Bill Carmichael: Tax hypocrisy from Lib Dems

ACCORDING to the Liberal Democrats this week, citizens who arrange their financial affairs to minimise the amount of tax they pay are little more than criminals – even if what they do is perfectly legal.

Announcing a 900m crackdown on tax avoidance, Chief Secretary of the Treasury Danny Alexander likened tax avoiders to benefit cheats and said it was "morally unacceptable" not to pay your "fair share" of tax.

Alexander and Deputy Prime Minister Nick Clegg seemed keen to blur the distinction between tax avoidance, which is entirely legal, and tax evasion, which is a criminal act that could land you in jail. This is nuts. It means that people who hire an accountant to help fill out their self- assessment form in an effort to reduce their tax bill are, in Lib Dem eyes, guilty of a crime.

Hide Ad
Hide Ad

What of people who take advantage of tax avoidance schemes such as filling out a Gift Aid form when they make a donation to charity, or who take out an ISA savings plan? Are they criminals, too? Such economic illiteracy is precisely what you would expect from the Lib Dem conference, but it is the rank hypocrisy that really sticks in the throat.

In the last parliament, for example, Alexander is said to have told House of Commons authorities that his flat in London was his second home thereby, it was said, enabling him to claim 37,000 under the MPs' lavish expenses system. When he sold the property, Alexander avoided tens of thousands of pounds in capital gains tax, later saying it was not payable because of the operation of final period relief.

There's no suggestion that Alexander did anything illegal. His deal was within the rules but as we've seen, according to the Lib Dems, playing within the rules is no longer good enough. Indeed, Alexander is condemned from his own mouth and if he had any decency he would be writing out a fat cheque to HMRC to ensure he pays his "fair share" of tax. Don't hold your breath.

What this episode reveals is a peculiar notion by many politicians that all the money in the country automatically belongs to the state. The job of government, they think, is to spend this money on whatever those politicians want – including their own expenses, salaries and platinum plated pensions. Whatever is left, if you are lucky, may be distributed to those who worked their socks off to earn the money in the first place.

Hide Ad
Hide Ad

The problem with this approach – and the coalition Government's crackdown on tax avoidance is part of it – is that it threatens to kill the goose that lays the golden eggs.

If and when the economic recovery does happen, it won't be thanks to the politicians, non-productive public sector workers or quango queens. It will be the result of hard work and innovative ideas from the creative thinkers, job creators, risk takers and entrepreneurs that drive Britain's businesses.

The best a government can do is get out of the way and let them get on with it.

Gymslip mums

The National Institute for Health and Clinical Excellence (NICE) this week recommended that schools should hold ante-natal classes for pregnant teenagers.

Hide Ad
Hide Ad

Apparently, this will help gymslip mums "engage with health services" because they feel embarrassed when they have to deal with judgmental older women such as midwives and doctors' receptionists.

My first thought was haven't schools got enough to do? Then I wondered who would run these classes? Very probably those same "judgmental" midwives who work down at the health centre.

If all goes well aren't these pregnant girls going to eventually overcome their embarrassment and give birth in hospital – or are schools supposed to provide a few gas and air bottles and an epidural drip behind the bike sheds?

Britain has the highest rate of teenage pregnancy in Western Europe. Isn't it sad that so many young girls will have to face the trauma of childbirth at a time when they should be concentrating on gaining the skills and knowledge that could transform their prospects in life?

Related topics: