The Taxpayers’ Nemesis

December 22, 2009

Christmas has come early for those who don’t want to see the Tories gain a landslide victory in the 2010 General Election as one of their key satellite groups, the “Taxpayers’ Alliance” has been unmasked as using phony foundations to circumvent UK charity laws.

The Alliance has consistently supplied talking points and even policies for the Conservatives over the past few years, almost always relating to fiscal and economic matters. Its ideas are always the same. As its own literature puts it, “The government is riddled with waste and inefficiency…High taxes are damaging the British economy and our way of life is suffering as a result…tens of thousands of jobs are being lost to off-shoring as huge tax bills reduce incentives to work, invest and save and discourage entrepreneurship” etc…

Its mission is to shrink the state along Thatcherite lines, which translated in the 1980s into attacks on the welfare state, deindustrialization (to break the unions mainly) and high unemployment, which had the effect of necessitating increased benefit payments and so on. It is also a fundamentalist grouping, seeking to “Oppose all tax rises” – an extremist view if ever there was one.

Presumably, the Alliance is quite happy, ecstatic even, that as tax expert Richard Murphy reports, “One third of the UK’s largest companies do not pay tax” while “In 2006 Grant Thornton calculated that the 54 billionaires in the UK paid tax at an average rate of 0.14%.”

The Taxpayers’ Alliance doesn’t care about such issues – it doesn’t feature them at all on its main site (using the search string “corporate tax evasion”) and there have been only 3 blog postings by bloggers associated with the Alliance who mention it (only to play down its importance).

In its day to day hack work, the Alliance attacks government spending by appealing to ordinary taxpayers – which on the face of things is fair enough. After all, with corporations like Google able to shift the vast majority of their profits out of the country with ease, the tax burden falls disproportionately on the citizenry.

But that’s not the purpose of the Alliance. As this week’s revelations have made clear the Alliance is merely a policy unit of the Conservative Party, taking “charitable donations” via an arms length proxy called the Politics and Economics Research Trust.

By channeling their money through the PERT, wealthy donors to the Alliance (such as Sir Anthony Bamford owner of JCB, or Tony Gallagher of Gallagher Estates) have been able to claim 40 percent tax deductions, even though the money has then found its way to the Taxpayers’ Alliance – a political campaigning organization, not a charity.

Under British law, charities are not supposed to be political organizations, putting the Alliance at risk of breaking the law. As the Guardian reports, “The Charity Commission has opened several “assessment cases” prior to a possible investigation.”

Moreover, one of the brains (and the beef) behind the Alliance, a “retired teacher” named Alexander Heath reportedly “does not pay British tax and lives in France.” Strange then that he should be so concerned with the plight of British taxpayers.

What emerges is an unflattering arrangement where the Alliance is benefiting from government instituted tax breaks designed to boost private charitable giving (as the exchequer steps in to make up the gap between what the donor “gave” and the amount after the 40 percent deduction).

The crusaders against government waste, public sector employment, high taxes and big government are living off the largesse of big government themselves, but we shouldn’t be surprised, as the Alliance is purely a political tool used by the right to pillory the left and create room for further Thatcherite economic policies.

And a very effective tool it has proved too. Take this week’s press references to its activity:

From the Telegraph, “The public service chief on £5,000 a day” speaking of the head of the Financial Services Authority Sir Callum McCarthy. “The TaxPayers’ Alliance, which has researched the earnings of quango chairmen, calculates that Sir Callum effectively earned £4,872 a day for a four-day week.”

The Daily Mail reports on the same material, slamming the “Quango ‘kings and queens’ earning up to £5,000 a day for part-time work” and quoting Ben Farrugia from the Alliance, who says that “instead of serving taxpayers’ interests, some non- executive members and chairs may put their quango’s interests first….”

The Daily Star quotes Susie Squire of the Alliance in a story about the “MORE than 100 greedy peers [who] claimed over £50,000 in expenses for working in the House of Lords.”

The Express quotes an Alliance spokesperson in a story about a doctor who had been suspended on full pay for three years before being found guilty of malpractice.

The Scotsman reports on the alleged £12 million bill for fraud within the civil service, using Matthew Elliott of the Alliance as an interviewee.

The Telegraph reports on Alliance research which reportedly shows “green taxes” rising to £26 billion this year meaning that “Families up and down the country have been overcharged on everything from turning on the TV to flying abroad, all for the sake of ineffective green taxes and regulations.”

The list goes on. Obviously the Taxpayers’ Alliance has established a massive reach within the UK Press – as a glance at the “media coverage” section of its website will inform you. What it won’t tell you about, are the Guardian allegations against the Alliance, but no matter.

According to its own propaganda, the Alliance remains a virginal crusader seeking to purge the UK of its bloated and inefficient public sector and, up till now, the press has been happy to quote from them universally uncritically – handing them a mysteriously free pass to spread their information.

This week, the theme has been Quangos (Quasi-non governmental organizations)- with the Alliance bemoaning how “they remain unaccountable and distant from the public that pays” while “Serious action needs to be taken to increase democratic control over quangos, so that they are genuinely accountable to ordinary people.”

Very well. But only as long as the Taxpayers’ Alliance recognises itself as a bloated Quango in its own crusade. And while they are at it, why not release details of their funders, if they are to receive charitable donations while ranting about Quangos being undemocratic and aloof from the concerns of citizens?

If not, then shut up.

In reality, there are plenty of eloquent advocates of lower taxes and better public services, voices which also try to take into account abuses of the tax system by the wealthy and don’t seek to pummel the public sector simply because it is public.

The real enemy of ordinary taxpayers isn’t the highly abstract “public sector.” The distinction between public and private makes little sense anyway when both prop up the other and the private sector has thoroughly penetrated public services while the banks depend on tax monies to survive. No, the real enemies are those who seek to make ordinary people pay for the vices of the rich – speculative finance gone wild, tax evasion on a mammoth scale, environmental devastation – through diminished services, fewer social protections and – yes, higher taxes.


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