 1 December there will only be one party saying no to new runways, rejecting nuclear weapons and nuclear power and proposing a radical overhaul of our politics and democracy. I’ll go to the constituency to campaign because we are a fundamentally unique party – saying things that others refuse to say – but I won’t pretend that I don’t wish we could have done things differently.

I believe that moments like this don’t come along very often – but they require the will of all parties involved to realise their potential. Ultimately, until other leaders of progressive parties face the electoral facts, we are all losers, no matter who wins in Richmond Park.


Caroline Lucas is the MP for Brighton Pavilion.