Posts Tagged 'tax'

Tax reform and a Corbyn-led government will save our local services

Peter Latham, author of Who stole the town hall?, argues that the Spring Budget highlighted the Conservative Party’s allegiance to the City of London, not the small businesses, entrepreneurs and self-employed they profess to support.

He says that, to resist Tory-driven austerity policies and save our public services, we need a resurgence of social democracy and a reformed tax system.

“The Chancellor’s decision not to increase self-employed national insurance contributions (NIC) by £2bn, in a U-turn following the Spring Budget on 8th March, showed that the Tory government is ‘imprisoned by a minority of its backbenchers and by the Daily Mail’ according to The Guardian, 16 March 2017.

Moreover, as Aditya Chakrabortty noted, the government’s policies ‘hit the just-about-managing harder than the rich’. For example, the 2016 red book lists reductions to taxes on big businesses worth £18bn over the next five years.

Conversely, Jeremy Corbyn’s devastating assault on the Chancellor’s provision of just £2bn over three years to cover the crisis in social care – just a third of what the Local Government Association calculates is necessary – was slated by the mainstream media for not mentioning the Tory manifesto: even though he attacked the decision to raise the NIC rate.

Many Tory MPs fight shy of acknowledging their party’s first priority to the City of London, preferring to pass themselves off as the voice of small businesses, entrepreneurs and the self-employed. Increasing Class 4 NICs for the self-employed stuck in their craw, leading many party members to inform Philip Hammond and Theresa May that they would not support it.

Continue reading ‘Tax reform and a Corbyn-led government will save our local services’

#PanamaPapers: Beyond Naming Names

Media coverage of the Panama Papers, the leaked set of 11.5 million confidential documents that provide detailed information about offshore companies listed by the Panamanian corporate service provider Mossack Fonseca, has been widespread this week.

But in today’s guest blog post, author and academic Andrew Sayer warns against seeing tax havens as anomalies and asks us to look beyond the current focus on naming and shaming the users of Mossack Foneseca’s services… 

Andrew Sayer

Andrew Sayer

‘We have done nothing illegal’. If you’ve been following the stories of tax dodging that have come out of the Panama Papers, you will have seen this feeble response many times.

To explain why the elaborate schemes for avoiding tax are not illegal, just remember the golden rule: those with the gold make the rules.

And they make them to suit themselves.
‘When plunder becomes a way of life for a group of men living in society, they create for themselves, in the course of time, a legal system that authorizes it and a moral code that glorifies it.’ (Frédérik Bastiat, liberal economist, 1850)

Tax havens are not are not anomalous islands in an ocean of normality. Continue reading ‘#PanamaPapers: Beyond Naming Names’

6 free articles on the economic impact of austerity

Photo credit:

Photo credit: Number 10

In the immediate aftermath of the first wholly Conservative government budget in nearly 20 years reaction has been mixed.

Some believe Chancellor George Osborne’s move towards a higher-wage, lower-tax economy is fair and will give the majority of families a higher standard of living. For others, the budget was seen as ‘deceitful’, with the proposed cuts in benefits outweighing the gains, leaving the poorest even worse off.

The coming weeks and months will of course reveal the true impact but now is a good time to review some of the economic impacts of the austerity programme to date, assessing them on the basis of scholarly evidence and research.

For the next week we’re giving you FREE access to six articles from across our journals. These examine austerity economics across local government, the legal system, disability movements, social work and the voluntary sector:

Weathering the perfect storm? Austerity and institutional resilience in local government (Policy & Politics, volume 41, number 4): Evidence from case study research shows the dominance of cost-cutting and efficiency measures, as in previous periods of austerity. But creative approaches to service redesign are also emerging as the crisis deepens, based upon pragmatic politics and institutional bricolage.

Austerity justice (Journal of Poverty and Social Justice, volume 21, number 1): Discusses why civil legal aid has reached this low point and the impact of the loss this source of support for advice on welfare benefits and other common civil legal problems.

Cutting social security and tax credit spending (Journal of Poverty and Social Justice, volume 19, number 3): Examines the scale and nature of earlier government cuts by focusing on the indexation and capping of benefits, making benefits more selective and the fate of contributory benefits in the cuts.

Out of the shadows: disability movements (Critical and Radical Social Work, volume 2, number 2): In resisting cuts to disability benefits and services, today’s disability activists have consciously established themselves as an important part of a wider resistance to austerity.

Crisis, austerity and the future(s) of social work in the UK (Critical and Radical Social Work, volume 1, number 1): Examining the impact of the Government’s policy of ‘austerity’, which seeks to shift the costs of that crisis onto the poorest sections of the population while seeking also to undermine the post-war welfare settlement.

