Tax: what's a fair share?

The Public Accounts Committee is back on the tax trail.

And so the Public Accounts Committee (PAC) is back on the tax trail. Although did it ever really stop? Certainly, despite the upbeat assessments of the economy made by outgoing Bank of England governor Sir Mervyn King, the pressures on public and private purses haven’t eased. This explains the strength of public feeling that everyone should contribute a fair share of income in taxation. The tricky bit, as the PAC is discovering, is that working out exactly what constitutes a fair share isn’t as straightforward as it might seem.

Having previously called in the tax partners of the Big Four accountancy firms and the heads of companies already publicly called out for not coughing up as much to Treasury coffers as they might (step forward the apparently unholy trinity of Google, Amazon and Starbucks), this round of committee sessions will see some of the same faces hauled back in to answer many of the same questions.

Earlier this week I was at an event where one senior member of the committee was less than positive about the current direction the committee is taking.

He didn’t seem to agree that this fixation on the effective corporation tax rates of firms who decide to base their head quarters overseas was the best use of the committee’s time and resources.

Elsewhere this week tax campaigners UK Uncut Legal Challenge failed in their bid to bring HMRC to book for what UK Uncut claimed was an unlawful deal struck between HMRC and Goldman Sachs.

In dismissing the case the judge agreed that the deal had not been HMRC’s finest hour but he found nothing unlawful about it. To some extent UK Uncut has achieved some of its objectives by bringing the issue of the way big business deals with HMRC into the spotlight and raising the profile of the Goldman’s case in particular. For its part, HMRC continues to deny claims that it is soft on big business.

But getting money out of most large organisations and wealthy individuals is tougher than it should be. And it is certainly tougher than chasing small business owners. In reality, striking a deal with wealthy corporations or individuals might end up being the quickest, simplest and most cost-effective approach to collecting revenues. Ideally this agreement would be one that displeases the entity paying tax more than it does HMRC (although one that displeases both sides a little is probably the most likely outcome). While such an approach may well be cost effective, without the disinfectant of greater transparency such deals will always stink a bit.

Two phrases that have been bandied around so much in the last 18 months that they are rapidly becoming cliché are that we need greater transparency, and that we need a simpler tax system.

Whether Google, Amazon, Goldman Sachs or anyone else with tax affairs complex enough to involve a potential settlement with HMRC has anything to hide or not, the mere fact that details are kept out of the public eye raises suspicions.

The tax affairs of individuals and corporates are between them and HMRC, but if they opt out of the system that the small business owner or the proverbial hard-working family has to settle for then they should do so in the knowledge that the details of the settlement will be made public.

This article first appeared on economia

Photograph: Getty Images

Richard Cree is the Editor of Economia.

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Absolutely Fashion showed what fashion week is really like: nasty, brutish and short

With fake meetings about fake covers, the documentary gave a glimpse into the abyss at the heart of the fashion world.

London Fashion Week is the sad little sister of the one in Paris, where I once attended a Valentino couture show dressed by Gap, watched what looked like live-action anorexia nervosa at Armani and got into a fight at Chanel. Did a man wearing a lion’s head on his real head look stupid? Yes, said I. No, said the fashion ­journalist, with fury.

Fashion Week had a small elegy this year – a BBC2 documentary called Absolutely Fashion: Inside British Vogue, which was fantastically misnamed. There is nothing inside Vogue, except a vague groping for novelty, which is technically an abyss. But that did not stop the programme’s director, Richard Macer, from sitting in Vogue House for nine months, watching women smell each other’s mascara. In the way of a certain type of media, he seems to have emerged more ignorant than when he began. This is the central principle of fashion: stupefy the buyer and she will pay to be reborn as something uglier.

