Conservative commitments - 12, 11 fails

A crackdown on tax evasion and the "aggressive" avoidance of tax

This would be unarguably a good thing. I’m not sure how you crack down on tax avoidance; it is, by definition, legal (tax evasion is illegal; tax avoidance is using the tax system to minimise one’s tax burden).

Sadly, this is a promise without weight. The Conservatives so far have done precisely the opposite, despite making the same promise, so it’s most likely that this will continue. For example, the much-vaunted agreement with Switzerland to disclose bank accounts was voluntary and included a long delay, ensuring that even those who volunteered had plenty of time to rearrange their affairs. Yet that agreement was sold as a major achievement. The tax gap was £95 bn a year in 2010 and the Conservatives have clamped down on it over 5 years, reducing it to the tiny amount of £122 bn a year. HMRC’s own estimates, which are woefully poor, and one might expect to be biased to show HMRC in a good light, admit to a tax gap of £34 bn. This compares to DWP’s estimate of benefit fraud (on all benefits) as being £1.2 bn.

This policy aspiration is near enough an outright lie. There will be no crack down and there will most likely be new tax loopholes and avoidance opportunities. It is another appeal to voters to make the Conservatives appear to be keen on justice and the rule of law (principles that in other areas they vigorously pursue) when history tells us that they are not. If ever there was a ‘something for nothing culture’, it is in the world of tax reliefs, in which people expect not only lower tax rates than everyone else, but even tax credits (i.e payments).

The detailed manifesto commitments are minor, but do look to be sensible. If we could trust the Conservatives fully to honour this policy, it would be a great thing, although it wouldn’t catch much of the tax gap, which needs far more rigorous policies. Sadly, the evidence is that they are more committed to tax avoidance than they are to law, order, justice, fairness or manifesto commitments. Those aspirations only apply when the rich will not suffer as a consequence.