Letter: All the very best swindles are legal

Your correspondent Ivan Humphrey suggested in his letter last week that we should spend less on foreign aid and more on supporting some of our cash-strapped public services.

Friday, 2nd November 2018, 12:45 pm
Updated Friday, 2nd November 2018, 12:51 pm

He says there have been massive cuts in public expenditure. But these cuts are a political choice by the Conservative government, not an economic necessity.

The government actually collects far less tax than it could. Income from tax is lost all over the place due to the “tax gap”, the difference between the tax that should be paid and the amount actually paid.

High quality estimates put this as high as £120 billion a year and rising (www.taxresearch.org.uk).

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This is hugely greater than the amounts needed to properly fund all the services we need, never mind the relatively small amount for foreign aid.

The tax gap arises partly because the government permits large companies to arrange their financial affairs using tax havens where they pay little or no tax. Ordinary working people cannot do this, so they cannot avoid their taxes, only the big boys can.

All this is legal, but as someone once said, “all the best swindles are legal”.

This problem is worsened by Conservative cuts to the funding of HMRC.

They simply do not have the resources to pursue large companies for the tax they should be paying.

And the Conservative government wants to appear “business friendly”.

By this they mean allowing big business to get away with as much tax avoidance as they like.

As for foreign aid, much of it is tied to trade deals between Britain and third world countries. Foreign aid is enlightened self-interest that benefits British jobs and industry.

China, the USA and other countries do likewise. Pulling back on foreign aid would allow other countries to benefit from trade deals that we currently enjoy.

At a time when Britain is turning its back on the world’s largest and wealthiest free trade area right on its doorstep, to pursue trade deals with far away places, do we really want to abandon some of the world’s poorest people?

It doesn’t exactly add up to the new “global Britain” promised by Brexit supporters, and it will damage British trade and other interests with the rest of the world!

John Islip, Kettering