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Tax Avoidance and Evasion

Part of the debate – in the House of Commons at 12:44 pm on 25th February 2020.

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Photo of John Martin McDonnell John Martin McDonnell Shadow Chancellor of the Exchequer 12:44 pm, 25th February 2020

I beg to move,

That this House
notes that the tax gap, the difference between the amount of tax that should be paid to HMRC and what is actually paid, has been estimated at between a minimum of £35 billion and £90 billion;
believes that successive Conservative governments have failed to address tax avoidance and evasion while making savage cuts to public services and undermining the social security net;
further notes that the Tax Justice Network has described the UK as backsliding on financial transparency;
is concerned by reports of the Conservative Party’s links with individuals and companies that have engaged in tax avoidance;
and calls for the proper funding of public services after a decade of austerity and for robust action to tackle tax avoidance and evasion.

With a Budget in just over a fortnight, over the coming days we will be setting out an agenda of issues that we believe the Government need to address to tackle the social and climate emergencies that our country now faces. And yes, there is a social emergency in many of our communities. Yesterday, my hon. Friend Jonathan Ashworth, the shadow Health Secretary, exposed the appalling levels of health inequality across the regions of our country. Today, the Marmot report shows what he described as the “shocking” results of 10 years of austerity: life expectancy has stalled for the first time in more than 100 years, and has even been reversed for the most deprived within our community, women in particular.

Yesterday, Andrew Gwynne, the shadow Secretary of State for Communities and Local Government revealed the scandalous impact of cuts to local councils—for example, the impact they have had on the services desperately needed to keep our children safe. This afternoon, my hon. Friend Barbara Keeley, the shadow Minister for mental health and social care, will describe the immense suffering and distress caused by the cuts in social care imposed by this Government. Members will remember the report only last year, reporting that 87 people died each day before actually receiving the care they needed.

At present, we have a Government who, on this evidence, have proved to be incapable of providing care for our people, of housing our people, of feeding them or of providing the work that will lift them and their families out of poverty. There is a lot of hyped-up talk about the big expenditure numbers that might be associated with the coming Budget. What we are interested in is outcomes, and the impact on the wellbeing of our people. These will be the key tests of the forthcoming Budget. Will it really end austerity? Will it really reverse the decade of austerity cuts that have been imposed on our community by this Government? Will it ensure that our people are properly cared for, properly housed, properly fed and lifted out of poverty? Alongside all of this, in a week when we have seen the Prime Minister’s failure to respond to the flooding that has damaged so many of our people’s lives, the overriding test is: will this Budget tackle the existential threat of climate change?

It is interesting that, contrary to virtually all the advice from mainstream economists 10 years ago, the newly elected Conservative Government took the political decision to impose austerity cuts on our community. As we have repeatedly said, it was a political choice, not an economic necessity. The alternative was to ensure that we had a fair taxation system to fund our social infra- structure, and that we borrowed to invest in our physical infrastructure to grow our way out of recession. The reality is rather that the neo-liberal ideologues simply could not let the economic crisis go to waste. They seized the opportunity to launch their experiment to downsize the role of the state through cuts, outsourcing and privatisation. This was linked to ever more restrictions to reduce the effectiveness of trade unions to represent their members and to shift the balance of power between capital and labour in the workplace.

The result has been that virtually every area of our public services is in crisis, with the slowest growth in wages in 200 years, 8 million of our people in working households in poverty and over 4 million of our children in poverty. The UN rapporteur has described levels of destitution in our country and the treatment of disabled people as an abuse of human rights. The Government’s alibi for austerity was the global financial crisis, even though Government spending was never a cause of that crash. Now, 12 years on, the Government no longer have that fake alibi for the cuts. It is clear the Tories do not just want to shrink public services and cut public sector jobs in the short term; they want to downsize our public services for good—as the Institute for Fiscal Studies has said, baking austerity into Government.

All this suffering, all this hardship, all this holding back the potential of a near-generation of our people would have been rendered completely unnecessary if we had had a fair taxation system and had invested in our economy. A fair taxation system starts with ensuring that people and corporations pay their taxes. That patently is not the case at the moment. There is much talk about levelling up; well, let us start with levelling up the rules of taxation and the amount many of the rich and the corporations pay in taxes.