Inside Politics with Batley and Spen MP Mike Wood: It’s time to stop tax avoidance

TAX ISSUES Wealthy HSBC clients were helped to hide cash overseas.
TAX ISSUES Wealthy HSBC clients were helped to hide cash overseas.

The great trick played on the electorate by successive governments over the last 30 years has been to convince people that benefit fraud is the primary source of both the economy’s and society’s ills.

The government sets the agenda and the media rushes to lap it up. In fact, efforts to convince us of this have been so pervasive that people actually believe 27 per cent of our benefits budget is lost due to fraud, when in fact it is 0.7 per cent. This is almost half of what we lose through official error and even less than the amount of benefits that go unclaimed!

Anyone who knows or works with people who are on benefits, who are sanctioned by the Department for Work and Pensions or whose legitimate entitlement has been stopped simply to meet a government target, knows that this is no life of luxury.

A quick glance at the latest DWP figures will show you all of this – but ministers, newspaper editors and television producers all want us to believe something quite different.

They want us to blame those on benefits, often the poorest and most vulnerable in society, for all our problems in order to distract us from what is going on with the people at the top!

The bankers, highest earners and big corporations are the real source of society’s ills not to mention our economic ones.

There is a well-documented catalogue of banking scandals, mostly in the USA, that led the world to the 2008 financial crisis and recession, yet still we hear the blame being placed squarely on irresponsible government overspending. In other words, economies all over the globe crashed because Labour built a few too many SureStart centres in England!

You couldn’t make it up. And yet the line is constantly repeated and repeatedly believed.

The behaviour of the rich, be they celebrities, bankers or the heads of big companies, was a scandal, even before we knew about HSBC and its facility for some of its wealthier clients to hide their money in Swiss bank accounts.

Whether it is tax evasion or tax avoidance makes no difference. Both should be addressed as aggressively as possible.

The question of tax avoidance is nowhere near as complicated as some commentators would claim. Legal ways of minimising tax burdens exist, the ISA for example, but where the law doesn’t cover something or a loophole exists and is exploited then this goes against the spirit of the law and Parliament’s intention. As such it must be stopped.

If HMRC is underfunded, sort it out. If the law needs changing, do it.

What we don’t need is smoke and mirrors designed to demonise one section of society, one that can’t defend itself, in order to protect one with the means and wherewithal to look after itself.

We have a government that is keen to protect the rich and ensure they get richer. It’s for this reason that I was delighted to see Labour leader Ed Milliband taking on tax evasion and avoidance in such a robust way. He needs to do more of this kind of thing.

Ordinary people, hard working people, people trying to make ends meet need to know the real reason they’re struggling, especially when the government is intentionally setting out to make them poorer and the rich richer.