UK is a tax haven, says tax expert Richard Murphy

In a lecture entitled, "The Courage to Pay: tax, faith,honesty and business", Mr Murphy will say that the UK has become atax haven for rich and multinational companies.

Mr Murphy is a Quaker, commentator and founder of the TaxJustice Network, who has been at the forefront of exposinginjustices in the international tax system.

Giving the Beckly Lecture at the annual MethodistConference in Plymouth, he will say: "The poorest have been payingmore tax. But for the rich and multinational companies the UK hasbecome a tax haven. The result has been a massive rise ininequality in this country as the rich have got richer and the resthave stood still, or worse."

Mr Murphy will also point out that the cost to theEuropean Union of tax evasion may be €1 trillion a year, and thattax avoidance and evasion by multinational corporations using taxhavens may cost developing countries about £100 billion a year.This is almost exactly the same as total world aid budget.

"There is now a choice to be made," he will say. "We canstop tax cheats cheating or cut pensions. We can cut corporationtax rates for large companies or cut the NHS. We can sack staff whocould crack down on tax avoidance at HMRC or deny our children aproper education. We can introduce half hearted measures to tackletax abuse - as the government plans - or force our children to stayat home until they're 25. We can cut the 50p tax rate or providethe capital to create the green investment bank that could putpeople to work in this country."

The Methodist Church is supporting Church Action onPoverty and Christian Aid's Tax Justice Bus Tour this autumn.

The full text of the Lecturefollows:

Thank you so much for asking me to speak to you thisevening. I greatly appreciate the invitation.

As you now know, I'm not a Methodist. I'm a Quaker withsome Anglican leanings. But we share a faith; and I hope that'senough.

I define Quakerism as exploring that of God in everyoneand everything. And that's what I want to do in the next half anhour or so, although everything is going to be quite narrowlydefined as tax.

Now tax is not everyone's idea of fun, especially ifyou're Jimmy Carr right now. But as he's learning, there's more toit than that. Tax can even be dangerous. But, he's not alone inthat recent realisation.

I think I should make it clear that you too are takingsome tax risk tonight. That's because in a recent report from HMRevenue & Customs to The Treasury Select Committee of the Houseof Commons  my work was described as both 'dangerous' and'misleading'. Now the words 'dangerous' and 'chartered accountant'do not often go together - and it has to be said my sons clearlyafford me more respect since I've been labelled as what they thinkan enemy of the state -  so I think I should confess what I'vedone to acquire this very odd status.

This, thankfully, is easy to explain. I have asked peopleto pay their taxes when due, where due, and in the rightamount.

Now you'd think that HM Revenue & Customs would beonly to keen to have a chartered accountant who actually tellspeople to pay up. But no - it's not all those vast number ofaccountants who are putting vast effort into helping people not paytax who are dangerous in their eyes; paradoxically it's the one andonly accountant who does the opposite who gets the label'dangerous' applied to them.

So how did a Quaker chartered accountant become adangerous man? That's pretty much the subject I want to talk aboutover the next forty minutes or so. In doing so I hope to do threethings. The first is to give you some idea how I got to be involvedin this issue. I hope you'll indulge me - but without thatexplanation I don't think that what follows makes sense. Secondly Iwant to give you a whirlwind tour of the history of the tax justicemovement. Lastly I want to explain why for me this is a campaigningissue intimately and inextricably linked to my faith. Throughoutthat I hope to explain why I want businesses and people to havewhat I will call the courage to pay their tax. That's an ambitiousprogramme.

So let's start at the very beginning. Or in my case atuniversity, where I studied both economics and accountancy. Puttingaccountancy aside for the minute, the economics I was taught and Idid not get on. I don't mean I couldn't do it: I was near the topof my year. It was just I did not believe it. What it said was thatthe more we have, whatever it might be, the better off we are. AndI realised that this assumption - or article of faith if you like -was wrong, as I realized were many of their other claims. As aresult I did, in a sense, give up on those economists, their claimsand in any belief that the market solves everything longago.

Let me give you just a brief example of what they getwrong. As the brilliant Australian economist Steve Keen has shown,if the maths on which economists base their claim that markets knowbest is to work then everyone in the market - even those not yetborn -  has to know everything from now to the end oftime.

Now, I'm sure there are people here who think God doesknow that. But I very much doubt anyone does think they know that.And I hope no one claims they know the mind of God.

