You have to give it to Osborne: he can dress up a pig’s bladder and make it look like a silk glove.   He’s just announced today that “stashing the profits of tax evasion in Switzerland is over”.    It’s nothing of the kind.   Switzerland is making a one-off deduction from all UK accounts held in Swiss tax havens like Zug or Zurich, but at a much lower rate (34%) than is chargeable in the UK, only from 2013 onwards, and without proper exchange of information which would end the secrecy as the fertile terrain in which tax cheating can flourish.   Osborne also deludedly boasts: “We will be as tough on the richest who evade tax as on those who cheat on benefits”.   Really?   The £5bn benefit fraud is certainly being cracked down hard on (quite rightly, by all governments), but the fgovernment’s efforts to stop £70bn a year in tax evasion are like trying to hold water in a colander.

The Swiss deal is even more limp than it appears at first sight.   Whilt the ostensible tax rate levied is 34%, the effective rate for most UK account holders in Swiss tax havens will be a feeble 20-25% of total assets.   Because the deal will not be operative for 2 years, there’s plenty of time for bank clients to withdraw their savings to escape the tax and stash them elsewhere – rather like telling thieves the police will be after them in 2 years’ time.   What the Swiss bankers delicately refer to as the ‘financial privacy’ of their clients is being preserved, i.e. the UK will still not know who the transgressors are and thus still be unable to track down what other tax evasion they may be up to.   And while the Germans managed to screw an upfront payment of nearly £1.5bn out of the Swiss as a ‘gesture of goodwill’, Osborne only managed to get £380.   If this is a great deal, Goerge, I hope you never make a poor one.

Tax evasion is a cancer which has ballooned under de-regulated neo-liberalism.   According to careful estimates made by Richard Murphy, director of Tax Research UK, Britain loses each year some £25bn in tax avoidance, £70bn in tax evasion, and a further £25bn in taxes uncollected.   This sum of about £120bn a year is very close to the total current UK budget deficit which is giving Osborne the excuse to shrink the welfare state and wither the entire public sector through massive expenditure cuts.   Nobody seriously suggests that a government will be able to recover all of the tax due which is avoided, evaded or uncollected, but there is no doubt that if this government pursued the tax evaders with even half the ruthlessness with which they’re skinning benefit recipients and public service users, they could recover a very substantial part of it.

And here are two pieces of advice.   Stop cutting the number of tax inspectors in HMRC, already reduced by a third from 99,179 in 2004-5 to just 68,037 in June 2010.   And simply amend the Finance Acts to declare that all transactions with companies registered in countries or territories that do not meet minimum regulatory standards are illegal.   That would eliminate, or at least severely weaken, the tax havens including the still flourishing Swiss one.

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