“He doesn’t understand fashion,” said one critic, which I think meant: “He should have licked Karl Lagerfeld’s shoes while crying about belts.” To this critic, that is understanding fashion. It is a religious hierarchy. (That no one has asked Lagerfeld what he has done to his face, and why, proves this. When I met Lagerfeld in Paris, he was behind a velvet rope. I wondered if he sleeps with it.) Macer is a sexist, suggested another critic, who seemed to think that any industry that employs women in large numbers – human surrogacy farms, for instance, or Bangladeshi textile factories, or German super-brothels – is feminist. This is the stupidest definition of feminism I have yet heard and I have fashion to thank for it.

Macer was too frightened to ask questions about exploitation, pollution or the haunting spectacle of malnourished adolescents inciting self-hatred in older females in pursuit of profit, and he is not alone. I read no insights about London Fashion Week, but I do not care about clothes. He was so cowed by his access as to be undeserving of it, and Absolutely Fashion was as much about the laziness and commercial imperatives of modern journalism as it was about fashion, from which we should expect nothing.

Macer had a tiny scoop: British Vogue learned that American Vogue was running a cover of the singer Rihanna in the same calendar month. It decided to run early and people stayed up all night anxiously repaginating. He had the opportunity to ask Anna Wintour, the editor-in-chief of the US magazine, about it, but a staffer begged him not to. So he didn’t. He segued from journalist to PR. He drank the opiate – and I understand this, because if you don’t, you won’t survive. “Come again,” Jean Paul Gaultier once told me in Paris. His meaning was: “. . . but only if you love my clothes”.

In one scene, the actor Hugh Jackman was photographed in a bathtub at Claridge’s Hotel in London. He was fully clothed and looked marginally more stupid than he does dressed as the genetically mutated wolf man Wolverine, but that is not the point. “Come and see how handsome you are, Hugh,” cooed a Vogue woman. I wouldn’t have minded Jackman preening over an image of himself in private, but this exposed a truth: some journalism is celebrity PR.

Elsewhere, Kate Moss did a shoot wearing clothes that belonged to the Rolling Stones. It was based, she said, on a well-known shoot that they once did “in exile”. She meant tax exile, which was funny.

That Vogue, which is still, at least nominally, a magazine, should devote itself to this junk is not excused by an intellectual curiosity so dulled that one executive said that New York Fashion Week had “a sort of Lego element to it”.

British Vogue is edited by Alexandra Shulman, and in the manner of print media with long-standing editors – she has been there for 24 years – it is, in essence, a cult. In this case, a passive-aggressive-ocracy. (People are always surprised to learn that magazines are tyrannies, but there it is.)

I do not know whether Shulman wanted Macer there or not, or whether she didn’t have the clout to stop it, but once he was in, she treated him with the bored derision of a woman contemplating a ball gown chewed by moths. Shulman has the face of a woman who should get out while she can. In her only revealing scene, she had to choose between two front covers. One was “artistic” because it showed Kate Moss’s knickers; the other was unthreatening because it showed only Kate Moss’s face. “My heart is never allowed to rule,” she said, and she laughed. But I think she meant it.

She lied to Macer, too, holding fake meetings about fake covers so the world would not learn that Vogue had, by its cracked standards, a huge scoop: the Duchess of Cambridge would appear on the cover of the 100th-anniversary issue in a hat.

Absolutely Fashion also taught us, had we not known, that fashion is peopled by privileged creatures who are impervious to the extent of their privilege and who are, therefore, bad journalists, because they cannot even effectively interview themselves. For instance, the photographer Mary McCartney, one of Paul’s daughters, told Macer that she had never got work because her father was a member of the Beatles.

To be oblivious to reality is essential in fashion. Everyone is equal under the skirt. Yet McCartney flourishes because of the doctrine of the age: the already prosperous are more worthy of prosperity.

Not everyone seemed so disingenuous. One woman described the search for the non-existent novelty as “exhausting”. She no longer believed in the cult.

Absolutely Fashion, if you watch it critically, is more interesting than Macer perhaps allowed himself to dream. In its way, it embodied any fashion week anywhere: nasty, brutish and short. 

This article first appeared in the 22 September 2016 issue of the New Statesman, The New Times