Pick on the poor, they can’t answer back

 “The difference between tax avoidance and tax evasion is the thickness of a prison wall” – Denis Healey

We have a new war on benefit fraud, thanks to The Sun and David Cameron. What would we do without them?

Benefit fraud is, of course, A Bad Thing, but what I find most objectionable is the belief of many members of the public, fed by a constant pushing from government and the press, that the entire welfare budget is a massive slush fund paying out to every lazy, conniving shyster under the sun (or worse, it’s all being paid out to “teh assileum seekus!”). For a start, benefit fraud takes up 1% of the welfare budget. That’s right. 1 piddling, naffing per cent. True, that’s £5.2bn, which is quite a large sum of money if not put in context, but still. 1%. Not really worth the acres of hectoring column inches this war is going to provoke, is it?

I don’t mind people debating welfare, but the problem is that so much talk on it tends to be ill-informed prattle, usually revolving around the fact that all people on Job Seekers Allowance are lazy. To which the only sensible reply is to count to ten, make a cup of tea and quote Mark Steel at them:

What a curious economic century we must have had. The population must have gone through a period of laziness at the end of the 19th century, then felt a sudden spurt of energy and got jobs.  Until the 1930s, when they got lazy again.  Then they perked up around 1938, which was handy as it was just in time for the war.  This was fine until 1980, when everyone changed their mind and decided to stay in bed all day, which makes sense as this coincides with the invention of the duvet.

Of course, the 15,000 people expected to lose their jobs at the Ministry of Justice are just lazy as well.

Instead, I get angry about tax avoidance, which costs the Treasury fifteen times more than benefit fraud. Quite why the richest in society feel the need to reduce their tax bill so that the burden for public services gets shouldered disproportionately more by the middle and lower-earning workers, I’m not quite sure. It’s probably something to do with their selfishness and greed. In fact, I agree with this raving communist. Who do you reckon said this:

The subjects of the country ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities

Well done economics buffs, that was – of course – Adam Smith. Bear that in mind next time you see a report from the Adam Smith Institute saying we should privatise oxygen, or get babies to work so that they can pay for their own child benefit payments.

Now, let’s talk about a random businessmen – Sir Philip Green, say. Here is a Nick Cohen column from 2006, before he had gone completely, utterly barmy:

in the spring, the BBC’s Money Programme calculated that Green and his family had ‘saved themselves’ £300m [actually £285m – Cory] from their £1.2bn salary by living for a part of the year in Monaco, whose residents don’t pay income tax.

Of course, one person’s tax break is another person’s tax burden. The £300m the Green family ‘saved themselves’ must be paid by people who earn considerably less than £1.2bn a year or £1.2m a year or even £120,000 a year.

Standing up for such paupers used to be the point of a Labour government. Even if it could not force the likes of Green to pay their fair share, it retained the power to shun them and make it clear that those who don’t contribute towards their country can’t expect their country to be grateful.

Even that modest defiance of the plutocrats is beyond Labour now. Yesterday, the Queen announced her birthday honours and high on her list was Green, who received a knighthood for ‘services to the retail industry’.

If I were in the Inland Revenue, I would fret about the moment when the little people who stupidly still pay taxes realise that the state is treating them like fools. It insists that they must hand over their earnings on pain of punishment by the courts, while inviting Philip Green to Buckingham Palace to be honoured by the Queen.

Richard Murphy makes a wonderful point here:

let’s put Green’s side of this. He said “no tax was avoided because none was due”. An interesting argument from a retailer but which means I hope in future he does not mention the word ‘save’ when promoting his regular sales because there will be no saving over the original price during such events since that original price is not due during the sale and, therefore the comparison cannot be made. Which just shows how disengenuous is his argument about tax saving because it is obviously contrary to current usage of English.

 You will be pleased to know that our esteemed coalition are taking serious steps to stop Philip Green’s tax avoidance.

Sir Philip Green, the billionaire owner of high-street chains including Topshop and Dorothy Perkins, has been enlisted by the government to carry out an external review of its drive to cut public spending.

The entrepreneur’s audit of government spending will run alongside the coalition’s major review currently under way to start cutting the £155bn deficit.

Welcome to 21st century Britain, a country where if you cheat the system out of thousands of pounds, you’ll be called “freeloading scum”, but if you really screw the system and evade paying £285m worth of tax you’ll be heralded by governments and asked to run the country.

Advertisements
This entry was posted in Economics, Politics and tagged , , , , , . Bookmark the permalink.

