Cuts to Welfare, Subsidies to Corporations – The hidden welfare state

The Black Triangle Campaign was founded to support the human rights of disabled people and to oppose the Government’s “Work Capability Assessments”, which re-classify sick and disabled people as “fit for work”.

 

The hidden welfare state that the U.K. government dares not speak of

The UK has two welfare states. There is one that is reported and endlessly discussed, and another, which is rarely mentioned. Whilst the first is suffering enormous cuts under the Tory/LD coalition, the other just keeps expanding.

Governments on the left and the right can always justify welfare cuts by pitting, for example, mobility scooters against needle exchanges, or the soft-play area in children’s playgrounds against an old people’s home. Who deserves it most, they say, students or cleaners? Old or young? But when we’re running not one, but two welfare states, that’s a totally fake scenario. The real choice is between playgrounds or gas rigs; between Meals on Wheels or The City of London Currency Speculators’ Maintenance Allowance.

There’s a connection – never mentioned – between, let’s say, Britain’s eight new deep-water gas rigs and its new food banks. The connection is that the $4.5 billion subsidy package being doled out to transnational gas corporations is a very big slice of the welfare pie. And to keep the gas transnationals on the benefits to which they are addicted, hungry humans have to queue for tinned food that is too close to its sell-by date to be kept on the shelves of supermarkets, many of which are themselves massive recipients of corporate welfare.

Not only does the UK pay out unemployment benefits less generous than Romania, Albania and the US, but the wages of the employed have simply not kept pace with productivity over the last 30 yrs. Tory Ideology is all about Handouts to the Wealthy paid for by the Poor.George Osborne has cut £18bn from benefits plus a further £81bn from public services in the name of unavoidable austerity, whilst at the same time providing huge subsidies, tax cuts and removing regulation for the hidden ‘welfare’ system that benefits the private sector.

No goods or services are directly returned to the government in exchange for these expenditures, although of course, politicians will argue that they’re stimulating the economy, helping struggling industries, creating jobs or funding important research but actually this is just a corporate welfare system.

The Cato Institute, for example, estimated that in the US, $93 billion were devoted to corporate welfare in 2002. This was about 5% of the federal budget, and nearly twice the amount spent on social welfare ie. feeding people, housing the homeless, raising children out of poverty etc.

There is no reason to think the situation is different in the UK. However, overall statistics for the UK corporate welfare budget are hard to discover, and the variety of different subsidies are staggering. Needless to say, the Tories focus their attention on fraud and waste in the social welfare budget.

Welfare fraud and waste is never far from the top of the UK’s news agenda – but the real figures often bear almost no resemblance to popular belief. The British public, for example, think around 27% of the welfare budget is lost of fraud, according to TUC research.

The Department for Work and Pensions’ latest data on fraud and error in the benefit system shows a very different reality: fraud exists, but at a far lower level than the public believes – and is outweighed by errors from claimants and officials alike. The DWP estimates £3.5bn has been overpaid due to errors and fraud in the system; 2.1 per cent of the overall benefit expenditure.

The corporate welfare budget arises from four main sources: Paying little or no tax – Tax havens; tax breaks; enjoying huge subsidies and the removal of employment and environmental protection regulations.

Tax Havens
 The UK’s 100 biggest public companies are running more than 8,000 subsidiaries or joint ventures in onshore and offshore tax havens, according to research. The figures, published by the charity Action Aid, show that only two of the companies listed on the UK’s FTSE 100 have no subsidiaries in tax havens – while companies such as Barclays and Tesco own hundreds. http://www.guardian.co.uk. The UK Crown Dependencies and Overseas Territories constitute half of the world’s most frequently used tax havens.

