Belfast Telegraph

Wednesday 17 September 2014

Rich get richer, poor get help, middle gets squeezed

A few weeks ago, the post brought a nasty surprise: a form letter to my husband from the taxman saying that his return had not been received in time and he was being fined £100.

There were a lot of reasons to feel cross about this, the first being that I had posted the return, if not exactly in good time, then in time for it to arrive by the deadline.

The second was that there appeared to have been a delay of at least a week between the date of the letter and the date it was posted, leaving less than two weeks to appeal, or pay up.

The third was the contrast between the speed with which HMRC issues its penalty notices and the time we had spent on hold, trying to obtain answers to our questions by phone.

People trying to pay their taxes are routinely kept on hold, on a paid-for line, for more than five minutes. In our case, the average was more than 15 minutes.

Add together the cost of the call and our time and an argument could be made that we are due almost as much from HMRC as it is claiming from us. But the world does not work like that.

For, while lowly officials at HMRC are sending letters to the likes of my husband, their bosses are lunching with the super-rich, while their lawyers are scrutinising the small print of tax legislation to find out how - or even whether - they can extract some revenue from global giants, like Starbucks, who pay scarcely a penny.

Nor is it just tax. The swingeing fine imposed on the Swiss bank, UBS, by international regulators last week was a reminder of how the banks have had the whip-hand over the rest of us.

Whether it was corrupt individuals or the system, or both, that made possible the rigging of the London Inter-Bank Offered Rate (Libor) by Barclays, UBS and others, there were losers.

And those losers were everyone who was placed at a disadvantage by an interest rate, on their debt or their credit, on which something had essentially been creamed off first.

Yet still the Government tells us we should work longer and save much more for our retirement - in funds depleted by management fees and ravaged by the vagaries of the stock market. The big secret that the Government is unlikely to divulge is that those at the very top are largely insulated from the effects of the economy. Their capital is in safe havens, they treat tax as negotiable, they take gold-plated pensions early.

The other half of this secret is that the poorest, too, have been protected (at quite a different level, of course): the safety net remains; benefits are (or were) inflation-proofed, housing is subsidised.

And in between are the rest of us; cajoled, chided and browbeaten into obeying rules that, as we learnt when it was too late, apply only to us.

Together, we constitute an enormous middle, which is less squeezed than deceived.

I hope that the middle of the next generation will see through the artifice and be less co-operative and more demanding.

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