Tag Archives: tax

Autumn Statement

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Things we have learned from the Autumn Statement:
1) Labour were right, borrowing to invest is a good thing
2) After 6 years of pain, the Tories haven’t managed to reduce our national debt one jot, it’s still going up
3) The cost to our economy of Brexit will cancel out any saving from not contributing to the EU. Although right now we are bearing the cost and still contributing
4) Despite Mrs May’s lovely speech, the poorest families will be hundreds of pounds a year worse off
5) But don’t worry, because there’s still enough money to fund tax cuts for those earning over £43,000 a year.

 

On Aberdeen, oil and food banks

Pylon_dsUnusually, I made it all the way through Saturday’s Guardian, into the money section, where this headline caught my eye:

Aberdeen: once-rich oil city now relying on food banks

The story brings together two issues I’ve dealt with regularly on this blog, and seemed to illustrate the failure of government to make any attempt to address either.

I first wrote about the need to move money out of fossil fuels nearly two years ago. We invest in pensions to provide for a healthy and happy future. It is, therefore, pointless for pension funds to put money into businesses which are leading to detrimental and devastating climate change. Since then, investment in fossil fuels has come to be seen as more and more risky, as we have recognised that in order to secure our future, we need to leave fossil fuels in the ground. Not a strong foundation for ongoing long-term business success.

The collapse of the oil industry in Aberdeen has come sooner than any collapse due divestment and the risks of climate change. In this case, the falling price of oil simply makes North Sea Oil too expensive, although doubts about the wisdom of burning all this oil have had a small part to play in all this. But, whatever the reason, now is surely the time for Aberdeen to diversify and invest in technology and industry which is better for the future, in particular the renewable energy sector. Recent moves by the government, however, have all been about reducing support for the renewable industry, binding ourselves to the Chinese for nuclear power and putting faith in fracking.

Meanwhile, people are losing their jobs, or having their pay cut, or having to work longer hours to make up the money. And we have created a society where those who suddenly find themselves out of work or out of pocket no longer have the security of a social safety net. State provided social security has dwindled to the extent that people are having to rely on food banks. Whether you think this is a good thing or not, I don’t recall the social consensus shifting so far that we have consented to abandon anyone who falls on hard times or who cannot support themselves or their families for whatever reason.

The state is no longer providing for the needs of the poorest and most vulnerable. Nor, it seems, is it providing for “hard-working families” who are suddenly unable to work. And at the same time as it continues to make cuts to payments to those in need, the government fails to acknowledge that it is no longer meeting basic needs.

How did we let this happen? Why did we let this happen? Are we ready to abandon the post-war consensus that all should contribute according to their means to support all according to their need? That’s what our taxes are for. For the most part, we are all trying to contribute according to our means, while the support for those in need is steadily cut back. At the same time, those with the biggest means to contribute are also most able to find the best way to reduce their contribution – both individuals and corporations. Why aren’t we angrier?

One final thought. 13 people are facing jail for demonstrating against a third runway at Heathrow. Their defence was that their actions were necessary in order to prevent deaths caused by pollution and climate change. But their defence was rejected and it looks like their civil disobedience will see them get custodial sentences. Their actions should be a wake-up call to us all. For as the New Internationalist blog pages observe, It’s not civil disobedience we need to worry about though, but our civil obedience. I’ll leave you with more of that quote from Howard Zinn, which I found here.

Civil disobedience…that is not our problem…. Our problem is civil obedience. Our problem is the numbers of people all over the world who have obeyed the dictates of the leaders of their government and have gone to war, and millions have been killed because of this obedience… Our problem is that people are obedient all over the world, in the face of poverty and starvation and stupidity, and war and cruelty. Our problem is that people are obedient while the jails are full of petty thieves, and all the while the grand thieves are running the country. That’s our problem.

 

Make It Fair – time to tackle Tax Dodging

make tax fairWell, we’ve come a long way. Tax is making great progress along its pathway of rehabilitation back into society. To be sure, austerity has focused our minds. Now we’re really missing all those lovely things our taxes used to pay for (teachers, nurses, gritters, libraries, Sure Start centres) we’re severely unimpressed when some people and businesses don’t pay their fair share.

