As the Guardian has noted:
The row over tax avoidance by multinational companies escalated on Monday night as it emerged that Dave Hartnett, until 10 months ago the country's leading tax official, has been appointed to a new position with a leading accountancy firm mired in the controversy.
Hartnett will work one day a week with Deloitte, the auditors for Vodafone and Starbucks, which faced tax avoidance allegations during his time as head of HM Revenue & Customs.
The appointment was approved by David Cameron and the advisory committee on business appointments last week, although Deloitte did not announce the high-profile signing.
The appointments committee added a list of six caveats to its approval letter, designed to ensure Hartnett does not share any information about how to avoid UK tax and to guard against potential conflicts of interest.
As the aso note:
But tax campaigners and MPs criticised the appointment and suggested that although Hartnett cannot advise UK organisations, he could use his knowledge to strengthen the positions of offshore tax havens.
And there is good reason for that. Deloitte said
Hartnett, 62, will advise overseas governments on how to implement "effective tax regimes".
And there in lies the rub. Because when big firms of accountants talk efficiency and effective tax systems what they really mean are tax systems that are for the benefit of their clients, with low tax as the outcome. Nothing Deloitte says alleviates this fear:
A spokesman for Deloitte said: "Dave Hartnett will work as a consultant to Deloitte advising foreign governments and tax administrations, primarily in the developing world. He has significant experience in advising such countries on the development of effective tax regimes, necessary to ensure their continued economic growth. He will not work with UK companies or with HMRC."
When I hear Hartnett call for country-by-country reporting I'll know her's serious - but Deloitte are lined up firmly against it. Forgive my cynicism, but that's not the help these countries need. That's why the Guardian alos notes:
Richard Murphy, of Tax Research UK, called the latest switch from the state to the private sector "the creeping control of the state by the big business elite".
He said: "We've had people who are very senior who have moved over to big business, but never the very top. He was meant to be the taxman's taxman."
He suggested that Hartnett may be called upon "to advise on tax avoidance in offshore locations".
This is a profoundly worrying appointment as the break down in the necessary barriers between business and HMRC continues. There' nothing personal about this: it's the systemic failure that's so profoundly worrying.
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Richard, even more intriguing is the fact that it is Deloitte that is recruiting someone to advise “foreign countries especially developing countries on effective tax systems”!
How is it possible to be absolutely astounded and not in the least bit surprised at the same time? I’m astounded that this has been permitted a mere 10 months after he left his post at HMRC, and that the Advisory Committee should think it appropriate that the former head of HMRC should be allowed to join one of the major firms that HMRC would have been investigating and scrutising after such a short period of time (notwithstanding their limited ability to prevent such an appointment)
That said, I’m not as much concerned about Mr Hartnett bringing useful knowledge from his time at HMRC to Deloitte as I am about the possbility that this is a “reward” for his time at HMRC and the light touch big business and trax avoidance regime he oversaw – I am consequently very interested in the level of remuneration for his 1 day a week post!
The answer is that Hartnett has been hired to advise governments, not companies (did you read the FT?) and HMRC believe he will be using his experience to advise developing countries how to foil tax dodges that he has previously spotted and blocked. “Effective tax regimes” are regimes that collect taxes.
Absolute nonsense
Deloitte oppose what development experts think essential
And they run a massive tax haven network that development experts are sure harm developing countries
Your arguments cannot in any way be reconciled with plausibility
Deloitte oppose what development experts think essential
Not true.
They are often brought in as subject matter ‘experts’ by all the major governmental development agencies.
Show me where on tax
That’s what Hartnett does
I’m not sure I’d agree that the control of the state by big business is ‘creeping’, Richard. It was creeping under Labour. Since 2010 it’s been more like a trot or canter, and unless I’m seriously mistaken will hit a gallop as the Tories try desperately to complete their project of wrecking the social democratic state, and rewarding their friends and funders in big business before their time in office is done.
