Common ground with John Redwood?

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Perhaps the most surprising attendee at the PCS drop in session I’ve just blogged was John Redwood MP.

If you read the report of the parliamentary debate on this issue on Monday you’d think (correctly I think, based on what was said there) that John Redwood believed there is really no such thing as tax avoidance, all that can be done about tax evasion is already undertaken and that tax debt is not the issue of debate.

But that is far from the case , it seems, for when John Redwood sat down with me, face to face, for quite a long discussion (the longest I had during the whole afternoon) a quite different picture emerged.

He had detailed questions on tax debt and what to do about it, and wanted more information on what makes the figure up.

He agreed cutting staff at HMRC when tax evasion is a real issue makes no sense.

He sought reassurance I had not included the use of ISAs in my figure for tax avoidance – and I assured him I had not.

He discussed the issue of double tax relief and I could rapidly demonstrate how on the accounts based analysis I had done this could not be the basis for the  tax gap I had highlighted.

We discussed if that gap could all be capital allowances as accounts and some of my critics imply – and he laughed at the implausibility of that. He knows – and said he knows  – that this is is also an issue of transfer pricing, of non-remittance of profits captured outside the UK, of genuine tax avoidance – which he admits exists – but towards which he takes a different moral stance.

And he agreed, as did all the MPs when presented with simple reasoned evidence, that the HMRC claim that the tax gap is £40 billion has to be far too low.

Of course we disagreed too, about tax rates, flat tax and much more.

And yet we also explored country by country reporting – which he said “as a business person” made instinctive sense to him.

I suspect we will meet again to discuss these issues.

What was interesting was this – that unlike so many who bring closed minds when commenting on this blog he had sufficient open-mindedness to come and discuss the real issues – and reflect as a consequence with much less certainty than he did in the House on Monday.

We didn’t agree on all issues. I suspect we never will. But if others who like to comment on my work would like to stop fixating on whether my estimate is right to the last £1 or £2 billion (which it is not – it is an estimate after all) and were willing instead to address the issues they’d see that for any government this matter is absolutely vital. Unless you correctly estimate and try to collect your whole tax base the credibility of your tax system is threatened – and that, as the MPs I discussed this with all agreed, threatens democracy itself.

It’s that fact that justifies the focus on this issue.

And it’s that fact and the need to raise revenue that amply justifies the need to address this issue.

And my suspicion is that this is a parliament that is going to demand much enhanced action to do just that.