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A genuine alternative

13 July 2010

The emergency budget on 22nd June 2010 was hard hitting. A dark day for many low paid, vulnerable young people in society. YM Equalities Officer Debbie Mallet explains why itÂ’s unnecessary and that there is an alternative.

While PM David Cameron hid behind the Lib Dems in the House of Commons, Chancellor George Osborne delivered a typical Tory budget hammering the poor, further protecting the rich and marking a swift return to Thatcherism.

The Liberals backed out of pursuing their main pre election promises which helped secure them seats in Parliament. Instead, they backed many of the Tory led policies despite being vocal in opposing them throughout the election campaign.

Onslaught

The public sector has been hit with a two year pay freeze and could see thousands of job losses over the coming months. Front line staff in HM Revenue and Customs (HMRC), the department responsible for collecting income tax in the UK, is expected to be directly affected.

Currently, the ‘tax gap’ - the amount of tax uncollected or evaded is estimated at around £120billion. Twenty thousand jobs have already gone from HMRC with a further five thousand being cut by 2011. It’s been PCS' argument for some time that Government should invest in public services to help collect more of this revenue in.

PCS has joined the campaign against tax injustice with organisations such as War on Want and The Tax Justice Network. By actively campaigning against this, it would ensure we had the resources to collect outstanding tax which could then be ploughed back into vital public services.

Make them pay

Companies see tax dodging as a legitimate part of their operations. Approximately £250billion goes uncollected in the developing world as a result. The UK’s tax debt alone could provide double funding for the National Health Service (NHS) overnight.

Registering companies in ‘tax havens’ is a popular way of hiding true amounts of tax which they should be paying and ensures they only need to pay the absolute minimum. But as these large companies rack up huge profits, it’s the lower paid in society left to foot the bill.

PCS has put forward a number of proposals which we believe would make a fairer and more efficient tax system. We want to see tax avoidance made illegal to rid our system of loopholes exploited by the rich. We want money invested into tackling tax evasion.

We want the tax allowance system changed. For example, the tax relief on pension contributions for people earning over £100,000 a year costs approximately £10billion annually. We believe multinational companies and the rich should be paying their fair share.

HMRC has written off £11billion in uncollected revenue because of a lack of resources. We want an end to cuts in HMRC to allow staff to collect as much as they can and we want an introduction of a transaction or ‘Robin Hood’ tax on financial transactions in the City and abolish tax havens.

Reducing the tax gap would give the Government more options than just making more and more cuts.

About the campaign


The Robin Hood Tax is a tiny tax on banks, hedge funds and other finance institutions that could raise billions to tackle poverty and climate change internationally.
 

Starting as low as 0.005 per cent – and average 0.05 per cent when levied on the billions sloshing round the global finance system through transactions such as foreign exchange, derivatives trading and share deals, it could raise hundreds of billions of pounds every year.
 

For more information or to get involved by signing our tax justice pledge online visit www.pcs.org.uk/taxjustice