Conservative estimates (with a small c despite it being at the beginning of a sentence) reckon that the UK loses £35bn a year due to tax dodging. That should be enough to fix all the potholes in Sheffield’s roads and still have a bit left over for a few extra teachers and nurses. But it’s not just the UK. A few weeks ago, I was listening to Suzanne Matale from Zambia talking about the massive flow of money out of her country from tax dodging multi-national businesses. More than three times as much money leaves Africa for the rich west as is received in via international aid. Just think how many teachers, nurses and roads that would cover.

While we’re thinking, let’s reflect on why it has taken us so long to keep our promise to give 0.7% of our country’s income in overseas aid. It’s a great landmark to have reached, but why do we begrudge giving such a tiny proportion when so much more money is moving the other way? It seems so simple – if we could crack down on tax avoiders, in the long run, countries like Zambia would have plenty money to fund education, healthcare and road building, and eventually international support would no longer be needed.

But tax isn’t simple, as anyone who has wrestled with self-assessment, or even a tax credit application form will know. A lot of the time, businesses aren’t technically breaking the law. Some would say businesses have a duty to their shareholders to carry out effective “tax planning” (nice euphemism). We’ve even heard a member of the House of Lords declare that “everyone is doing it”.

So we need to take a different view. Our personal taxes are part of our contribution as citizens and solidarity with each other to build up the common good. It’s the same for businesses. It’s no longer enough to say that a business is beholden to its shareholders. It also must take care of its workers and other members of the community where it chooses to operate. It’s not acceptable for a corporation to extract all the copper from Zambia’s soil without paying its fair share of taxes to the benefit of the Zambian people. After all, where would business be without healthy, educated workers able to rely on the physical infrastructure of a country kept safe by a well functioning democracy and rule of law?

That’s the moral argument for paying tax. But it’s pretty hard challenging practice that isn’t illegal. This is where the Tax Dodging Bill comes in. A coalition of charities, including Christian Aid, Action Aid, Oxfam and Church Action on Poverty, is calling for a new bill to close some of these scandalous tax loopholes and for the additional revenue generated to be spent on tackling poverty. Most of this kind of tax dodging is possible because companies operate in a number of countries with different tax rates and laws. So vast companies like Google, Starbucks and Amazon (and even lovely homegrown Boots) can get away with paying next to nothing in tax in the UK, while smaller companies only based here pay the full amount. This is hardly fair for businesses trying to compete, nor is it fair for the rest of us missing out on essential services which lost revenue can’t pay for.

Campaigners against tax dodging are calling for the newly elected government to introduce a bill within 100 days of coming to power, which would help tackle poverty in developing countries and to use the funds raised here to tackle poverty in our society. The Tax Dodging Bill addresses foreign multinational businesses trading in the UK. It would make it harder for these companies to dodge UK taxes by ensuring they can’t use tax havens to hide profits. The bill also calls for a rigorous review of tax breaks to ensure that any which remain are truly beneficial to the UK economy, society or environment. UK tax rules should not encourage UK companies operating overseas to avoid tax in developing countries, so the bill calls for the rules to be reviewed in this light. Campaigners also want to the bill to call for more transparency in the UK tax regime, including country-by-country reporting of tax and profit data, and tougher sanctions on tax avoiders and those who provide tax avoiding advice. Finally, the campaign is calling for political parties to commit to using the funds raised in the UK to tackle poverty here.

With the election just weeks away, and no-one ahead in the polls, all parties are still creating their final messages to appeal to voters. Right now, we the people have power and influence! If you’re fed up of seeing the big boys getting away with it, join the campaign. You can email all your local parliamentary candidates about tax and sign the Tax Dodging Bill petition.

Enough is enough. Tax dodging lines the pockets of the already wealthy while robbing the poor by diverting funds away from government services. Not everyone is doing it. The richer you are, the easier it is to pay less. That’s why we need a Tax Dodging Bill now. Let’s hear it for tax collectors – we’ve come a long way from Zacchaeus and the Beatles!