Tax Breaks
Almost one in four of Britain’s biggest listed companies paid no corporation tax in this country last year – and almost half fail to disclose their tax payments to the UK at all, according to research by The Mail on Sunday.  According to the annual reports and accounts of all the companies in the FTSE 100, 47 companies gave no obvious figures for tax paid in Britain.  Of the 53 who did, 12 showed they paid no tax at all and, six actually received a tax credit.Tax Avoidance
 Treasury minister, David Gauke, admitted in reply to a parliamentary written question that only four employees of HMRC are working to capture 124 tax fugitives. The amount of uncollected tax rose again last year. A Labour MP pointed out that the four officials dedicated to the tax fugitives compares with the 450 HMRC staff involved in administering the withdrawal of child benefit from higher-rate taxpayers.

Subsidies
Currently, it is estimated that the government has already provided £43.5bn in various subsidies including the National Infrastructure Plan, the Equity Loan and Help to Buy schemes, the Enterprise Finance Guarantee and the Regional Growth Fund, with nothing to show for it. Far greater sums are in the pipeline, up to £310bn.

Meanwhile supermarkets get an enormous subsidy to help with one of their major overheads, staffing costs. This is because many employees in these large and successful companies are paid only the minimum wage. And because the current minimum wage is not a living wage, nearly everyone on it has to claim tax credits to be able to make ends meet. Those tax credits are funded by the taxpayer. The supermarkets are effectively state subsidised industries.

In addition to the recent unprecedented public support for the financial sector The NEF (New Economics Foundation) identified at least three significant hidden subsidies:

* The ‘Too Big to Fail’ subsidy: The government now provides a public guarantee, effectively insurance against banks going bust. This gives banks a huge commercial advantage over other firms in a market system. It means banks are able to borrow money much more cheaply than if they were not ultimately underwritten by the public. Exchanges with leading auditors in front of the House of Lords Select Committee on Economic Affairs in January 2011 confirm this. A conservative analysis reveals that this hidden subsidy could be worth £30 billion annually. It means that bonuses to senior staff for ‘performance’ and dividends to institutional investors are at least in part a straight transfer from the taxpayer.
* The quantitative easing windfall subsidy: When it was decided that the economy needed more liquidity, the Bank of England pumped money in using the technique called ‘quantitative easing’. To meet various, and sometimes self-imposed, requirements, it did by purchasing government bonds through investment banks. Merely for being passive conduits for this ‘risk free’ arrangement the banks took a cut of every trade. Here nef analysts found that banks enjoyed a significant windfall, but that lack of transparency keeps the likely amount hidden.
* The ‘make the customer pay’ subsidy: Since the baking crisis of 2008, the banks have been increased the gap between what they have to pay to borrow money, and what they charge people to borrow from them. This is the so-called interest rate ‘spread’. This is because they can borow money from the Bank of England at virtually 0%. As it is, the taxpayer is subsidising the banks twice over: once through taxpayer funded public support to the banks, and secondly through paying much higher interest to borrow than the banks do. This hidden subsidy amounts to at least another £2.5 billion each year.

Sale Of Small Council Homes Condemning Thousands To The Bedroom Tax – The VOAG Investigates

Thousands of one and two-bedroom council homes have been sold off since 2010, preventing tenants affected by the “bedroom tax” from downsizing to avoid the penalty, research by The Independent shows.

The controversial policy is meant to free up social housing space by encouraging hundreds of thousands of tenants to move to smaller properties, by cutting their benefits if they have a spare bedroom.

But figures obtained by The Independent show that a severe shortage of smaller council homes across the country is being exacerbated by the right-to-buy scheme – leaving many victims of the bedroom tax with no choice but to accept reduced benefits.

In the areas hardest hit by the housing crisis, more than two-thirds of council homes sold off under right-to-buy since the Coalition came to power had one or two bedrooms, figures obtained under Freedom of Information show.

Central London is suffering from the biggest sell-off of small homes. In Camden, 81 per cent of properties sold since 2010 had two bedrooms or fewer, and 49 per cent had one bedroom. Figures for Hammersmith and Fulham show that 77 per cent of sales were of small properties.

In Southwark, 74 per cent of those sold were small, with 32 per cent one-bedroom properties, and in Lambeth, 74 per cent of its right-to-buy sales were of the smallest homes.

