Slash ID cards, cut Trident – it’s time to help the needy

By Hugh Lanning

In a recent online debate, readers of the Economist were split 50/50 as to whether the rich should pay higher taxes. In contributing to the discussion I made the point that the rich should pay more taxes in three ways.

First, they should pay what they owe. There are billions of pounds in tax that they evade and avoid.

Secondly they should pay the same as us, not less. The tax system needs to operate so that the effective proportion of tax they pay is not less than that of the rest of the population.

Finally they should contribute to society more than others, because they can afford it. In recent evidence to the Irish Government, the Irish Congress of Trade Unions revived the old notion that all sectors of society should contribute in accordance with their ability to do so.

For watchers of Saturday night television, you’ll know the bad King John needs more money, for which we can read “public expenditure” in modern parlance. So which model should we follow? The Sheriff seeks to tax the poor, Robin robs the rich.

But is our choice really just between being the bold outlaw or the bad guy? If the Sheriff represents the state, he should be sacked. He hardly operates a fair tax system for all – one that has no exceptions and is transparent and seen to be just. Hanging peasants in the castle grounds is a harsh form of justice. On the other hand, highway robbery is not an efficient system of tax collection either.

But these are not the choices – we want fair rules – the rich do not pay what they owe. They spend millions to accountants to evade and avoid paying taxes.

Although only evasion is illegal – both are wrong.

The public sector should be an exemplar but it colludes with Universities and many others to avoid paying VAT and other taxes. The HMRC – the old Inland Revenue and Customs departments merged – need to be given more resources, more jobs not fewer. Over 20,000 jobs have been cut, but each post collects over £600,000 more than it costs. The HMRC should have an imperative to collect taxes. At present it chases – on one floor – poor individuals for £200 tax credit whilst on another not bothering with firms owing less than £20,000. Revenues have declined due to recession, so why not collect more? And whilst we are at it, move towards a more progressive tax system.

For trade unions and workers in the public sector – they are coming for us. You only have to see the measures brought forward in Ireland (7% pension levy) and in Eastern Europe (IMF imperatives to cut jobs, pay and public services). We should instead be aiming for public expenditure growth – for example a modest 2% of targeted expenditure with a focus on social protection.

In a recession, the priority should be social protection of those growing millions of unemployed, on benefit – the young and the old. To quote ICTU again: the most vulnerable, low paid, unemployed and social welfare recipients (should be) insulated against the worst effects of recession. We should stop conditionality of benefits when there are no choices, no jobs to go to. We are not opposed to helping people back into work, but work fare – making people work to get benefit – is a return to Poor Law ethics.

Instead we should have a work agenda:

First, drop the Welfare Reform proposals

Why pay the private sector more for doing a job less well than their public sector counterparts in Job Centre Plus? Why pay people to try to place the unemployed in jobs that don’t exist. Instead, benefits need to be put up to sustainable levels – £63 is not enough to live on. We need to support those in work to stay in work – every redundancy adds to the DWP budget.

Next, there should be no pay cuts – let’s raise the minimum wage to something more like a living wage – that is, one you can live on.

We need to fight for the rights for all too decent work – not protectionism for British workers. To pander to, rather than fight fascism cannot be the solution. If we invested in people they would see that money was being spent for a purpose – to protect jobs. This would undermine the far right far more than ID cards, tighter immigration laws and protectionist slogans.

So who’s going to come to the rescue – who will wear Robin’s tights to deliver this agenda – Gordon? Brendan? Actually there is a huge consensus – with only minor variation. If you look at the TUC’s agenda produced for the G20, Put People First, Oxfam’s Meet Fred agenda, Compass or Bob Crowe’s People’s Charter – there is no real difference in words or solutions. The challenge is to be proud and bold: to promote and campaign for a pro-poor tax and welfare agenda which aims to get the rich not the poor. We need to build on the 40,000 who marched in the wet on the Saturday before G20. This will require a Public Services Alliance bringing together all those who believe in, use and want public services for the future. The political debate in advance of the general election is already becoming how much to cut – this is the wrong question, the wrong debate.

We cannot lose sight that these problems are global – which need international solutions. The developing countries are the most likely victims once again. It will help if, following the G20, we do clean up the international finance system – move towards tax justice, not tax havens. The poor get ripped off not just here, but globally. The worldwide fight is for quality jobs everywhere, compliance with ILO labour standards to undermine off-shoring work to the cheapest location.

Opinion polls – even recently – have demonstrated that there is a majority view: people want to have a fair tax system that means everyone pays their fair share in order to protect the public services they want and need. Not to prop up rich bankers or buy Trident. They do not see or understand why they should have to pay more taxes whilst others don’t.

The only issue is are we prepared to do anything, though to do nothing means defeat. To be fatalistic about the future means our worst fears will come to pass – a Tory Government with a mandate from hell. We need to build a consensus to protect public services and for tax justice and – to quote Oxfam – for a pro-poor agenda that is difficult for any future government to slash and burn.

Let’s stand up and be counted.