And yet that's what economists require us to know if theirmaths is to work. It's ludicrous, it's wrong, and their attempts towork round the problem never really overcome the fundamental issuesthat their initial assumption of what they call 'perfect knowledge'creates.

I won't spend much more time here talking much more abouteconomics. I've done that at length in my book The Courageous State, for which the shameless plug is now over. The importance of thisearly realisation of where I stood on economics was however that Iwent on to become a chartered accountant with a more open mind thanaverage because I carried with me inherent doubts about whethermarket based economic ideology was plausible, let alone right. Ihave to admit, that in the accountancy profession such doubt isrelatively rare.

Despite that doubt, I trained at what is now KPMG - thenand now one of the largest accountants in the world - and because Iended up working in tax I inevitably learned about offshore whilstthere. But let me put this in context: we're back in the early 80sand apart from one, almost ignored, report in the USA no oneanywhere realised the threat to the world economy that offshore taxhavens posed at that time.

Just as they didn't when in the mid 1980s I helped bringTrivial Pursuit to Europe and saw the whole range of offshoreplanning that the combined minds of two of the Big 4 firms ofaccountants could bring to the structuring of such a product. Istress: I saw offshore, I helped make that work in some ways, and Ilearned a lot as a result. If you like, I stand before you asinner, and ask your forgiveness.

What I saw can be summarised simply. Offshore was veryclearly a world of make believe. In most cases nothing ever reallyhappens in an offshore company. All its decision making, all itsaccounting, all its paper work is really done somewhere else. Aveneer that it has a presence in wherever it claims to be iscreated. Lawyers and accountants in the tax haven help thatpretence. Those who route transactions this way pretend tothemselves that this is something real going on. And I decided thatpretence was corrosive, for the people involved, for the business,and maybe more widely - although I did not get to that realisationuntil later on.

That experience was transformative. At the same time asseeing all this I was setting up my own firm of charteredaccountants. Now I won't claim we did everything right and nor willI say I haven't changed my mind on tax issues over the years -because that would not be true - but I can say we set out to be asstraight as we could be in the norms of the time. So we didn't takeclients offshore. And we didn't use artificial planning usingtrusts, for example. And we didn't advise on all schemes that wereavailable if we simply thought them wrong. We aimed to let ourclients sleep easy at night knowing that if the Revenue knocked ontheir door they'd have nothing to hide. I still think that's whatan accountant should do.

That policy was important in two ways. First, it wascommercially successful: there is a market in tax honesty you'll bepleased to hear. I wish we heard more about it. I wish it wasupheld and applauded by the professional accountancy institutes.Secondly, it convinced me that tax compliance waspossible.

Tax compliance is now an important concept for me and thetax justice movement. I define it as seeking to pay the rightamount of tax (but no more) in the right place at the right timewhere right means that the economic substance of the transactionsundertaken coincides with the place and form in which they arereported for taxation purposes.

Let me use a simple example to explain what this means inpractice. It means if you pay into a pension you should get the taxrelief the law intended because what you've done and what the lawintends is consistent.

But it also means that if you're a comedian doing gigs inthe UK to earn your daily bread it's very unlikely that if you payyourself via a Jersey company, a Jersey trust, a rather odd loandeal that no one ever thinks will be repaid and a minimum wagecontract for your services then it's very unlikely that theeconomic substance of what you are doing is anything like the formin which you report it for tax. When that happens you're taxavoiding. And by that I mean you're literally trying to get roundthe law - because to get round is what you do when you avoidsomething.

But if by chance you made a mistake when avoiding your tax- because, say someone, somewhere wrote down that you need notrepay the loan in the example noted, , as you'd always understoodto be the case - then in that very moment what you've done mighttip over into being tax evasion because the whole arrangement intowhich you'd then entered then becomes a sham. Tax evasion is, ofcourse, illegal. You can see why Denis Healy once said that thedifference between tax avoidance and tax evasion was "the thicknessof a prison wall".

Such arrangements are the bread and butter of offshore taxavoidance. Some are less offensive. But the fact is that offshorealways requires people to suspend their disbelief: it is quiteliterally a world of fiction when it comes to avoidance. And whenit comes to evasion it requires the wilful turning of a blind eyeby those involved, or the application of what Senator Carl Levin inthe USA calls the application of the MEGO principle. MEGO means 'myeyes glaze over' - and that's just what happens to the professionalpeople who operate these schemes. They look at the little bit of itin front of them and say it looks all right. Their eyes glaze overwhen asked to look at the whole scheme because if they didn'tthey'd see it for what it was.

