For most people a crime is a crime and if you got caught you tended to do the time or take the punishment. If the vast majority of us fiddled our expenses, we would be prosecuted, lose our jobs and perhaps (depending on the scale of the fiddle) go to prison. Likewise helping yourself to a bottle of water after a riot can get you 30 days in prison, yet misselling members of the public around £ 3.9 billion pounds worth of PPI results in no real punishment for the people responsible.
Bob Diamond’s partial use of the Nuremberg defence, whereby there was no real problem with fiddling the Libour rate, because he had told someone in the Treasury what was going on, may not work in court because merely informing a superior of criminal acts committed or about to be committed is no excuse for committing the criminal act. The banks aside for a moment, if most of us don’t pay our council or road tax we get prosecuted (and our cars get crushed into the bargain) yet tax evasion largely goes unpunished.
Tax evasion may be costing the UK exchequer some £64 billion pounds a year, the equivalent of £1,000 pound per person within the UK. The shadow economy also hits the exchequer hard and indirectly affects every one of us in the wallet. Non declared income, tax loopholes, simple avoidance or off the books economic activity within the shadow economy adds up to tax free economic activity to the tune of £ 160 billion pounds a year. This is around 10.5% of the UK’s GDP, and is ironically somewhat large than the UK’s deficit which sits at around 8.3% of the UK’s GDP.
Tax Research UK, estimates that this shadow economic activity means that the Exchequer loses out to the tune of £64 billion pounds per year, this is some 16 times larger than the £ 4 billion pounds that the UK Government estimates its misses out on due to tax evasion. That is roughly about £1 pound out of every £8 in the economy. Yet the Con Dem Government in its ideologically driven reckless slash and cut approach to the public sector has reduced the number of staff in Revenue and Customs from around 100,000 to 65,000 and plans to reduce the numbers to around 50,000 by 2015 – talk about a no brainer!
Mind to expect the Tories to seriously tackle tax evasion, is a bit like expecting New Labour to stand up to the Trade Unions or both of them to have an honest debate about Party funding. The UK Government is heavily involved in aiding and abetting tax evasion worldwide, British Overseas territories, including the Cayman Islands, help to hide some £ 1.6 trillion pounds from the different nation’s tax authorities. So it should be little wonder that some of the city banks are hand in glove with drug dealers, dictators and terrorists when it comes to money laundering.