Margaret Hodge shrugs off “tax prat" line

Interview with the PAC chairman.

It’s been an interesting year for tax, and in particular the debate about where the line is drawn between legitimate tax planning and aggressive avoidance. The focus on whether everyone is contributing their fair share is a consequence of austerity and is being played out all around the world, where every pound, dollar and euro of income is more valuable than ever.

In the UK, the Public Accounts Committee (PAC), the body responsible for shining a light into the murkier corners of government finance and making sure taxpayers get value for money, has been at the heart of this debate. The current chairman of the committee is Lady Margaret Hodge. Lady Hodge (the title comes from her second husband) is proud of the PAC’s work on tax, a project it kicked off after a whistleblower reported a so-called sweetheart deal between Goldman Sachs and HMRC. In getting the committee to focus on the issue, Hodge has turned tax into something of a personal crusade.

In the process she rounded on tax advisors, including accountants and lawyers, who devise tax-minimising schemes. The PAC hauled the top tax partners at the Big Four in for a challenging session. In the process she has earned the ire of parts of the profession. Taxation dubbed her its “Tax Prat of the Year”, in a cover story that challenged almost every aspect of the PAC’s report.

Sitting in her Westminster office, Hodge shrugs off the “tax prat” line and claims she doesn’t have a view about the accountancy profession as a whole. “There are people who do a good, honest job. But there is a divide. There are others, in accountancy and the legal profession, who take a different view to mine about the role of tax in society.”

Anyone who has followed the work of the PAC, or indeed who has followed Hodge’s career, won’t be surprised to hear her mount a passionate defence of the positive redistributive role of tax.

“There is a civic duty on all of us to contribute according to our means to the common good,” she says. “In very practical ways all your readers want a public transport system that works and want the realm defended and so on. Even if you can manage on your own and don’t need the support of the state, there are all sorts of things you want from the state and there is a moral imperative to pay a fair contribution to society.

"I know there are people who don’t think that way, I just disagree with them.”

Hodge admits the PAC stumbled onto tax avoidance as an area for investigation, but she is clear why it has become such a defining issue.

“The reason it’s become a big issue is because we’re living in hard times and everyone is feeling the pinch. People want to know everyone is paying a fair share. And it is about fairness. There are those who see tax as just a legal obligation, but I don’t agree. There are legal obligations, but they arise out of a civic duty.”

The rest of this interview can be read on economia.

Margaret Hodge MP. Photograph: Getty Images

This is a news story from economia.

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George Osborne takes up job at BlackRock - but what does it mean for politics?

The former Chancellor insists he hasn't forgotten about the Northern Powerhouse.

George Osborne is to take up a part-time role at asset management giant BlackRock.

The former Chancellor is understood to have been hired by the chief executive of the world's biggest investor, Larry Fink. He will be working alongside his former economic adviser Rupert Harrison.

The appointment has been approved by the Independent Appointments Committee and Osborne intends to continue as a backbench MP.

He said: "I am excited to be working with the BlackRock Investment Institute as an adviser. BlackRock wants better outcomes for pensioners and savers - and I want to help them deliver that. It's a chance for me to work part-time with one of the world's most respected firms and a major employer in Britain. 

"The majority of my time will be devoted to being an MP, representing my constituents and promoting the Northern Powerhouse.  My goal is to go on learning, gaining new experience and get an even better understanding of the world."

Once tipped as a future Prime Minister, Osborne's career ambitions were stymied after he backed Remain in the EU referendum and was sacked in Theresa May's Cabinet reshuffle. Whether he will find the halls of fund managers more comfortable than the green back benches is yet to be seen, but for now he has been clear he intends to continue his constituency duties. 

He will work at the BlackRock Investment Institute, which researches geopolitical, technological and economic trends. 

He is expected to provide insights on European politics and policy, Chinese economic reform, and trends such as low yields and longevity and their impact on retirement planning. 

While the pay packet has not been officially confirmed, Sky News quoted a source saying it would be hundreds of thousands of pounds.

But the move will also place a pro-Remain former Chancellor at the heart of the City of London, just as his Tory front bench is losing its support over Brexit negotiations.

Speaking shortly after the EU referendum vote, BlackRock chief executive Fink said he "didn't get a lot of sleep" the night of Brexit, and that the decision had led to greater uncertainty. 

 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.