Ed Miliband turns up heat on Clegg over tax avoidance

Another day, another round of worrying headlines for the deputy prime minister, barely 100 days in office, effectively running the country in David Cameron's absence and now facing one of his most sustained periods of pressure - from the press, Opposition and his own backbenchers over the issue of tax avoidance.

Another day, another round of worrying headlines for the deputy prime minister, barely 100 days in office, effectively running the country in David Cameron’s absence and now facing one of his most sustained periods of pressure – from the press, Opposition and, as Left Foot Forward reported yesterday, his own backbenchers – over the issue of tax avoidance, which he had pledged to crack down on.

Labour leadership candidate Ed Miliband entered the fray today, demanding to know what happened to the Liberal Democrat leader’s committment to raise more than £4.5 billion by clamping down on tax avoidance. In a letter to Mr Clegg, he writes:

During the election campaign you made much of the Liberal Democrat commitment to tackle tax avoidance. You said, if in government, you would raise £2.4bn by attacking income tax avoidance, £1.4bn by halting abuse of corporation tax and a further £750m from stamp duty through tackling offshore registration by non-doms. You claimed that your plans to clamp down on tax avoidance meant that you would not need to raise VAT.

However, since the election you have had a very different message for the country. You have claimed that there is no alternative to the VAT rise, produced no credible plan to make progress on tackling tax avoidance, and we now hear from the Financial Times that HM Revenue & Customs is to soften its stance on avoidance in order to make cuts to its legal budget…

Will you explain to the country why you no longer feel it necessary to tackle tax avoidance? And will you publish a detailed timetable showing the timescales on which you expect to make progress? Those who hear you say there is ‘”no alternative” to your proposed tax rises on poor and middle income earners and to deep spending cuts beyond those you supported during the election campaign, expect nothing less.

The FT report cited by Mr Miliband revealed HM Revenue & Customs (HMRC) was planning to adopt:

“…a less combative approach to resolving tax disputes with businesses in a move designed to cut a mounting legal logjam and unlock billions of pounds tied up in court battles over avoidance. Dave Hartnett, permanent secretary for tax at HMRC, said there had been examples of officials being too “tough” in disputes over tax assessments.

“HMRC is packed full of very intelligent people, but we are sometimes too black-and-white about the law,” he told the Financial Times.

The move, part of a drive for greater efficiency on the part of the cash-strapped department, could produce what Mr Hartnett called a “surge” in revenue over a couple of years, on top of extra money being collected in cases of individual tax evasion.

All of which prompted Tax Research UK’s Richard Murphy to blog:

So Hartnett, the man who just a few years ago said that he’d make sure tax avoidance was ‘no longer worthwhile’ is now going soft on it in the week Nick Clegg said that the coalition is considering the introduction of a new rule “to ensure that wealthy individuals pay their fair share of tax” and a week or so after Cameron says he’s going to make the fight on benefit fraud his number one priority…

…the messaging is dire. What this says is the Coalition is happy for the rich to abuse, will be soft on their abuse, will not be seeking to enforce tax law (that’s explicitly what Hartnett has instructed his staff not to do) and does not care that it was a lack of tax income, not a loss of control of spending, which gave rise to this crisis.

And the Treasury is also using a senior civil servant to snub the deputy prime minister.

As fiascos makers go this mob are proving themselves masters of the art.

25 Responses to “Ed Miliband turns up heat on Clegg over tax avoidance”

  1. B Bigelow

    RT @leftfootfwd: @Ed_Miliband turns up heat on Clegg over tax avoidance: http://bit.ly/aJv5SB #ConDemNation

  2. LockPickerNet

    @Ed_Miliband turns up heat on Clegg over tax avoidance: http://bit.ly/aJv5SB #ConDemNation via @leftfootfwd

  3. Billy Blofeld

    Ed doesn’t have a financial leg to stand on. Either he or one of the other leadership candidates will first need to apologise for Labour’s 15 economic crimes.

  4. Ralph Ferrett

    RT @leftfootfwd: @Ed_Miliband turns up heat on Clegg over tax avoidance: http://bit.ly/aJv5SB #ConDemNation

  5. Liz McShane

    BB – With regards to ‘Labour’s economic crimes’…..I presume you mean intervening in the massive banking crisis and averting a 1930s style depression ? An approach which quite a few other developed countries emulated ….

