top of page
  • Writer's pictureMark Howitt

Autumn Legacy

At last month’s Labour party conference, shadow chancellor Rachel Reeves announced that her party would “go after those who profited from the carnival of waste during the pandemic” explaining that covid fraud had cost the country £7.2 billion.

During the pandemic HM Revenue Customs operated several schemes - furlough, self-employed support and the farcical Eat Out to Help Out - together accounting for £5.1 billion of fraud, of which about £575 million has since been recovered and much trumpeted. However, this has only been accomplished by taking HMRC staff off other investigative work which generates about 20 times the cost of employment. The switch to recovering covid fraud monies has in fact come at a cost to us, the taxpayer.

(In view of the subsequent admission by Rachel Reeves that some sentences in her book, The Women Who Made Modern Economics, were “not properly referenced in the bibliography”, my source for the preceding paragraphs was issue 1609 of Private Eye.)

This has always been a bugbear of mine. The UK tax code is a mess and we’re probably stuck with that. But if a government wants to increase tax revenue the simplest way to do that is to increase the number of tax compliance officers. To be explicit about that “generates about 20 times the cost of employment”: an HMRC compliance officer on a salary of £35,000 can expect to collect otherwise unpaid taxes of £35,000 x 20 = £700,000. Per year.

In her 2017 article Resourcing and refocusing HMRC for Tax Justice Network, Cathy Cross puts that multiple at 30 and highlights that “HMRCs budget after years of systematic cuts was 40% less in 2016 than in 2000.” Since then it’s only got worse, there is a determination to cut staff numbers to pre-2016 levels and even talk of merging HMRC and the DWP.

In an idle moment earlier this year I wrote down the names of the nine prime ministers who had held office since I was 18 years old, then ranked them on the vague basis of being “good”, not in any moral sense, nor for their policies, just good at being prime ministers, statecraft. It was a surprise to me that the number one slot was held by a close friend of the lead singer of the Rolling Stones. Those responsible for the underfunding of HM Revenue & Customs occupy positions 4, 6, 7, 8 & 9 and are the most recent incumbents of the highest office of government. None of them are stupid, all expensively educated but, since David Cameron (as of today - frighteningly - our foreign secretary) came to power in 2010 there has been a blind obsession with the self-imposed austerity programme. Or at least, showing numbers to the Daily Telegraph that seemingly illustrate a purposeful fight towards deficit reduction even if the reality is otherwise.

As Cathy Cross says “It is clear that depriving HMRC of resources has not resulted in a more efficient tax authority.”

I’ve not ranked the 14 chancellors who have held office since 1983 but the current one, Jeremy Hunt will deliver what is likely to be his last Autumn statement on 22 November. When it comes to tax cuts he has little room for manoeuvre although with an eye on a general election he might go for crowd-pleasers, cutting stamp duty and inheritance tax. But if he really wanted to leave a legacy he could do no worse than announce massive funding for additional HMRC compliance staff.

Image: Erik Witsoe

19 views0 comments

Recent Posts

See All


bottom of page