Tax recovery could help fund spending

Many ask how Rishi Sunak’s generous budget will be financed (Tory praise for summer statement comes with concerns over finances, 8 July). The Tories can confidently scatter cash into the economy, knowing that the OECD, Wall Street, Eurodad Capital Flight and other international agencies estimate there are more than $32tn (£25.4tn) of tax-unpaid assets held in some 75 tax havens, which grows at $1tn (£0.8tn) per annum. It is this vast sum of illicit money, endlessly searching for safe, profitable havens, that keeps global interest rates at near zero.

Of this, it is estimated that $3tn (£2.4tn) is from the UK. If Sunak spends $300bn (£237bn) of this UK hoard, it is only 10% of our tax-haven assets. So, long-term borrowing at near 0% rates is not likely to be a problem. We, the people, will pay the loans back to the tax havens in due course. If HMRC is empowered to levy back-tax and penalties as normal, it will approximately amount to the whole capital – $3tn – and spare the UK taxpayers.
Noel Hodson
Member of Eurodad Capital Flight

• Sunak’s statement was the creation of a chancellor determined not “to scare Conservative backbenchers”, as your editorial says (8 July). The trouble is that, unless he enlightens the likes of Steve Baker and John Redwood with economic facts – like the £300bn deficit being covered by the Bank of England’s recent increase in quantitative easing, how other countries, such as Japan, manage very well with large debt, and how government investment in people’s pay triggers economic multipliers so that a large percentage is soon recovered in tax – the chancellor is unlikely ever to offer anything other than, as you say, cocktail umbrellas in the face of an economic hurricane.
Bernie Evans
Liverpool

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