This is my friend Prof Prem Sikka in the Guardian yesterday:
[The Parliamentary Accounts Committee] laments HMRC's cosy relationship with large companies, but is silent on the cosiness with the tax avoidance industry. It notes that HMRC officials attended numerous lunches, dinners and receptions organised by PricewaterhouseCoopers (PwC), KPMG, Deloitte and Ernst & Young. The lavish hospitality is organised to promote private interests rather than enhance HMRC accountability.
Many former ministers act as advisers to big accounting firms. For example, Labour grandee Lord Peter Mandelson has been an adviser to Ernst & Young. Former ministers Lord Digby Jones and Lord Norman Warner of Brockley have been advisers to Deloitte. Former Labour home secretary Jacqui Smith is a consultant for KPMG. Former Conservative minister Sir Malcolm Rifkind has been an adviser to PwC. Do such political links skew the relationship between government departments and the private sector?
The links between the big accountancy firms and the Treasury attract no comments from the committee. For example, former PwC staffer Mark Hoban is the current financial secretary to the Treasury. Sir Nicholas Montagu, one-time chief of the Inland Revenue, joined PricewaterhouseCoopers in 2004 before moving on to other lucrative commercial appointments. PwC partner Richard Abadie has been the head of private finance initiative policy at the Treasury. In June 2009, former PwC partner Amyas Morse was appointed UK comptroller and auditor general and became responsible for directing the National Audit Office. Former PwC tax partner John Whiting is the director of the newly established Office of Tax Simplification, advising the government on simplification of tax laws. Chris Tailby, one-time tax partner at PricewaterhouseCoopers became head (until 2009) of anti-avoidance at HMRC. In July 2010, partners from KPMG, Ernst & Young, Grant Thornton and BDO became members of the government appointed Tax Professionals Forum and help shape the UK tax laws.
And he has only scratched the tip of the iceberg.
The revolving door is a massive problem, not least as many of these firms have had prosecutions or professional judgements against them for tax abuse in the last decade whilst at the same time they operate in all the major tax havens where they work day in and day out to undermine our democracy and that of other states by seeking to actively undermine our tax systems, laws and regulations, all of which, in my opinion, should debar them from consulting for the government.
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You are depressingly correct Richard. Really, this involvement of the private sector in the public sector, especially in the case of people coming from companies who are up to their eyeballs in tax avoidance, is corruption.
Is Britain any less corrupt than countries like Russia, Nigeria or Italy, which have well deserved reputations for corruption?
Having spoken to John Whiting a few months back I gather that his appointment to the office of tax simplification is an unpaid role and that the office of tax simplification has been trying to simplify the tax code by scrapping barely used reliefs that are left over from a bygone era (eg no tax on 15p lunch vouchers).
Another change proposed by the office of tax simplification is merging National Insurance and Income Tax, which is surely something that few on this site would object to. Indeed it would make certain types of tax avoidance much harder.
I object very strongly to merger of NIC and income tax as they serve entirely different roles
And I also object to unpaid roles in government – reserving them for the rich
I confess that I am astonished that you believe a pound earned by the sweat from a man’s brow should be taxed more highly than a pound earned by a man for doing nothing, but I will accept that under certain limited circumstances the man who works for a living may receive some additional compensation should he be unable to go out to work.
I would suggest that a board that has met a mere 7 times in the past 12 months is hardly the reserve of the rich and certainly not a full time job by any stretch of the imagination. If it is then I am amazed that something like St John Ambulance exists because it places far greater demands upon the common man who works for a living.
I propose an investment income surcharge on those who do not work for a living
And of course John Whiting does not just attend 7 meetings a year
And St John’s Ambulance is a charity – government is not
But then, I don’t think you’re trying to argue seriously at all. This looks suspiciously like trolling to me
I am puzzled, if you believe in an investment income surcharge then why not roll together National Insurance and Income Tax in the interests of simplicity because surely both will end up rather similar?
Perhaps a better illustration would have been the many unpaid parish and town councillors throughout the country because they are definitely in government.
[Incidentally without wishing to be pedantic it is St John Ambulance, not St John’s Ambulance.]
Because the contributory principle is vital and pensioners suffer in a merger
The contributory principle would work far better if National Insurance receipts were ring-fenced rather than merged with general taxation. The biggest problem is that National Insurance is a glorified ponzi scheme.
They are not merged
They are run through a separate account