Lib Dems signal tax avoidance groundhog day

Ever feel like you’re being had?

Last year, this is what Danny Alexander MP, Chief Secretary to the Treasury, had to say to the Liberal Democrat conference in Liverpool:

There are some people who seem to believe that not paying their fair share of tax is a lifestyle choice that is socially acceptable… Tax avoidance and evasion are unacceptable in the best of times but in today’s circumstances it is morally indefensible. We will be ruthless with those often wealthy people and businesses who think they can treat paying tax as an optional extra.”

And he announced that the UK Government wanted to see a five-fold increase in prosecutions for tax evasion and – ta da! – that HMRC would get an extra £900 million in resources in order to “create a dedicated team of investigators to bear down on offshore tax havens and online tax evasion.

Fast forward to this year’s conference in Birmingham, and this is what Danny Alexander had to say today:

Last year, I announced a package of investment to strengthen our fight against tax evasion, as well as tax avoidance…. This year, an additional 2,250 HMRC staff will move into new anti-evasion and avoidance jobs. This month, over 1,000 of these jobs are being advertised.  And already this package is bearing fruit.  I promised you we’d collect an extra £7bn a year by the end of the Parliament;  And I can tell you we’re already on track to raise £2bn this year.

It took 12 years for the previous Government to take action against the wealthiest 5,000 people some of who weren’t paying their fair share of tax….In less than a month’s time, a new ‘affluent team’ will be place. This team will look specifically at the next 350,000 wealthiest taxpayers. These are the people who pay or should pay the 50p rate of tax. And my message to the small minority who don’t pay what they owe is simple, I agree with the Chancellor. “We will find you and your money” and you will pay your fair share.

Now I’m not going to be so churlish as to suggest this is not a good thing.  Of course it is.  Tax avoidance by the rich effectively adds to the burden of tax on the poor.  And Alexander is right to point out that Labour did hee-haw to tackle it;  that’s what happens when you’re comfortable with the fabulously rich.

But if this is progress it’s glacial.  Shame the same approach hasn’t been taken with welfare reform which has hurtled along at a rattling pace, threatening, hurting and distressing families and individuals.  But apparently we need to act fast to cut the welfare bill and rein in public spending as part of the grand plan to cut the deficit.  Yet, prudent budgeting in the current climate surely demands that as well as slashing expenditure, income must be maximised.

Thus, like many I was heartened to hear that the Liberal Democrats were carrying this maxim into the coalition, seemingly determined to prove that we really are all in this together.

So what difference has a year made?  None.  Some plans, it seems, take longer than others to come to fruition.  And like Groundhog Day, here we are again.  Despite it being caul kale rehet, some media outlets fell for it.  If I can google the Lib Dem conference of last year, surely they can too?

Where is the robust questioning on why so little progress on last year’s promise?  Did HMRC get its additional £900 million in this year’s financial settlement?  If not, how much has it actually received?  Does Alexander’s 2011 speech indicate that not a single loophole has been closed, not an extra penny piece collected?  Has the five fold increase in prosecutions materialised?  If we “are on track” to collect £2 billion this year, does this mean nothing has actually been collected in the year since the original announcement?

Still, mustn’t grumble.  Progress is progress.  At this rate, by next year, Danny Alexander will be able to announce that he is cracking down on tax avoidance, that the 2,500 affluent team has been appointed, and that we are still on track to collect £2 billion in currently avoided tax.  Hoping of course that no one will notice, least of all the fourth estate, that this is what he had to say this year.

5 thoughts on “Lib Dems signal tax avoidance groundhog day

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  4. Indeed,

    What troubles me about the tax loophole clamp down issue is that i expect it is easy to tub thump on but difficult to deliver on – otherwise someone else would have done it years ago. Important to do but I have my doubts about it as the policy to hang your hat on.

    I’m also worried about the LibDems, who I support, just seeking some headlines on some easy targets.

    The fundamentals about the economy are all about how they balance fiscal policy and deficit reduction as well as promotion of growth. No easy answers there.

    I have been impressed by their policy on income tax threshold increase as a fundamental reform. I hope they can continue to develop this in coalition.

    I have been disappointed by the increase in VAT which has proved necessary – I hope a way can be found to reduce this.

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