Now of course I wasn't the only person to realise this.And I definitely wasn't the only person to know that tax havens hada particular role to play in tax abuse well before they came towider public attention. But although that was the case if we goback just a decade there was no organisation campaigning anywherein the world on tax abuse, tax havens and the need to deliver whatwe now call tax justice. In retrospect I find that amazing, but itquite simply seems no one had thought of it.

Well, almost, but not quite. In 2000 Oxfam commissioned areport from a small group of people - almost all of whom I now know- on the impact of tax havens on development. That group estimatedthen that the cost arising from tax haven activity might be as muchas US$50 billion a year - but having produced the report Oxfamrealised, I think it's fair to say, just what a dangerous andsubversive idea this was - and ran a mile from it for a longtime.

It was 2002 before things suddenly changed. I'd sold myinterest in my accounting practice and was the new father of twovery young sons, and was now living outside London, pretty sure Iwas being called upon to do something different with my life.Thankfully, and I'll put it on record now in case I don't do soagain, I had the full and active support of my wife for thatchange. Which meant that when Prof Prem Sikka of Essex Universityinvited me, on the basis of a few things I'd written and an emailor two, to a conference on offshore tax in Jersey organised byATTAC - then and now one of the leading campaign groups calling fora financial transaction tax in Europe - I went. And there I metJohn Christensen - who had been the chief economics adviser to theStates of Jersey until the late 1990s, before they'd got fed upwith his anti-tax haven stance and invited him to "take the boat inthe morning" as they do with those they considerundesirable.

It's not fair to say the rest is history and that the TaxJustice Network can date itself from that moment - because othermeetings took place that autumn and others were involved in Germanyand Switzerland in particular, but in March 2003 I found myselfchairing the launch meeting of the Tax Justice Network in the Houseof Commons in London. The biggest adventure of my life hadbegun.

In that case let me explain what tax justice is allabout.  After all, there are organisations with remarkablysimilar names promoting all sorts of weird ideas designed to reducethe size of the state, the tax burdens of the rich and to make taxhaven use much easier. You can pretty much say we're the oppositeof all those things. The Tax Justice Network was created as thefirst think tank / campaigning organisation in the world with thespecific aim of saying that the current structure of internationaltax practices, promoted by big firms of accountants, lawyers andbankers (who we call "the pinstripe mafia") and tacitly accepted asnormal by all the rich nations of the world does enormous damage tothe developing countries of the world.

I can't say they do countless damage though because fromthe outset the Tax Justice Network has been a pretty odd NGO. For astart almost all those who founded it have grey hair. And we have atendency to wear suits and silk ties' although I'm ignoring thattonight. And because we're mostly pretty heavily qualified we alsoproduce a lot of research.

So, for example, we can say how much money we think ishidden by wealthy individuals in tax havens. It is at least $11.5trillion . Give or take that is five times the total annual incomeof the UK.

And we can say that we think that costs the world wellover $200 billion a year in lost tax revenues. Not all of that, ofcourse, is a loss to the developing countries of the world, butquite a lot of it is. Those places are particularly vulnerable tocorruption and have tax authorities too weak to challenge theirwealthy elites. Money pours out of them into tax havens as aresult.

And that's not the only the cost of tax havens. We canalso say that we think tax avoidance and maybe evasion bymultinational corporations using tax havens may cost developingcountries about £100 billion a year - by coincidence almost exactlythe same as total world aid budget .

If you put wealthy individuals and companies togetherthen, according to a report issued by the European commission lastweek almost US$20 trillion is hidden in just the Cayman Islands,Switzerland, Singapore, Hong Kong and Jersey combined . There are,of course, many other tax havens too.

At the same time they estimated, confirming a previousestimate of mine , that the cost to the European Union of taxevasion may be €1 trillion a year.

Now that's not all down to tax havens, but what isstaggering is that almost none of this was noticed, talked about,or ever discussed in academic or political debate before we in theTax Justice Network raised the issue.

In particular, when we started this campaign almost no onetalked about tax havens. In no small part because of our patientwork they moved centre stage at the London G20 summit in April2009, which I attended and where I became the first blogger to everaddress a question to a world leader at such an event; again somesmall indication of our progress.

