Osborne takes the first step on tax avoidance. Now for the rest…

The chancellor's GAAR should help ensure tax justice. But it's only a start, writes Salman Shaheen

George Osborne’s article in the Observer following the G20 meeting of Finance Ministers in Moscow at the weekend provides the first sign that Britain is finally ready to tackle tax avoidance and help reform an international tax system that is almost a century out of date. But the Chancellor will have to go much further than these warm words alone if he is serious about clawing back the money multinationals are avoiding paying in the UK, and helping developing economies move from aid to a more sustainable form of growth.

Osborne is bang on the tax-free money when he identifies the problem as a systemic one. The international tax system was designed, after all, for the nation state in the days before globalisation. But tax avoidance occupies a space between laws. It is not so much that it is legal, as companies practising these aggressive schemes claim in their defence, but that the laws as they exist are inadequate to cover it.

The result is the press is left picking over the PR disasters of Google, Amazon, Starbucks and most recently Associated British Foods, while a cash-strapped Britain finds itself with a tax gap of £123bn according to Richard Murphy of Tax Research. In an era of austerity, public mistrust of corporates and government and increased risk for companies increasingly coming under challenge for structures they’ve employed for decades, no one wins from a system that promotes uncertainty and an unlevel playing field.

On this, the Chancellor is absolutely right. The trouble is the actions he has lined up to back these necessary words will make little more than a dent in the tax avoidance industry. If the problem is systemic, as he identifies, then it can’t be solved by tinkering around the edges, only wholesale reform.

For one, he trumpets the General Anti-Abuse Rule (GAAR) he is introducing, essentially a net allowing HMRC to challenge artificial and abusive tax avoidance schemes which, because they are often complex or novel, could not have been contemplated directly when formulating the tax legislation.

But as Michael Meacher – who is pushing for a much stronger version of the GAAR in Parliament – told me, the government’s proposal will only catch the most egregious schemes, letting the rest slip through:

The real purpose of the GAAR is not to counter tax avoidance, but to narrow its definition, making everything else ethically and technically acceptable because it is outside that narrow remit.

Secondly, Osborne points to Britain’s push in the EU and in the Extractive Industries Transparency Initiative for limited forms of country-by-country reporting to provide greater transparency in the oil, gas and mining sectors.

This is a vital first step. But if Osborne is serious about tax transparency, he must now make the case for a much more robust form of country-by-country reporting whereby every large multinational corporation in every sector would be required to publish in their annual audited financial statements a country consolidated profit and loss account, limited balance sheet and cash flow data on tax paid for every jurisdiction where they have a permanent establishment for tax.

Finally, Osborne backs an OECD report to the G20 on base erosion and profit shifting. This is to be welcomed and much will depend on the outcome of the action plan that is put to the G8 in July.

But Osborne must recognise that merely tinkering with the transfer pricing system, whose weaknesses have left the UK and developing countries alike open to multinational corporations shifting their profits into tax havens, is not enough. Osborne should be pushing for serious examination of a system of unitary taxation, under which companies would submit a global consolidated account in each country in which they are present, then apportion the global profits among these countries by a formula reflecting the genuine economic activity of the company in each jurisdiction.

Only through these measures can the problem of tax avoidance be seriously tackled. Osborne’s words are warm and welcome, but they are just the first step. Now the world will be watching as Britain prepares to host the G8. The Chancellor’s task is not to falter or miss this historic opportunity.

Wiping the first step. Photograph: Getty Images

Salman Shaheen is editor-in-chief of The World Weekly, principal speaker of Left Unity and a freelance journalist.

Flickr/Michael Coghlan
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Why does the medical establishment fail to take women in pain seriously?

Women with mesh implants have been suffering for years. And it's not the only time they have been ignored. 

Claire Cooper’s voice wavered as she told the BBC interviewer that she had thought of suicide, after her mesh implant left her in life-long debilitating pain. “I lost my womb for no reason”, she said, describing the hysterectomy to which she resorted in a desperate attempt to end her pain. She is not alone, but for years she was denied the knowledge that she was just one in a large group of patients whose mesh implants had terribly malfunctioned.

Trans-vaginal mesh is a kind of permanent “tape” inserted into the body to treat stress urinary incontinence and to prevent pelvic organ prolapse, both of which can occur following childbirth. But for some patients, this is a solution in name only. For years now, these patients – predominantly women – have been experiencing intense pain due to the implant shifting, and scraping their insides. But they struggled to be taken seriously.

The mesh implants has become this month's surgical scandal, after affected women decided to sue. But it should really have been the focus of so much attention three years ago, when former Scottish Health Secretary Alex Neil called for a suspension of mesh procedures by NHS Scotland and an inquiry into their risks and benefits. Or six years ago, in 2011, when the US Food and Drug Administration revealed that the mesh was unsafe. Or at any point when it became public knowledge that people were becoming disabled and dying as a result of their surgery.

