Many constituents have understandably written to me expressing their concerns regarding tax avoidance and tax evasion, particularly since the shocking revelations of the practices within HSBC. Their actions have been deplorable, and I believe HSBC and the individuals involved should he held fully accountable for their actions.
Tax evasion is illegal, though some will still try to do it. Aggressive tax avoidance by the mega-wealthy may fall just this side of legality thanks to the ducking and diving of smart financial and legal advisers, but the morality is highly dubious.
It needs to be tightened up in ways this government has not attempted. The next Labour government will do so.
On a point of principle, it is crucial that everyone pays their fair share of tax and makes their due financial contribution to public services, and also that the mega-wealthy are not seen to twist and abuse the tax rules to avoid paying their share. Just as you and I are expected to pay our taxes, so everyone else should be expected to do so too.
And the reason is very simple. People and organisations who deliberately try and avoid paying their fair taxes are stealing directly from our front-line public services. The next time we hear of a shortage of nurses, or of cut-backs in teachers or firefighters, or libraries closing or home-care for the elderly under threat then there will be two prime groups of suspects in the dock: the Tory-led government with its “all in it together” (sic) austerity drive & deficit-fetishism, and the tax-dodgers and their advisers.
The current Coalition Government has failed to adequately address this serious issue. The latest figures published show that the difference between how much tax should be collected and how much actually is collected has been rising under the Coalition Government. Public services are now being deprived of £34 billion in revenue through this government’s inability to deal with tax avoidance.
So the next Labour Government will use its first finance bill to strengthen measures against aggressive tax avoidance. This bill will include measures to close loopholes used for tax avoidance, increase transparency and bring in tough deterrents. The Labour Party will also draw up legislation for consultation on clamping down on some of the most complex areas of tax avoidance to ensure that scandals like HSBC cannot happen again.
Measures that will be taken to tackle tax avoidance include (but are not limited to): making it harder for big companies to dodge UK taxes and removing unfair tax breaks, ensuring UK tax rules do not encourage big companies to avoid paying tax in developing countries, and making the UK tax regime more transparent and tougher on tax dodging.
The Labour Party’s proposed measures to tackle tax avoidance were laid out by Labour MPs during an Opposition Day debate on the 11th February. These measures were opposed and defeated in the Commons by Tory and Lib Dem MPs, but a Labour Government would introduce this Bill at the earliest stage possible to take decisive action against tax avoiders.
