At a time in history when the UK’s overall debt pile is still rising relentlessly, there are powerful arguments in fiscal prudence.
Opponents of such prudence bandy about the word “austerity”, as if cuts were motivated by Dickensian cruelty towards the poor.
In truth even many leading politicians on the left of the political spectrum in the UK accept that Britain’s budget deficit must be eliminated. Removal of the deficit will only mean that the overall debt pile is no longer rising. There will have to be further ‘austerity’ if that debt load is to come down.
Given the size of the UK’s welfare bill, the arguments in favour of reform of that budget (including a benefits cap) are well rehearsed and widely accepted across the spectrum at Westminster (including by much of the Labour Party, but not its leader Jeremy Corbyn). However, for such a policy to have credibility everyone in the nation must pull their weight.
There is growing and justifiable concern that some of the richest individuals and companies are not doing so. Even a Tory government, for example, has been tightening the tax treatment of wealthy so-called ‘non doms’.
This is a complex area of policy. Here in Northern Ireland, there is cross-party support for lower corporation tax rates to attract investment by wealthy overseas companies.
Even so, the suggestion that the internet giant Google is paying a tax rate of only 3%, much lower than a likely 12.5% corporation tax rate, has sparked understandable outrage.
How to reconcile these two positions – the need to attract talent and investment and the need for all of the rich to pay their share? (most already do: the wealthiest 10% of earners pay more than half of the UK’s income taxes).
Relatively low marginal rates of tax that are strictly enforced, is one obvious answer. Taxes that are widely paid too, which in Northern Ireland must mean determined pursuit of border fuel cheats by HMRC and the National Crime Agency.