After a decade of campaigning for senior politicians to take tax avoidance seriously I am obviously delighted we now have three come along at once. The Prime Minister, Deputy Prime Minister and Chancellor have all announced this is a top priority for them. The trouble is that in this case, like three buses together, they might all have the same route number displayed, but the drivers seem to have little clue where the destination might be.
Cameron's language, in particular, was robust throughout January, in both press conferences and at Davos. He was emphatic: on 4 January it was reported “The Prime Minister said he was going to make “damn sure” that foreign companies like Starbucks and Amazon which have been found to avoid legally paying a large corporation tax in the UK paid their fair share.” http://www.telegraph.co.uk/news/politics/david-cameron/9779983/David-Cameron-Tax-avoiding-foreign-firms-like-Starbucks-and-Amazon-lack-moral-scruples.html
In February that language changed, considerably. It was reported he'd said in India "I think the problem with that is that there are some forms of tax avoidance that have become so aggressive that I think there are moral questions we have to answer about whether we want to encourage or allow that sort of behaviour."
That language was much more nuanced than that in January; the word 'aggressive' has now been added to the lexicon. In addition he added "Some would say: 'Well just keep changing the law to make the aggressive avoidance illegal.' But with respect to many friends in the accountancy profession it is difficult to do that. So there is a legitimate debate to say very aggressive forms of avoidance are not appropriate." http://www.guardian.co.uk/politics/2013/feb/18/david-cameron-india-visit-tax
But what does that mean? First, has Cameron now realised (or been told, as he had clearly not been in January) that the government's proposed General Anti-Abuse Rule goes nowhere near tackling Starbucks, Amazon and Google (as I can assure you as a member of the committee tasked with assisting its implementation is the case). Has he as a result backtracked, adding the word 'aggressive' to his lexicon to limit the range of issues he has addressing?
Has he also limited his ambition? Is he moving from being “damned sure” to imploring changed behaviour by suggestion of mere moral sanction? It's not clear, but George Osborne has provided a better indication. In his Observer article on 17 February he suggested a range of measures he would take to tackle tax avoidance, with an emphasis on abuse in developing countries.http://www.guardian.co.uk/commentisfree/2013/feb/16/george-osborne-on-his-tax-reform-agendaHowever, as I have argued, he added nothing new to his range of weaponry when making his claim that he was serious about tackling tax avoidance; indeed every single measure he referred to already exists or is in the course of being enacted.http://www.taxresearch.org.uk/Blog/2013/02/16/osborne-commits-to-ending-tax-avoidance-but-i-need-convincing-that-he-means-it/
And all this should be set against the background of the harm this government has already caused in degrading the corporation tax system domestically and internationally, as well evidenced by the House of Commons International Development Committee in 2012. It is hard to see how any steps Cameron and Osborne can now take will reverse the impact of the measures they have already enacted to overtly assist tax avoiders.http://www.publications.parliament.uk/pa/cm201213/cmselect/cmintdev/130/13006.htm#a8
The simple fact is that the rhetoric Cameron started is little more than that. So far the Coalition has done more to help corporate tax avoiders than any government since corporation tax was introduced in 1965 and nothing now announced will change that. In that case we need to be careful. Cameron and Co. may know much more about what they're doing than they let on. Indeed, their rhetoric may be as far removed from the reality of what they're seeking to achieve as the average tax avoidance scheme is from economic reality. If we don't presume that's the case they might be playing a good game of double bluff. We mustn't take the risk of being fooled by the rhetoric.
Note: a version of this is appearing on Left Foot Forward. Apologies for formatting: time is short.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
The only change has been rhetorical, so far. In the past the Tories largely shunned such rhetoric (the Jimmy Carr saga aside) for fear of offending their buddies in big finance. Now they’ve clearly calculated that it is more politically expedient to make it sound like they’re taking this issue seriously, even if this risks offending a few influential extremists. The economic far right might not like it but it’ll play well in the suburbs.
So near and yet so far. I don’t expect serious action to happen in this parliament – it’s one thing to offend tax cheats, quite another to mess with their ill gotten gains – but that shouldn’t cause campaigners to be downhearted, quite the contrary.
By accepting the *rhetoric* the Tories have effectively conceded the *argument*!
They might be two-faced obstructionists but they’ve cleared the way for the next Labour government to actually do something. This Tory concession, shallow though it is, leaves Labour with no excuses whatsoever.
Frankly I never take any notice of Cameron’s utterances – the majority of them are pure spin and he never ceases to jump on any political bandwagon which comes along. I have just bought your latest book on Kindle , of course I had to do this through Amazon (with quite a heavy heart). However I do not own a Kindle, I have a Kindle app on my Samsung wi-fi 7inch tablet so I do feel a little better about that. I am making a conscious effort not to buy from Amazon and I know other people who are doing the same. Unfortunately I now have to find a source for obscure African cds (bought for the husband) but this is proving rather difficult.
http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2013/02/leftist-tories.html
The capitalistic state must try to fulfill two basic and often contradictory functions – accumulation and legitimization…This means that the state must try to create or maintain the conditions in which profitable capital accumulation is possible. However, the state also must try to maintain or create the conditions for social harmony. (The Fiscal Crisis of the State, p6)
Chris Dillow ask the question: ‘Could it be that we over-rate the importance of the colour of the government, and under-rate that of the social norms and class power which constrain governments?’
It seems to me that the public antagonism to the tax arrangements of Starbucks, Amazon et al may be exactly such social norms and an example of class power.