But this is not new, anyway. One of the most significant problems is that the remit and rules of the Advisory Committee on Business Appointments (ACOBA) haven’t been up to the task for years (and at one point under Blair would have been watered down even more). They were always weak and open to exploitation, even when the majority of public servants had some belief in a public service ethic, and thus were rightly uncomfortable at trading the inside knowledge they had for commercial gain with a private sector employer. Or when ACOBA had a chairperson who actually believed in the reasons for why that institution exists.
But now government and public service has become so captured by – and directed at advancing the intertests of – big business, and the ethos and culture of public service and management duly corrupted to that end, I seriously doubt there’s the will or the wish to make the necessary and long overdue changes that are needed. There are simply too many politicians and civil servants (including military personnel) who see their time in government (and the knowledge they gain while there) as a stepping stone to a far more lucrative job in the private sector.
To change that now we need a systemic AND cultural shift that will only be possible by refounding public adminsitration, and that, in turn, will only happen by recentring and refocusing democracy to serve the interests of civil society – not simply big business and the 1%.
Before we talk about refocusing democracy perhaps we should consider how we might achieve it in the first place. Don’t forget, it was recently revealed the Queen can veto laws she doesn’t fancy. That’s not democracy is it? So the Monarchy has to go for a start, or at least be reduced to a purely cosmetic role. This won’t sit well with the parasitic classes as a whole lot of parasitic behaviour is done in the Crown’s name, read Kevin Cahill’s Who Owns Britain for more. From the same source one learns if one wishes to investigate the legality of the parasitic processes then one has to negotiate phalanxes of Old Etonions all with their obfuscators set to kill, not stun. The Old Boy network will have to go too then. I think it’ll happen but it’ll take some doing.
How we might achieve it would be a book length blog/comment, Bill 🙂 But anyway, your examples show how deeply and dangerously embedded into the polity of the UK the parasitic classes are. And for that reason I doubt there’ll ever be a change, and certainly not in my lifetime. In fact, if I were a betting man I’d have odds that the corporate capture of the state (minus the bits that need to be maintained as democratic window dressing)will be the outcome of the next 20 years of politics in the UK (and in various localised variants, pretty much everywhere else).
I’m sticking with the positive view as postulated by the Fourth Turning concept. I think we’ll see them off over the next decade or so. I’m sixty now and I’d like to think I’ll be here to see it 🙂
This isn’t evidence of systemic breakdown but of takeover, it’s a new system emerging, one of overt oppression as opposed to the covert regime we have today. As far as the predator class is concerned, we’re here to be milked and increasingly they just don’t care who knows it. Presumably this is why the courts and judiciary are now being refashioned as corporate entities, so we have no lawful redress. I suspect myself that grievances which cannot be immediately expressed lawfully will express themselves unlawfully in time. This idea seems to be beyond the grasp of our oppressors. Well… so be it.
He was bought and paid for years ago.
Why should we doubt that Deloitte will charge substantial fees to overseas governments to provide effective tax regimes? It is entirely normal for them to provide services and charge a fee to anybody that will pay it.
Furthermore as these overseas tax regimes become more effective it will encourage more individuals in those overseas regimes to take advice from Deloitte on how to avoid those taxes, another service for which they will also collect a fee.
Ultimately it is entirely in Deloitte’s interest to work the system at both ends and that appears to be what they are doing. “Effective” tax regimes almost always mean “complex” tax regimes and that is where the money is for a company like Deloitte.
It would be far more interesting to see what projects he is given to work on.
There seems to be no law of marginal utility when it comes to yet more money these people can earn! The mock ‘retirement’ party for him shown on Channel 4 and staged by UK Uncut must have been embarrassing but it is likely that he is beyond shame.
Isn’t part of the reason why this regulatory capture has been able to develop the fact that our civil servants are kept in an amateur state? There is a deliberate policy of moving them around so they do not become too ‘professional’, because of the danger that this may lead to corruption.
