The current Tax Gap is scandalous and exposes how much the Westminster elite has completely disregarded any commitment towards fairness and social justice at a time of unprecedented cuts to public services. Beyond the tax evasion, the real problem is that the Westminster based political parties have been fundamentally compromised by the prolonged and unhealthily close relationship with the City.
We are where we are because of the cumulative effect of the legacy of 18 years of Conservative and 13 years of New Labour government. Over recent decades, successive Labour and Tory governments have literally looked the other way, when it comes to tax evasion, allowing the UK's tax gap to grow to an eye-watering £34 billion each year. Total fiscal consolidation over the course of this Parliament amounts to £120 billon pounds, which indicates the scale of the problem.
Labour can cry wolf as much as it likes over this scandal, but these lost billions are as much their legacy as the Tories'. Back in 2005, the last Labour UK Westminster Government merged Inland Revenue and Customs and Excise and then proceeded to cut almost a third of jobs in five years (99,000 to 68,000). They also slashed the budget for tackling the tax gap by nearly 50% (£3.6 billon to £1.9 billion) between 2006-10.
Simply relying on ‘business as usual’ to fix this problem just won’t do – despite the bluster and the rhetoric from the usual suspects to expect Westminster to fix the problem is simply naive. Tax evasion needs to be dealt with worldwide – recently the Swiss banks have crumbled in the face a number of court cases in the US (and a few Swiss banks even collapsed) in relation to tax avoidance by US citizens.
If the USA can do it, then why not the UK - clearly there is a lack of any desire to do anything about it (hence Ed Ball’s silence and George Osborne's lack of urgency). The UK’s Crown Dependency Tax havens are based in some of the few remaining (fiscally useful) scattered remnants of Empire lie at the heart of the tax evasion problem.
Plaid Cymru will not compromise on its commitment to tackling tax evasion. Vast sums of money that should have been collected properly and invested in vital public services such as health and education have been lost. Plaid Cymru, while the Westminster parties fall over themselves to appease the City bankers and their wealthy backers, puts Welsh communities first.