I'm not pretending as a result that we have as yet changedthe world to the extent that we want. That would be untrue. But Ican say that as a result of the research basis for our work we havepersuaded many of the merits of our case. You will now find thatmany, if not most, of the world's major development NGOs campaignon tax, tax havens or related corruption issues. The list includesChristian Aid, ActionAid, Oxfam, War on Want and to some degreeSave the Children here in the UK. I know others are thinking ofjoining in. Around the world there are too many torecount.

Those development agencies have become the campaigning armof the tax justice movement. And our role as a centralorganisation, mainly comprising grey-haired thinkers, has been toprovide them with the armoury of data to support arguments forreform, and to detail new and innovative solutions to the problemsso that these campaigns are not just a negative process of drawingattention to a problem, but also a positive process that demandsthat specific reforms take place. It is that combination that hasbeen critical to our success to date.

For example many NGOs, working together under the PublishWhat You Pay banner, took one of our very first ideas and haveturned it into an international success story. That idea, which Icreated as a result of my very first conversation with JohnChristensen, is called country-by-country reporting . To put itsimply, this demands that every multinational corporation shouldpublish a profit and loss account for every single jurisdiction inwhich it trades. At present we have no idea in very many cases inwhich  countries a multinational company does trade and wehave even less idea about what they do there, how much they earn,and how much tax they do or do not pay as a result.

But this information is vital. 60% of world trade isundertaken on what is called an intra-group basis; that is, tradebetween two companies under common ownership. So this is Forddealing with Ford. BP dealing with BP. And so on. If we knew whichgroups did this, where, and how much of that trade was routedthrough tax havens,  and particularly how much of it wasrouted through tax haven on an intra-group basis, then we wouldknow how much of these companies profits they were artificiallyhiding in tax havens. What is more, so would the world's taxauthorities, which is a particularly important point.

But this same idea had particular importance for thosecampaigning on the extractive industries. The extractive industriesare  made up of those companies which drill for oil or gas ormine for essential raw materials. Around the world these resourcesare overwhelmingly located in developing countries and they have,unfortunately, been associated for decades with corruption, civilstrife and even war,  and as a result with underdevelopment.The cost to billions of people, quite literally, has beenenormous.

The response from development NGOs has been to call foreach multinational  company  working in the extractiveindustries to publish just how much tax it pays in each of thecountries in question so that the governments in those places canbe held to account for the funds that they receive. Holding them toaccount in this way provides an obvious incentive to reducecorruption, improve governance, and to spend properly to meet theurgent needs of their populations. What was missing, however, was auniversal standard for delivering the information in question sothe companies had to supply the data to make this processpossible.

Country-by-country reporting has delivered that mechanismand quite extraordinarily, in a period of less than a decade thisrequirement for the extractive industries to account for the taxesthey pay is now already law this in the USA and should become lawin the European Union later this year. Those laws, admittedly, donot give us all the information we need about all the multinationalcompanies in the world, and nor do they give us all the data weneed about the abuses that take place in tax havens. We have stillgot to campaign for that. But the point is we have, working withour partners, developed and delivered a real mechanism that canchange the lives of people by demanding accountable government inAfrica, in Latin America, in Asia and perhaps even in the USA, theUK and Norway, where there was previously no such opportunitybefore. Our task is to change people's life prospects, and this ishow we are doing it.

That though is not all that we have done, or all on whichwe have succeeded. We've campaigned extensively on tax havens. Mywork, and that of John Christensen, has forced the governments ofJersey, Guernsey and the Isle of Man to radically change theirtaxation systems so that they now comply with European legalrequirements. This has made us deeply unpopular in thoseplaces.

My campaign to remove the UK's subsidy to the Isle of Man,which I estimated when I started this single-handed effort to beabout £220 million a year, and a very significant part of its totalgovernment income, has proved successful. That subsidy has now beenremoved. The Isle of Man is no longer subsidised by the UK to be atax haven.

We were also intimately involved in the campaign to closedown the VAT loophole that saw the export to and import from Jerseyof CDs, DVDs and other products to avoid paying VAT in thiscountry, which was costing us well over £100 million a year in losttax revenue in this country, and jobs in every UK highstreet.

Our aim in all these cases, and many others, has been tohighlight the way in which tax havens and those who use them havebeen free riding on the back of the economy of the UK, andelsewhere at cost to the ordinary people of thiscountry.

