The Staggers

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Why Cameron was right to condemn Jimmy Carr

Hypocritical and politically inept? Perhaps, but Cameron was right to take a stand.

By Richard Morris Published 21 June 2012 12:30

David Cameron condemned Jimmy Carr's tax avoidance. Photograph: Getty Images.

David Cameron said Jimmy Carr was "morally wrong" to avoid tax. Photograph: Getty Images.

"I wonder if whoever advised Cameron to comment on Jimmy Carr has realised what they’ve done yet?" tweeted Marina Hyde this morning and most commentators seem to be in agreement that the Prime Minister has been foolish to make a moral pronouncement about a comedian's tax affairs. It’s certainly a licence for journalists to rake over Tory donors' tax returns.

But doesn’t the argument about whether or not he’s been politically inept or hypocritical, mask another uncomfortable truth: that he could be right. I understand the argument that it’s wrong for a politician to condemn someone who hasn’t broken the law – but I’m not sure I agree with it. We expect our politicians to make moral judgements, we call them out on it all the time, over issues like health, education, welfare and military intervention. It seems a nonsense to say that when someone has acted legally but in a way that makes them feel morally uncomfortable, our leaders should keep schtum.

Cameron had three options: say what he did; say the opposite ("perfectly legal, done nothing wrong") – imagine how that would have played - or played the Ed Miliband "but I don’t think it is for politicians to lecture people about morality" card. Good luck with that one at the next PMQs, Ed, because that’s not what you’ve said in the past. Here’s a cracking quote from a Miliband speech last year.

The bankers who took millions while destroying people's savings: greedy, selfish, and immoral; the MPs who fiddled their expenses: greedy, selfish, and immoral; the people who hacked phones at the expense of victims: greedy, selfish and immoral.

Miliband was right then, just as Cameron was right yesterday.

Of course, hypocrisy litters the story left, right and centre. Various newspaper groups writing about this story employ ways and means to bring down their own tax burden. And there is an issue about where you draw the moral line. Plenty of folk avoid tax everyday, without a moment’s guilt. Pension contributions, ISAs, duty free shopping. Nothing wrong with any of them. But anyone using them is utilising a tax avoidance scheme – does that remove their right to express an opinion about the moral rectitude of rather more complicated and creative pieces of accounting? I don’t think so.

Cameron will undoubtedly live to regret his words about Carr – the newspapers will make sure of that. But that doesn’t necessarily mean he was wrong to say it. Does it?

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Tags: David Cameron tax havens

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30 comments

Thu, 2012-07-19 14:13 — Goji (not verified)

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Thu, 2012-07-05 00:48 — ahmadnasr89

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Sat, 2012-06-23 13:43 — Chris12345 (not verified)

I won't support anything Cameron does

Fri, 2012-06-22 21:30 — DBL (not verified)

What a great debate the custodian of UK morality has started, but has he put his proverbial foot in in?

As we witnessed with MP's expenses, the hypocracy of our 'honorable members' was plain to see.

Presumably now we can expect nothing short of a full disclosure of all (legitimate) tax avoidance schemes the 'honorable members' have benefited from, including family trusts and other shelters whose sole purpose was to avoid one form of tax or another.

I wonder if the 'honorable members' will be as quick to unwind these arrangements as Mr Carr?

Fri, 2012-06-22 16:04 — mbrecker (not verified)

It doesn't surprise me that Cameron refused to stay out of the hypocracy about Carr and his taxes. Currently the tax shelter he was using is legal. There's no law that says you must pay more tax because you have a high profile job. The only reason others have said we want to pay more tax is to score points (both politically and in the global markets).

Cameron's just sick of being the whipping boy for the press in this story. What's th solution? Have a go at everyone else who makes a lot of money because the MSM will eat this stuff up.

Fri, 2012-06-22 11:04 — Arddeyeff (not verified)

The target to prevent tax avoidance should be the very handsomely paid authors of the avoidance schemes. I am a retired Chartered Accountant and for a long time I have had trouble with the thought that in the name of ensuring clients do not pay more than their fair share of tax under our complicated tax regime, many of my fellow professionals seek to ensure that their clients pay far less tax than they should by extending little known tax breaks to apply to circumstances other than those for which they were intended. It should be made a criminal offence to devise any scheme the prime purpose of which is to avoid tax legally. In the meantime I suggest that all professional financial bodies make it clear that such practice falls well short of the professional standards to which they aspire.

