Leading article: The Chancellor's missed opportunity

Share
Related Topics

Political pragmatists will say that George Osborne has done a good deal in getting Swiss banks to levy what is effectively a tax on secret accounts held by British citizens. It should net the Treasury around £5bn. But the truth is this is a dubious deal that allows tax dodgers to pay less than they would in UK taxes, go unpunished for the crime of tax evasion and keep their identities from the taxman.

A much better alternative was in the wings. The revised European Union Savings Tax Directive has received the approval of 25 EU states and others could have been brought to agreement. The directive would have required an automatic exchange of information on income from interest and capital gains throughout Europe, Switzerland, Liechtenstein and Britain's tax havens.

The lower-grade bilateral deal with Switzer-land has effectively scuppered that. For all Mr Osborne's rhetoric on being "as tough on the richest who evade tax as those who cheat on benefits", he is letting tax dodgers off lightly. Why? Although tax evasion costs the Exchequer about £14bn a year, large amounts of cash enter the UK economy through tax havens like Jersey, Guernsey, the Isle of Man and the Cayman Islands. And the UK mainland is a tax haven for people of foreign domicile; even if they are resident here, they pay no tax on income not remitted to the UK.

Those who favour tax havens argue that they are an impetus for economic growth, sound fiscal policy and individual freedom. But there is a difference between tax regimes, which assist open commerce, and those that are so deliberately opaque that they hide the spoils of cheating, fraud, corruption, terrorism and drug-dealing. At a time when jobs of low-paid public-sector workers are being sacrificed, the Government should be doing more to make the rich pay their fair share.

React Now

iJobs Job Widget
iJobs General

C# .Net Developer

£23000 - £35000 Per Annum: Clearwater People Solutions Ltd: C# .Net Develop re...

Electronics Design Engineer

£35000 - £45000 per annum + Benefits: Progressive Recruitment: My client are l...

Senior BI Engineer (BI/MI, Data Mining)

£60000 - £65000 per annum + Bonus & Benefits: Ashdown Group: Senior BI Enginee...

IT Teacher

£100 - £120 per day: Randstad Education Chelmsford: We are seeking a teacher o...

Day In a Page

Read Next
 

The daily catch-up: Joe on Vlad, banks of the Jordan and Blair's radicalism

John Rentoul
 

Believe me, I said, there’s nothing rural about this urban borough’s attempt at a country fair

John Walsh
Some are reformed drug addicts. Some are single mums. All are on benefits. But now these so-called 'scroungers’ are fighting back

The 'scroungers’ fight back

The welfare claimants battling to alter stereotypes
Amazing video shows Nasa 'flame extinguishment experiment' in action

Fireballs in space

Amazing video shows Nasa's 'flame extinguishment experiment' in action
A Bible for billionaires

A Bible for billionaires

Find out why America's richest men are reading John Brookes
Paranoid parenting is on the rise - and our children are suffering because of it

Paranoid parenting is on the rise

And our children are suffering because of it
For sale: Island where the Magna Carta was sealed

Magna Carta Island goes on sale

Yours for a cool £4m
Phone hacking scandal special report: The slide into crime at the 'News of the World'

The hacker's tale: the slide into crime at the 'News of the World'

Glenn Mulcaire was jailed for six months for intercepting phone messages. James Hanning tells his story in a new book. This is an extract
We flinch, but there are degrees of paedophilia

We flinch, but there are degrees of paedophilia

Child abusers are not all the same, yet the idea of treating them differently in relation to the severity of their crimes has somehow become controversial
The truth about conspiracy theories is that some require considering

The truth about conspiracy theories is that some require considering

For instance, did Isis kill the Israeli teenagers to trigger a war, asks Patrick Cockburn
Alistair Carmichael: 'The UK as a whole is greater than the sum of its parts'

Alistair Carmichael: 'The UK as a whole is greater than the sum of its parts'

Meet the man who doesn't want to go down in history as the country's last Scottish Secretary
Legoland Windsor's master model-makers reveal the tricks of their trade (including how to stop the kids wrecking your Eiffel Tower)

Meet the people who play with Lego for a living

They are the master builders: Lego's crack team of model-makers, who have just glued down the last of 650,000 bricks as they recreate Paris in Windsor. Susie Mesure goes behind the scenes
The 20 best days out for the summer holidays: From Spitfires to summer ferry sailings

20 best days out for the summer holidays

From summer ferry sailings in Tyne and Wear and adventure days at Bear Grylls Survival Academy to Spitfires at the Imperial War Museum Duxford and bog-snorkelling at the World Alternative Games...
Open-air theatres: If all the world is a stage, then everyone gets in on the act

All the wood’s a stage

Open-air productions are the cue for better box-office receipts, new audiences, more interesting artistic challenges – and a picnic
Rand Paul is a Republican with an eye on the world

Rupert Cornwell: A Republican with an eye on the world

Rand Paul is laying out his presidential stall by taking on his party's disastrous record on foreign policy
Self-preservation society: Pickles are moving from the side of your plate to become the star dish

Self-preservation society

Pickles are moving from the side of your plate to become the star dish
Generation gap opens a career sinkhole

Britons live ever longer, but still society persists in glorifying youth

We are living longer but considered 'past it' younger, the reshuffle suggests. There may be trouble ahead, says DJ Taylor