Brighton and Hove council has sold 111 properties since 2010, of which 74 per cent had one or two bedrooms. Although Bournemouth council sold just 20 homes, all of them were small.

The analysis of 125 council areas found that of 14,616 properties sold across England, 45 per cent had one or two bedrooms. About 61 per cent of England’s total social housing stock is made up of one- or two-bedroom properties, suggesting that some councils appear to be selling off a disproportionate number of smaller homes.

Alison Garnham, the chief executive of the Child Poverty Action Group, said the figures exposed the bedroom tax as “a hasty shambles” which had forced some of the most vulnerable children into unfit housing. “It’s often pushing them into the worst quality housing in the private sector – places that aren’t fit for habitation because of problems like damp and mould.”

Labour’s shadow housing minister, Emma Reynolds, said: “The truth about David Cameron’s bedroom tax is that there are simply not enough smaller homes for people to move to. With the Government failing to keep its promise on replacing every home sold through right-to-buy with a new home built, the shortage is getting worse.” Labour plans to scrap the policy if it wins a majority in next year’s general election.

Government efforts to reform the welfare system have resulted in tenants being moved out of expensive areas. But even those cities receiving families who are priced out are losing smaller properties through right-to-buy. In Hull, for example, 44 per cent of houses sold since 2010 had one or two bedrooms.

The housing charity Shelter urged the Government to review the bedroom tax in the light of the findings. “This research points to a serious contradiction at the heart of government policy,” said Roger Harding, Shelter’s director of communications, policy and campaigns. “Unless sufficient one- and two-bed homes are made available the bedroom tax is an unfair penalty on people who have no choice but to stay where they are.”

Beat The Bedroom Tax – Loophole gives hope!

Advice From Fight Racism! Fight Imperialism
Written By Robert Clough

The revelation that possibly 15% of all tenants forced to pay the bedroom tax are in fact exempt because of a legal error must give hope to those fighting this vicious attack on the working class.

Described in the media as a ‘loophole’, it is in fact down to the criminal incompetence of the Department of Work and Pensions (DWP) who ignored clauses in housing benefit regulations set out in 2006. This error means that any tenant who has been on housing benefit since before 1 January 1996 and who has been occupying the same house over that period is exempt from paying the bedroom tax.

In an urgent bulletin issued on 8 January 2014 acknowledging the ‘mistake’, the DWP stated that only a ‘small number’ of tenants would be affected. DWP Secretary Iain Duncan Smith and DWP ministers have said between 3,000 and 5,000 tenants would have their bedroom tax payments refunded. These wretches had no basis for their estimates, and made them up to minimise the scale of the government’s incompetence. The true figure will be at least 40,000, and possibly many more. One Wirral housing association, Magenta Living, believes from its own records that 320 tenants out of 2,076 paying the tax are exempt. This figure does not include those who are in succession tenancies, or who have had to move through force majeure in the period since 1996 (because of fire or flooding, for instance), or who have downsized because they could not afford to pay the tax. Even so, at least 15.4% of its tenants have been unlawfully forced to pay the bedroom tax. This is not out of line with initial figures obtained for other housing authorities in the north, and would translate into a national figure of over 80,000 (15.4% of the 522,000 currently paying the tax).

What does this mean for the tenants involved and their families? They have had to make choices between heating and eating. Life, difficult enough beforehand, has been made intolerable by the worry of eviction for non-payment. It drove Stephanie Bottrill to suicide in May 2013 – we now know she was exempt. Thousands have been forced to abandon what had been their family home for decades. Their lives, and those of their families, have been wrecked – and we are talking here about up to 200,000 people living in the 80,000 affected households. To compound the cruelty, councils such as Wirral and St Helens have unlawfully demanded repayment of Discretionary Housing Payments made to those now recognised as exempt.