Food Banks and Society

Food banks are never far away from the news, not least because it’s hard to believe that so many people are reliant on their provisions in one of the richest countries in the world. Despite the Government failing to respond to this growing scandal, Frank Field and the Church of England launched their own inquiry, and this week the resulting report from the All-Party Parliamentary Group, Feeding Britain, was launched.

Interestingly, the authors of the report say that this: “our first and most important point is that we want to call all people again to consider how we want to live together as members of this society and how we can encourage one another”. In the light of the report, and in my experience working as a debt advisor and with a food bank, I’d like to offer my considerations.

I think we need to live together in a society which values and respects people in work. I do not think this is the case in a country where people are working, sometimes several jobs, and are still not earning enough to pay the bills. I’d like to see a society where people are not exploited for their labour, where zero-hours contracts are a happy adjunct to busy lives for a few and not a systematic way of keeping costs down while people don’t know where their next meal is coming from. I’d like to see a minimum wage which rises as the cost of living goes up. I’d like to see national and local government encouraging the implementation of a Living Wage for their own staff, contracted staff and through their procurement and tendering procedures, as well as ways to encourage other businesses and organisations to pay a Living Wage. I’d like to see protection of the rights of workers and strengthening of Unions, rather than a steady erosion of terms and conditions in the name of “flexible working”. I’d like to see a society which values people above profit, where money and growth is the means to an end and not an end in itself.

I think we need to live together in a society which values and respects people who are not in work. I do not thinks this is the case in a country which has become so focused on the very few who play the system that it has forgotten to take care of everyone else. I’d like to see a social security system which is a genuine safety net for those who are struggling and going through a tough period in their lives. I don’t want to live in a society where a man with learning disabilities who is trying hard to live independently after he lost his Mum and his job in a Remploy factory has his income taken away for four weeks because he struggles to read the letters sent to him from the Job Centre, and where he finds himself in debt because no-one took the time to explain to him that benefit changes mean he has become liable for part of his council tax bill which has previously been fully covered. I don’t want to be part of a society which counts and celebrates the number of people in work, and counts the number of people on benefits, but where those people who are not in work but have been cut adrift from the benefit system become people who no longer count. I want to live together in a country where we understand that our contribution to the state through tax and national insurance funds the way we share our responsibility for the well-being of all. I don’t want to be part of a country which is driven by an ideology which believes state spending should be as small as possible, and in the pursuit of this goal fails to protect the vulnerable and leaves all of us in fear of crashing through the gaping hole in the social security safety net if anything should happen.

I think we need to live together in a society which recognises the responsibility of Government to invest in the welfare of its citizens. I don’t believe we need to pursue austerity at all costs. I don’t believe that continuing to cut, not just benefits, but the services we rely on to help us navigate through life and Government bureaucracy, is the way to build up our common life. I believe that people want to share in our collective responsibility towards one another and would be happy to contribute. I think that there are people at the wealthier end of the spectrum who could shoulder a bigger portion of this responsibility. If we really need to tackle the deficit (though if Government borrowing is so cheap at the moment, perhaps it is not the imperative we are told it is) then increasing income is just as valid an alternative to reducing costs. Serious effort should be applied to closing tax loopholes and increasing transparency so we can collect the billions in taxes currently being avoided by multinationals operating in this country. We could introduce a “Robin Hood Tax” like our fellow citizens in Europe are doing, so that we benefit more as a country from the enormous financial markets in the City of London and so that there is at least a small application of the brakes on damaging speculative short term trading.

The Feeding Britain report makes other suggestions about benefits, tax credits, access to credit, energy and water bills, access to the internet and mobile phones. All these things are key to easing the financial squeeze faced by poor households. It also suggests something which it calls Food Bank plus. The theory is once some of the measures above are put in place, households with a short term crisis will not need to use a food bank, freeing the service up to offer more support to those with longer-term needs. The report identifies that the issue of food, being such a basic physical and social need, means that people have come for help who are otherwise “hard to reach”. With a more joined-up, co-ordinated approach, Food Bank plus would offer a portal to provide better support for these people, including debt advice, benefits advice, help for mental health issues, access to credit such as via credit unions, back to work programmes, help and advice around cooking and nutrition.

