Tax justice, inequality, and the general election | ActionAid UK

Richard Pyle

Interim Tax Justice Campaign Manager

After a 20-year silence, the political mainstream is talking about inequality again. What does it mean for our tax justice campaign in an election year?

Tax pays for children in Zambia to be in school
Tax pays for children in Zambia to be in school

So far 2014 has been a year of revisiting old problems. From ethnic tensions in Europe, to the very make up of the UK, the political agenda is now chock-a-block with arguments that we thought we’d settled and problems we’d duly forgotten about altogether.

Indeed, for the last 20 years our politicians seemed to have wholesale forgetten about the problem of wealth inequality. The general consensus seemed to be that inequality was an outdated concept and best replaced with terms like social mobility — or equality of opportunity.

But inequality never went away: It got much worse

So it was that last week Oxfam and the Equality Trust added to the mix of new-old issues with two reports that demonstrated in stark terms how inequality had ballooned in our society — and now represented a fundamental threat to poverty reduction and prosperity in the UK and in developing countries. 

They’re not alone. Calls for action to combat inequality have come from powerful (and unusual) places in recent weeks including Barack Obama, the Pope, and even the IMF, who argued in a recent report that inequality is a threat to the very fabric of our society. Strong words indeed and perhaps why the ‘i word’ crept into the Chancellor’s budget statement this week.

Recent reports even suggest that Ed Miliband is going to make inequality the centre plank of the Labour campaign towards May 2015, using it to give new depth to his cost of living narrative.

So what does this mean for ActionAid’s tax justice campaign?

Well, first and foremost it means tax justice is destined to be at the centre of the political debate in the run up to a tightly contested general election.

As the IMF suggests, one of the simplest ways to reduce wealth inequality is to redistribute wealth through the means of progressive taxation. Crucially, that also means plugging the holes in the global tax system that allows those taxes to be avoided.

Secondly, if inequality is to become the political centre-ground, it means we must be more ambitious about the reforms we seek.

That means challenging the belief that tax avoidance is an unshakable norm but that it is, instead, the result of a series of political choices undertaken by governments in the thrall of a powerful elite. 

Tax justice matters at home and abroad

We need to accept that we cannot exist in a development bubble, but that we need to engage in a wider debate that rejects the false divide between rich and poor countries, the global North and global South, the developed and the developing.

The UK is in a position to dramatically shape the global approach to tax and inequality and we have a responsibility to make the most of the opportunity that the general election presents us with. 

Let’s show our representatives that inequality is not something that can be ignored or forgotten. It is a fundamental imbalance that causes poverty at home and in other countries. And through sorting out the global tax system, it can be permanently rebalanced to the advantage of everyone.