This cruelty will continue into a second year because there is no organised resistance despite judgments that benefit tribunals have made in favour of tenants. First Tier Tribunals have ruled that bedroom size is a factor that has to be taken into account in determining bedroom tax liability. They have also ruled that in making bedroom tax decisions, housing authorities have to consider room purpose and current usage; the rights of children to a family life where parents have separated; the specific needs of disabled people, and take into account the human rights of tenants. A real movement would be making hay with this.

Councils have argued that they cannot act on First Tier Tribunal decisions since they do not set legal precedents. However, Upper Tribunals do, and a Bolton Upper Tribunal has set a very important precedent, saying that a room can only be a bedroom if it has a bed in it and is used for sleeping in. In other words, if a room is not furnished with a bed and is not used for sleeping in, then it is not a bedroom (see speye.wordpress.com for greater detail). The importance of this lies in the way councils made their original bedroom tax decisions. Labour and Tory alike, they all uncritically accepted data submitted by social landlords which was no more than the number of bedrooms as recorded on tenancy agreements, and refused to inspect each home to determine how those rooms were being used. This blanket approach was unlawful, and with councils having to undertake annual reviews of housing benefit decisions in February and March, campaigns must up the ante by demanding that council officers inspect every social housing property before making housing benefit decisions for 2014/15.

The DWP has said that it will act to remove the 1996 exemption. While there is no limit to the vindictiveness of the ConDem coalition, this may not be straightforward. Coming in the wake of the continuing Universal Credit fiasco it will be a further exposé of governmental incompetence. The media will find it hard to stigmatise those affected as Benefit Street ‘scroungers’: the overwhelming majority of them are either disabled people or carers who have worked in the past but are unable to do so now. In the meantime up to 80,000 tenants can take out complaints of maladministration against the DWP with the Parliamentary Ombudsman and against their local council with the Local Government Ombudsman. They will also be able to sue both for the financial hardship and distress they have suffered. All of this shows that the bedroom tax can be beaten: it merely requires determined organisation.

 

To us, it’s an obscure shift of tax law. To the City, it’s the heist of the century

In David Cameron we have a leader whose job is to quietly legitimise a semi-criminal, money-laundering economy

‘I would love to see tax reductions,” David Cameron told the Sunday Telegraph at the weekend, “but when you’re borrowing 11% of your GDP, it’s not possible to make significant net tax cuts. It just isn’t.” Oh no? Then how come he’s planning the biggest and crudest corporate tax cut in living memory?

If you’ve heard nothing of it, you’re in good company. The obscure adjustments the government is planning to the tax acts of 1988 and 2009 have been missed by almost everyone – and are, anyway, almost impossible to understand without expert help. But as soon as you grasp the implications, you realise that a kind of corporate coup d’etat is taking place.

Like the dismantling of the NHS and the sale of public forests, no one voted for this measure, as it wasn’t in the manifestos. While Cameron insists that he occupies the centre ground of British politics, that he shares our burdens and feels our pain, he has quietly been plotting with banks and businesses to engineer the greatest transfer of wealth from the poor and middle to the ultra-rich that this country has seen in a century. The latest heist has been explained to me by the former tax inspector, now a Private Eye journalist, Richard Brooks and current senior tax staff who can’t be named. Here’s how it works.

At the moment tax law ensures that companies based here, with branches in other countries, don’t get taxed twice on the same money. They have to pay only the difference between our rate and that of the other country. If, for example, Dirty Oil plc pays 10% corporation tax on its profits in Oblivia, then shifts the money over here, it should pay a further 18% in the UK, to match our rate of 28%. But under the new proposals, companies will pay nothing at all in this country on money made by their foreign branches.

Foreign means anywhere. If these proposals go ahead, the UK will be only the second country in the world to allow money that has passed through tax havens to remain untaxed when it gets here. The other is Switzerland. The exemption applies solely to “large and medium companies”: it is not available for smaller firms. The government says it expects “large financial services companies to make the greatest use of the exemption regime”. The main beneficiaries, in other words, will be the banks.

