I have to admit that I have form with Ed Troup, the executive chair of HMRC. As the Guardian has noted this morning, it was me who drew attention to his 1999 article in which he described tax as legalised extortion just before he appeared before Margaret Hodge at the Public Accounts Committee in 2013. Margaret noticed. He had an uncomfortable day.
Today is another such day. The Guardian has noted that the law firm in which he was a partner before joining the Treasury and then HMRC was an adviser to Ian Cameron's investment fund and corresponded with Panamanian law firm Mossack Fonseca for them.
I stress there is nothing to say that Ed Troup had anything to do with this. And nor is there any suggestion of illegality. But that has never been the point. This has always been about attitudes, connections, what they reveal, and what needs to be done as a consequence.
Rather like David Cameron could have said that much as he respected his father he would not have done what he did, and this issue would have moved on so could Ed Troup have said in 2013 that he regretted his 1999 article and we would have accepted, with good grace, that a man can change his mind and act in accordance with his new understanding. He was given that opportunity. He did not take it. I presume that was because he stood by his 1999 views.
I said in 2013, and I repeat now, that if that is his opinion then he is not suited to the job he holds. That requires a person who believes that tax is rightfully owed, and not just for legal reasons but because the state has a proper claim on a part of a person's income as a result of the role it plays in society from which the individual benefits in partnership with government. Without a person having that understanding I do not see how anyone can do the job Troup does in the way that society would want him to fulfil that task.
In that case I think Ed Troup, who I have met, is the wrong person for this job. As I also think many within the upper echelon of HMRC management are also unsuited for the task given to them, which is why HMRC is in such a mess, has too few resources, cannot collect the tax owing to it (hence the tax gap) and has far too close a relationship with big business.
If the government is serious about collecting tax it needs people at HMRC who believe in tax, what it does, how it can do it, and collecting it as a result. That's not what we've got. It's time for a change.
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Hear, Hear.
And as we recruit these people, your book ‘The Joy of Tax’ needs to be included in the induction pack.
Reading that article in the Guardian I wondered whether the government in fact sees any essental discontinuity between the work of HMRC with large corporations and the work with them of accountant and legal advisers, such as Troup used to work for. Or whether for the government it is just a matter of emphasis.
And that leads me to wonder whether there is any sort of parallel with what has happened under this government with the role of town and country planning. The government has deliberately changed the set-up so that the role of planning is now not to control development, as before, but, explicitly, to enable it. If a planning authority fails to enable development to the extent and in the manner directed by government then development may take place without local planning authority restriction or approval. The current housing and planning bill goes further with provisions for, virtualy, the privatisation of planning approval and allows an applicant for planning consent to choose an ‘approved’ body (i.e. a private planning consultant) rather than the local planning authority to process the planning application – mirroring what has already taken place in the less contentious area of building control. Of course it would be in the main large commercial developers who took advantage of this new regime.
Part of the justification of course is that local planning authorities (essentially local government) no longer have the resources to handle planning applications expeditiously. Parallels with HMRC seem ominous. Could this be the direction that the government intends to follow with the administration of corporate tax?
I see the outsourcing as very, very likely
And staggeringly wrong
Andrew, I think Richard is right. You are in effect trying to put “lipstick on a pig”.
Totally agree on both points over HMRC & Town planning. I have had a lot of personal dealing with HMRC recently to try to pay tax due. In the case of self employment N.I payments which appeared to suddenly “not be required” for my partner aged 56, I eventually found out that for the past year they had been sending notifications to some address in Lancashire and when the correspondence was returned they just kept resending. They expect everything to be dealt with “on-line” and none of the departments have contact with each other so each time you sit on the phone for 20 minutes to speak to some under trained personel you never get a proper answer because they are unable to give one. I know from a friend who used to work for HMRC in corporate tax, whenever she managed to trace a trail to an offshore account she was blocked at every point. Cameron has had time for his advisers to adjust what has been submitted to the public. Trouble is that in the past Labour under Blaire & Brown was also lacking. Brown also made promises he broke. This is probably why the public & the youth want complete change and the only option on that is Jeremy Corbyn. If he is able to listen to & follow the advice of people like you Richard, we might have some hope for real change in tax justice. Not under this government whoever is the front man/woman.