I can see what they are saying. I recognise that people came to the food bank I worked for who were very suspicious of anyone from the council or social services or the job centre, but were reassured by the staff and volunteers who made them a cup of tea, listened to their problems and gave them a bag of food. But… food banks cannot become an institutionalised part of our welfare system. We must be a country where the state takes responsibility for its citizens. If people are going hungry, the system is broken and needs to be fixed. If the appropriate funding was invested in job centres and advice staff, then people would have access to the advice they need and the benefit system would be navigated successfully. If mental health services were accorded the value and funding of their physical health counterpart, then people would have confidence in the services that were offered. Likewise for social services.

We are back to discussing the kind of society we want to live in, how we want to live together. The report speaks of a lack of social glue holding society together. I don’t think it is possible to say this is all down to government cuts. However, I do believe that the way the Government is behaving is symptomatic of the reason for the lack of social glue. Business, politics, economics – it is all driven by the pursuit of growth. It is all about the bottom line. We are all here to be efficient economic units – efficient in production and insatiable in our consumption. The value of people and the relationships between friends and neighbours are sacrificed on the altar of growth. But I want to be part of a society which values people above profit. Where government policy is decided on in the light of its impact on people and communities. Our trust in one another is eroded when inequality rises, when our status is under threat, our jobs are insecure and the social contract between a government and its people is broken. We could hope that civil society will do the job of government, will pick up the pieces and look after those in need. But I thought we’d moved on from that. I thought we’d decided as a society that we would like our collective responsibility to one other to be fulfilled through the instrument of the state providing education, health and welfare equitably and justly for all of us throughout the country, regardless of status or background. Otherwise we’ll end up like the Post Office, complaining now that it has been privatised, that it is not profitable to run services in remote areas for the same price as everywhere else. We surely knew that before it was sold, that’s why it was nationally owned. As a metaphor for the current regime, the Post Office debacle tells us pretty much what we need to know.

If you’d like to read more, some great work exploring the real lives of food bank users can be found in the Listen Up report and in the Emergency Use Only report.

Other interesting comments on the Feeding Britain reports can be found below

Joint Public Issues: Feeding Britain

The Safety Net: in urgent need of repair

A Way Forward on Food Banks

As Children Starve, Where’s the State?

And if you want to read some books about growth, equality and the creeping reach of market capitalism I can recommend these:

The Spirit Level by Richard Wilson and Kate Pickett

How Much is Enough by Robert and Edward Skidelsky

What Money Can’t Buy by Michael Sandel

Psst! Do you want to know a secret?

It’s been quiet on these pages over the summer holidays. Not that stuff doesn’t happen, but getting up late and being out of the country means I’ve missed most of it. The terrible distressing stories from Iraq, Syria and Gaza haven’t gone unnoticed, but I haven’t felt able to make an informed, helpful comment on these issues.

Something else has been slipping by unnoticed, though. I expect it has slipped by most people, without them ever realising it was happening. I’m talking about TTIP. See – you’ve still no idea what that is! And if I tell you it stands for Transatlantic Trade and Investment Partnership, are you any the wiser?

It is a deal being negotiated between the US and the EU to removed barriers to trade between the two regions. So you’d expect this blog to have something to say in criticism of an unfettered free market. And I do have a problem with the elevation of “the market” as the solution to all our problems, economic at any rate. But my problem with TTIP runs deeper than this.

For a start, there’s the fact that most people have never heard of it. Negotiations are being carried out in secret, and most of our MPs don’t have any idea about the details of the deal. Its remit is wide ranging, and it needs to be subject to scrutiny. In the interests of democracy, the general public should know what is being discussed, understand its likely impact on our society, and have a say in whether they agree with this or not.

I have more concerns because most of the “barriers” to trade between the EU and the US are in the form of the higher levels of safety standards, environmental protection and workers rights which we have in the EU. Clearly it is better for business if standards are regularised, so that products are compliant across both regions. But lets guess which way standards are likely to change in areas where they differ.

Another aspect of the deal would be to force public services to open themselves up to private companies bidding for contracts, removing any option for governments to choose to keep them in public ownership. Maybe you think private ownership is a good thing, maybe you don’t. Right now, that’s a debate that is raging in the UK with regard to the NHS. If this deal is agreed, there will be no debate, and the NHS could soon be in the hands of American private healthcare companies.

