Editorial: Tax and the thinking Liberal Democrats

Britain's tax heroes point the way towards a policy safe ground for Clegg's beleaguered party.


The impression is often created that practically all rich people in Britain are – one way or another – dodging their taxes. Either they are sheltering their income in some offshore tax haven, receiving their money through some convoluted avoidance scheme, or counting the days to ensure that they do not lose their tax breaks by staying in the UK too long. As we report today, however, there would appear to be a respectable number of very rich and successful individuals who – miraculous though it might seem – do the right and responsible thing by the country they live in.

We believe their example deserves to be highlighted far more often than it is, not only because it demonstrates the possibility of being simultaneously wealthy and decent, and not only because such individuals help to give the lie to the inevitability of a vast exodus of the moneyed to Zurich or Hong Kong if the tax rate is tweaked to their disadvantage, but because it might encourage others to do likewise, peer pressure being a big factor in changing bad behaviour. Not everyone believes British tax to be such a bad deal, even though the dominant image is of elaborate tax avoidance schemes tailored to shadowy financiers.

That said, however, the Government has much more work to do if it is to convince rank-and-file taxpayers that it is doing enough to bring the delinquents to account. Nor is it realistic to expect that everyone would follow the example of Sir Martin Sorrell and the others who feature in our report, if only they knew more about them.

This is why the Chief Secretary to the Treasury, Danny Alexander, was guaranteed a warm reception when he promised yesterday that HM Revenue and Customs would have an extra 100 staff to combat tax avoidance by people with assets of more than £1m. It is also why the decision of the Liberal Democrats to make tax the theme of their autumn conference, under the slogan, “Fairer Tax for Tough Times”, was a good one.

But it was not only, or chiefly, a good decision in terms of the party’s public profile. It is, or should be, beneficial for the Liberal Democrats in other ways. First, because the redistributive potential of tax is an area where there is little or no disagreement between the party faithful in general, and their leader, Nick Clegg. As has been evident in recent days, when Mr Clegg has said that he would not support further cuts “on the backs of the poor” without the introduction of some form of wealth tax, they have no difficulty in speaking here with conviction and with one voice.

Second, tax is an area where the Liberal Democrats can draw a real distinction between themselves and the Conservatives, never easy for the junior partner in a coalition. And third, tax is a subject on which the Liberal Democrats have something tangible to show for their efforts, which is just as difficult for a party in coalition. It was the Liberal Democrats’ idea to remove many low earners from tax by raising the income tax threshold, and it is being implemented. Their proposal for a so-called mansion tax was eventually dropped from this year’s Budget. But it was considered seriously, and a successor, in the form of some – as yet too hazily formulated – wealth tax may not yet be extinct, despite the Chancellor’s stated opposition.

Whatever the pluses and minuses of a wealth tax, however, the simpler approach in the first instance would be for the Government to ensure that its own rules on tax are not flouted and that everyone, the mobile super-rich included, pay the levies that are due. Mr Alexander’s extra tax officials may be part of the solution, but so is the example of those wealthy people who already pay up.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

Recruitment Genius: Project Implementation Executive

£18000 - £23000 per annum: Recruitment Genius: They work with major vehicle ma...

Recruitment Genius: Chiropractic Assistant

£16500 per annum: Recruitment Genius: A Chiropractic Assistant is needed in a ...

Recruitment Genius: Digital Account Executive - Midlands

£18000 - £26000 per annum: Recruitment Genius: They work with major vehicle ma...

Recruitment Genius: Web Developer

£28000 - £30000 per annum: Recruitment Genius: This company provides coaching ...

Day In a Page

Read Next

Errors & Omissions: how to spell BBQ and other linguistic irregularities

Guy Keleny

South Africa's race problem is less between black and white than between poor blacks and immigrants from sub-Saharan Africa

John Carlin
NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own