But that’s not the end of it. While big business will be exempt from tax on its foreign branch earnings, it will, amazingly, still be able to claim the expense of funding its foreign branches against tax it pays in the UK. No other country does this. The new measures will, as we already know, accompany a rapid reduction in the official rate of corporation tax: from 28% to 24% by 2014. This, a Treasury minister has boasted, will be the lowest rate “of any major western economy”. By the time this government is done, we’ll be lucky if the banks and corporations pay anything at all. In the Sunday Telegraph, David Cameron said: “What I want is tax revenue from the banks into the exchequer, so we can help rebuild this economy.” He’s doing just the opposite.

These measures will drain not only wealth but also jobs from the UK. The new legislation will create a powerful incentive to shift business out of this country and into nations with lower corporate tax rates. Any UK business that doesn’t outsource its staff or funnel its earnings through a tax haven will find itself with an extra competitive disadvantage. The new rules also threaten to degrade the tax base everywhere, as companies with headquarters in other countries will demand similar measures from their own governments.

So how did this happen? You don’t have to look far to find out. Almost all the members of the seven committees the government set up “to provide strategic oversight of the development of corporate tax policy” are corporate executives. Among them are representatives of Vodafone, Tesco, BP, British American Tobacco and several of the major banks: HSBC, Santander, Standard Chartered, Citigroup, Schroders, RBS and Barclays.

I used to think of such processes as regulatory capture: government agencies being taken over by the companies they were supposed to restrain. But I’ve just read Nicholas Shaxson’s Treasure Islands <http://www.guardian.co.uk/books/2011/jan/22/treasure-islands-tax-havens-shaxson-review> – perhaps the most important book published in the UK so far this year – and now I’m not so sure. Shaxson shows how the world’s tax havens have not, as the OECD claims, been eliminated, but legitimised; how the City of London is itself a giant tax haven, which passes much of its business through its subsidiary havens in British dependencies, overseas territories and former colonies; how its operations mesh with and are often indistinguishable from the laundering of the proceeds of crime; and how the Corporation of the City of London in effect dictates to the government, while remaining exempt from democratic control. If Hosni Mubarak has passed his alleged $70bn through British banks, the Egyptians won’t see a piastre <http://en.wikipedia.org/wiki/Egyptian_piastre>  of it.

Reading Treasure Islands, I have realised that injustice of the kind described in this column is no perversion of the system; it is the system. Tony Blair came to power after assuring the City of his benign intentions. He then deregulated it and cut its taxes. Cameron didn’t have to assure it of anything: his party exists to turn its demands into public policy. Our ministers are not public servants. They work for the people who fund their parties, run the banks and own the newspapers, shielding them from their obligations to society, insulating them from democratic challenge.

Our political system protects and enriches a fantastically wealthy elite, much of whose money is, as a result of their interesting tax and transfer arrangements, in effect stolen from poorer countries, and poorer citizens of their own countries. Ours is a semi-criminal money-laundering economy, legitimised by the pomp of the lord mayor’s show and multiple layers of defence in government. Politically irrelevant, economically invisible, the rest of us inhabit the margins of the system. Governments ensure that we are thrown enough scraps to keep us quiet, while the ultra-rich get on with the serious business of looting the global economy and crushing attempts to hold them to account.

And this government? It has learned the lesson that Thatcher never grasped. If you want to turn this country into another Mexico, where the ruling elite wallows in unimaginable, state-facilitated wealth while the rest can go to hell, you don’t declare war on society, you don’t lambast single mothers or refuse to apologise for Bloody Sunday. You assuage, reassure, conciliate, emote. Then you shaft us.

Tax Breaks For The Banks – Cuts For The Rest Of Us!

I can’t quite believe what I’ve just read. Robin Hood just got shot with his own arrow and no-one even noticed. He’s laying there now, bleeding on the floor, but we’re all going to step over him on the way to work. The Sheriff of Osborne-ham finally cooked up a plan so cunning there’ll be no more robbing from the rich to give to the poor Ever.

