£16 billion a year lost to evasion. Exactly 10 times as much as is lost to benefit fraud. More benefit fraud investigators than tax evasion officers. HMRC consistently failing to recover the money they’re there to recover.
What does a small-minded government do when faced with under-performing public services? Privatise, of course. Or, in the current age, they part-privatise, putting lucrative parts of the system out to tender. Internal markets and competitive bidding are the only routes that small-minded governments can imagine to improve services. We’ve seen it extensively in the NHS, in prisons and increasingly in education. Recently the model has become a little more sophisticated as, for example, providers of imprisonment are paid on the basis of reoffending being cut. The economic case is clear: reoffending costs the economy huge amounts of money, so cutting the reoffending rate saves us money. Offering imprisoners a cut of the saving will encourage new, dynamic and efficient forms of rehabilitation.
It’s a small-minded way to approach anything, and it’s degrading to all concerned. But as it’s the order of the day, we might ask why this logic hasn’t been applied to the horrendously underperforming HMRC? It can’t be because it’s sensitive information which we shouldn’t allow private contractors to deal with, as we already let private contractors know everything they want to about the intimate personal aspects of peoples lives. It can’t be because there is an insufficient pool of talent/capacity to take on the work – we’ve got a City whose main purpose is to provide shady whatnots for youknowwhos. We’re world leaders in it.
So why not? These are people who respond very well to financial incentives (we know this from their pay awards, and from the fact that they will all, we’re often threatened, leave the country if we tax them at anywhere near a fair rate). Why not incentivise (hah! I said incentivise) these world-leading experts with a cut of whatever moneys they were able to repatriate? Put the missing £16 billion out to tender and at least we’d scrape back some of it, minus the incentivising cut.
Much as I hate privatisation for the way it degrades us all, this is an area which is already degraded beyond repair, so I would gladly support such a plan. But where the small-minded governments would jump at this kind of plan in any other area (indeed, it’s their only kind of plan), it’s not been discussed in the HMRC’s case. It’s not discussed at all. The HMRC do very badly, have their funding cut, and we shrug and move on. It feels like there’s actually very little appetite for recovering the moneys, despite what gideon and dave were saying last week.
Full disclosure: the man in the picture is a French, not an English. He may not even be a banker or tax specialist or anything, but he was wearing a suit and that’s enough for wooly liberals like me. Booo. Booo bad suit man boo.