When Cooper complained about the pain, a GP told her she was imagining it. Likewise, the interim report requested by the Scottish government found the medical establishment had not believed some of the recipients who experienced adverse effects. 

This is not a rare phenomenon when it comes to women's health. Their health problems are repeatedly deprioritised, until they are labelled “hysterical” for calling for them to be addressed. As Joe Fassler documented for The Atlantic, when his wife's medical problem was undiagnosed for hours, he began to detect a certain sexism in the way she was treated:

“Why”, I kept asking myself, when reading his piece, “are they assuming that she doesn’t know how much pain she’s feeling? Why is the expectation that she’s frenzied for no real reason? Does this happen to a lot of women?”

This is not just a journalist's account. The legal study The Girl Who Cried Pain: A Bias Against Women in the Treatment of Pain found that women report more severe levels of pain, more frequent incidences of pain, and pain of longer duration than men, but are nonetheless treated for pain less aggressively. 

An extreme example is “Yentl Syndrome”. This is the fact that half of US women are likely to experience cardiovascular disease and exhibit different symptoms to men, because male symptoms are taught as ungendered, many women die following misdiagnosis. More often than should be acceptable, female pain is treated as irrelevant or counterfeit.

In another significant case, when the news broke that the most common hormonal birth control pill is heavily linked to a lower quality of life, many uterus-owning users were unsurprised. After all, they had been observing these symptoms for years. Social media movements, such as #MyPillStory, had long been born of the frustration that medical experts weren’t doing enough to examine or counter the negative side effects. Even after randomised trials were conducted and statements were released, nothing was officially changed.

Men could of course shoulder the burden of birth control pills - there has been research over the years into one. But too many men are unwilling to swallow the side effects. A Cosmopolitan survey found that 63 per cent of men would not consider using a form of birth control that could result in acne or weight gain. That’s 2 per cent more than the number who said that they would reject the option of having an annual testicular injection. So if we’re taking men who are afraid of much lesser symptoms than those experienced by women seriously, why is it that women are continually overlooked by health professionals? 

These double standards mean that while men are treated with kid gloves, women’s reactions to drugs are used to alter recommended dosages post-hoc. Medical trials are intended to unearth any potential issues prior to prescription, before the dangers arise. But the disproportionate lack of focus on women’s health issues has historically extended to medical testing.

In the US, from 1977 to 1993, there was a ban on “premenopausal female[s] capable of becoming pregnant” participating in medical trials. This was only overturned when Congress passed the National Institutes of Health (NIH) Revitalisation Act, which required all government funded gender-neutral clinical trials to feature female test subjects. However, it was not until 2014 that the National Institutes of Health decreed that both male and female animals must be used in preclinical studies.

Women’s exclusion from clinical studies has traditionally occurred for a number of reasons. A major problem has been the wrongful assumption that biologically women aren’t all that different from men, except for menstruation. Yet this does not take into account different hormone cycles, and recent studies have revealed that this is demonstrably untrue. In reality, sex is a factor in one’s biological response to both illness and treatment, but this is not as dependent on the menstrual cycle as previously imagined.

Even with evidence of their suffering, women are often ignored. The UK Medicines and Healthcare Regulatory Agency (MHRA) released data for 2012-2017 that shows that 1,049 incidents had occurred as a result of mesh surgery, but said that this did not necessarily provide evidence that any device should be discontinued.

Yes, this may be true. Utilitarian thinking dictates that we look at the overall picture to decide whether the implants do more harm than good. However, when so many people are negatively impacted by the mesh, it prompts the question: Why are alternatives not being looked into more urgently?

The inquiry into the mesh scandal is two years past its deadline, and its chairperson recently stepped down. If this isn’t evidence that the massive medical negligence case is being neglected then what is?

Once again, the biggest maker of the problematic implants is Johnson&Johnson, who have previously been in trouble for their faulty artificial hips and – along with the NHS – are currently being sued by over 800 mesh implant recipients. A leaked email from the company suggested that the company was already aware of the damage that the implants were causing (Johnson&Johnson said the email was taken out of context).

In the case of the mesh implants slicing through vaginas “like a cheese-wire”, whether or not the manufacturers were aware of the dangers posed by their product seems almost irrelevant. Individual doctors have been dealing with complaints of chronic or debilitating pain following mesh insertions for some time. Many of them just have not reported the issues that they have seen to the MHRA’s Yellow Card scheme for identifying flawed medical devices.

Shona Robison, the Scottish Cabinet Secretary for Health and Sport, asked why the mesh recipients had been forced to campaign for their distress to be acknowledged and investigated. I would like to second her question. The mesh problem seems to be symptomatic of a larger issue in medical care – the assumption that women should be able to handle unnecessary amounts of pain without kicking up a fuss. It's time that the medical establishment started listening instead. 

 

Anjuli R. K. Shere is a 2016/17 Wellcome Scholar and science intern at the New Statesman

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