You’ll probably hear a lot today about the banker’s levy being made permanent. Osborne has announced (ahead of the budget) that an extra 800 million will be taken from the banks, making a total of £2.5 billion over the year. The bank levy will stay in place, making it a permanent feature.

Not a Robin Hood tax, not nearly enough, but a step in the right direction eh? Well, erm…no.  George Monbiot in the Guardian outlines a change to corporation tax that he calls the “heist of the century” a “kind of corporate coup d’etat” and “the biggest and crudest corporate tax cut in living memory”. What’s more, he points out that yet again, no-one knew about it, it wasn’t in any manifesto and it’s so complicated, that most people would never understand it anyway without expert guidance.

Effectively, £6 billion from Vodafone or a few quid from Wayne Rooney has just turned into small-fry. In fact fry so tiddly, it’s barely visible to the naked eye. This move will save big business endless, eye-watering, startling billions.

“At the moment tax law ensures that companies based here, with branches in other countries, don’t get taxed twice on the same money. They have to pay only the difference between our rate and that of the other country. If, for example, Dirty Oil plc pays 10% corporation tax on its profits in Oblivia, then shifts the money over here, it should pay a further 18% in the UK, to match our rate of 28%. But under the new proposals, companies will pay nothing at all in this country on money made by their foreign branches.”

“Foreign means anywhere. If these proposals go ahead, the UK will be only the second country in the world to allow money that has passed through tax havens to remain untaxed when it gets here. The other is Switzerland. The exemption applies solely to “large and medium companies”: it is not available for smaller firms. The government says it expects “large financial services companies to make the greatest use of the exemption regime”. The main beneficiaries, in other words, will be the banks.”

Monbiot goes on to ask: “So how did this happen? You don’t have to look far to find out. Almost all the members of the seven committees the government set up “to provide strategic oversight of the development of corporate tax policy” are corporate executives. Among them are representatives of Vodafone, Tesco, BP, British American Tobacco and several of the major banks: HSBC, Santander, Standard Chartered, Citigroup, Schroders, RBS and Barclays.”  Well, surprise surprise.

It’s not good enough to say “Oh well, it’s the Tories, you expect this kind of thing from them”. On the same day that even Warren Buffet is saying that we need to raise inheritance tax to tackle a growing “entrenched” plutocracy, Little-Lord-Osborne has decided that we need to do quite the opposite.

In case you’d forgotten, David Cameron told the Sunday Telegraph at the weekend that he: “would love to see tax reductions, but when you’re borrowing 11% of your GDP, it’s not possible to make significant net tax cuts. It just isn’t.”

He really is breathtakingly dishonest isn’t he? As Monbiot concludes, this government has decided on a course of PR that, as with so many of their other policies, treats us like complete and utter fools.

STOP THEM before they make the rich staggeringly richer on the quiet, dismantle and privatise the NHS, bring back a two tier education system under the guise of “free schools” and cut budgets faster and deeper than has ever been attempted before.
Demonstrate, Protest, Occupy – March 26^th.

http://socialistrevolution.com

Banks To Pay A Lower Tax Rate Than Small Businesses.

Banks to knock £19 billion off their tax bill despite taxpayer bail out

Despite being rescued by taxpayers during the crash, UK banks will avoid paying £19 billion of tax on future profits by offsetting their losses during the financial crisis against their tax bills. This is equivalent to more than £1,100 for every family in the UK, a TUC report says today (Monday).

The TUC report – The Corporate Tax Gap – says that as well as benefitting from an £850 billion bailout from taxpayers and the Bank of England during the recession, banks are able to offset their £19 billion of tax losses between 2007 and 2009 against paying tax on future profits.

The report, authored by tax specialist Richard Murphy, has calculated this double subsidy from the accounts of five UK high street banks – HSBC, Royal Bank of Scotland, Barclays, Lloyds TSB and HBOS (later Lloyds Banking Group) – and HM Revenue & Customs (HMRC) data.

