Richard Lambert, the head of the Confederation of British Industry spoke to the TUC today. This spirit of cooperation is the first bit of good news.
The second bit is that the FT reports that he said:
I do agree that there is a legitimate question on the non-dom side. It is important that a tax system should be seen to be fair and open, that there should not be any whacking loopholes that undermine the whole approach. So we need to know more about the non-doms.
The third bit of good news is that he said:
My feeling strongly always has been that if it's a duck, tax it like a duck; if it's income tax, tax it like income and if it's capital gains, tax it like capital gains.
That's settled then. Let's tax carried interests in private equity as income, which is what they are. The BVCA Memorandum of Understanding with HMRC in 2003 was a document that said income was a capital gain. It's obviously wrong.
So that should be the CBI 100% behind things I've been campaigning for. The logic of the argument has been conceded in both cases.
But hang on a minute. Mr Lambert then said:
We need clarity on what actually is going on before we spring off and come up with solutions.
and that it would be wrong
to push back against the forces of globalisation, by being protectionist and restricting cross border flows of goods and services, and by slashing the income of high earners through the tax system. That would be disastrous and have serious consequences for growth and employment. It would cut the UK off from the benefits of open markets and free trade, and both capital and talent would drain out of our economy into someone else's.
Where's your evidence Richard Lambert? There is none. And as Simon Jenkins (former political editor of the Economist) said recently in the Sunday Times:
The claim that executives with families well installed in London and country houses will suddenly vanish to Monaco or the Cayman Islands if not paid millions more each year (or if fully taxed on those millions) is absurd. It ignores the role of location, lifestyle and other nonpecuniary perks in a modern executive's career package.
London's financial preeminence is based primarily on its lax market regulation and its agreeable living conditions for those not reliant on public services. Businesses will leave Britain not when executives are properly taxed but when they start losing money.
I've argued the same thing, often. And Jenkins is right, and shows Lambert's claim for what it is: a request that the abuse stop, but not just yet.
It's time the CBI smelt the coffee. Or should what bit of tax justice on domicile and private equity it neither understands and can disprove despite now agreeing the logic of our arguments.