TTIP could prevent better laws to protect our environment and combat climate change
TTIP could prevent better laws to protect our environment and combat climate change

But most insidious of all is the erosion of government power to introduce legislation to protect workers, consumers and the environment. If governments want to implement a living wage, or raise standards for air and water pollution, for example, and a business feels this will impact on their profits, they will be able to sue that government. Not through the usual channels of the national court, but by taking them to an ad hoc secretive arbitration panel, overseen by corporate lawyers. Businesses already hold way to much sway over government policy. This further diminishes government’s ability to make policies for the public good, where people’s taxes will end up paying for corporations to keep the law.

I don’t think you need to be against free trade to recognise that this deal, as it stands, is bad news. Large multinational corporations don’t need more power. It is difficult enough to make sure they pay proper taxes, don’t exploit their workers and take responsibility for tackling climate change and taking care of the environment. And we certainly don’t want to be handing over power to big business in secret without knowing what is being negotiated and given up on our behalf. The secrecy and the strait-jacketing of our elected governments make this deal an attack on democracy.

If you’d like to raise your voice in opposition, you can join the campaign on the 38 degrees website. If you’d like to read more, try George Monbiot or this blog.

HMRC says I’ll Take That

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I’ve found the reaction to Gary Barlow’s failed tax avoidance scheme very interesting. As I understand it, the scheme he (and a few other people too) invested in (apparently to support up-coming musicians) has been ruled not to work as a means to off-set taxes due, so the tax on earned income invested in the scheme becomes payable. He hasn’t actually done anything illegal, unless he now fails to pay his taxes, and yet there have been calls for him to return his OBE.

Have we finally reached the point where trying to find and exploit loopholes in tax laws is considered morally wrong if not illegal? Perhaps it’s the OBE that upsets us – given for raising funds for good causes which would probably have benefitted from his tax revenues. Perhaps it’s just because he’s been found out – should or would we have felt the same outrage if the tax scheme had been ruled as legitimate?

However we look at it, it seems to me that we’re not keen on the idea that someone with lots of money isn’t contributing their fair share to the welfare and benefit of all society. This runs contrary to what our Government believes – that we mustn’t tax our so-called wealth creators too hard or they will run away and take their wealth creation elsewhere.

But wealth creators only benefit society if their wealth is shared around into the economy. The theory of trickle-down economics has collapsed under the pressure of the growing gap between rich and poor since the advent of Thatcherism. Rich people’s money isn’t circulated in the economy – it is hidden away in off-shore, tax-free investments. If we want the rich to contribute to the well-being of all, it’s going to be through taxes.

We seem to have the same attitude when it comes to companies too. Even our politicians are up in arms at the idea that the American pharmaceutical Pfizer wants to take over the British Astra Zeneca because they suspect the deal is all about stripping the assets from the British company and then benefitting from the low tax rate in the UK. In other words, using Britain as a tax haven. But it is the same politicians who have created the environment to make this possible. Attracting companies from overseas is one thing, but like with individual wealth creators, the wealth that is created needs to come into the economy.

So what do we really want? Do we create the conditions for individuals and corporations to pursue wealth for their own benefit (after all they have worked for it) and hope that we might gather up some crumbs from the table? Or do we want a system which works in the best interests of the whole of society, where each (individual and corporation) contributes to the good of all according to their means? The public reaction to both these stories suggests we want everyone to contribute to a better society. Let’s do what we can to make sure these principles are applied by those in power making our legislations, and think about these principles when we vote on Thursday.

Finally, thinking about contributing according to means and progressive taxation, I’m going to leave you to look up a story Jesus told about the offerings of the rich compared with a poor widow in Mark 12 v 41-44.

Calling to Account

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Last Friday it was time to put my money where my mouth is. I posted on this blog a few months ago about a campaign training event I went to with ShareAction and Christian Aid. If we have shares in a company, directly or via pension funds, then the company is investing our money, and we have the right to hold them to account. I previously wrote about a campaign to challenge pension fund managers, but the training also dealt with attending a company AGM to ask a question as a shareholder.

