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Tax scandal shows how Government treats ordinary people and the wealthy differently

When David Cameron became Prime Minister in 2010, tackling the budget deficit was supposed to be his top priority, writes Labour Parliamentary Candidate for Ipswich, David Ellesmere.
Five years on and his Government is predicting that it will still borrow more than £90bn his year.
All the evidence shows that borrowing remains high because tax income is under target, rather than because spending is under target.
The “Tax Gap” - the difference between what the Government should be collecting in tax and what it actually receives - is calculated by HMRC as £34bn. Some believe it’s much higher.
You would have thought the that this should be the Government’s top priority.Their response to the HSBC Swiss banking scandal shows that it’s anything but.
In 2010 the Government was passed information by a whistleblower which showed that the Swiss branch of HSBC was actively helping its rich customers dodge taxes - both legally and illegally.
One customer is said to have withdrawn £2.25m in bundles of cash. This was not seen to be in any way dodgy.
But despite being presented with clear evidence of wrongdoing, the Government seems to have been on a go slow trying to get back the money these tax dodgers owe.
6,000 British customers have been identified but the Government has only recovered £135m from them. France and Spain have only half that number of customers, yet France has recovered £188m and Spain £220m.
Evaders are only having to pay a penalty of 10% of the sum owed and are getting immunity from prosecution. With penalties this light, it’s hardly surprising that so many people thought it was worth the risk of getting caught.
Things get even murkier when you consider the revolving door that there seems to have been between Government and HSBC.
Stephen Green, the chairman of HSBC when its Swiss branch was breaking the law, was made a Conservative Lord by David Cameron. This was after the Government had received the information about HSBC’s wrongdoing. David Cameron then made him a trade minister.
Even worse, Dave Hartnett, who was the boss of HMRC, retired and went straight into a highly paid job at HSBC advising them on “financial crime”. I presume this was on how to stop it. They didn't need any help on how to commit it.
Before he left HMRC, Mr Harnett negotiated a tax deal with the Swiss authorities.
This gave HSBC’s bankers almost guaranteed immunity from prosecution for any crimes they might have committed relating to tax fraud in Switzerland.
We were told at the time this deal would net the Government £5.3bn. Now it looks like it will only raise £1.9bn.
What will make most people angry is the comparison - yet again - with how the Government treats ordinary people and the wealthy.
If you make an error with your benefit claim, however small, then the Government will be after you like a rat up a drainpipe. They will want the money back and they may decide to prosecute.
But if you’re a wealthy tax dodger - if the Government decides to do anything at all - you’re let off with a slap on the wrist and immunity from prosecution.
If you are unemployed and the Government decides you are not working hard enough they take your benefits away. If you are a wealthy tax dodger, hiding your money away in Switzerland, this Government cuts your top rate of tax to encourage you to behave.
Our public services are being cut - and will continue to be cut - because some wealthy people and big multi-national corporations are not prepared to pay their fair share of tax.This has to stop.

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