CPS to crack down on tax evasion

A populist move, which may be less popular than expected.

The head of the Crown Prosecution Service, Keir Starmer, has told the Financial Times that he is planning to increase fivefold the number of tax evasion cases the organisation takes on. Caroline Bingham writes:

Tax consultants who push dishonest avoidance schemes – and the professionals who invest in them – are central targets in the strategy. 

“There have been some cases involving lawyers, some involving tax consultants, and plumbers,” Mr Starmer said in an interview. “Within the ramped-up volume, it’s intended that we will select cases to send a clear message as to the breadth of our coverage.”

The FT reports that there were just 200 convictions secured in 2010, even with a conviction rate of 86 per cent. We can infer from those figures that the CPS only takes on cases where it has a very strong expectation of success, which is a different operating procedure from most other crimes which it prosecutes.

The tough stance of the CPS is matched by an equivalent stance from HMRC as both organisations try to crack down on the estimated £14bn a year lost to evasion.

Part of the plan is to explicitly pick cases which are harder to prosecute to make it clear that any type of tax evasion — not just the easy-to-prove cases — may be subject to prosecution. In addition, the CPS will apparently be prosecuting "everyday" tax evasion — that is, rather than just going after the most egregious offenders, it will prosecute people who match the typical profile of a tax evader. Starmer told the FT:

There have been some cases involving lawyers, some involving tax consultants, and plumbers. Within the ramped-up volume, it’s intended that we will select cases to send a clear message as to the breadth of our coverage.

The news is undoubtedly a success of sorts for campaigning groups like UKUncut, which has focused on tax evasion and avoidance and a source of missing income for the nation since 2010. There is now crystal-clear acceptance on the part of some of the most conservative institutions in government that it is unacceptable to be cutting public services while not putting as much effort as possible into securing revenue.

But the way the CPS intends to go about this new policy may be a double-edged sword. UKUncut has historically focused on the biggest individual cases, like Vodafone, which it alleges avoided £6bn in tax, or Topshop owner Philip Green, who the group claims avoided £285m.

The CPS plans to go after the exact opposite. Those hit will likely be self-employed people failing to declare all their income, as well as those more explicitly evading tax. It is harder to frame such a crackdown as the rich stealing from the poor given at least some of those evaders will themselves be earning little.

That's not to say that the CPS isn't pursuing a progressive strategy in implementing its new prosecution plan. But it may turn out being less populist than it, or the protest groups who have pushed for it, planned.

Keir Starmer. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Getty
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A good apprenticeship is about more than box-ticking

The political apprenticeships arms race, promising ever increasing numbers of apprenticeships but with little focus on quality, is helping nobody. 

The political apprenticeships arms race, promising ever increasing numbers of apprenticeships but with little focus on quality, is helping nobody. Playing a numbers game often means the quality and the personal touch that turns a placement into a career opportunity can be lost. The government has set a target of three million new apprenticeships by 2020. In London Boris Johnson set a target for 250,000 apprentice starts, but fell short by over 100,000. Both targets miss the point; any target should focus on outcomes, not just numbers through the door.

Policy makers need to step back from the rigid frameworks and see what works on the ground.  For me this involved eating a bacon sandwich, which is arguably a risky exercise for politicians.  I was seeing how the owner of the Bermondsey Community Kitchen and Café, Mike, has transformed the space above his café into a training kitchen teaching young unemployed people the skills they need to gain qualifications to work in restaurants.

The posters on the wall spell out the choices available to the young people. They make it explicitly clear that there is an alternative to a life in prison, which some of the trainee chefs have already experienced, with pictures of celebrity chefs including Jamie Oliver, Delia Smith and Gordon Ramsay outlining how they worked their way to where they are now. None of the young people have had an easy start in life. Barriers they face include autism, lack of literacy skills, insufficient funds to pay the fare to the café and criminal records. But Mike and the team running the kitchen are determined to give them the chances every young person deserves. From City & Guilds qualifications, work placements and ensuring they have a job at the end of the process, this is the type of grass roots project that the government could learn from. With two groups of eight students over three half days, this is skills training that is about as personal as it gets. The young people are enthusiastic about the course, the practical skills they are learning and optimistic about the future.

The project is funded partly through the café, but mainly through grants and donations (including pots and pans from Raymond Blanc and funding from trusts as well as the local council). Mike has plans to expand. He wants premises with space for a nursery so young mothers who might otherwise struggle to complete a course can attend, he has a vision for two or three more similar enterprises across Southwark. I have no doubt he will achieve this but the challenge for policy makers is making it easier for people like Mike who are delivering flexible qualifications and delivering better results. Bureaucratic processes, lengthy forms and refusals would have put less determined people off. As the funding for skills is devolved, there is both an opportunity and a challenge to look at how innovative models can be supported. Unless more is done to ensure groups that might be defined as ‘hard to reach’ get opportunities, there will always be significant numbers falling through the gaps in a sometimes impersonal system.

Over 60 per cent of the apprenticeships in London focus on low level qualifications with little prospect of employment upon completion. Many skills based apprenticeships fail to match demand, the booming construction industry for example is crying out for skilled workers and with all parties agreeing new homes are a priority its surprising to learn that in London only 3 per cent of apprenticeships are in construction.

Apprenticeships need to focus on leading to work, and work that is skilled and pays enough to live on. They should be about opportunity not opportunistic employers. In a report published in October 2015, Ofsted was critical of apprenticeships saying too many of them ‘do not provide sufficient training that stretches the apprentices and improves their capabilities. Instead they frequently are being used as a means of accrediting existing low-level skills, like making coffee and cleaning floors.’

The new apprenticeship levy charged to businesses with a wage bill over a certain amount could be a useful way of enhancing opportunities but the definition of apprenticeship needs to be refined. On a recent visit to the iconic Brompton Bikes factory, the London Assembly Economy Committee was told that although the firm has to pay the new levy as a result of its size, they have a bespoke way of training their apprenticeships so they have the skills to get jobs with Brompton Bikes at the end of the process. Because this tailored training doesn’t meet the narrow government criteria they aren’t formally accredited apprenticeships and thus Brompton are unable to claim any funding back from government despite their excellent work.

I am increasingly frustrated that the most exciting and inspiring projects I visit don’t always meet the criteria for funding. We are doing something wrong if people are asked to fit something that works into a form that meets criteria rather than rewarding their successes. Instead huge amounts of public money are being put into funding low quality low skilled apprenticeships that sometimes appear to be more about avoiding the minimum wage. This is not just a waste of money; it is a waste of the lives of the young people. As the Bermondsey fishmonger we bumped in to on the way out of the café told us, sometimes what works is smashing the box, not ticking the box.