So, on Friday, I found myself, standing at the podium, as a corporate representative for ShareAction, ready to ask a question at the RSA AGM. My heart was thumping and my knees were shaking, but my voice was steady and the room was listening.

RSA is an insurance company, better known as More Than for personal insurance. They’ve had a bad year, making as big a loss last year as their profit the year before. There was a lot of hostility in the room towards the board from shareholders who had seen their dividend disappear. I’d expected to be intimidated by the board, but it was clearly the board which was on the defensive.

Louise, who came with me from ShareAction, had met me outside the trendy building in Central London, prepared all the paperwork, including the question, and filled me in on the company background. We signed in and then registered our questions. We already got a positive response from the team registering questions to our plan to ask the company about its tax arrangements. “I hope you get a good answer”, we were told. As a veteran of these occasions, Louise made me feel at home, and introduced me to another AGM campaigner preparing to challenge the company about its poor performance.

I asked my question about the company’s business in places used as tax havens, wanting to know if RSA had substantial business there, or just used them for tax minimisation purposes. Despite identifying the need for transparency, and the risk to the business of a tax avoidance scandal, the best answer RSA could offer was that it complies with all appropriate tax law. I tried to follow up suggesting that the issue was about more than compliance, but the board hid behind the need to manage their taxes for the benefit of the shareholder. Louise asked about climate change, but also followed up my question for me, eventually getting the board to admit that some of these subsidiaries were there for “corporate purposes”.

It was good to be able to directly ask a company whether they were using tax havens. I wasn’t sure how much difference this would make to the company’s actual behaviour, but Louise seemed to think that the evasive answering indicated that RSA was embarrassed by our question. Asking questions at an AGM is not going change things over night. It is one campaigning tool among many, aiming to raise awareness of issues with companies which might not otherwise consider these things, putting things like tax and climate change higher up the agenda, chipping away at accepted norms.

Would I do it again? Yes! Fitting in a trip to London has its own challenges, but there’s always the free lunch! Next time I’ll bring a bigger bag, as snaffling a couple of napkins full of flapjacks and brownies would seem to be the order of the day.

 

 

Another Tax Scandal

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How much tax do you pay? Do you even know? Do you begrudge it or willingly contribute to the public services which benefit us all? Attitudes to tax have undergone rather a transformation in recent years, starting with campaigns by NGOs like Christian Aid. And these days, cuts in public services brought about by the government’s austerity politics don’t sit well with revelations about multi-national corporations’ tax dodging.

So now, tax isn’t dull and boring, or even taboo anymore. It’s on everyone’s lips, it’s making people angry, it’s considered a matter of justice. And what we’re really worked up about is the fact that some big companies, which seem to be doing pretty well for themselves, operating in the UK , benefitting from our infrastructure, aren’t paying any tax. They aren’t giving anything back. Google, Starbucks, Amazon, by clever accounting, have avoided their tax responsibility, while hard-pressed citizens are contributing while their wages are frozen and their hours are cut.

I watched a film last week which showed up how the UK is at the heart of global financial markets and at the heart of systematic global tax dodging. “The UK Gold” is an award-winning film by Mark Donne and Joe Morris and uncovers what is going on under our noses in the City of London.

The film shows, that as the British Empire disappeared, outposts remained in places like the Cayman Islands, Bermuda and British Virgin Islands. Here, laws are passed which are much more for the benefit of other people than the local residents, allowing businesses to record activity there which happens elsewhere. Profits are recorded where tax rates are low or non-existent, et voila! The tax haven is born.

But it doesn’t stop there. For me, the real scandal is not what goes on in a far-off sea, but what happens much closer to home. Most companies in the FTSE 100 index have subsidiaries in tax havens. It is these links in the Caribbean, Singapore and Hong Kong which make the City of London so desirable. Whatever the government might say, the City of London has no interest in closing tax loopholes or opening up tax havens to greater scrutiny, or shutting down their existence altogether. And the City of London is pretty good at protecting its own interests.