I read the FT article the last time you mentioned it. It was published in 1997, not 1999. No idea why the Parliamentary briefing note gets the date wrong, but anyone can look up the article in the FT archive.
As I commented in February – see http://www.taxresearch.org.uk/Blog/2016/02/25/why-does-hmrc-need-a-boss-who-thinks-tax-is-legalised-extortion/ – he was arguing in favour of the rule of law, and that increasingly complex legislation does not stop avoidance and can actually facilitate it (as some of the court cases demonstrate: if the legislation is too finely articulated, the courts can find it hard to read purposively). In that same FT article, he also pointed out that film tax reliefs would create “exploitable distortions to the tax base” but the government of the day went ahead with them anyway.
None of that changes the argument I made
Or the opinion he expressed
As you well know
I heard Aaronson trying to explain away Troup’s poisonous remarks on R4 this morning. complete rubbish.
No wonder HMRC’s staff morale is the lowest across the civil service. What are the staff meant to think of their work when they’re boss calls them extortionists in effect.
I missed that
But I would expect Graham to agree with him: his own views are simialr
Well, you didn’t miss much unless you’re a fan of scraping the bottom of the barrel.
He was reduced to falling over Lord Clyde’s `shovel` fantasy in the Ayrshire Pullman case dating from 1929!
Which he supposedly wants to be rid of
So many good things to share on Facebook now. I’m sure my ‘friends’ are ‘unfollowing’ me by the dozen.
“I have to admit that I have form with Ed Troup”
Richard, we would have been disappointed if you didn’t! 🙂
I just want tax officials to enforce the law, as laid down by legislation, according to interpretation and legal precedent as set by the courts.
It shouldn’t be a place for them (or any other public official) to impose their views on the size of the state – in either direction.
If they want to impose their ideological views, they should run for office.
It is quite bizarre how individuals with a clear and evident conflict of interest become appointed to positions of power and influence within essential state functions.
Yet more evidence of the game being rigged by ensuring the key decision makers will always support the desired outcome of the government. Yet more evidence of an elected dictatorship (AKA the establishment!)
Hear hear Richard. It’s regulatory capture otherwise known as control fraud in politically incorrect circles. Feel sorry for the workers at HMRC with such a leader and contempt for those who appointed him.
This has been the case (regulatory capture) for much of what passes for the (un)civil service. Examples: DECC is, more or less, an off-shoot of EdF & other large power companies (secondments into DECC from the power companies account for around 50% of staff). Other gov orgs such as whatever they call the rabble that deal with competition in the UK, is a rotating door for corporate lawyers – in & out they go – my contacts in DG Competition openly sneer at what passes for UK competition authorities (who they regard as a mixture of incompetent & corrupt). There are some good people in the UK civil service (I have come across one or two) however, there are swathes of chancers from private industry with an eye out for the main chance (natch) & about as much interest in public service as Pol Pot had in human rights. This “legacy” has been developing for 36 years – it is Thatcher’s legacy – willingly continued by tories and tory-lite (the previous labour admin).
Is it permissible to be cynical here?
It occurs to me that HMRC’s de facto owners have a vested interest in an effective revenue service against 99 percent of Britain’s companies and individuals.
You will note the term ‘against’: efective is political as well as economic – rigorous and ruthless, implacapable and thoroughly unpleasant, so that the mediation of a middle-sized accountants’ firm is an expensive neccessity for all.
As for the 1‰, and the 1% of that 1% who actually matter, HMRC and the law need to be complicated and capricious – and effective unless propitiated by extremely expensive assistance.
Otherwise, what’s the point?
There is no profit for the big accountants and the ‘offshore’ industry in an ineffective, supine HMRC; and there is a political imperative in keeping up appearances.
I would suggest that that HMRC’s ruling clique have overdone it: with respect to your profession, Richard, Accountants are better at counting than at managing, and Britain’s most senior accountants have been blinded by their own cleverness and greed into overplaying a dishonestly-dealt hand.