The Corporate Tax Gap warns that banks could soon be paying a lower rate of tax than small businesses. The corporate tax gap – the difference between the rate of tax set by the Government and the actual rate companies pay – has grown by an average of 0.5 per cent a year over the last decade. Between 2000 and 2009, the effective corporation tax rate fell from 28 per cent to 21 per cent, much deeper than the headline rate cut from 30 per cent to 28 per cent, says the report.

With the Government planning to reduce corporation tax to 24 per cent, the UK’s largest companies, including banks, will soon be paying an effective tax rate of 17 per cent – three per cent lower than small businesses, who are less able to exploit loopholes and therefore pay a headline rate of 20 per cent. As a result, the UK will soon have a regressive corporation tax regime, says the report.

The TUC has calculated that the banks’ £19 billion double subsidy could pay for the following cuts between now and 2015:
*Switching the indexation of benefits from RPI to CPI (£5.84 billion)
*Housing benefit (£1.77 billion)
*Tax credits (£3.22 billion)
*Child benefit for higher rate taxpayers (£3 billion)
*Estimated cuts to the science research budget (£3 billion)
*Estimated cuts in HMRC resources to tackle tax avoidance (£2.1 billion).

TUC General Secretary Brendan Barber said: “Banks caused the global financial crash and triggered the recession that produced the deficit. Yet not only did they take almost a trillion pounds from taxpayers to bail them out, they are now using the losses caused by their irresponsibility to cut their tax bills for years to come”.

 The Government’s bank levy is small change compared to this huge loss as the business-as-usual bonus levels show. It’s double bubble for the banks, but huge cuts, job losses and VAT increases for ordinary families. Small firms have every right to be angry too. Not only are they finding it hard to get credit from the banks, soon they will be paying more tax on their profits than the banks and other big companies.

The Voice of Anti-Capitalism in Guildford – Spotlight On The Budget

There’s no need for the cuts – the money’s there

This week’s budget will see the mainstream parties and the media agree that there is no alternative to huge cuts in public spending. The only debate is about how fast this should happen. Yet there is plenty of money that could be used to ensure that there are no cuts to vital services. Mark Thomas writing in the Socialist Worker gives us some suggestions:

Close the tax gap

The gap between tax owed and tax paid in Britain could be as much as £120 billion a year, say the Tax Justice Network. This “tax gap” is made up of tax avoidance using legal loopholes, and illegal tax evasion. Even the Revenue & Customs department says that £40 billion of tax is avoided and evaded. In addition, £28 billion in tax owed is still unpaid. But the Tax Justice Network say this “dramatically underestimates” the real figures. It puts the total tax gap at a minimum of £70 billion a year, but say it may be as much as £120 billion. The projected annual tax deficit between the government’s income and spending is likely to be around £170 billion. The Tax Justice Network point out that tax avoidance “shifts the burden of tax payment from capital (and the large companies that utilise it) onto labour, and from the wealthy and self-employed onto employed labour.” The rich should pay much more in tax. But even if they just paid what they currently owe there would be plenty of money for public services.

Cut military spending

Britain’s military budget for this year is approximately £37 billion. Under Labour, military spending has increased 11 percent above inflation since 1997. And the extra costs incurred from the wars in Afghanistan and Iraq aren’t covered by the Ministry of Defence’s budget. The Treasury Reserve pays them. Since 2001, an additional £9.5 billion has been spent on the occupations of these two countries.

Take from the rich

The recession seems to be over for some. Pay outs to shareholders in top companies are set to rise by 18 percent. Top bankers are still raking it in after the government stepped in the bail out the financial industry. Bob Diamond, Barclays bank’s president, boasted a couple of months ago that he wouldn’t accept a bonus this year in response to public anger. Yet Diamond still grabbed more than £22 million in pay last year. Other Barclays employees will share a bonuses of £2.2 billion. Investment bankers at its Barclays Capital division will get an average payment of £95,000.