More broadly, we are focused heavily on the worldwideabuse that tax havens deliver and as a result have produced anindex called the Financial Secrecy Index  which now ranks allthe major tax havens of the world. It ranks their opacity, orsecrecy if you like, and that's because it is secrecy that letsthis abuse take place. When we launched the last index in 2011 itwas reported in the press of more than 70 countries.

Again, this has not been popular work. But I knew we weresucceeding when the head of the Cayman Islands' Monetary Authoritydescribed me as the leader of the international tax Taliban. If thetax havens are hurting, then what we're doing isworking.

We've been busy at home as well. In this case working withpartners in the trade union movement, where I have strong links, Ihave worked to highlight the issues of tax avoidance and taxevasion in the UK economy. I published my first estimate of taxavoidance in the UK in February 2008. I estimated tax avoidance tocost £25 billion a year , split almost equally between largecompanies and individuals. Extraordinarily, to that point in timethe UK government had never published an estimate of tax avoidance,and they certainly hadn't published one for evasioneither.

I have published my estimate of tax evasion since then,which I think to be £70 billion a year. In addition, we also knowthat £25 billion of tax is outstanding and due to the Revenue atany point in time .

These are astonishing sums of money, previouslyunacknowledged. Now admittedly the UK government does not agreewith them , and this is not the time to explore the technicalreasons why we have such a different view on this, although I domake clear that I think our tax authorities' estimates bothavoidance and evasion are ludicrously low, and note that theEuropean Commission, reporting just last week  would seem toagree with me as they now seem to be embracing my calculations forEurope as a whole - where the total tax loss comes to some €1trillion a year .

The point however is that by forcing this issue onto thegovernment agenda and out from there into public debate, via theGuardian newspaper, by blogging and tweeting, through the recentpress series in The Times (of all papers) and through numeroustelevision and radio documentaries which I and others in the TaxJustice Network have been involved with a public awareness of thisissue has been created. That in turn, I have no doubt, leaddirectly to the creation of the UK Uncut and Occupymovements.

I have welcomed both movements. They've done things theTax Justice Network has not done. The pressure they have brought tobear on UK companies has been enormous. It has also had a realpolitical impact. Chuka Umunna, now Labour's shadow businesssecretary, virtually made his name on the day that he asked BobDiamond how many subsidiaries Barclays had in various tax havens.Those were excellent questions and Bob had no idea how to handlethem. But someone had to write the questions for Chuka, and thatwas the Tax Justice Network.

So we are in the business of creating change, and it'spretty clear that we are succeeding. No one is more surprised thanJohn Christensen and myself, plus all those others who have workedon this issue over the years. We're especially grateful to ourfunders, and in my particular case most especially to the JosephRowntree Charitable Trust, the union movement and the TUC, and theNorwegian government. I can add for the Tax Justice Network OxfamNovib in the Netherlands, Christian Aid and the Ford Foundation.But I stress, we remain a very small organisation. I'm alwaysamused when people ask to come to our offices and I have to explainthat that's either the converted garage in my back garden or theshed in John Christensen's garden.

It's true that we have used, according to others, theinternet and social media to extraordinary fact. I had no idea sixyears ago when I started my blog that it would now be the number 1 economics blog in the UK, but according to independentassessors it is. These things help, but they only help if you aregiving a clear and unambiguous message as to why you are doingthese things so let me turn to that as my final theme before webreak the questions. At which point I should also add that fromhere on this is very much personal testimony.

I well remember a book written by the cricketer andAnglican Bishop David Shepherd in the mid-1980s. It was called"Bias to the Poor". It was a great title. I think it's fair to saythat everything that the Tax Justice Network does has within it abias to the poor.

We believe that if developing countries were to collectthe taxes that are owed to them then they could develop their ownviable, democratic, stable governments that could deliver, subjectto the processes of local democratic choice, the healthcare,education, infrastructure and other needs that are so obviouslyvital if very many of the poorest countries in this world are toget out of poverty. That is why we have worked so hard to make suremultinational companies pay their taxes in the right place at theright time and do not hide the money that they take from developingcountries and put it in tax havens. This will be a recurring themefor our work for a long time to come.

The same motivation is true of my work that has a UKfocus. That has the same bias to the poor. That is why I work ontax justice. For me, and I do not speak for the movement as awhole, this work is the fulfilment of my Christianvocation.

