Thursday, April 07, 2016

A week is a long time in politics and two years can be an age ...

It was of course an earlier Prime Minister, Sir Harold Wilson, who famously said that "A week is a long time in politics."

Tom Newton Dunn of the Sun tweeted this morning that David Cameron was being painted as "a hero in 2014, a villain in 2016. For the same thing."

In 2014 the European Union put forward a proposal to force families to provide a vast amount of information about their financial affairs for a register.

Here is an extract from what Richard Dyson of the Telegraph wrote about it at the time:

"New legislation planned in Brussels is set to heap fresh costs and paperwork on families’ financial planning, as well as leaving their affairs open to unwanted public scrutiny.

"A European law is being drafted whose original aim was to prevent corporate money-laundering. The objective, supported by the UK, was to force companies to disclose on a register the money and other assets held inside trusts or equivalent legal arrangements.

"But officials in Brussels have widened out the proposals as the bill has evolved, to include trusts. The effect could be to force millions of families to compile elaborate accounts of their assets and financial arrangements including insurance policies, property and bequests made in their wills, for entry into a register. And that register, if legislators get their way, could be made available to any member of the public.

"British lawyers and tax experts are baffled by the potential implications. Most are bitterly opposed to the costs and intrusion that could result."

David Cameron quite openly lobbied against the extension of any register to private family financial affairs and was praised at the time for standing up against an "intrusive" proposal from Brussels.

This week thanks to the Panama papers leak, suddenly defending privacy makes you a villain.

I think we need as simple and transparent as possible a tax system, with fewer exemptions and less opportunities to "play the system." And tax evasion, which is illegal, is wrong whoever does it.

But arranging your affairs in legal ways to pay less tax is another matter. As a Judge, Lord Clyde,  once famously ruled

"No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue"

That isn't just a sensible principle: until some government has is brave and foolish enough to try to overturn that ruling through primary legislation, it's also the law.

POSTSCRIPT

There is a balanced and well-argued article by John Rentoul in the Indy, The Panama papers: what do they say, what does Cameron say and should I be outraged?

Rentoul concludes that

"It seems quite plausible that, as a sideline to his main job as a stockbroker, Ian Cameron merely took advantage of the lifting of exchange controls in 1979 to run an offshore investment fund, and that he did so entirely within the law."

There appears to be no evidence that David Cameron himself ever acted wrongly or that Downing Street is not telling the truth when they denied that the PM or his wife or children are deriving any benefits now or will derive any future benefits from any offshore trust, and Rentoul adds

"It would be just as unfair to blame David Cameron for his father’s business choices as it was to hold Ralph Miliband’s Marxist beliefs against Ed Miliband."

His final point, which is a good one, is that

"We have ended up where we usually do after furores of this kind, which is with the demand that politicians should publish their tax returns. The politics of the London mayoralty election in 2012 meant that candidates for that office are now expected to publish – which is why we know about Zac Goldsmith’s fluctuating trust income. At the time, Mr Miliband, Mr Cameron and George Osborne all agreed to publish their tax returns, but somehow never got round to it. If that’s what you want, sign a petition, but be aware that it would make it less and less likely that normal people would ever want to go into public service."

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