Two very important things happened last night that are very closely related. Protestors were dragged from the steps of St Paul’s Cathedral as they protested against economic injustice. Many within Occupy claimed that financial institutions were deliberately defrauding the rest of society for their own profit and that this was immoral and should be stopped. Meanwhile about two miles away from St Pauls, HM Treasury discovered that a financial institution was deliberately defrauding the rest of society for their own profit (to the tune of £0.5 billion) and was hastily acting to close the tax loophole.
This morning we found out that the bank was Barclays. Barclays was one of fifteen other banks which had signed an agreement that said they would make sure they and all their clients paid the correct amount of tax. It seems that Barclays were surprised by the Treasury’s decision and believed that the scheme was justified and that similar schemes were in operation by other banks. One of the two schemes that were outlawed was a scheme which claimed tax credits back from the exchequer from income which had not been taxed in the first place. Effectively this was getting a tax rebate without the inconvenience of paying tax in the first place. The fact that this blatant avoidance of tax was considered to be completely acceptable is perhaps a sign of the culture that tax is a legal obligation to be minimised rather than a moral obligation to be embraced.
The Occupy camp at St Pauls has spent the last four months calling attention to the moral deficiencies of the current economic system. They have been helping to change the culture where the rich and the powerful have been ignoring their obligation to help those that need it. Many Christians were amongst those protesting against the great economic injustice that exists within our society. It is part of our duty as Christians to point out these injustices and to help change the culture so that the rich not paying their due is never acceptable. The Government last night showed that some action is being taken but we must not let the voices calling for change fall silent with the eviction of the Occupy camp.
Through the “Close the Gap” campaign the Churches have asked that companies be open about how much tax they pay and in what country. We are also asking that Government passes a law – called a General Anti-Avoidance Rule – which says very simply we will ignore legal structures and transactions which are done to avoid Tax. The Chancellor is due to make a decision on a General Anti-Avoidance Rule before the Budget on 22nd March. If you go to the Close the Gap website you will find a tool to help you email your MP asking for this rule to be created. Such a rule could introduce more justice to the Tax system – as well as help alleviate poverty in the UK and abroad.
Correction: The post originally stated that the Government owned a majority share of Barclays when this is not the case as Terry Hudson pointed out and the post has been edited to reflect that fact.