Cameron's tax crackdown undermined as Lawson accuses him of "prancing around"

The former Tory chancellor says that the government is "getting nowhere slowly" on reducing tax avoidance by multinationals.

David Cameron has long sought to present reducing tax avoidance as a priority of the coalition. While cutting taxes for high-earners (with the reduction in the top rate of inncome tax from 50p to 45p) and reducing corporation tax to the joint lowest level in the G20 (it will stand at 20% in 2015, down from 28% in 2010), he argues that the government is committed to ensuring that all pay their fair share. By ending the mass avoidance (and evasion) that existed under Labour, the Tories and the Lib Dems claim that they can raise more revenue from lower rates. 

Cameron will return to this theme today with the announcement of a new public register designed to reveal the true owners of the anonymous "shell" companies associated with tax evasion. "For too long a small minority have hidden their business dealings behind a complicated web of shell companies," he will tell the Open Government Partnership in London. 

But the PM's anti-avoidance drive has been undermined by an unlikely source. In a debate in the House of Lords last night, Nigel Lawson accused the coalition of "prancing around", rather than making the changes needed to ensure that large corporations pay their dues. The former Tory chancellor warned that multinationals "shift their profits and their intangible assets around the world in such a way that they pay little or in some cases no UK corporation tax at all", while "small and medium-sized enterprises" face "the full rigour of corporation tax". 

He went on:

It is a totally inequitable system. So what is the government doing? Just prancing around saying we are talking about with our opposite numbers from other OECD countries and other European countries and goodness knows what.

They love going to these conferences and they happily make statements that they have reached a great understanding and a great agreement but the problem is just the same, it hasn’t gone away.

Lawson proposed that the government should introduce a new system with separate taxes on profits and sales to ensure that companies like Starbucks, Google and Amazon make some contribution. He said: "God forbid that the United Kingdom should take a lead and introduce a sensible tax system of its own which would probably comprise a very low level of corporation tax - tax on corporate profits - and perhaps a low level of corporate sales tax, because sales are where they are and sales in this country are sales here which we can tax here.

"But more than anything else we should be taking a lead. I have to say to the government that you are not even getting nowhere fast - you are getting nowhere slowly."

Labour, meanwhile, has welcomed the announcement of a public register, while highlighting the rise in uncollected tax to £35bn and the failure of the government's Swiss tax deal to raise anything close to the promised amount. After George Osborne booked £3.1bn from the agreement, it has so far raised just £440m. 

Nigel Lawson said of ministers and tax avoidance: "they love going to these conferences and they happily make statements". Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Grant Shapps on the campaign trail. Photo: Getty
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Grant Shapps resigns over Tory youth wing bullying scandal

The minister, formerly party chairman, has resigned over allegations of bullying and blackmail made against a Tory activist. 

Grant Shapps, who was a key figure in the Tory general election campaign, has resigned following allegations about a bullying scandal among Conservative activists.

Shapps was formerly party chairman, but was demoted to international development minister after May. His formal statement is expected shortly.

The resignation follows lurid claims about bullying and blackmail among Tory activists. One, Mark Clarke, has been accused of putting pressure on a fellow activist who complained about his behaviour to withdraw the allegation. The complainant, Elliot Johnson, later killed himself.

The junior Treasury minister Robert Halfon also revealed that he had an affair with a young activist after being warned that Clarke planned to blackmail him over the relationship. Former Tory chair Sayeedi Warsi says that she was targeted by Clarke on Twitter, where he tried to portray her as an anti-semite. 

Shapps appointed Mark Clarke to run RoadTrip 2015, where young Tory activists toured key marginals on a bus before the general election. 

Today, the Guardian published an emotional interview with the parents of 21-year-old Elliot Johnson, the activist who killed himself, in which they called for Shapps to consider his position. Ray Johnson also spoke to BBC's Newsnight:


The Johnson family claimed that Shapps and co-chair Andrew Feldman had failed to act on complaints made against Clarke. Feldman says he did not hear of the bullying claims until August. 

Asked about the case at a conference in Malta, David Cameron pointedly refused to offer Shapps his full backing, saying a statement would be released. “I think it is important that on the tragic case that took place that the coroner’s inquiry is allowed to proceed properly," he added. “I feel deeply for his parents, It is an appalling loss to suffer and that is why it is so important there is a proper coroner’s inquiry. In terms of what the Conservative party should do, there should be and there is a proper inquiry that asks all the questions as people come forward. That will take place. It is a tragic loss of a talented young life and it is not something any parent should go through and I feel for them deeply.” 

Mark Clarke denies any wrongdoing.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.