The cautionary tale of the 79-year-old tax dodger

How much of George Osborne's pledge to cut tax evasion is chest-thumping?

UK chancellor George Osborne has unveiled a budget full of detail on government plans to crack down on tax evasion. The UK government has been banging its drum for some time on the topic, but now it’s released some firm detail on what it intends to do, and in particular its offshore strategy. The question is how much of this is chest-thumping and what will it actually mean?

Here, like in many other areas, it’s useful to see what the US is doing and it’s clear that the UK has taken its lead from across the Pond. The US has had significant success putting the fear into US citizens with assets abroad. The US Internal Revenue Service has netted more than $5bn in back taxes, interest and penalties since 2009. This included the conviction of a 79-year-old former offshore account holder, Mary Estelle Curran, who was fined $21m having failed to report tax of $667,716 on her undeclared offshore accounts (although the accounts did hold $41m so she wasn’t left destitute by the fine!). The HMRC has outlined plans to use similar name and shame tactics to get the desired result.

The message the government and HMRC are trying to send is clear: the government is doing its worst to be a big bad monster and force tax-dodgers to quake in their boots and fess up. The government says it will ‘name and shame’ not only avoiders, but those who help them all – or as David Cameron referred to them in Davos earlier this year: “the travelling caravan of lawyers, accountants and financial gurus”. The aim is to bring in an extra £4.6bn in taxes over the next five years and the tax exchange agreements recently agreed with Jersey, Guernsey and the Isle of Man are expected to bring in more than £1bn of that over the same period.

This seems like a modest amount, and it would be entirely realistic to see this figure edge higher. According to global wealth consultancy WealthInsight the amount of offshore funds held in the UK and Channel Islands by local clients’ stands at about £515bn. Osborne’s figure of £1bn is, therefore, a tiny drop in this ocean of offshore money.

However it’s important to remember that this kind of rhetoric about tax dodgers is not new. Governments have been talking about it for the past seven years, although it’s only now that the regulatory machinery has caught up. There’s little doubt the smart money has already moved to become transparent – those caught in the coming years are likely to be those without Cameron’s ‘caravan’ of sophisticated advisers.

Still it’s important not to underestimate to what lengths the tax authorities will go to claw back revenue. Since 2010 the HMRC has spent £1bn on tax gathering including employing an extra 2,500 staff by 2014-15. And the HMRC is not just targeting high flyers; it recently released a list of evaders who had avoided £25,000 or more. The writing is on the wall. The government coffers need any penny they can scrape together and the HMRC is set to go to what may seem like extreme lengths to claw back all it can get from its taxpayers, at home and abroad.

George Osborne. Photograph: Getty Images
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Michelle Obama's powerful speech demolishes Donald Trump without even mentioning his name

This is one speech he won't be able to steal. 

After her stirring speech at the Democratic Convention, Michelle Obama can be sure of one thing - Melania Trump won't be able to copy it.

Obama, like her husband, is a fine orator, so much so that the wife of Republican nominee Donald Trump was widely suspected of borrowing from her speeches.

But those who crowded into the audience on Monday night could be sure of the real deal. 

Obama did not mention Trump by name, but in an implicit criticism of him, she spoke passionately about the responsibilities of the Presidency, and how the United States had moved on since the days of slavery and oppression. 

The Obamas knew their kids were watching them, she said: "We know that our words and actions matter." 

And in a reference to Trump's Twitter obsession, she declared: The issues a President faces "cannot be boiled down to 140 characters".

Obama, whose husband fought a fierce campaign against Hillary Clinton to clinch the Democratic nomination in 2008, now heaped praise on his former rival. 

Clinton was a "true public servant" who "did not pack up and go home" after losing to Obama in 2008, she said. She had carried out "relentless, thankless work" to actually make a difference in children's lives. 

And she reminded the audience the Presidential election was not just about left-right politics: "It is about who will have the power to shape our children for the next four or eight years of their lives."

But the African-American First Lady's most powerful statements were a reflection on race, gender and social mobility - issues far outside of Trump territory. 

In a reference to Clinton's 2008 concession speech, where she talked of making "cracks in the glass ceiling", Obama declared: 

"That is the story of this country, the story that has brought me to this stage tonight, the story of generations of people who felt the lash of bondage, the shame of servitude, the sting of segregation, but who kept on striving and hoping and doing what needed to be done so that today I wake up every morning in a house that was built by slaves.

"And I watch my daughters, two beautiful, intelligent, black young women playing with their dogs on the White House lawn.

"And because of Hillary Clinton, my daughters and all our sons and daughters now take for granted that a woman can be president of the United States."

She also recalled the little black boy who made headlines around the world when he visited the White House and asked the President: "Is my hair like yours?"

Obama's calm but intense delivery brought the packed arena to its feet, and earned her several standing ovations. Bill Clinton, former President and husband of Hillary, was seen to say "wow" from his place in the audience.

She ended with a final dig at Trump's slogan "Make America Great Again". Obama told the crowd:

"Don’t let anyone ever tell you that this country isn’t great, that somehow we need to make it great again. 

"Because this right now is the greatest country on earth."

Michelle Obama's speech: The best quotes

On Obama's 2008 victory

I will never forget that winter morning as I watched our girls, just 7 and 10 years old, pile into those black SUVs with all those big men with guns.

And I saw their little faces pressed up against the window, and the only thing I could think was, what have we done?

On bringing up kids

We insist that the hateful language they hear from public figures on TV does not represent the true spirit of this country.

How we explain that when someone is cruel or acts like a bully, you don’t stoop to their level. No, our motto is, when they go low, we go high.

On Hillary Clinton

What I admire most about Hillary is that she never buckles under pressure. She never takes the easy way out. And Hillary Clinton has never quit on anything in her life.

On who shouldn't be President

When you have the nuclear codes at your fingertips and the military in your command, you can’t make snap decisions. You can’t have a thin skin or a tendency to lash out. You need to be steady and measured and well-informed.

On equality

I wake up every morning in a house that was built by slaves. And I watch my daughters, two beautiful, intelligent, black young women playing with their dogs on the White House lawn.

And because of Hillary Clinton, my daughters and all our sons and daughters now take for granted that a woman can be president of the United States.

On the US

Don’t let anyone ever tell you that this country isn’t great, that somehow we need to make it great again. Because this right now is the greatest country on earth.

You can read a copy of the full speech here.