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Britain's biggest union, Unite, is calling for a crackdown on tax havens, which it claims rob the Treasury of £33bn a year.
As Britain faces a bleak new year with public finances under increasing strain, Unite is urging prime minister Gordon Brown to make the "culprits" of the credit crunch pay their fair share of tax.
The union cites figures published by analysts Tax Research UK, which suggest that Britain's top companies avoid paying £25bn in tax a year through the use of tax havens. In addition, a conservative estimate suggests that wealthy individuals - those earning over £200,000 a year - avoid a further £8bn in tax.
"A commitment to make 2009 the year Labour gets tough on the tax havens would be met with delight by hard-working families," said Unite joint general secretary Derek Simpson. "For years, super-rich individuals and corporations have undermined the UK's tax revenues and without decisive intervention from the government those same people would have destroyed our economy. Thanks to them, our jobs and homes are at risk."
There has been growing disquiet over the use of tax havens - financial "boltholes" that allow companies to pay little or no tax. Britain joined France and Germany in pledging to get tough on tax havens and draw up punitive measures for uncooperative countries at an OECD summit in Paris, although Brown has been accused of standing in the way of a crackdown. According to Tax Research UK, the top 100 companies have reduced their tax payments by 5% over the past five years.
The union is calling on the government to force financial institutions to close down their structured finance operations, repatriate offshore profits and make them subject to UK tax, and close down private banking advice departments that help to exploit tax loopholes.
Clawing back just one year's tax would have been enough to pay for the government's £20bn fiscal stimulus package, the union noted. "The taxes these corporations and super-rich individuals avoid could go a long way to boosting the UK economy during these tough times," Simpson said. "The government must close the loopholes that allow the super-rich to avoid paying their fair share of tax. It is also time for the banks to close down their private banking advice sections."
Barack Obama, the incoming US president, has added to the pressure for further scrutiny on tax havens, commenting: "We need to crack down on individuals and businesses that abuse our tax laws so that those who work hard and play by the rules aren't disadvantaged."
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