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.

Getty
Show Hide image

Donald Trump vs Barack Obama: How the inauguration speeches compared

We compared the two presidents on trade, foreign affairs and climate change – so you (really, really) don't have to.

After watching Donald Trump's inaugural address, what better way to get rid of the last few dregs of hope than by comparing what he said with Barack Obama's address from 2009? 

Both thanked the previous President, with Trump calling the Obamas "magnificent", and pledged to reform Washington, but the comparison ended there. 

Here is what each of them said: 

On American jobs

Obama:

The state of our economy calls for action, bold and swift.  And we will act, not only to create new jobs, but to lay a new foundation for growth.  We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together.  We'll restore science to its rightful place, and wield technology's wonders to raise health care's quality and lower its cost.  We will harness the sun and the winds and the soil to fuel our cars and run our factories.  And we will transform our schools and colleges and universities to meet the demands of a new age.

Trump:

For many decades we've enriched foreign industry at the expense of American industry, subsidized the armies of other countries while allowing for the very sad depletion of our military.

One by one, the factories shuttered and left our shores with not even a thought about the millions and millions of American workers that were left behind.

Obama had a plan for growth. Trump just blames the rest of the world...

On global warming

Obama:

With old friends and former foes, we'll work tirelessly to lessen the nuclear threat, and roll back the specter of a warming planet.

Trump:

On the Middle East:

Obama:

To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect. To those leaders around the globe who seek to sow conflict, or blame their society's ills on the West, know that your people will judge you on what you can build, not what you destroy. 

Trump:

We will re-enforce old alliances and form new ones and unite the civilized world against radical Islamic terrorism, which we will eradicate completely from the face of the earth.

On “greatness”

Obama:

In reaffirming the greatness of our nation we understand that greatness is never a given. It must be earned.

Trump:

America will start winning again, winning like never before.

 

On trade

Obama:

This is the journey we continue today.  We remain the most prosperous, powerful nation on Earth.  Our workers are no less productive than when this crisis began.  Our minds are no less inventive, our goods and services no less needed than they were last week, or last month, or last year.  Our capacity remains undiminished.  

Trump:

We must protect our borders from the ravages of other countries making our product, stealing our companies and destroying our jobs.

Protection will lead to great prosperity and strength. I will fight for you with every breath in my body, and I will never ever let you down.

Stephanie Boland is digital assistant at the New Statesman. She tweets at @stephanieboland