This week’s budget will see the mainstream parties and the media agree that there is no alternative to huge cuts in public spending.
The only debate is about how fast this should happen. Yet there is plenty of money that could be used to ensure that there are no cuts to vital services.
Here are a few suggestions:
Close the tax gap
The gap between tax owed and tax paid in Britain could be as much as £120 billion a year, say the Tax Justice Network.
This “tax gap” is made up of tax avoidance using legal loopholes, and illegal tax evasion.
Even the Revenue & Customs department says that £40 billion of tax is avoided and evaded.
In addition, £28 billion in tax owed is still unpaid.
But the Tax Justice Network say this “dramatically underestimates” the real figures. It puts the total tax gap at a minimum of £70 billion a year, but say it may be as much as £120 billion.
The projected annual tax deficit between the government’s income and spending is likely to be around £170 billion.
The Tax Justice Network point out that tax avoidance “shifts the burden of tax payment from capital (and the large companies that utilise it) onto labour, and from the wealthy and self-employed onto employed labour.”
The rich should pay much more in tax. But even if they just paid what they currently owe there would be plenty of money for public services.
Cut military spending
Britain’s military budget for this year is approximately £37 billion.
Under Labour, military spending has increased 11 percent above inflation since 1997.
And the extra costs incurred from the wars in Afghanistan and Iraq aren’t covered by the Ministry of Defence’s budget. The Treasury Reserve pays them.
Since 2001, an additional £9.5 billion has been spent on the occupations of these two countries.
Take from the rich
The recession seems to be over for some. Pay outs to shareholders in top companies are set to rise by 18 percent.
Top bankers are still raking it in after the government stepped in the bail out the financial industry.
Bob Diamond, Barclays bank’s president, boasted a couple of months ago that he wouldn’t accept a bonus this year in response to public anger.
Yet Diamond still grabbed more than £22 million in pay last year.
Other Barclays employees will share a bonuses of £2.2 billion.
Investment bankers at its Barclays Capital division will get an average payment of £95,000.