FORGET about Starbucks, Google and Ebay, there is a new way of dodging tax on the block and it’s called digital sales.

Under EU VAT rules digital downloads – such as ebooks, apps and music files – are not classed as products. When UK consumers buy them VAT is imposed at the same rate as the country where the supplier has its headquarters.

According to consultancy Greenwich Consulting, Britain is losing more than £1.6 bn as a result of this tax loophole.

Putting two and two or, better still, a billion and a billion together there is a clear picture emerging of why this country has a budget deficit – there’s nothing coming in.

David Cameron knows this but on television he will happily point the finger at “out of work families”

who claim £500-a-week in benefits as one of the reasons for the economic imbalance.

Let’s be honest there aren’t too many families in County Durham claiming money like that and £500 is not even a drop in the ocean compared to the billions that are lost to the economy through tax avoidance and tax evasion schemes operated by international companies and wealthy individuals.

Mr Cameron and George Osbourne have both stated on television recently that the Conservatives are “ the party for people who want to get on in life”.

What kind of people are they talking about? Clearly, not the nine out of ten redundant Remploy workers who still have not found some work after Government help (Echo, Dec 7).

John Phelan, Howden-le-Wear.