What We Learned Last Week (01/12 – 07/12)

kamsandhu —  December 8, 2014 — 4 Comments

1) Chancellor holds back £30bn surplus in National Insurance pot, as families are driven to poverty and food banks

Image: businessforscotland.co.uk

Image: businessforscotland.co.uk

It has been revealed that Chancellor George Osborne sat on a £30bn surplus in National Insurance last year. The House of Lords Library shows that £106bn was spent from National Insurance contributions last year, with £85bn spent  on the benefits system and £21bn on the NHS.

Writing in the Daily Mirror, Deputy Prime Minister John Prescott explained his findings:

“I discovered something that stunned me – the Government last year held back nearly £30 billion”, he said.

“National ­Insurance money can only be used for the NHS or benefits. So since he can’t spend it on anything else and chooses not to fund ­hospitals, the Chancellor lets it sit there.”

Can there be a clearer display that the economic policies of this government are ideological?

Bear this act in mind when the Chancellor claims we need to cut welfare by £25bn, that we don’t have enough to fuel the NHS, but do have room for another tax cut for millionaires.

Read more about this story here.

2) Autumn Statement: Misery and lies

The Chancellor George Osborne announced his Autumn Statement on Wednesday. Again, he manipulated statistics and attempted to appease the public with some extra funding for the NHS (expect more of this appeasement in the run up to the elections) however, these statements are insincere.

One big trope used by Conservatives is feigning that we all of a sudden have a ‘strong economy’ – ‘the fastest growing in the G7’ is a phrase that gets bandied about. What Conservative representatives fail to tell you is that fast growth following harsh stagnation for long periods is not difficult to achieve, but more importantly we are also the only country in the G7 to have wider inequality than we had at the turn of the century.

This means that for most of us, things are no better or are worse, but for a small handful, the top echelons of society, bank balances are still growing.

The richest 1000 people have increased their wealth by 50% since 2008 – enough to wipe out the deficit. Bank managers have paid themselves bonuses worth £81bn since 2008. Again, enough to wipe out the deficit. Yet, George Osborne fights to stop limits to these bonuses and gives us Autumn statements that tell us we must cut further from welfare and the poorest, knowingly plunging people, families, children into insecurity, poverty, hardship and illness.

Osborne also claimed that because we have such a ‘strong economy’ he can afford to give the NHS an extra £2bn. This isn’t true. Firstly, there is no strong economy. There is no strong economy. The Conservatives have borrowed more in their four years than 13 years of the previous government. Borrowing has had to increase due to weak tax receipts because lots of rich people don’t pay their tax, and the growth of low pay employment has meant that those in work are not earning enough to pay tax. The deficit would be gone by the next election said Conservatives in 2010, yet every target has been missed.

And on the protection of the NHS, a senior Tory was recorded saying that Cameron would have to renege on promises to ringfence NHS spending if he is to win the next election and cut the deficit. Further, plans to overhaul A&E services have been put on hold due to risk of backlash described as potential ‘political suicide’ this close to the election. This means that they would do it despite it being clearly against public interest and opinion. And they will do it if given the chance of another term. And let’s not forget all those lucrative connections for Conservative Ministers who want to profit from our NHS, like Steve Dorrell MP who was also acting as adviser for KPMG while they eyed up a £1bn NHS contract.

The Conservatives do not care for our NHS, our welfare or the lives of those not in the top 1%. Apparently, they ‘have no need to attract dog-end voters in the outlying regions’ and in these sorts of statements we see not just the understanding of who this party is for, but also their indifference to the treatment and lives of those they aren’t.

In the run up to the election, we must also be aware of attempts by government to shut down any challenges and debates, as we saw when the Chancellor blasted the BBC when a reporter described the budget as ‘utterly terrifying’ and condemned the deepest cuts since the 1930s. The Chancellor claimed it was ‘nonsense’ and called the BBC ‘hyperbolic’. Though with the Institute for Fiscal Studies also claiming that government spending cuts would have to happen on ‘a colossal scale’ (with £35bn having already taken place, and £55bn yet to come) it seems difficult for the Chancellor to keep his facade even in Mainstream press.

Though that doesn’t mean that there isn’t plenty more hidden within these statements. While the Chancellor withholds money from benefit claimants and our NHS, PR for corporate companies is happily funded:


Read more about this story here. (Though be aware – these points about the Autumn Statement from the BBC do not challenge the things that Osbourne said, such as his comments G7 as we have above. This is merely a list of the points from the statement).

3) Lack of anti-tax avoidance laws contributing to ‘yawning’ tax gap

Image: blogs.telegraph.co.uk

Image: blogs.telegraph.co.uk

And as we are told that there ‘is not enough to go around’ and we must ‘tighten our belts’ and the Chancellor creates budgets to eat away at the morsels of life for those at the bottom of the economic scale, a study from Tax Research LLP on behalf of the PCS Union, shows that the tax gap – the gap between what should be paid in UK tax if the system worked as intended and what was actually paid – is over £119bn.

“The figures clash significantly with those produced by HMRC, the government’s tax collecting body. The PCS-commissioned research estimates that over 2013 and 14 the UK lost £73.4bn to tax evasion (“tax lost when a person or company deliberately and unlawfully fails to declare income that they know is taxable or claims expenses that are not allowed”) over the course of the studied period, dwarfing the official government estimate of £22.3bn.

“The other areas that contribute to the tax gap are tax avoidance – defined as “tax that is lost when a person claims to arrange their affairs to minimise tax within the law in the UK or in other countries”. The PCS estimates tax avoidance costs the UK economy £19.1bn over the course of the year. Tax debt – tax which is not paid by a person or company who knows that they owe it, but who don’t pay or delay payment – cost the UK £18.2bn over 2013-14.

“While the total tax gap has narrowed slightly from the £120bn Tax Research estimated in 2010, tax evasion has been rising quite sharply over recent years and is predicted to do so.

“Tax Research estimates that the £73.4bn estimate will grow beyond £100bn in 2018-19 should the UK government not take action.

“In a pamphlet written to accompany the report, the research’s author Richard Murphy recommended that the UK government introduce wholesale reform to its tax law to incorporate avoidance strategies, and “the introduction of country-by-country reporting for multinational corporations” combined with “a reversal of the cuts to staff in HMRC and at Companies House”.

Where is the clampdown on this loss of vast amounts of money? Richard Murphy once described tax evasion as ‘the cancer eating our democracy.’

Read more about this story here.

by Kam Sandhu @KamBass

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4 responses to What We Learned Last Week (01/12 – 07/12)

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