Osborne’s studied silence over this last week speaks volumes. If the issue were anything else but tax evasion and avoidance, he would be seeking to find an angle to turn it against Labour for all he’s worth. But on tax avoidance he’s skewered. It was on his watch that no action was taken when news first leaked out in 2010 about massive tax evasion by the British super-rich at the British HSBC bank in Geneva. Indeed the wrongdoing was deliberately kept secret in government circles for 5 years, and only surfaced when a whistleblower blew it. On his watch the same HSBC bank, the ‘highly suspect British company’ as the US authorities nicknamed it for its polluted culture, was heavily fined in 2012 in the US for money-laundering for drug cartels and pariah states, but no action was taken in the UK.
This is not an isolated case: it fits a pattern of studied inaction. In the last 5 years HMRC tax inspector staff have been cut back by nearly 40%, even though the evidence indicates that for every £1 spent in 2013-4 by the unit dealing with the UK’s largest and most complex cases an additional £97 was recovered. The Serious Fraud Office has seen its budget cut to a mere £35m which can only be explained as a deliberate (and successful) effort to make it incapable of taking on banks and their big law and accountancy accomplices. Even now, despite HMRC trumpeting in 2011 that all 6,000 British-held accounts in the HSBC files were ‘ripe for investigation’, it has collected just £135m in tax, interest and penalties – less than 1% of the estimated total in the accounts and far less than France, Belgium and Spain have collected from a smaller number of their citizens’ accounts.
With the Tories it’s all mouth and wind. At the Lough Erne G7 summit last year Cameron boasted of fixing a new international agreement which would drastically crack down on tax avoidance, but with little or no action in the UK. Osborne boasted in 2012 that he had negotiated a deal with the Swiss which would unlock huge receipts for the UK from tax evaders, but in the event it has produced only a fraction of what he promised, and only with the crass loophole that the identity of the lawbreakers would be kept secret. Then in April 2013 the government introduced rules to ban companies and individuals who took part in failed tax avoidance schemes from being awarded government contracts, but in practice no such business has been barred.
It is perfectly clear that the Tories aren’t seriously opposed to tax avoidance at all – in fact they’re all for it, provided they’re not found out. Nearly all their top donors are at it, and in this election it may turn out to be their Achilles heel.