The UK Gold shows a vicar from Hackney trying to get elected to one of the wards in the square mile of the City of London. The City has its own authority, its own version of democracy (where businesses have far more votes than residents), even its own police and Lord Mayor (not Boris Johnson!). And just to make sure government doesn’t do anything silly like pass a law which might allow some of the trillions of pounds which pass through the city actually benefit the rest of the country, it has its own special seat in the House of Commons and House of Lords. Not a democratically elected seat, but a special one, right next to the Speaker, called the City Remembrancer, so he (and it will be a he) can whisper in the Speaker’s ear and lobby for vested interest in the very heart of our instruments of democracy. I don’t suppose the enormous wealth of the City of London will be included in restrictions on funds spent on lobbying on election issues within 12 months of an election in the proposed gagging law

I had a mix of emotions after the film – ranging from weary cynicism that the world was ever thus, through a despair of impotence, to indignant rage that we are being fleeced right under our very noses. But Billy Bragg, speaking from the mainstage at Greenbelt, said that cynicism is our biggest enemy, and organisations like Christian Aid and Oxfam mean that our rage can be put to work, rather than leaving us impotent.

Things are changing. Crown Dependencies and Overseas Independent Territories have had to sign agreements to disclose information to tax officers and not keep it secret. This came about under the pressure of the Enough Food for Everyone If campaign. David Cameron recently announced that the real (“beneficial”) ownership of countries will have to be recorded and the list made available to the public in the UK. This has been the subject of Christian Aid’s latest campaign. Uncovering the secrecy is the first step to holding businesses and people to account, and campaigning is making a difference in this area. You can join Christian Aid’s campaign to make the beneficial ownership information public in the rest of the Europe here. And we can keep talking, blogging, asking, writing to our MPs, keeping the tax on the agenda. Because that money has been stolen from us, from our public services. And not just in this country, but all round the world. Christian Aid estimates that $160 billion is lost to poor countries every year – much, much more than they receive in overseas aid, and that really is a scandal.

Close the Gap

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After my last post about Kate Pickett’s lecture on the Spirit Level, Liam Purcell from Church Action on Poverty told me that their current campaign to Close the Gap was inspired by this research. I’ve been following and supporting this campaign, so I thought I would write a piece all about it.

The Spirit Level investigates how the relationship between a country’s economic growth and the health and wellbeing of its citizens breaks down once a country reaches a certain level of income. The UK has reached this level – until the recession the UK was getting richer but not healthier or happier. Other things were making a difference, and the Spirit Level research demonstrates that differences in income inequality between countries can account for differences in health and wellbeing. Not only this, but reducing income inequality brings benefits not only for the poorest people in a society, but for every sector of the population.

Church Action on Poverty is campaigning to Close the Gap between rich and poor. This would not only transform the lives of those on the lowest incomes, people who Church Action on Poverty works with on a regular basis, but would also make our whole society fairer, happier, healthier and safer. The campaign focuses on four areas: fair taxes, fair pay, fair prices and fair say.

Fair Taxes

Anyone who knows me IRL knows I’ve been campaigning with Church Action on Poverty and Christian Aid on tax since the tax bus came to town! We’ve all been pretty annoyed that Starbucks, Google and Amazon, to name but a few, seem to be able to operate and make profits in this country without paying their fair contribution to the infrastructure which makes their operations possible. Christian Aid also offers a perspective from poorer countries. If we need company taxes to help our economy, how much more important are they in countries with smaller incomes and bigger needs? Tax was a key part of the recent IF campaign, calling for the closure of tax havens loopholes, disclosure of information between tax jurisdictions, and a public register of who really owns companies (beneficial ownership) so money can’t be hidden and citizens can hold businesses to account. We have really put tax on the table, and just in the last few days, the Prime Minister announced that the UK would publish a register of beneficial ownership and that this register would be public and not just for the tax office. Now Europe and the US needs to follow suit.

More needs to be done to close loopholes and tax havens, and Church Action on Poverty is asking for a re-think on tax. It is part of belonging together to contribute to the welfare of all. This is true for businesses and individuals, and we need to build a fair and transparent taxation system that reflects this attitude. If you want to see more about how the UK is still hiding money and how companies in the City of London are not paying their fair share, come and see the film The UK Gold, being screened in Liverpool on 21st November 2013.

