Guest Editorial: Major companies should not be allowed unfair tax breaks

Councillor Sean Morton is the Scottish Labour candidate for Moray in May’s General Election. In line with insideMoray’s open policy, today he provides our guest editorial. This invitation is open to any current or prospective representatives in Moray…..

Sean Morton

A few weeks ago I made a pledge, if elected in May, to support the Tax Dodging Bill being proposed by charities such as Oxfam and backed by faith leaders across the UK.

If passed, the Bill would make it harder for big companies to dodge UK taxes and ensure they’re not getting unfair tax breaks; ensure UK tax rules don’t encourage big companies to avoid tax in developing countries and make the UK tax regime more transparent and tougher on tax dodging.

The campaign also, quite rightly, calls for political parties to commit to using the funds raised in the UK to tackle poverty here.

I never anticipated that just this week the issue would rocket to the top of the news with the revelations that the richest UK citizens have been helped to hoard £21bn by HSBC in its Swiss branches. The cost to the UK economy and the impact on our budgets is immense.

To put it in perspective – benefit fraud costs the country £1.2bn. This compares with £5bn a year that the government loses through tax avoidance. So for every £1 lost to benefit cheats we lose £4 because of people like Gary Barlow who don’t pay their taxes.

On top of that, every year the UK loses billions of pounds to corporate tax dodging and incredibly, it’s completely legal. Big corporations are taking advantage of an unfair system that allows them to dodge paying their fair share, benefiting themselves at the expense of the rest of society, including more responsible businesses – many of them small or medium, and based right here in Moray.

The simple truth is that the rules of the game are rigged in favour of the biggest and most powerful companies who have the most access to power. There is a revolving door between Tory donors, Tory peers, the big corporations and the Swiss branches of the HSBC.

There’s no doubt that we need an economy that is good for business and helps create jobs.

Re-balance the economy

What we need to do is re-balance the economy in a way that benefits the millions, not just the millionaires. We should be focussing on training our young people so that they are equipped with the skills business needs. We need to ensure that there are not just places at university for our young people but more places at colleges, including in technical subjects like joinery and plumbing.

We need to ensure we’re training the next generation of great teachers to give every young child a fighting chance at success. More than that, we need to make sure that the conditions are right for businesses to flourish – giving them access to the funds they need through regional investment banks – which only Labour proposes.

Labour will provide the support and certainty businesses need to grow and thrive. The next Labour Government will work with Britain’s businesses to build a broad-based recovery based on rising living standards, with fewer low skill, low paid jobs and more high skill, high paid jobs.

That’s why we are committed to staying in the EU, cutting business rates for small businesses and freezing energy bills for businesses as well as families.

Labour will tackle tax avoidance and support businesses that play by the rules – as the vast majority of businesses do. When people are found to have used aggressive tax avoidance schemes they won’t just have to pay the tax that’s owed, but for the first time will also face a penalty.

And we’ll close tax loopholes that see some firms avoiding paying stamp duty when they buy shares. Our economy and tax system shouldn’t be stacked in favour of the wealthiest against the rest of us.

Now, the Tories try to say that is anti-business. It’s not. It was so disheartening but not surprising to see David Cameron this week warning that Labour were out to get successful people. They want to paint this as class envy. They want to pit middle-class people against the working-class, the working poor and the unemployed.

The truth is though, to borrow the Tory phrase and actually mean it: we’re all in this together. These super-rich people are living in another world. All of us who play by the rules, middle-class and working-class, are being cheated by the super-rich.

We’re being cheated out of vital funds at a time when cuts are affecting all of us: with fewer teachers, an NHS in crisis and council services decimated. But the Tories want us to be divided and to forget about their super-rich friends hoarding their cash.

It reminds me of the story of the banker, the shop-keeper and the job-seeker. A banker, a shop-keeper and a job-seeker are sat at a table. On a plate in the middle are 12 biscuits. The banker takes 11 biscuits for himself, then turns to the shop-keeper and says – “watch out for that job-seeker, he’s after your biscuit.”

We don’t need to live with this farce any longer. Let’s make tax fair. Let’s stop people defrauding the country of billions of pounds that could be invested in schools, hospitals, ending child poverty and more.

Let’s use the money we claw back from these crooks – because that’s what they are – to build a country where everyone has a fighting chance at a good life.

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