In Luke chapter 4 Jesus said that he came to deliver goodnews to the poor and freedom to the oppressed. And the truth isthat in my opinion you simply can't take the message of Christianconcern for the poor out of the Bible and have anything meaningfulleft. It is, I think, what Christian faith is about.

Now I am well aware that there are those on the right wingof politics who say that the only way in which a Christian canevidence this charitable intent to the poor is by voluntarydonation out of their income to relieve poverty. We have seen theTaxpayers' Alliance and Institute of Directors saying that recently. The payment of tax, they say, prevents Christians undertakingthis charitable activity, which is indication of their faith, byremoving the financial resources they need to give. Well I must becandid. I see no merit at all in that argument.

I believe that such organisations promote this ideabecause they do not believe in the state. And they equally do notbelieve in the power of the state to liberate people fromoppression.

I do.

I do not have a blind belief that politicians get thingsright, or that everything the state does is right. We are human.That means, by definition, that mistakes will occur, and of coursethey do. But the argument put forward by those who believe in flattaxes in particular that the state has no role in the provision ofessential services including healthcare, education, provision ofpensions, social services, other essential systems on which thefabric of our society is built is just wrong. And if you don'tbelieve that those who promote flat taxes don't believe in suchthings I offer the following quotation from an interview I had in2006 with Alvin Rabushka who created the flat tax concept . He saidthen:

The only thing that really matters in your country isthose 5% of the people who create the jobs that the other 95% do.The truth of the matter is a poor person never gave anyone a job,and a poor person never created a company and a poor person neverbuilt a business and an ordinary working class guy never droveeconomic growth and expansion and it's the top 5% to 10% whogenerate the growth for the other 90% who pay the taxes to supportthe 40% in government. So if you don't feed them [i.e. the 5%] andnurture them and care for them at the end of the day over the longrun you've got all these other people who have no aspiration foranything more than, you know, having a house and a car and going tothe pub. It seems to me that's not the way you want to run acountry in the long run so I think that if the price is somereadjustment and maybe some people in the middle in the short runpay a little more those people are going to find their children andtheir grandchildren will be much better off in the longrun.

I can't link that with a bias to the poor. As for the roleof government he said:

I think we should go back to first principles and causesand ask what government should be doing and the answer is "not awhole lot". It certainly does way too much and we could certainlyget rid of a lot of it. We shouldn't give people free money. Youknow, we should get rid of welfare programmes, we need to havepurely private pensions and get rid of state sponsored pensions. Weneed private schools and private hospitals and private roads andprivate mail delivery and private transportation and privateeverything else. You know government shouldn't be doing any of thatstuff. And if it didn't do any of that stuff it wouldn't need allof that tax money so that's the fundamental position and as long asyou're going to have government do all that stuff you're going tohave all those high taxes.

That's what the flat tax proponents really think. That'swhy the Institute of Directors and the Taxpayers' Alliancesuggested slashing the size of the state in the UK to allow for theintroduction of a flat tax.

I'll tell you what will happen if that were to occur. We'dsee a flood of wealth from the poor to rich in this country, andwe'd see mass poverty on a scale that I wish were unimaginable, butwould seem to be what these people want.

My argument rejects this viewpoint. My argument is thatwe, as Christians have a duty to use to power of the state todeliver good news for the poor. Over a long time many Christiansseem to have agreed. If they hadn't those who used the power of thestate to abolish slavery would have been wrong to do so.

Those who worked to transform the South African state toabolish apartheid would also have been wrong.

And those who believed in the 19th century that the supplyof clean water and sanitation, all delivered through the state, wasthe means for achieving a healthy population in the UK would havebeen wrong.

Whilst those who worked tirelessly for a universal rightto free education would also have been misguided. Charity schoolsshould still, in the opinion of those who argue against such a supply, be the basis of provision. I think we can all imaginewhere that would have got us.

Thankfully all those who campaigned for those thingsweren't wrong. They were right. And as a result I think it is ourduty as Christians to stand up and to account for our faith and tosay that it is not an issue that only concerns us on Sundaymorning. It is a 168 hours a week duty to stand witness for what webelieve in.

