Kirsty Davies says we need to take further measures to overcome inequality in Wales
Economic inequality is out of control. The growing gap between the rich and the rest is preventing millions of people from lifting themselves out of poverty.
Extreme inequality is both morally wrong and economically damaging. It is in everyone’s interests to tackle it.
Despite decades of economic growth, regeneration and anti-poverty policies, there are significant inequalities in Wales with many Welsh people facing economic inactivity, mental and physical ill health, poor educational attainment and increasing exclusion.
The results of our recently published Welsh Doughnut, a relatively simple but powerful economic model, highlighted this worrying truth. The report showed that almost one-quarter of households in Wales are living in relative poverty and a staggering 40% of households are unable to heat their homes adequately. This is happening right here, on our doorstep.
On a global scale, we’re living in a world where the gap between the rich and the rest is rapidly increasing and as the wealth of the few grows, the poorest are being left behind. If current trends continue then the richest 1 per cent of the world’s population will own more than half the world’s wealth by 2016. Oxfam’s research last year showed that, in the UK, just five families had the same wealth as over 12m Brits put together.
Creating a fairer tax system could make a big difference in the fight against extreme inequality. The British public are right to be outraged at the constant stories we’re hearing of multinational companies, such as Amazon (who have a warehouse in Jersey Marine, on the border between Neath and Swansea) and Starbucks (who have fifteen cafes in Wales), who are making huge profits and not paying their fair share, or big accountancy firms and high street banks helping their customers to exploit loopholes in a ludicrously complicated tax system. This really angers me, not just because it is unfair, but because it is depriving governments around the world of vital revenue needed to combat poverty.
Stopping multinational companies from dodging their taxes, which cheats societies out of billions of pounds of lost revenue, must be a top priority for the next government.
Tax dodging is costing governments billions – both in the UK and in developing countries. This is money which is vital for tackling poverty.
The Tax Dodging Bill campaign is calling for all political parties to pledge to introduce a new Bill in the first 100 days after the election to tackle corporate tax dodging in the UK and in poorer countries, and to make sure the additional revenue raised is used to fight poverty.
Only a commitment to a full package of reforms will send the message that the problem is being taken seriously. A Tax Dodging Bill would make it harder for multinationals to dodge UK taxes, stop them from getting unjustified tax breaks, make the UK tax regime more transparent and ensure that UK tax rules don’t encourage British companies to avoid tax in developing countries. Such a bill could bring in at least £3.6bn a year to the UK Treasury, which is the equivalent of £600 for every British household living below the official poverty line.