Fri, 2012-06-22 00:27 — Davidaslindsay (not verified)

Keep Jimmy Carr on long enough, and he was surely going to say or do something funny eventually. And now, he has.

The execrable 10 O'Clock Live cannot possibly be brought back again after this. What, brought back with Jimmy Carr? Or brought back without him, for guests to mention every time that one of the presenters or the favoured protagonists needs to be brought down a peg or two?

This may even herald the end, not a moment before time, of the 20-year-old tendency to regard stand-up comedians as the fountains of all knowledge, understanding and wisdom. Thank you and goodnight to Stephen Fry.

The spectacle of Dan Hodges bewailing David Cameron for having betrayed Blairism by denouncing tax avoidance says so very, very much on so very, very many levels.

And in return for the stamping out of all provision for the Crown Dependencies and the British Overseas Territories to function as tax havens, students from those Dependencies and Territories should be recognised as home students.

Thu, 2012-06-21 22:21 — Mrs.Josephine Hyde-Hartley (not verified)

"We expect our politicians to make moral judgements, we call them out on it all the time, over issues like health, education, welfare and military intervention."

Er..no we don't. Elected politicians make Laws, actually.

Thu, 2012-06-21 20:56 — Hikaru22

The trouble with Cameron is that he ought not to have used the word 'morality' - not given the kind of company that he's been keeping in recent years. There would have been ways for him to condemn the widespread practice of tax avoidance amongst high earners, without him walking straight into that one.

Thu, 2012-06-21 20:52 — niuyys

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Thu, 2012-06-21 20:18 — Rev Graeme Hancocks (not verified)

Ok. But the two faced hypocrisy of highlighting Jimmy Carr whilst ducking questions about friend and fellow tory Barlow by Camron is as nauseating as it is transparent.

As someone else has written at least Carr had the decency to apologise. Take away the gong from Barlow - an O(ther) B(uggers) E(fforts) if there ever was one.

Thu, 2012-06-21 16:52 — RJD

Just to pick up on another senseless comment in this blog - the writer suggests it's perfectly ok to avoid tax in the normal, average way (boring old ISAs) but to get really clever and imaginative is immoral! If this guy has kids, I pity them if them if they come in top of the class. So we create a system which rewards ingenuity and then declare the winners evil! Put your thinking cap on and deal with the real issue. Competition in the tax market.

Thu, 2012-06-21 16:37 — RJD

No he was not right to condemn it. The hypocrisy aside, you may as well condemn a footballer for scoring a goal. Let's be honest, what idiot when shown two legal tax doors, one labelled £100 and the other labelled £20 quid, volunteers to go through the £100 door? Everyone, socialist or not, is compelled to maximise their economic welfare. We all donate but not to government!

I have lost all respect for Jimmy Carr for taking the dishonest and populist route out of this idiotic debate. And btw I'm left wing. The problem is that all liberal economic governments have added competition to tax payment in the last 30 yrs. We can all legally compete within the tax system to see who can pay the least amount of tax. And as with nearly all economic competition, the rich win. Will Cameron remove competitiveness from the tax regime? No. Will he 'condemn' it when he thinks he needs to score a few voting points with the electorate? You betcha.

Thu, 2012-06-21 16:35 — RJD

Thu, 2012-06-21 15:02 — anon3 (not verified)

Writer, in answer to the your last question. Yes. Because unless he has had a complete change of position (which he should articulate as such) he remains of the same view as when he employed P Green for help in identifying waste in Whitehall. In which case it is not a matter of simple hypocrisy it's a matter of one rule for me and my mates, another for the rest of you lot, including easily spotted and identifiable ringleaders. Which is not hypocrisy, it's bullying, or tyranny. Cameron badly needs to evualate the company he keeps before it is too late, but I fear he is too steeped in it to be even self-aware, never mind aware of the rest of us. His heart might be in the right place but some stuff you can't read in books

Thu, 2012-06-21 15:13 — Des Demona (not verified)

True dat
P Greene avoids 300 million in tax by having his dividend paid to his wife who is resident in Monaco. Kinda pisses on Jimmy Carr's scale - and he wasn't given a job in government!

Thu, 2012-06-21 14:31 — Arturo Bandini (not verified)

P.S. He really does betray his insecurity about his bald-spot in that photograph, eh?

He certainly can't compete with Ed "Axminster head" Miliband there!

