The need for a general anti-tax avoidance principle (GANTIP) to be enshrined in the British finance system is now overwhelming. The totality of tax avoided by super-rich individuals and big corporations has been estimated by independent research at some £25bn a year, and even by the Treasury at up to £13bn a year. At a time when Alistair Darling is seeking to cut the colossal £175bn black hole in the public accounts by £50bn, ending (or very substantially reducing) tax avoidance must feature as one of the most palatable options available. Yet once again as the Finance Bill returns to the floor of the House of Commons at committee stage, the Government has introduced no such GANTIP amendment. That is all the more surprising since, ironically, the Government has been forced to put down a new clause to block a tax avoidance device which has only come to light since the Finance Bill was published. It simply reveals that however much HMRC attempt to stop up every loophole, it is a sisyphean task since new avoidance devices will rapidly appear to replace it, and it is a never-ending process. Why then doesn’t the Government stop it at its root?

To push this argument, I put down two months ago with the assistance of Richard Murphy, one of the country’s tax experts and a radical reformer, a new clause to be debated in the Finance Bill committee stage. It has not however been selected by the Speaker’s office for debate on the grounds that the effect of the new clause would be to increase taxation (of course it would – that’s the whole point of it!), but the Government has taken to itself the prerogative that only itself can increase taxes, so the new clause is ruled out of order! A classical example of self-defeating procedure which insulates the Government from being held to account for its own folly or its own timidity. And of course the banks, Barclays above all judging by the revelations in the Guardian’s excellent ‘Tax Gap’ series, are laughing all the way to the bank.
So what can be done to get out of this box? One option is to intervene on the Minister when he moves the Government’s new clause to block up the latest loophole in the tax avoidance colander, by demanding an explanation why the Government is so frit about GANTIP, which is what I shall do tomorrow. Another is to raise the matter at PMQ. But perhaps the best route is to take a delegation, including Richard Murphy, to see Alistair Darling and argue it out face to face across the table. I have never known a Government that so often needed to be saved from itself!

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