Corporate tax dodging is father of austerity

Industrial scale tax evasion and avoidance is not only symptomatic of the insatiable greed of the hyper-rich and the over-mighty corporations, it also serves another purpose which is much less recognised.   The touchstone of the neoliberal ideology is globalisation – let the markets be all-powerful and governments get out of the way.   That is served by light-touch (i.e. minimalist) regulation, blind trust in free markets, and the unfettered mobility of capital.   But it further demands that the State should be kept deprived of adequate funding so that its capacity for intervention is short-circuited.   That is exactly what widespread tax evasion/avoidance achieves.   A State starved of tax revenues – even HMRC admits it loses £35bn a year on tax scams, though Richard Murphy of Tax Justice Network argues it’s nearer £120bn a year – cannot deliver the goals of social democracy which a majority of the electorate desire.   Increasingly the government falls prey to the markets even to raise its own revenues.

With the erosion of its tax revenues the State is forced to resort to debt to finance social infrastructure.   Increasingly the political emphasis shifts to placating the financial markets and the agenda is dominated by debt repayments, the interest rate cost of debt, and the corollary – the squeeze on public services.   That inevitably produces a smaller but more compliant State, which the Thatcher-Blair neoliberal ideology so strongly demanded, leaving ordinary people to face the erosion of their rights and purchasing power and almost permanent austerity.

This is why the coming election is arguably the most critical since 1945.   What is at issue is the final roll-back of the social democratic consensus of the 1940s and its total replacement by a fully marketised State in which all public services are subverted into fee-charging organisations on a free market basis.   What is urgently needed is a Labour counter-narrative to expose and challenge this anti-democratic Tory goal.

The Tory narrative goes like this.   Labour left a terrible economic mess (actually it was the bankers and the international recession), and we had to clear it up (actually they made it worse by importing persistent austerity).   It’s been painful, but we’re all in it together (actually incomes have fallen by an average of 8% for almost everyone except the top 1%, those with incomes of over £3,000 a week, who have made large gains).   Now with the economic recovery we’ve brought about, stick with us (actually it’s been the slowest economic recovery for a hundred years and it’s already fading, with all the economic indicators pointing negative, and the only light in the tunnel from the halving of the global oil price, no thanks to Osborne).

Labour’s counter-narrative should go like this.   When the banking crash occurred in 2008-9, Alasdair Darling, the Labour Chancellor, did the right thing by enabling the economy to grow, which brought down the deficit by £40bn within 2 years.   Osborne dropped this sensible policy like a hot brick and imposed relentless austerity which contracted the economy so far that the deficit, still stuck at about £100bn, is not now being reduced at all.   The real Tory goal is not primarily to cut the deficit, but to use the deficit to force Britain away from social democracy with high-quality public services to a market-driven State where fee-charging is dominant and only the very rich prosper.   Vote Labour to stop this hi-jacking of the State by the rich and powerful and to restore a society which protects the weakest and gives a fair chance to all.


4 thoughts on “Corporate tax dodging is father of austerity

  1. Good day to you Mr Meacher. In fact you have defined exactly the policy being pursued by the City of London through their Tory placemen.

    I am genuinely sorry that your impassioned and creditworthy article has failed to convince that Mr Miliband and Co will deliver an alternative. Parliament has become a one-size-fits-all millionaires club that I would describe as completely irrelevant to the needs of 99% of the people of this country.

    Looking at the years leading up to the great depression (for the 99%) I was struck by the tone of this speech:

    Mr. MARJORIBANKS The Chancellor of the Exchequer produced a scheme on Monday for the confiscation of 596 land, under the guise of taxation. Here he is imposing taxation under the pretence of the withdrawal of a privilege. I want to point out that this is not really the withdrawal of a privilege, but is fresh taxation. It is beyond controversy that money is to be extracted from the taxpayers as Income Tax that they will never be able to get back. That has gradually been brought home to the intelligence of all thinking people who have studied this proposal. My concern is not for the State, whose resources are supposed to be diminishing, but rather on behalf of the individual who will never get his money back. The only thing that could possibly give the taxpayer any relief would be, either the end of the world or the coming of the Red revolution, and as neither the end of the world nor the millennium of the hon. Member for Bridgeton (Mr. Maxton) is likely, I do not think the taxpayer can look forward to any relief.


    What a difference in tone. But note that even then Income Tax (a wholly unlawful tax) was being burdened upon the people least able to pay.

    I despise the Party/whip system with the current selection process designed to propogate a fatally corrupt system, but I despise old Labour a little less, while despising new Labour a lot more. Daily treason and corruption par for the course. No wonder Blair and Falconer changed the treason laws.

    No, I’ll not vote again for immoral wars and overseas aid designed to promote corporate interests and foreign despots, and massive weaponised immigration, surveillance to protect us from what is in fact state terrorism: 9/11, 7/7, Download and watch “ripple effect”.

  2. I see now the ninty nine percent who aint rich pay their taxes while companies and the one percent dont they the companies also get help of the tax payers to sweeting their pot id thought private being private they paid their own way looks like swindling the peasants is the way forward for all partys unless the ninty nine percent who aint rich wake up to the fact they been done good and proper jeff3

  3. Cynical as I am every so often you write an article that is so shrewd and so accurate in it’s analysis and clarity that I almost feel like cheering.

    It’s unfortunately therefore that you do not speak for your party.

    “Vote Labour to stop this hi-jacking of the State by the rich and powerful and to restore a society which protects the weakest and gives a fair chance to all.

    Fine words and, “if only?”

    Unfortunately; and few thing illustrate this point more clearly that Miliband, his sponsors and all his sticky fingered mates, this is no longer, (not in any sense,) what the Labor party are about and a vote for Labor is simply a vote for the continuance of exactly the same policies that you so rightly, preceptively and expertly condemn in your article.

    Vote Labor to continue the hi-jacking of the State by rich, powerful and unaccountable commercial interests and to continue with the exactly the same Tory, (neo-liberal, Progressive, whatever,) policies that are inflicting increasing inequality, poverty and exploitation on weakest, (are even killing them,) whilst denying to all anything remotely like, a fair chance; would be far more honest and accurate; and in your heart I think you know this.

    This is one of the oldest rhetorical, (political,) tricks in the book; to append a completely unwarranted and spurious conclusion, (that voting for Labor; still the same people who introduced and who have so profited personally from these polices, will be the way to curb then,) to as clear and as rigorous a piece of political and economic analysis as I’ve read anywhere recently.

    This country’s political system is already so completely broken, corrupt, dysfunctional and compromised, that speaking as voter, (speaking as someone who has been unemployed for 6 years, whilst actively trying to return to work for 4 of them, with a severely and increasingly disabled dependent wife, who is also dependent on the NHS and benefit system,) all the courses of action open to me as a voter seem equally to be councils of despair.

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    Few things I can think of illustrate the true reality of unemployment in the UK quite so clearly or so vividly.

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