Thursday, 16 September 2010

Mervyn King backs the Tax Justice campaign?


Mervyn King addressed the TUC yesterday. Much of what he said - and the reaction to it - was fairly predictable (and there's a good report in the Morning Star).

However, King - who had assiduously avoided commenting on policy with a stock line "that's not for me to comment" - gave the tax justice campaign a shot in the arm with his cagey endorsement of the question put by PCS President Janice Godrich.

With the annual tax gap estimated to be around £120 billion, Janice asked if Mr King agreed with the union that tax loopholes should be closed, HM Revenue and Customs should increase staff rather than cut them and decisive action should be taken against tax evaders. Each tax compliance officer brings in £658,000 of revenue.

Mr King said he could not comment on tax policy but that the case seemed "persuasive" and was "irresistably" put.

Speaking afterwards, Janice said: "We have seen recently the massive problems caused by staff cuts in HMRC and with billions of pounds in tax revenue going uncollected every year, it makes absolutely no sense to go even further.

"If the chancellor of the exchequer was persuaded by our arguments as Mr King seems to be, and had even a fraction of this money in his coffers, it would change the terms of the debate about public spending overnight.

"Collecting the tax that is owed, largely by very wealthy individuals and organisations, is part of the real alternative to the government’s cuts that are being driven by dogma rather than good economics."

With the endorsement of the establishment Mr King, the £120 billion tax gap must now be a priority for the coalition government in place of devastating public sector cuts

The tax gap, as part of the alternative to public spending cuts, was all over the TUC this week - as Richard Murphy blogs - and hopefully the issue may find its way into the debate again at Labour Party conference.

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