It helps, of course, that their arrogance in ignoring the appearance of their captured Government has been matched by patient efforts to inform the public, who may yet call them to account.
I would agree with you on accountants
…But you would disagree with my cynical assumption that the entire and only purpose of a Department – or any organ of the state – is that the Minister and their senior managers can apply the powers of their ministry to the service of their patrons.
Fair enough; there is a limit to the utility of cynicism, and much to be said for assuming good faith: an honest man may prosper, and all around him do so when he does.
But that which I regard as cynicism, others live and breathe and work in, as an ordinary and effective business plan; and that normalisation, that very ‘ordinariness’ in what should be regarded as extraordinary criminality, requires creative and sometimes rather jarring rhetoric to crack the dangerous complacency in which it flourishes.
I find that offering a cynical interpretation of another’s questionable actions forces them to justify themselves; that involves a self-examination which, if the ‘questionable’ turns out to be answerable to moral censure and the law, leads them to a change in attitudes.
Others are, of course, evasive; and a few are openly and unashamedly immoral: both are politically useful as examples to the public – and the negative impression that they give induces fatal doubts in those participants who rationalise their way to an uncertain hope that they are honest when, on reflection, it turn out they are not.
Or perhaps I should desist from utilitarian arguments for the virtue of cynicism, when it is in fact a vice; and apologise for seeking to transform you into a cynic!
I admit I have more faith that you
And some pessimism as to outcome
Richard, is there something here about the idea of ‘jobs for life’?
I joined Her Majesty’s Customs and Excise as a spotty youth in 1975. At the first Christmas party we had a seasonal visit from ‘The Collector, London Port’ (his title might give a clue as to what his role was, and ‘the Port’ extended from the the wharves at Battersea to the airport at Southend). He was one step away from God…and everything was duly cleaned, dusted, polished or painted in readiness.
A less regal personality it would have been hard to imagine. He met and greeted. He was animated, interested and able to engage with young and old, new-boys and old stagers, about the trials and tribulations of their working days. He had joined the Revenue before the War as a clerk in the post room and, barring a few years off to deal with Mr Hitler, had worked his way up the ladder doing more or less every job at every grade. He wasn’t ‘educated to degree level’, nor was he ‘dynamic, creative…’ and whatever else the HR people might identify as the core skills for the post these days. But he was wedded to the idea of public service, of ‘Collecting’ taxes and duties, of catching the wily smuggler and those anxious to miss-describe their cargoes in order to pay a lower Tariff. He and his staff collected the money that paid for the schools and the hospitals. It was what he did, and was wedded to, dedicated to, for forty odd years. He ‘knew it all’, he had been there and done it, and as a consequence was held in high regard and indeed affection by his staff – in marked contrast to (as reported yesterday) the 1 in 4 HMRC staff who presently have any confidence in their managers.
Dare I add that by way of ‘bonus’, he might have seen a carriage clock after forty years, and a gong perhaps?
In amongst this misty-eyed nostalgia for a civilisation ‘gone with the wind’, I do wonder if it’s beyond the wit, or brief, of those looking to fill the top jobs to include amongst the desirable qualities ‘loyalty, 30 years relevant experience and demonstrable commitment to the task in hand’. I’m not holding my breath!
I would never have succeeded in a job for life
My father did: serving a nationalised industry loyally and I suspect very well
I think there is much merit to the idea
The experience of Customs and Excise in the 70’s is just like mine – the managers had worked their way up and knew the job and had hands on experience of dealing with defaulters, smugglers and evaders. The people in management positions now have in many cases minimal tax knowledge or hands on experience but have been promoted on the basis of saying the “right thing” to the right people. In the latter part of my career in the Revenue I felt I was fighting the traders with one hand but at the same time looking over my shoulder to ward off attacks from the acolytes of the cult of managerialism that now pervades HMRC with its discredited performance appraisal system,the emphasis on the “right” behaviour (in other words not rocking the boat)and the idea that the trading entities we dealt with were “customers”.