UK public contractors face probe into tax avoidance

Given the 'capture' of British policy-making by the tax avoidance and financial industries we won't hold our breath . . . but the Financial Times is reporting something long overdue:

"Simon Hughes, the Liberal Democrat deputy leader, has joined forces with tax campaigners to call for a probe into government contractors that may be avoiding tax."

Hardly surprising, given that the UK water industry last year paid £1.6 billion in dividends to shareholders - while receiving tax credits worth £200 million. TJN's Richard Murphy weighs in:

“The single biggest problem our government faces is not having enough tax revenue to fund essential spending. One obvious solution is to change the rules on government procurement. As a minimum, anyone offered a government contract must be able to show they’ll pay tax on it in full in the UK and to make sure they do not use tax havens.”

There will be a lot of these contractors to choose from. The UK's Private Finance Initiative would be an excellent place to start, as these general shockers suggest (also see here, for more on the uselessness of PFI, and more excellent work by Simon Hughes here, on a more specific dirty shocker.)

In other words, this is a good thing - and a sign of changing attitudes - but we fear that any resulting 'reforms' will be expertly filleted by financial sector lobbying.