Spot the difference between the two main parties on tax avoidance

Noam Chomsky once wrote “The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum….”. There’s been a very lively debate recently about tax avoidance, following revelations from Switzerland about HSBC. Labour and Tory Ministers and Shadow Ministers have been chucking accusations around with abandon, but I can’t really see what the difference is between them. Here’s two examples.

1) Ed Miliband calls out Tory donors for tax avoidance. Ed Miliband avoided inheritance tax after the death of his father (kind of). George Osborne talks of cracking down on tax avoidance, but in a former life as a backbench MP, felt comfortable handing out advice on how to avoid tax. There are different types of tax avoidance. All are legal though. How can we trust MPs from either party to actually do something radical to ensure all pay their fair share of tax, when they are all hypocrites when it comes to tax?

2) A stupid row broke out after Ed Balls suggested people should always get a receipt – even for odd jobs they are paying in cash for, as to do otherwise would be facilitating tax avoidance. Iain Duncan Smith called this “absurd”, saying this demonstrated “Labour’s complete lack of understanding of how business works and how people get by”. It does seem a bit daft to expect people to do as Ed Balls wants, but he is saying nothing different than Tory Treasury Minister David Gauke did, when he said in 2012:

“Getting a discount with your plumber by paying cash in hand is something that is a big cost to the Revenue and means others have to pay more in tax.

“I think it is morally wrong. It is illegal for the plumber but it is pretty implicit in those circumstances that there is a reason why there is a discount for cash.”

Ed Miliband at the time refused to agree cash in hand payments were morally wrong, saying instead:

“What I say is that the job of government is to pass the right laws to clamp down on tax avoidance – that’s the most important thing of all.

So Tory makes a statement, Labour criticises. Labour makes identical statement, Tories criticise. Lively debate then within an incredibly narrow spectrum. Or two cheeks of the same backside as a certain Bradford MP loves to say.

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3 thoughts on “Spot the difference between the two main parties on tax avoidance

  1. Given that this is a big stick with which to beat the Tories, Labour’s performance has been poor, to say the least. They have effectively cooperated with the switch technique, where tax evasion by the rich and corporates has now become a discussion about the feckless self-employed.

    Ed started something with his “tax haven clapdown” announcement, but they seem unable to concentrate on the ball. They are the David Luiz of politics. There are numerous things they could announce that would scare a few horses, but would prove immensely popular. Abolishing non-dom status for one. Taxation on global income (like those left-wing Americans) for another. A pledge to dramatically expand the corporate investigation wing of HMRC (which would pay for itself many times over) would be another step.

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