And if, as I think it has to be, that the relief ofpoverty is at the core of what we are seeking to achieve then Ialso have no doubt we have a duty to engage with the politicalprocess. For some that will be as politicians.  For me that isnot the case. I am not a member of a political party, and I amwilling to work with all those political parties that show sympathywith the creation of a taxation system that is truly progressiveand which seeks to redistribute income and wealth in this countryfrom the best off to the least off. As a result I have worked withthe Labour Party, the Liberal Democrats, Greens and nationalists. Ihope no one would accuse me of being partisan.

The reason, I suggest, why we need to engage now is thatfor the last 30 years the economic system of this country has beenbiased against the poor. The wages of most people in this countryhave, when inflation is taken into account, been stagnant. Whenrising house prices are taken into account, for many they may havefallen. It is for that reason that so many of us went into debt,and what we borrowed was the savings of those who had been maderich during that same period. The Occupy movement called them the1% and that label was so effective because it was socorrect.

For the 1% tax rates have fallen. The highest rate ofincome tax in the UK was 60% in 1980 and soon it will be 45%. VATwas 12 1/2% in 1980 and now it is 20%. Corporation tax rates weremore than 50% in 1980 and soon they will be 22%. National Insurancerates have gone up. The base on which income taxes are charged forthose on lower earnings has been expanded, considerably. That meansthe poorest have been paying more tax. But for the rich andmultinational companies the UK has become a tax haven. The resulthas been a massive rise in inequality in this country as the richhave got richer and the rest have stood still, or worse.

That is wrong. And if we are to bring good news to thepoor then we have to say so. It takes courage, I can assure you,and it takes conviction but it doesn't actually take very manyfacts because they are so stark and so obviously indicate the biasthat has taken place. All I can guarantee is that it makes youunpopular. And yet events over the last few years, and indeed evenover the last few weeks, have shown how sentiment is changing onthis issue.

What those events make clear is that there is now a choiceto be made.

We can stop tax cheats cheating or cutpensions.

We can cut corporation tax rates for large companies orcut the NHS.

We can sack staff who could crack down on tax avoidance atHMRC or deny our children a proper education.

We can introduce half hearted measures to tackle tax abuse- as the government plans - or force our children to stay athome  until they're 25.

We can cut the 50p tax rate or provide the capital tocreate the green investment bank that could put people to work inthis country.

Those are all choices. I suggest that the government hasmade the wrong choices. So far, and almost without exception thechoices they make favour the rich. That's why I say the choices arewrong. Alvin Rabushka who proposed flat taxes might like thegovernments plans, but I don't.

And I stress that when I put those choices before you I donot for one minute suggest we don't need multinational companies.Nor am I saying for a moment that there's anything wrong with beingin business. I am, I would remind you, a chartered accountant. Idon't apologise for that.

What I am saying is that businesses also succeed with thehelp of government. They gain from healthy, well trained workforces, good infrastructure, strong law and order, a level playingfield where they know everyone of their competitors pays the rightamount of tax as much as they do, and where they know strongregulation ensures all play by the rules. 

In other words, I am saying, as Richard Wilkinson and KatePickett did in the Spirit Level, that we all win from a fair taxsystem that redistributes wealth whilst laying the securefoundations for a strong market economy. But we haven't got that.And to say so is, I think part of our witness. It is part of ourChristian witness. It is what I believe my ministry is.

I think it our duty to challenge and to change ourculture, to call on businesses and people and to say have thecourage to pay your tax in the right place, at the right time andin the right amount - because that's what we as a society all needto do if we're to flourish.

Let me close. I was outside St Paul's Cathedral lastOctober on the day that the doors were shut on the Sunday whenworship did not take place. I had the privilege of speaking to thepress and BBC that day. And as I did so I had a very firmconviction, one which it is now clear that Giles Fraser shares,that if Jesus had been present with us then he would have beenoutside on the steps with the Occupy movement quoting the words ofIsaiah as he did when he stood in the synagogue in Nazareth, whenhe said

The spirit of the Lord is upon me
because he has anointed me
to tell the poor the good news.
He has sent me to announce release to the prisoners
and sight to the blind,
to set the wounded victims free,
to announce the year of God's special favour.

That's what Jesus said his ministry was about. I thinkit's our job to help the poor hear the good news, and with regardto those oppressed by debt, to seek the year of God's specialfavour.

I have spent a decade working to deliver tax justice withthat mission in mind. I hope you support that idea in your prayers,in your congregations and in your communities. If so, I offer youmy grateful thanks.