The leaders of the Methodist, Baptist, Quakers and United Reformed Churches have signed a joint open letter to the Chancellor, due to be published in the Daily Telegraph on Monday (31 October), urging him take stronger and more decisive action to crack down on unjustifiable corporate tax avoidance.
The Open letter, coordinated by the ecumenical charity, Church Action on Poverty, makes clear that record levels of inequality are “tearing at the fabric of society… increasing numbers of individuals and communities feel that they have no stake in wider society and have no realistic hope of their children bettering themselves… “In an age of austerity and spending cuts, we believe that tax avoidance is morally unacceptable and tax evasion has to be seriously addressed. Tackling these issues will reduce the need for further damaging cuts in public spending.”
The letter has been signed by nine church leaders, including the President of the Methodist Conference, Rev Leo Osborn, the General Secretary of the Baptist Union, Rev Jonathan Edwards, the Anglican Bishop of Dudley, Rt Rev David Walker, the Co-Clerk of Quaker Peace and Social Witness, Gwen Schaffer, the Deputy General Secretary of the United Reformed Church, Revd Richard Mortimer; Alison Gelder, Chief Executive of Housing Justice, Sr Maureen Tinkler Director of Vincentians in Partnership and Anne Peacey, Chair of National Justice and Peace Network of the Roman Catholic Church, as well as Niall Cooper on behalf of Church Action on Poverty.
Niall Cooper, National Coordinator of Church Action on Poverty said:
“The signatories to Open Letter to the Chancellor today have sent a clear message, that as leaders of Christian Churches in this country, they are taking a stand on the side of the poor and the vulnerable. Aside from wider debates about the role of the City of London in the nation’s life, the scale of tax avoidance practiced by many of the UK’s biggest companies is morally unacceptable, and it is time for the Churches, politicians and society at large to say these practices must stop.”
A delegation from the organisations represented will be handing in a copy of the Open Letter to the Chancellor at HM Treasury, 1 Horse Guards, at midday today, 31 October.
The Open Letter calls for specific action by the Chancellor in three areas:
- Ending the anomaly that when goods are bought by internet or mail order from a company based in the UK they attract VAT, but if they are bought from some off shore territories they are entirely tax free. A tax avoiding industry has sprung up, routing purchases though these territories purely to avoid tax. The £130million that this costs the UK exchequer is small in comparison to the total loss, but for instance would be enough to largely protect the Sure Start programme and children’s services from the 11% cut in the Early Years Intervention Grant.
- Urging the Chancellor not to proceed with the draft proposals on Controlled Foreign Companies announced on 30 June. Whilst advocates of the policy claim that it will increase the UK’s ‘business competitiveness,’ what it actually offers is big incentives for companies to shift their financial operations to ‘off-shore’ tax havens as a means of avoiding paying UK taxes. Even on the Treasury’s own estimates, this will cost £840 million in lost taxes a year.
- Urging serious consideration of the need to introduce a General Anti-Avoidance Rule into UK domestic law. Whilst we all await the outcome of the Aaronson inquiry, due to report today (31 Oct), we are convinced that such legislation could be framed to meet the objectives of deterring and countering tax avoidance in a fair way, whilst at the same time providing certainty for business.