Decoupling the state and the third sector? The ‘big Society’ as a spontaneous order (Voluntary Sector Review, volume 4, number 2): Draws on Friedrich Hayek’s theory of ‘spontaneous order’, suggesting that the Big Society involves some implicit Hayekian assumptions. It concludes by considering the implications of regarding the third sector in such terms.

We publish seven highly prestigious journal in the social sciences. If you’d like to find out more about Policy Press journals and for information on how to subscribe to any of the journals then click on the links below.

Interview with Mr Rys, former ISSA Secretary General, on the occasion of the publication of his book Reinventing social security worldwide

An extract from the ISSA newsletter, Update

Mr Rys, thank you for agreeing to this interview and giving ISSA members the opportunity of learning more about your views on some key issues of social security policy and on the future development of the institution.

What was your motivation in writing this book now?
I would single out three main motives for writing this book. In the first place, I noticed that the younger generations of policy analysts did not seem to have a full picture of social security concepts which prevailed at the time of its expansion. Due to such gaps in the knowledge of the historical background of the institution, they sometimes considered as new emerging issues certain questions which had been researched and debated many years ago. My conclusion was that people of my generation have not succeeded in passing down the full accumulated knowledge of the subject and that some effort should be made to improve the situation.

The second reason was the wish to provide a correct historical account of the beginnings of international sociological research in the field of social security in the sixties and seventies of the previous century. As head of the research service of ISSA, I had the opportunity to develop a certain number of projects which made considerable impact on the promotion of social security research worldwide. This history reflects a collective effort of ISSA member organisations and forms an integral part of the institutional memory of the Association.

The third motive was the sudden outbreak of the world financial crisis during the last stages of the preparation of the manuscript. This event supplied a new evidence to prove some points made in the first part of the book regarding the mistaken belief in the reliability of the financial markets as providers of income capable to replace social security benefits. And perhaps more importantly, it underlined the danger concealed in recent trends in the evolution of social security which consist in a progressive abandonment of the principles of social insurance. The institution comes out always weaker after each repeated crisis and gradually loses its capacity to fulfil its original mission. Given the importance of social security for the preservation of the existing world socio-economic order, steps should be taken to review its functions so as to make the institution politically widely acceptable and economically sustainable.

What are the main messages you wish to convey?
The chief message concerns the need to preserve social insurance in its role of the main social security technique. Its contributory system with benefits granted as of right ensures to all beneficiaries their full human dignity while promoting the spirit of participation and self-help. Many social policy reactions to current social needs keep mixing social insurance principles with those of social assistance and encourage the use of social insurance benefits to cover needs, which are beyond their scope.

In order to regain confidence in the institution, it would seem necessary to reduce the volume of income redistribution through social security measures between different income classes of the population and transfer all income redistributive functions to the taxation system. This policy should be accompanied by an increased transparency of income flows generated by social insurance and regular information of insured persons concerning their future benefits.

What lessons do you see for social security in the light of the global financial and economic crisis?
One of the main lessons concerns the irreplaceable role of the state as a final guarantor of social security rights of the individual. It is not the case of the state as a direct provider of benefits but rather that of the state as an active supervisor of all measures. In the same way as in the financial and economic sector, the state must closely supervise and control the private and occupational welfare institutions so as to ensure that they correctly fulfil their functions.

Another lesson points in the direction of the need for building up financial reserves to permit the institution to function normally during the periods of economic crises. In view of the close dependence of social security on the performance of national economy, it is inevitable that the income of the institution decreases when the volume of benefits paid is at the maximum. Such financial reserves should hence be constituted outside the regular financial system of the institution possibly out of levies on some excessively high salaries or on earnings from speculative investments.

According to the ILO, 70 to 80% of the world population has no social security coverage. How would you answer the challenge of covering those in the informal sector and poor particularly in developing countries and countries in transition?
This challenge is real and there is no point in trying to hide the difficulty of providing an adequate answer. According to Beveridge, social security was meant to combat only those physical and social risks of human existence which exist even when the state of the society as a whole is as good as it can possibly be – it has never been created as an instrument for combating global poverty or even societal dysfunctions such as mass unemployment. These are basically two different sets of problems requiring different defensive approaches. However, the socio-economic and political reality in developing countries commands that the two targets be tackled at the same time. Under these circumstances, classical social insurance schemes should no doubt continue their advances, even at a slower pace, to protect the growing skilled manpower, indispensable for the creation of national wealth, while other source of finance such as general taxation should be sought to deal with the problem of global poverty. In this perspective, the main task of governments would be to keep an appropriate balance between these two types of social protection approaches.

Vladimir Rys is the author of Reinventing social security worldwide: Back to essentials

Enter your email address to follow this blog and receive notifications of new posts by email.

Twitter Updates


Creative Commons License

Republish our articles for free, online or in print.

The work on the Policy Press blog is licensed under a Creative Commons licence.

%d bloggers like this: