Tax Avoiding Corporations and the NHS
Guest blog from Chris Miller of Protect Our NHS
Bristol’s Clinical Commissioning Group (CCG), the body responsible for determining the contracts for a wide range of health care services, is currently seeking support from the city’s GPs to endorse a change to the CCG constitution that would allow tax-avoiding corporations to bid for NHS contracts.
Doctor Strike, photo credit: Adrian Midgley
Under the existing constitution, agreed in 2012, they are prohibited from doing so. The CCG describes this as ‘a minor change’, but as we know from the reaction to the Google tax deal and focus on other tax avoiders, this is an issue of some considerable public concern. In terms of the future of the health services, it is an especially critical matter, as it supports the drive toward further privatisation of our NHS.
Had the Bristol CCG been hoping that this would be a non-controversial issue the timing could not have been worse. The last CCG meeting, at which the proposal was discussed, coincided with the previous day’s announcement by the House of Commons, Treasury Select Committee that it was to investigate the current corporation tax structure. It was also the week in which MPs of all parties came out against the tax deal agreed between the global giant Google and the UK’s HMRC.
Campaign against the change
The Bristol ‘Protect our NHS’ (PoNHS) campaign, that for the last four years has been campaigning against the commercialisation of the NHS, is urging the Bristol CCG to think again about its proposed rule change.
It is writing to all Bristol GPs asking them not to support the constitutional amendment and, in collaboration with 38 Degrees, has launched a petition against the proposed change. The CCG has given until February 24th for any public comment on the issue. The PoNHS message to CCG members is that that they should not bend to corporate bullying tactics.
In particular PoNHS’s campaign last year to prevent Virgin Care winning the contract to deliver Bristol’s Children’s Community Health Services was premised on the company’s corporate structure which appears designed to avoid tax.
Virgin Care is ultimately owned by Virgin Group Holdings Ltd which is based in Jersey, Channel Islands. Virgin Group Holdings Ltd’s headquarters are in the British Virgin Islands. Both known tax havens.
The current actions by the CCG suggest that it was never really committed to their position on tax avoidance and that it is not an ethical organisation in any real sense. But this is about more than simply doing the right thing. It is also about protecting the future of the NHS.
The CCG say they have a duty to maximise the efficient use of tax revenues devolved to them and therefore should avoid expensive and wasteful litigation. But the real threat to NHS revenues comes from giving private corporations further access to NHS contracts.
Rather than asking Bristol’s GPs to agree to constitutional changes the CCG should instead seek their support for retaining the existing position in the face of corporate provocation.
The NHS is funded almost entirely through tax revenues and thus smaller tax revenues mean less funding both for the NHS and other public services. The NHS is currently heavily under-resourced in comparison with countries such as France and Germany that currently spend around 25% more on health care (relative to GDP) than we do.
All tax-avoiding corporations undermine public services by reducing the level of public finance available. Corporate tax avoiders not only want to pay no tax (and see no reason for doing so), but seek to profit from the taxes paid by others. They insist they are entitled to access to such markets but refuse to make a fair contribution to the revenues that creates the services (or market) they now seek to exploit.
A route to privatisation
It seems that corporate tax avoidance is nothing less than a privatisation device. While initially accepting the insufficient resources on offer corporates then employ a range of cost-cutting schemes, including...
- salary and wage reductions,
- the diminution of working standards,
- lowering patient care standards,
- off-loading essential but high-intensity non-profitable activities,
- before ultimately demanding a different fee-based, means-tested or insurance-based system of paying for the services...
..and thus the disappearance of a National Health Service.
NHS privatisation is gathering pace. To condone tax avoidance will only further accelerate this process.
A longer version of this article can be found at Protect Our NHS.
See our Tax Justice campaign.