Don’t let Cameron’s tax affairs distract you; scrutinise his government’s record on tax

The rich and powerful use tax havens to hide their identity, their wealth and to avoid paying the tax they owe: that’s nothing new.

So the most surprising aspect of the Panama papers is not that the global elite are implicated in dodgy offshore schemes, it’s the way in which the media has accepted at face value the claim that “no government has done more than this one to crack down on tax evasion and aggressive tax avoidance”.

The scandal is presented as an inconsistency between their actions on tax dodging, which are assumed to be strong, and their personal conduct.

Rather than scrutinise the UK government’s actions to tackle tax dodging, they’ve swallowed the rhetoric. Instead of asking: “why hasn’t Dave closed down tax havens”, the media machine has remained on more familiar ground, asking: is Dave being honest with us? Do his personal tax affairs match his rhetoric?

In short, distracting us from the substantive issue of whether the government’s policies on tackling tax dodging are actually working.

A closer look at the government’s record on tax, and it’s clear that while there is much talk of a ‘crack down’,  the action taken by the government falls far short.

Take the ‘anti-avoidance rule’, this actually gave the green light to practices that were previously considered legal grey areas, or the watering down of the Controlled Foreign Company rules in 2012 making it easier for British controlled companies to shift profits out of developing countries into tax havens, thus escaping the net of UK tax authorities.

Not much of a crackdown so far.

And then there’s Osborne’s ‘Diverted Profit Tax’, also known as the ‘Google tax’, so good it did little to prevent  the Google tax scandal earlier this year. 

The fact that the UK government has the constitutional power to stop British Overseas Territories and dependencies acting as tax havens, means scrutiny of the government’s record would expose as hot air its claims to be cracking down. In reality, its actions so far have only had a marginal effect on tax dodging, whilst seeking to legitimise the majority of this parasitic industry.

As Cameron defends his personal tax affairs his conscience may be clear, but simply demonstrating his tax affairs are legal is not, as his spin doctors would like us to believe, the end of this story.

The UK is at the heart of a global tax system, where the rules are rigged in favour of the rich and powerful.  Tax havens are enabling corporations to avoid tax on an industrial scale, both deceiving and short-changing the public. It may be legal, under rules set by this government, but it is not legitimate.

The rules need changing. The government can make that change. We need transparency, of course, but more than that, we need tax justice.