And so to our belated PMQs coverage, belated owing to my having decided to have a little snooze instead staff shortages due to the continuing adverse weather conditions.
Cameron began by toning his recent braying performances down considerably, and used two fairly calm and measured questions about protectionism to set up a telling point about the “British jobs for British workers” slogan. He correctly pointed out that it “encourages protectionist sentiment” even while Brown lectures the world on the “evils of protectionism” and zeroed in on Brown’s inability to apologise for misjudgements, including this one. But he can never resist being shrill for long. His last question ended “…and will he make a promise not to do it again?”, which just makes him sound ridiculous. The snarky schoolboy is never far away.
Clegg also got in a sideways hit at British jobs for British workers, but basically used his questions to do a very neat job of tying together all the tax themes he has been plugging for the last year – big, permanent fair tax cuts, an end to tax evasion in the Lords, big corporations and on the earnings of fatcats (or High Net Worth Individuals, as they are known in the trade – as in “Have you got my HNWIs? I left them on the filing trolley.”)
Mr. Nick Clegg (Sheffield, Hallam) (LD): I add my expressions of sympathy and condolence to the family and friends of Corporal Danny Nield, who tragically lost his life serving this country and the people of Afghanistan in Helmand province. Week after week, I have been asking the Prime Minister why he is not getting tough on tax avoidance. Every time, he tells me that he is doing all that he can. This week, newspapers have confirmed that big companies are using loopholes to get out of paying £14 billion in corporation tax alone. Instead of going on about British jobs for British workers, is it not time that he went on about British taxes for British companies?
The Prime Minister: This needs not only the efforts that we are making to clamp down on tax avoidance and tax evasion, but an international agreement. The right hon. Gentleman may be aware that there is a case in America at the moment in relation to Swiss tax avoidance. Once it is resolved, I believe that it is possible to get an international agreement for the exchange of information about tax cases. That would be the way to move forward our proposals for the exchange of information on tax and clamping down on tax evaders.
Clegg used his second question more effectively than he usually does, by taking Brown’s sympathetic first response and using it against him – Brown is in denial, Clegg said, because he created the impossibly complex system which allows billions of pounds worth of perfectly legal evasion avoidance to go on.
Mr. Clegg: The Prime Minister is living in denial. He created a system that lets big companies run rings round the Treasury, lets peers in the other place not pay their full taxes in this country and allows City bosses to pay less in tax on their capital gains than their cleaners pay on their wages. He is losing this country billions of pounds, which could be used to give big permanent tax cuts to ordinary families. Why should anyone trust him when he makes one rule for the fat cats and another for everyone else?
The Prime Minister: I remember that the chief donor to the Liberal party got into real trouble because he was a tax evader, and the Liberals never returned the money. Perhaps it is the leader of the Liberal party who is in denial at the moment.
We do everything we can, and will continue to do so, Budget after Budget, to remove the possibility of tax avoidance and tax evasion. In the end, it will need what the right hon. Gentleman should support—an international agreement. In the light of the Swiss case in the United States of America, I hope that we can make big progress on that, and I hope that the hon. Gentleman will support it.
If I may be permitted a rant, Clegg is absolutely right to refer to the system as the problem. The kind of inflexible control freakery that makes tax credits a nightmare for the genuine applicant and a breeze for the abuser is present, in one form or another, throughout the system. Brown’s inclination – proudly proclaimed here - to define ever more precise circumstances in which this or that allowance or relief may be claimed does not, as he thinks, close the loopholes ever tighter. It just changes the behaviour of the evader (often by creating another unforseen loophole).
Whatever Brown comes up with, there will be a get-round. There’s always a get-round. In the great battle of Gordon Brown versus an entire profession stuffed with very intelligent and highly paid tax consultants, who’d back the clunking brain? It’s not necessarily right or fair, but that’s the way it is. Urgent streamlining needs to take place if our tax system isn’t going to become an international joke within a decade.
Clegg could have improved his round-up still further, I suggest, by referring to Jack Straw’s recent amendment to the Constitutional Reform Bill which would ”make all peers be fully resident in the UK and pay full British tax”. Hey, sounds familiar, where have I heard that before? Oh, I know! Clegg asked the Prime Minister at last week’s PMQs to back a Lib Dem private member’s bill with the identical purpose. Brown dithered and declined to state open support and exactly four days later his government announces that they’re going to do it anyway. Well, blow me.
Clegg could also, as per, have refrained from the ghastly “ordinary families” tag. STOP IT! We are liberals! We’re All Individuals!
Incidentally, I did wonder last week why Brown didn’t flourish Michael Brown at Clegg in response to his tax evasion related question. But our unelected, unelectable Prime Minister is not good at thinking on his feet; his work experience bod must have pointed out since.
The development of an international consensus on sharing of individuals’ tax records across governments is something I am watching with interest (no, really). It strikes me that this is a legitimate reason for some form of data sharing - but it must not be allowed to turn into an argument in favour of the illegitimate reasons, and certainly not an argument in favour of a universally accessible data network. We have enough trouble controlling the information-hungry proclivities of our own abusive public servants, without taking on the rest of the world’s as well.
Watch the session here.