Fair Pay

Did you know that this week is Living Wage week? Do you even know what a Living Wage is? It is calculated independently of governments in this country by the Joseph Rowntree Foundation (yes, originally the chocolate guy) and is the hourly rate someone working full-time would need to be paid in order to reach what the public considers to be an acceptable standard of living. At £7.65 an hour (£8.80 in London) it is considerably more than the minimum wage of £6.31 (no London rate).

Those who criticise the Living Wage suggest that it would be too expensive to implement and would put people out of business. The first thing response is to remind people that the Living Wage is voluntary and functions as a standard to aspire to. But in case you think that is a cop out, from the reading I’ve done, those organisations which have implemented it have found that improvements in productivity and reductions in sick pay have more than outweighed the cost. I guess it depends how low your starting point is, but the same argument was raised when the minimum wage was introduced, and there was no corresponding increase in businesses going to the wall.

In fact, introducing a Living Wage looks like it would actually save the government money. A new report from think tanks IPPR and the Resolution Foundation suggests that paying everyone at least the living wage would save the government £2.2 billion a year because of a reduction of in-work benefits and an increase in tax and NI contributions, even taking into account the fact that it would be spending more on paying public sector workers. This is something that has vexed me for a while. The Government is effectively subsidising industries which pay low wages, which includes in particular retail and care. There are plenty businesses in these sectors making handsome profits. By topping up low pay, the Government makes low pay a sustainable option and allows it to continue, while supermarkets (for example) continue to rake it in. The solution is not to cut in-work benefits but improve pay, as is beautifully described in this article by Polly Toynbee. She also says “For the long term, power needs to flow back towards the utterly powerless employee. A German-style seat on the board, as well as on the remuneration committee, helps contain top greed…Companies should be obliged to publish their pay ratios, from top to bottom.”

This is the second strand of Church Action on Poverty’s fair pay demand. We need to question whether huge salaries paid to anyone are justified or acceptable. It is not just a question of whether someone is worth it, but rather is it fair or just that in our society there is such discrepancy in pay. There needs to be a shift in attitudes so that pay ratios between the highest and lowest paid workers of 100:1 or even 200:1 are no longer acceptable.

Fair prices

Working with people on low incomes as a debt adviser has really opened my eyes to just how expensive it is to be poor. My dual fuel, pay by direct debit, paperless billing discounts are not available to someone who has to use a pre-pay gas or electricity meter because they are having difficulty meeting their bills. The weekly shop is also much more expensive if you have no transport to the big out-of-town supermarket and have to rely on local shops. Even the buy two get one free offers are out of reach on a low income, never mind carrying all that extra stuff home on the bus!

Another big issue is the cost of credit, significantly more if you are on a low income, and harder to obtain. This is why door-step lenders, payday loan companies and hire-purchase businesses are thriving, because if there’s nowhere else to borrow money and your washing machine has packed in, what else are you going to do? The cost of borrowing like this is astronomical, there is no limit on the fees and charges added on by lenders, and very little checking up on whether a borrower has the ability to repay. If you get behind with your repayments, or “roll-over” your loan for another month, the debts very quickly mount up and become unmanageable and unpayable.

Church Action on Poverty is calling on businesses to stop charging premium rates to their poorest customers and instead introduce social tariffs. United Utilities, water providers in the north west, already do this, and it is an enormous help to some of the people who have come for debt advice. Church Action on Poverty is also calling for a cap on the overall charges which can be levied by lending companies. Regulation for payday lenders is being discussed right now, so if you want to add your voice to calls for fairer lending, you can sign this petition.

Fair Say

How easy it has been for society to slowly but definitely increase the gap between rich and poor, and make life more and more difficult for those at the bottom of the heap. It is easy because those at the bottom lack power. Those with the money not only have power over business and policy decisions, but also over what you get to hear about, what gets discussed in the media, and the way we think about those who have not. Church Action on Poverty works with poor communities, not just to alleviate their needs, but also to give them a voice, to be able to advocate for themselves and bring about their own transformation.

I know I sound like an old-school leftie, battling against the hegemony of the establishment, as if we were lost in 1984 (the novel not the year) with the thought police. But I challenge you to read that report I mentioned in the last post – Poverty: Truth and Lies. And when you’ve read it, then tell me that those in power are not controlling the discourse.