To boost wages, alter the balance of power in offices

Publishing income tax records could help predistribute wealth.

Publicly posting tax returns is an idea that's mostly been explored in the context of tax avoidance. The idea is that if the amount of tax the rich and famous pay were made public, "the might be motivated to fill out their taxes correctly", as the New York Times' Anna Bernasek put it in 2010. It ought to be supported by small-statists, too, since the disclosure of the myriad loopholes used by the wealthy to avoid tax would lead to support for a simplified tax system.

But public disclosure of income tax filings also has a role to play in political sphere: that of redistribution – or, to use the Labourite buzzword of the year, predistribution – of wealth.

A TUC pamphlet, published today, looks at how to boost the wage share [pdf]. That's the proportion of GDP which is paid to employees, as opposed to ending up in the pockets of shareholders (or, to a lesser extent, small business owners – official statistics record them as a separate category from shareholders or employees, because they share characteristics with both), and it appears to have seen a permanent drop since the 1970s:

Howard Reed and Stewart Lansley, the authors of the pamphlet, examine a few different ways to counteract that trend, from raising the national minimum wage or boosting take-up of the living wage to extending the role collective bargaining. They argue that could be done through a re-establishment of the Wages Councils, which were empowered to set minimum wages in various industries until John Major's government abolished them in 1994.

But one of the strongest ways to boost the wage share of income is to make it easier for individual employees to negotiate their wages up; and that can be helped greatly by making income tax returns – and thus, incomes – public.

When it comes to negotiating wages, employees are usually at a disadvantage. That's largely because, for all but the smallest companies, being one person short on headcount is much easier for a business to live with than having no job is for a person.

But there's also an information asymmetry. You both know publicly available salaries (for jobs similar to yours which are being advertised), but your employer also has access to a second pool of information: they know what they're paying your co-workers. That's information they can cite when it's in their interest and hide when it's not. Over time, that adds up, to lead to wages lower than they ought to be.

One of the purposes of unions is to overcome this information asymmetry; so in my profession, for example, the NUJ maintains a list of reported rates for freelancers, to help people fight for fair pay. But that's only useful to a certain extent; being able to cite the pay of the person who sits next to you when arguing for a raise is far more useful than being able to cite an average for the industry.

The balance of power within corporations is one of the hardest aspects of our lives for the state to affect, but one where it could do the most good. Publishing income tax records, as is already done in Finland and Norway, could well be a first step on that road.

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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Forget planning for no deal. The government isn't really planning for Brexit at all

The British government is simply not in a position to handle life after the EU.

No deal is better than a bad deal? That phrase has essentially vanished from Theresa May’s lips since the loss of her parliamentary majority in June, but it lives on in the minds of her boosters in the commentariat and the most committed parts of the Brexit press. In fact, they have a new meme: criticising the civil service and ministers who backed a Remain vote for “not preparing” for a no deal Brexit.

Leaving without a deal would mean, among other things, dropping out of the Open Skies agreement which allows British aeroplanes to fly to the United States and European Union. It would lead very quickly to food shortages and also mean that radioactive isotopes, used among other things for cancer treatment, wouldn’t be able to cross into the UK anymore. “Planning for no deal” actually means “making a deal”.  (Where the Brexit elite may have a point is that the consequences of no deal are sufficiently disruptive on both sides that the British government shouldn’t  worry too much about the two-year time frame set out in Article 50, as both sides have too big an incentive to always agree to extra time. I don’t think this is likely for political reasons but there is a good economic case for it.)

For the most part, you can’t really plan for no deal. There are however some things the government could prepare for. They could, for instance, start hiring additional staff for customs checks and investing in a bigger IT system to be able to handle the increased volume of work that would need to take place at the British border. It would need to begin issuing compulsory purchases to build new customs posts at ports, particularly along the 300-mile stretch of the Irish border – where Northern Ireland, outside the European Union, would immediately have a hard border with the Republic of Ireland, which would remain inside the bloc. But as Newsnight’s Christopher Cook details, the government is doing none of these things.

Now, in a way, you might say that this is a good decision on the government’s part. Frankly, these measures would only be about as useful as doing your seatbelt up before driving off the Grand Canyon. Buying up land and properties along the Irish border has the potential to cause political headaches that neither the British nor Irish governments need. However, as Cook notes, much of the government’s negotiating strategy seems to be based around convincing the EU27 that the United Kingdom might actually walk away without a deal, so not making even these inadequate plans makes a mockery of their own strategy. 

But the frothing about preparing for “no deal” ignores a far bigger problem: the government isn’t really preparing for any deal, and certainly not the one envisaged in May’s Lancaster House speech, where she set out the terms of Britain’s Brexit negotiations, or in her letter to the EU27 triggering Article 50. Just to reiterate: the government’s proposal is that the United Kingdom will leave both the single market and the customs union. Its regulations will no longer be set or enforced by the European Court of Justice or related bodies.

That means that, when Britain leaves the EU, it will need, at a minimum: to beef up the number of staff, the quality of its computer systems and the amount of physical space given over to customs checks and other assorted border work. It will need to hire its own food and standards inspectors to travel the globe checking the quality of products exported to the United Kingdom. It will need to increase the size of its own regulatory bodies.

The Foreign Office is doing some good and important work on preparing Britain’s re-entry into the World Trade Organisation as a nation with its own set of tariffs. But across the government, the level of preparation is simply not where it should be.

And all that’s assuming that May gets exactly what she wants. It’s not that the government isn’t preparing for no deal, or isn’t preparing for a bad deal. It can’t even be said to be preparing for what it believes is a great deal. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.