Thu, 2012-06-21 14:28 — Arturo Bandini (not verified)

Ca-moron did of course have a proper job... once... at Carlton Television - remember them? LOL

Thu, 2012-06-21 13:52 — Chu Mee (not verified)

I find it hard to judge Jimmy Carr as there are very few of us who would have said 'no thanks' if their accountant told them of a legal scheme to save a lot of tax.

However, the hypocrisy that Cameron is showing here makes my blood boil. Cameron's family wealth comes from his father setting up and running off-shore tax avoidance funds.

I assume Gary Barlow voted Conservative?

Thu, 2012-06-21 14:39 — Larry Sportello (not verified)

"I find it hard to judge Jimmy Carr as there are very few of us who would have said 'no thanks' if their accountant told them of a legal scheme to save a lot of tax."

Exactly. We seem to have imported a lot of high horses in the last couple of days.

Thu, 2012-06-21 13:29 — Barrie J (not verified)

Cameron was right to say it but the Tory Party is brim full of tax dodgers.
Hope to hear the Opposition naming them in Parliament.

Thu, 2012-06-21 13:19 — Fraziel1

He was right as it stinks. Hopefully now he will go after the tory tax dodgers. Mind you i would still have a politically inept David cameron over a geeky elitist liberal leftie member of the chattering classes who has never had a proper job in his life.

Thu, 2012-06-21 15:01 — Benjamin Rae (not verified)

Can I just check something with you Fraziel? Do you describe yourself as a supporter of Scottish independence and the SNP? You seem very comfortable with what is a a very unsavoury right wing government . You know the consider themselves to a social democratic party?

Thu, 2012-06-21 13:47 — Dark Heart of Toryland (not verified)

What is Cameron if not an elitist? And when did he ever have a 'proper job', before becoming leader of the opposition? (Admittedly, we might differ over definitions of what constitutes a 'proper job') And as for chattering classes, what does Cameron's Chipping Norton set amount to - albeit smug, complacent and over-privileged right-wing chatterers, rather than liberal lefty chatterers? I, for one, would prefer Jimmy Carr over - say - Rebekah Brooks or Jeremy Clarkson any day. Now, Rebekah Brooks' and Jeremy Clarkson's tax affairs: there's an interesting topic for investigation.

Thu, 2012-06-21 14:37 — Des Demona (not verified)

Jeremy Clarkson? Mmmmmm well not even touching his earnings from books, colums, etc -this is how he handles his Top Gear earnings.
He has a third share of Bedder 6 - the production company making and licensing the programme. In the last accounts the company paid 6 mill in dividends - netting him a cool 2 million on which a lower tax rate is paid than earned income. In addition he was paid a further 350,000k 'for services' i.e as self-employed not PAYE through employment with the company - thus giving him the opportunity to stash this who knows where in whichever avoidance scheme.
They are all at it and this focus on Carr is sheer hypocrisy.

Thu, 2012-06-21 16:27 — Anand Patel (not verified)

Not sure how you can judge Clarkson for running a company which produces a TV show, writes books, journalism, media events etc etc. he is clearly not an "employee" when he has significant control of the direction and production of the show. In this vain its wholly correct he is a company owner and shareholder of his company.

Incidently, the tax benefits are significantly smaller for dividend payments versus the didge that Carr used.

1. ALL company profits are taxed at 20% up to the first ~£300,000 and then 27% if higher
2. ALL divideds drawn are taxed at 20% (offset by the already payed Corp tax) up to the higher rate threshold (circa £44K) and then are liable for an additional 25% (on top of the 20% corp tax) so the difference between this and PAYE is closer to 10%

3. It is clear neither Clarkson nor Carr should be paid under PAYE as they both own businesses which do more than an "employee" type day job.

Thu, 2012-06-21 17:05 — Des Demona (not verified)

I think you are confusing the meaning of 'ownership. Just because someone is for example the managing director and major shareholder in a company doesn't mean they can't pay PAYE on income derived from that company. Clarkson could have paid nPAYE on the £350k annual payment for 'services' if he so chose. It is their choice not to, by taking taking payment in the form of dividends or loans. I'm afraid your point 3 doesn't hold water.

Thu, 2012-06-21 12:52 — Des Demona (not verified)

He may have been right to say it but the rank stench of hypocrisy permeates the words.
Dave's own Dad was far from averse to sticking his millions off shore. And don't get me started on Tory donors and UK Plc's whose COMI is allegedly a letterbox in Switzerland or Lichtenstein!
At least Carr had the decency to apologise - even if it is just to save his career.