One day a week, directorship, consultancy fee. So much more civilized and respectable than money in brown paper packets! When this sort of thing happens in Africa it is called corruption. Why are we so frightened of using the word here?
Because of the libel laws, I’d imagine. I agree this setup stinks of corruption.
I personally wish to congratulate Mr Hartnett on his new job and wish him every success.
I have every confidence he will carry it out to the highest professional and ethical standards.
“I have every confidence he will carry it out to the highest professional and ethical standards.”
In the same way,perhaps,that he concluded the Goldman Sachs deal?
Mr Hartnett will of course be surrounded by people that, without exception, carry out their work to the highest professional and ethical standards. Really?
http://www.bbc.co.uk/news/business-22698387
Theremustbeanotherway, I am not sure the relevance of your link — it refers to an accountant in another country, who has committed a serious crime and has been correctly removed from the system and will no doubt receive a hefty punishment. This BBC article shows the system is working, at least in this case.
I accept there are always bad apples in any sphere of life including the public service. But to suggest civil servants are by default corrupt crooks is a neoliberal myth which I am afraid you (and other commenters here) are just helping to promote.
If that myth is allowed to perpetuate, the Courageous State project faces obstacles to say the least.
Cheers
Chris
Sorry Chris
I don’t class letting Goldman Sachs off a few million pounds interest, because this might embarrass the Chancellor is carrying out work to neither the highest professional nor highest ethical standards.
You might have noticed that Mr Hartnett has joined a Big 4 firm and I would suggest that it does not necessarily follow that he will carry out work to the highest professional and ethical standards.
“But to suggest civil servants are by default corrupt crooks is a neoliberal myth….”
I suggest the above is a slight over reaction on your part, but may be I have struck a raw nerve and you are starting to appreciate the shortcomings and weaknesses of neo-liberalism.
May I suggest in addition to reading Richard’s a Courageous State you might wish to read:-
http://www.transparency.org.uk/our-work/corruption-in-the-uk
http://www.transparency.org/news/pressrelease/20121205_political_scandals_hinder_uk_fight_against_corruption1
“The Great Tax Robbery” by Richard Brooks
“The Predator State” by James K Galbraith, this in particular should highlight issues that are developing fast in UK government.
It might change your views!
I wonder what the track record is on HMRC officials joining accountancy firms – surely someone can ask a Parliamentary question to find out. If I suspect that this is a fairly standard progression – it would of course explain why HMRC do not have a culture of standing up and challenging auditors and accountants for fear of endagering their future job prospects.
“Hartnett, 62, will advise overseas governments on how to implement “effective tax regimes”
Surely when Deloitte recruit on such a basis – there must be some question as to their ability to advise on executive pay schemes where payment is meant to reward achievement rather than the opposite.
“He has significant experience in advising such countries on the development of effective tax regimes, necessary to ensure their continued economic growth.”
When and how did he obtain this experience – shouldn’t this be a matter of public record given his employment history and because the tax payers were paying for him to gain such experience.
On embarrassing the Chancellor. The judge said (para 57)”I do conclude the decision would have been the same even if Mr Hartnett had not taken account of the potential embarrassment.”
But he did take it into account
And therefore that’s not relevant
The judge found that the decision was not made to avoid embarrassment. The full text of para 57 reminds us there was another Commissioner involved in the decision. “In this case, though, I do conclude that the decision would have been the same even if Mr Hartnett had not taken account of potential embarrassment to the Chancellor. He gives other independent and substantial reasons why the 9th December decision was taken. That those would, separately from the irrelevant consideration, have led to the same decision is supported by the fact that Ms Dawes reached her decision without regard to it. That those other reasons were significant and substantial reasons for taking the same decision is supported by the report of Sir Andrew Park and the NAO.”
Irrelevant, yes; determinative, no.
I know the other Commissioner
I’m not sure I agree
But the judge decided