A CRACKDOWN on tax avoidence proposed by Jeremy Corbyn yesterday could end austerity politics at a stroke, according to economist Richard Murphy.
In a speech on economic policy, Mr Corbyn set out plans to collect the £120 billion lost every year through tax avoidance, evasion and uncollected tax debt.
He promised a tough anti-avoidance law, the closure of tax relief exploited by the rich and a complete reversal of staffing cuts at HM Revenue and Customs.
“Whatever tax laws we pass, we won’t get a progressive tax system in reality unless we can enforce it and collect the tax we are owed,” he said.
The vast sum owed to the Treasury would be enough to give every man, woman and child in the country £2,000 or double the NHS budget.
Tax Justice Network’s Mr Murphy praised the Labour leadership hopeful as a “rare politician putting forward a plan that could benefit everyone in the UK.”
HMRC estimates there is around £35bn in uncollected tax, but Mr Murphy points out they have excluded notorious offshore businesses such as Starbucks, Google and Amazon.
He said recouping just some of the cash would “change the political agenda.
“Tackling the tax gap could raise billions more than this government says is possible,” he told a meeting of Mr Corbyn’s supporters.
Mr Corbyn has worked with the economist to develop a proposal for a government-owned investment bank.
A national investment bank would ensure that public cash reaches British industry and small business, rather than the City of London.
Mr Murphy explained it would “have the aim of funding new housing, infrastructure, sustainable technology and so much more that would guarantee jobs in every constituency in the UK.”
On personal taxation, Mr Corbyn said he would “ask those who have been fortunate to contribute a little more,” although he did not specify what he wanted the top rate of tax to be.
Camden Unison convenor George Binette also raised the issue of a luxury goods tax.
But Mr Murphy said “the EU won’t let us do that” because national parliaments are banned from varying rates of VAT.