3 Responses to Pick on the poor, they can’t answer back

  1. Steve Haynes says:

    To put those 15000 who are losing their jobs in the ministry of justice in to perspective, the MoJ hires over 95000 people. Apple employs 35000 world wide. MoJ ever so slightly bloated in terms of personell? I think so.

    So whilst its sad 15000 are losing their jobs, but as Bentham says “It is the greatest good to the greatest number of people which is the measure of right and wrong” and cutting out 15000 jobs so that we can actually have a sustainable debt and economy isnt a bad thing over all.

    As for Greene, is this really a shock? If we trawl through Labours past 13 years in power we’ll find other such examples. One Peter Mandelson springs to mind in terms of brining people into politics which shouldn’t be there. Its how politics works. if we excluded everyone with a sightly dodgy history we’d be in a state of anarchy.

    Greenes dodgy tax receipts aside, the guy is responsible for turning the Arcadia group from a failure to a massive success, and he did this by cutting spending via waste management etc.

    He may be a tax dodging prick, but he’s good at what he does, and what he does is what we need to do with the government so him being there isn’t exactly a total negative.

    Also the ‘ lazy’ rhetoric on JSA is only prevalent in Daily Mail and its readership. Even hard core Thatcherites don’t think that most people on JSA are lazy.

    Case in point Ian Duncan Smith, who’s made it his personal mission to sort out welfare and poverty since being kicked out of the Tory leadership role. IDS is certainly right wing and Thatacherite yet from him we’ve seen signs since he took office of an actual serious look at welfare reform which clearly identifies, not the individual, but the system at fault.

    • Hi Steve,

      Thanks for replying.

      Firstly, those cuts at the MoJ aren’t going to help the court delays which Barnado’s think will affect vulnerable children: http://www.bbc.co.uk/news/uk-10908026.

      These cuts are counterproductive and are more likely to tip the economy back into recession than help us get out of it. The deficit does not need to be cut this fast. Cutting public spending is having a knock-on effect on the private sector that the government is hoping will grow after these spending cuts kick in. It’s sheer, economic madness.

      I’m not denying that Green is good at what he does, and of course Labour sucked up to Green as well – I quoted a column critical of Labour for giving Green a knighthood! And there’s a difference between a “slightly dodgy history” and avoiding having to pay £285m worth of tax! But the job of governments should be to stand up to “tax dodging pricks”, not invite them in to change the colour of the wallpaper in Downing Street.

      I’m not sure IDS’s reforms are really that fantastic: all his CSJ reports all seemed to come down to the conclusion that everything would be OK if only people would marry. And these latest welfare proposals weren’t costed properly and sounded like they’d been written on the back of an envelope.

      • Steve Haynes says:

        The left-wing blogs like Liberal Conspiracy have actually come out and said ‘ huzzah’ at aspects of IDS paper that’s been released . Notably the ‘ its the system not the person’ aspect.

        http://www.leftfootforward.org/2010/08/benefit-fraud-pm-plays-to-the-polls-whilst-ids-considers-the-real-issues/

        The article is still critical of the Tories over all but it does acknowledge IDS statement.

        As for the costing, hell at least they’re openly saying they’re looking at it and have placed the issue in the public domain for debate. Which is more than I can recall Labour ever doing.

        Also which proposals weren’t properly costed? The paper had a variety of different ideas in it ranging from the old Lib Dem policy of the citizens income, to negative income tax, all of which are different and would have different costings.

        As for the ‘double dip’, not seeing it. Whilst we can point to various ‘ bad signs’ like the fall of property values, we also have a rise in mortgage lending ( these things were reported a day after each other) so all the ‘ bad news’ is being counter acted by ‘ good news’ which in the long term suggests low levels of sustainable growth.

        Yes knocking off people in Public Sector affects the Private in multiple ways, but:

        1)Not cutting the structural deficit would be worse. Even if Taxes had been raised instead of cuts, we still find ourselves in a dodgy position. Hungary was threatened with having its credit rating dropped by Moody’s credit rating, and even the prospect of that happening to Britain ( what with us being the financial capital of the world) would be devastating.

        2) Critiquing the approach of the Government is pointless without knowing the outcomes of the spending review.

        The review isn’t just looking at what to cut but what to invest in and how. This means it can and will identify things that can increase the growth of the economy such as investing in start ups for small businesses etc.

        If they don’t have any or enough of those sorts of investments to stimulate the increase in the private sector then by all means criticise away, but the statements of condemnation ( hey look I made a very bad political pun)about the cuts, are premature until then.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s