The budget’s failure to clamp down on tax avoidance – centred on the City of London – starves both our own and overseas health systems of desperately needed cash.
While George Osborne’s latest budget has managed to distract everyone with a few small changes to the tax structure (those with savings, a fat pension pot or a liking for beer and bingo will do well), the enormity of the national tax abuse scandal has been hidden from view.
The government would have us believe that spending cuts, not taxes, are the solution to plugging the hole in public finances. But the real reason for the deficit is to do with the banking crisis- not spending increases. According to figures from the Office for National Statistics, government spending in 2009 was up 7.5% – but because of economic slowdown, rising unemployment and a reduction in corporation tax rates, the tax take fell by 20%.
The inconvenient truth: without fairer taxes and clamping down on abuse, we will never close the fiscal gap without causing massive social harm.
Tax evasion to the tune of $109 billion is being committed in the UK every year. Because the rich get to horde their treasure in offshore accounts where the tax man can’t reach it, just five families in the UK have accumulated more wealth than 12.6 million Britons put together.
Things are even worse in the developing world. Tax losses to poorer countries exceed the amount they receive in aid annually: the $1 trillion wiped out from the developing world every year to tax abuse dwarfs the $136 billion received in aid – by a factor of almost ten.
If not everyone pays their fair share, there are profoundly negative effects on the economy. And public services are the first to suffer.
Like health, for instance. Why have 7,000 key NHS clinical staff (including doctors, nurses, midwives and ambulance staff) been made redundant amid cuts enforced by the Coalition government since 2010? We are told that such cuts are the only way to close the “funding gap”, that having “too many hospitals” is “unsustainable”. Neither is true. The funding gap only exists because the richest are cheating the tax system. In reality, the cuts are ideologically driven: it’s a political ploy to hobble the NHS and discredit nationalized healthcare in order to generate momentum for privatisation.
Study after study confirms that the NHS is both more affordable and more efficient than market-based systems. The question is not whether we are able pay for universal healthcare, but whether we are willing. To do so, we need to achieve basic tax justice.
Tax abuse is bad for our health. It is robbing us of doctors, nurses and hospitals. Cuts to services mean that in many areas chiropody and physiotherapy are no longer available on the NHS, and there are long delays in receiving mental health care. And what is more, tax abuse is driving inequality. We now live in the most unequal society in the West, and as authors of The Spirit Level, Kate Pickett and Richard Wilkinson, make clear, “inequality damages the social fabric of the whole society”. Unequal societies are unhealthy societies.
It’s time we had a healthy discussion about tax. The bottom line is this: if wealthy people and corporations don’t pay tax, the rest of us suffer. This theft is being supported by the global tax secrecy network and health professionals need to start making the links between how such fraudulent financial practices impact on the health of ordinary people every day. For instance, what about the City of London’s tax haven status in the UK, which literally steals hundreds of billions of dollars from the developing world each year, depriving poor countries of a chance to develop functional healthcare systems of their own?
This is why Medact – an organisation of health professionals working towards a safer, fairer and better world – has been bringing together experts from the worlds of health and money, to illuminate the multiple relationships between tax and health and to advance tangible alternatives to a system that is illicit and unjust.
Why should we be tightening our belts under austerity when what we really need is better tax recovery? This is an issue that doesn’t stand on the left or the right of politics; it just makes sense. Any decent and moral citizen would agree. We shouldn’t let tax abusers off the hook.
So, let’s talk about tax – it’ll be good for you.Disclaimer: The views expressed in this blog are the views of the author and do not represent the official position of Medact.