  6. Kevin McNamara

    RT @ralphferrett: RT @leftfootfwd: @Ed_Miliband turns up heat on Clegg over tax avoidance: http://bit.ly/aJv5SB #ConDemNation

  7. Tax Research UK » Ed Miliband turns the heat on Clegg

    […] Left Foot Forward has reported that Ed Miliband has written to Nick Clegg saying: During the election campaign you made much of the Liberal Democrat commitment to tackle tax avoidance. You said, if in government, you would raise £2.4bn by attacking income tax avoidance, £1.4bn by halting abuse of corporation tax and a further £750m from stamp duty through tackling offshore registration by non-doms. You claimed that your plans to clamp down on tax avoidance meant that you would not need to raise VAT. […]

  8. Shamik Das

    RT @leftfootfwd: @Ed_Miliband turns up heat on Clegg over tax avoidance: http://bit.ly/aJv5SB #ConDemNation

  9. Liz McShane

    To add to Clegg’s woes (oh dear….), there are rumours going around that Charles Kennedy & a few others LDs might be defecting to Labour…

    http://www.bigthink.com/ideas/22913

  10. Mehdi Hasan

    RT @shamikdas: RT @leftfootfwd: @Ed_Miliband turns up heat on Clegg over tax avoidance: http://bit.ly/aJv5SB #ConDemNation

  11. Robster

    RT @leftfootfwd: Ed Miliband turns up heat on Clegg over tax avoidance http://bit.ly/aJv5SB

  12. Rachel Hardy

    RT @shamikdas: RT @leftfootfwd: @Ed_Miliband turns up heat on Clegg over tax avoidance: http://bit.ly/aJv5SB #ConDemNation

  13. pam lorenz

    RT @shamikdas: RT @leftfootfwd: @Ed_Miliband turns up heat on Clegg over tax avoidance: http://bit.ly/aJv5SB #ConDemNation

  14. Simon Payne

    RT @shamikdas: RT @leftfootfwd: @Ed_Miliband turns up heat on Clegg over tax avoidance: http://bit.ly/aJv5SB #ConDemNation

  15. Jane Watkinson

    RT @leftfootfwd: Ed Miliband turns up heat on Clegg over tax avoidance http://bit.ly/aJv5SB

  16. Mr. Sensible

    This is a total and utter disgrace. I cannot believe that HMRC is taking a softer line on this just when we need, more than ever, every person to pay all taxes they owe.

    Oh, and Liz, with regard to what Billy said, 1 of the things I get so annoyed about is when people say Labour sold our gold at the bottom of the market. I am convinced we’ve got a few fortune tellers onboard. If we had left the gold reserves and the price then happened to go down, we might be having a slightly different conversation.

    And Liz, if there’s anything in that talk about Kenedy, then given what Huhse said I think we can say ‘here comes trouble…’

  17. Robert

    how much tax did new Labour recover.

  18. Paul Krishnamurty

    Well done Ed Miliband. Further evidence that he’s easily the best leadership candidate.

    Tax avoidance is a scandal, that only remains non-salient because the public are unaware of the scale and nature of it. How can it be acceptable for The Sun to wage war on benefit scroungers, when at least ten times as much money is lost to the exchequer via tax avoidance, which is practised by the paper’s owner? Or for the govt to take money out of the domestic economy, while allowing billions to disappear into tax havens. Especially when many of them are UK dependancies!

  19. Kevin Richards

    RT @leftfootfwd: Ed Miliband turns up heat on Clegg over tax avoidance http://bit.ly/aJv5SB

  20. Mark Broadway

    RT @leftfootfwd: Ed Miliband turns up heat on Clegg over tax avoidance http://bit.ly/aJv5SB

  21. Billy Blofeld

    @Liz

    By “Intervening in the massive banking crisis” I presume you mean dithering like a mad woman for 9 months before the global crisis that was supposed to have “started in America” and which had been fuelled by a certain Scottish Chancellor.

    P.S. I’m looking forwards to Gordon’s next book. Should be a total laugh….

  22. Liz McShane

    BB – there’s no need to be sexist.

    I agree there should have been tighter banking regulations. However The Tories had no answer or idea. What Labour did aved us circa 500,000 people from losing there jobs and along with the added pressure that would have put on the state benefits etc. Feweer houses were repossessed and fewer small businesses went into receivership than previous Tory-led recessions.

  23. Mr. Sensible

    Liz, could what Kenedy is doing be linked to comments by Clegg in today’s Guardian?
    http://www.guardian.co.uk/politics/2010/aug/20/nick-clegg-electoral-reform-coalition

    I think you could call that the straw that broke the cammel’s back.

    And Billy, I, like Liz, happen to think the banks should have been regulated better. But what are the Con Dems doing about it? Zilch! Apart from moving the fernature around. Splitting up the banks isn’t going to solve the problem; Northern Rock was a retail bank, and Leyman Brothers, an Investment Bank was allowed to fail and look what happened.

  24. Mr. Sensible

    And since Billy mentioned books, I think Clegg’s is sure to be a best seller! Maybe, just maybe, we might get a definitive answer to when it was he sold out on the economy?

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