Henry G Manson looks at the PM’s tax avoidance responses?

Henry G Manson looks at the PM’s tax avoidance responses?

Has he walked into a trap that could have been avoided?

I was surprised to see the Prime Minister wade into smug comic Jimmy Carr’s tax affairs. It was clearly going to be a short-term populist move to speak of “morally wrong” tax affairs, but it seemed strange. He’s not the only one. In his Budget this year George Osborne went further calling tax avoidance “morally repugnant”. These are strong words and no doubt they both believe the public will lap it up. But it seems surprising that the leadership duo of the Conservative Party could open themselves up to charges of hypocrisy or selective outrage.

Lord Ashcroft was Conservative Treasurer under Cameron for five years with repeated questions about his status as a resident of Belize. Sir Philip Green was appointed by the government in 2010 to advise them on ‘public sector efficiency’, despite having similar concerns raised about his wife’s residency in Monaco. The Conservative Party’s third biggest donor has been alleged to have paid no tax at all in the last three years.

    Whatever of the rights and wrongs of minimising tax paid while remaining in the law, it seems that Cameron gave the green light for every journalist in the land to ask the Prime Minister or Chancellor to condemn anyone seen to be avoiding paying ‘the right’ share of tax.

I reckon the Tory duo are stung by charges of being out of touch in recent months and have over-compensated on this issue. Perhaps buoyed by their party’s effective attacks on Ken Livingstone’s tax arrangements in the London mayoral election Cameron couldn’t resist speaking out on the Labour voting Carr’s tax devices.

Lo and behold the following day Establishment pin-up and Conservative supporter Gary Barlow is fingered as another celebrity using a similar service. The Prime Minister’s response? He didn’t want to give a ‘running commentary’ on an individual’s tax affairs. I beg your pardon? This seems conveniently inconsistent with the stark judgemental rhetoric the day before.

    Labour could well stay clear of the issue knowing that some of their private donors may not be squeaky clear, but expect the unions to go full throttle. It fits with their charge that cuts to public spending could be avoided if some of the wealthiest people in society paid ‘the correct’ amount of tax. It might event resonate.

In austere times it can really rankle with many people when they see those earning considerably more than them pay less tax while they struggle to make ends meet. It wouldn’t surprise me if MPs with business earnings were in the spotlight soon as well as Conservative donors. David Cameron can’t have it both ways. Will the Prime Minister and Chancellor be able to brazenly pick and mix the moral high ground on tax? I can’t see how.

HenryG Manson

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