4th August 2020

Catch up with Fair Tax Councils

Over 30 people participated in an online event on Fair Tax Councils on 27th June 2020, organised by Central England Quakers Peace Committee and Peace Hub. John Sheldon chaired the event and introduced our speakers.

  • David Haslam (Church Action for Tax Justice) set the context on tax justice and inequality in the UK and worldwide.
  • Mary Patel (Fair Tax Mark) told us about practical ways in which we, as the grass roots, can make support the fair tax mark locally.
  • Ravi Subramanian (UNISON West Midlands) put the issue in broader context: in particular, the personal experience that UNISON members have of the consequences of unethical corporate behaviour.
  • Cllr Fred Grindrod (Bournville and Cotteridge Ward, Birmingham City Council) shared his knowledge of what councils like Birmingham City can do to help shine a light on this issue.

Below is summary of how the event answered our three questions – what is tax justice, how can our local councils support fair tax; and what can we do about it? You can read a longer write up on the Central England Quakers website.

What is tax justice?

In a fair tax system, the richest (who can afford the most) should contribute the most: that would be ‘Tax Justice’. But in our extremely unequal society, the richest use loopholes to avoid paying what they owe: £7 billion pounds of potential corporation tax is lost to the UK through shifting profits offshore.

Mary Patel noted the difference between:

  • Tax-planning where individuals and companies follow the letter and spirit of the law, and governments use tax to encourage or discourage particular behaviour (e.g. ISAs encouraging savings, carbon taxes discourage fossil-fuel use).
  • Tax-evasion where individuals and companies break both the letter and spirit of the law – this is illegal.
  • Tax-avoidance where individuals and companies follow the letter but break the spirit of the law – exploiting loopholes to get out of taxes they should be paying.  This is the focus of most tax justice campaigning.

David Haslam put this in the context of a UK culture that sees all tax as ‘bad’, but there is a big difference between regressive taxes such as council tax or VAT, and progressive taxes such as income tax or corporation tax. A land value tax could help tackle the UK’s wealth inequality.

Ravi Subramanian noted that companies which avoid tax are often also engaged in other unethical behaviour, such as poor pay and conditions for employees. He also highlighted the role of the ‘Big Four’ accountancy firms which allow and even facilitate tax-dodging (KPMG, PwC, Deloitte, Ernst & Young).

How can our local councils support fair tax?

£37.5 billion worth of public contracts have been awarded to tax dodging companies in the past 5 years – so local councils who spend public money on procurement have an opportunity to make a difference. Councils that sign up the Fair Tax Declaration pass a council motion, committing to:

  • good tax conduct in the council’s own affairs
  • demanding greater transparency of suppliers
  • supporting Fair Tax Week
  • certifying any council-owned businesses / subsidiaries to the Fair Tax Mark
  • joining calls for reform of procurement rules.

In the West Midlands Cannock Chase is already on board. Cllr Fred Grindrod explained that Birmingham City Council (BCC) passed a motion on tax justice in 2016. Following this, BCC has done some work on contractors used, but Fred felt more could be done to become a ‘Fair Tax Council’.

What can we do about it?

The Councils for Fair Tax Declaration, is seeking to use the power of local grassroots campaigns, in the way that Fairtrade and the Living Wage have. The Fair Tax Mark offer resources for encouraging local councils to sign up to the scheme, including a guide for councils, and template letters to councillors. Ideas are contagious in local government, and Fred was hopeful that as more councils get on board the issue could snowball.

As individuals we can encourage councils, churches or other bodies we are part of to look at the companies they use and invest in, and ask them to sign up for Fair Tax Mark. There are also opportunities for creative action – a campaigner in Exeter has crafted signs for companies with the Fair Tax Mark to display.

The Fair Tax Mark supports and celebrates responsible tax conduct, but there is a case for also boycotting major tax-avoiders such as Amazon. Both David and Mary felt that calls for systemic change and individual actions strengthen each other, especially when coordinated.

If you have any questions, or would like to take action for tax justice, get in touch!

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