What David Cameron had to say on tax avoidance yesterday was important. That’s not because I believe he means it. And it’s not because I think he understands what he said, or what he can do about it. No, it’s important because what he said sets a benchmark for appraisal of what he and his government actually do when it cokmes to tackling tax avoidance after he has come to realise the implications of his message.
Since there seems to be common ground between the papers on what was said I think it’s worth putting on record here. The transcript of his response to a question on Starbucks and Amazon was (this being based on the Mirror’s version, but the Telegraph’s is similar):
“We do need a debate in this country, not only what is against the law – that’s tax evasion, that is against the law, that’s illegal and if you do that the Inland Revenue will come down on you like a ton of bricks – but what is unacceptable in terms of really aggressive tax avoidance.
“Because some people say to me, ‘Well, it’s all within the law; you’re obeying the law, it’s okay’.
“Well, actually there are lots of things that are within the law that we don’t do because actually we have some moral scruples about them and I think we need this debate about tax too.”
He added: “I’m not asking people to pay massive rates of tax.
“We’ve got a low top rate of income tax now; we’ve got a low rate of corporation tax now; we are a fair tax country.
“But I think it’s fair then to say to business, you know, we’re playing fair by you; you’ve got to play fair by us.”
The Prime Minister said he intended to put the issue at the heart of the agenda when the heads of G8 group of leading nations meet in the UK this summer
“It’s simply not fair and not right what some of them are doing by saying: ‘I’ve got lots of sales here in the UK but I’m going to pay a sort of royalty fee to another company that I own in another country that has some special tax dispensation.’
“That is not right, and so we are looking at it.
“I’m chairing the G8 this year so I’m going to be getting the Americans and the French and the Germans and the Italians and the Japanese all to look at this together at how can we try and stop unfair tax farming practices.”
I’m delighted he’s said this, but as I’ll note in a following blog, I have almost no doubt at all that he has no clue what saying so means.
Which is going to make 2013 interesting.