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What do you Fink of tax avoidance?

February 13, 2015
Consertative peer Lord Fink's self-confessed 'vanilla' approach is not proving flavour of the month!

Conservative peer  Lord Fink’s self-confessed ‘vanilla’ approach has not made him flavour of the month…

I have had so much correspondence on this issue over the past few days that I thought it would be useful to pen a post to set out some of my thoughts.

And they are thoughts only, because working locally in frontline mental health care, on a public sector salary, I don’t have much personal experience of being able to avoid tax – much less to be able to afford to pay someone to advise me on how to do it better…

Not sure if you saw it, but I thought the debate on Question Time last night (12/02) was informative, and clearly there is an important distinction between tax evasion – which is illegal – and tax avoidance. But there is a moral and ethical dimension to tax avoidance which is important for politicians to show they understand, and will respond to through policy actions.

Ed Davey, the Liberal Democrat Cabinet minister (for Energy & Climate Change) who was on the Question Time panel last night made a good point about the importance of reforming the funding of political parties, because these issues become even more toxic when you take into account the fact that rich people often seek political influence via political donations.

Speaking to Lib Dem colleagues in Government, a lot of work has been done during this Parliament to try to close loopholes that allow the very rich to avoid paying tax – Danny Alexander at the Treasury has been working extremely hard on this: he has closed Labour’s tax loophole for private jets; appointed 1000 new criminal investigators to achieve more prosecutions; clawed back £9 billion through deals with Switzerland, Lichtenstein and the Channel Islands; got 262 banks to sign up to the Code of Practice on Tax stopping them from promoting tax avoidance. But I can quite understand that people think this is all yadayadayada, and it is clear that much more needs to be done to deter people in the first place.

And the issue of tax avoidance becomes even more unpleasant when set against the seemingly energetic work of Ian Duncan Smith’s Department of Work and Pensions in respect of benefit fraud.  You could be forgiven for thinking that there is one rule for the rich and another for everyone else, as Chris Bryant the Labour former Minister said on Question Time last night.

Personally, I think it is important that the government focuses attention on increasing taxes on wealth as opposed to income. And this is something that the Lib Dems will be pushing for over the course of the next weeks and months. Particularly, we should focus on land or property taxes as an effective, unavoidable way of raising tax revenue, as well as squaring up to the multinational corporations to get them to pay their fair share.

Because ultimately it is important that those with the broadest shoulders, those who can afford to pay into the pot, contribute a fair proportion of their wealth in tax as we all seek to create a civilised society, with good public services, free to all at the point of delivery. The party or parties that can convince the electorate that they are both serious about this and can deliver should be hopeful of good support at the General Election in May.

I put the case here that the Lib Dems have a record of action in Government on this issue, and there is a promise of more to come. We are working to build a stronger economy, in order to underwrite a fairer society; so that there will be opportunity for everyone.

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