Euan McColm: Cameron, tax avoidance and the G8
We’re furious about them, the Amazons and the Starbucks, with their cheap books, their three-for-two blu-ray movies, and their frothy coffees that we’re definitely going to boycott, even as we watch our ten quid Sopranos box sets and slurp our hazelnut lattes.
Our outrage is real enough, however, for politicians to see tackling the avoidance of tax by business and the wealthy as a priority. In these times of global recession, failure to pay a fair share seems doubly repellent. Concern over business practices – in good times, restricted by and large to the far left – reaches the mass market when financial pain is felt more widely.
Tomorrow, Prime Minister David Cameron will open the G8 Summit in Northern Ireland with tax avoidance top of his personal agenda. Across two days of meetings of the leaders of the UK, US, France, Germany, Italy, Japan, Canada and Russia in County Fermanagh, Cameron will try to reach an agreement to crack down on the use of tax havens by big businesses.
The Prime Minister aims to win support for action to close the sort of cross-border schemes (such as setting up a “headquarters” in a lower tax state while doing business elsewhere) that let companies – quite legally – avoid many millions in payments to the revenue.
Taking on “big business” is perhaps not the instinctively Tory thing to do, but Cameron is right to have made the decision to deal with tax avoidance. It’s more important for him to catch the public mood than the Tory one, at the moment.
The dissent in his ranks – specifically over Europe and gay marriage, generally over a belief among a substantial section of the Conservatives that Cameron cares little for any of the party’s traditions – can wait. Anyway, that problem may become less of a concern if Cameron has a good G8, if he displays some big, primary colours leadership.
The Labour party may be leading the Conservatives in UK polls, but the gap has narrowed considerably. In February, Labour was 14 points ahead, now it’s five.
Ask senior Tory or Labour politicians why this is and, more often than not, the answer will come back: Ed Miliband. Friend and foe predict, in greater numbers than should be at all comfortable for the leader of the opposition, that Miliband isn’t, regardless of current polling, a man voters will choose to be prime minister, not when they apply the unscientific “when push comes to shove” test.
That Labour lead of five points should be a damn sight larger in the mid-term of a coalition government that’s cutting social security while presiding over a stagnant economy. And if Miliband is to blame for Labour’s underperformance in the opinion polls, Cameron’s G8 could further diminish the gap between their parties. The summit, after all, provides a platform for Cameron at his best.
If we bravely defy the tyranny that says the Prime Minister must be a Tory of the “same old” variety, don’t we have to concede the larger stage and the bolder play suit him? He might not enjoy the support of all of his backbenchers but, when it matters, Cameron – much like former Labour PM Tony Blair – has the knack for getting the tone right.
Take his response to the killing of solider Lee Rigby in Woolwich. In the immediate aftermath of that terrible act, Cameron was faultless in his response, calm and reassuring. Last year, answering for the government on the inquiry into the Hillsborough disaster in which 96 football fans died, Cameron was unrecognisable as a Tory of popular imagination. His condemnation of the abuse of power was righteous and his apology on behalf of the Government convincing.
And, in driving through the legalisation of equal marriage rights for gay couples in the face of substantial opposition from his own MPs, Cameron was the counterintuitive Tory his party needed if it is ever to persuade centre ground voters that it has changed.
In each of these cases, it’s difficult to imagine Miliband having taken greater leadership or shown more authority. If a Labour party member tells you otherwise, she’s lying or confused.
So Cameron delivering news of agreement between world leaders to take meaningful action against tax avoiders could devastate that Labour lead. If he can present a victory for fairness come close of play on Tuesday, Cameron will also have made life more difficult for those from inside his party who’ve become openly hostile in their criticism.
It’s worth remembering that the adage about politics being showbusiness for ugly people is rarely more true than when it comes to large summits of the G8 and G20 variety. There is an expectation among voters that these meetings will deliver “progress” on important issues and a great deal of pre-summit negotiation takes place to ensure that agreements will be reached. Nobody wants any nasty surprises. To a great extent, outcomes are pre-designed. It’s like WWE wrestling with slightly less sweating.
With this in mind, we should play close attention to the detail of agreements reached. The tax affairs of insatiable multinational companies won’t be restructured after two days of carefully choreographed meetings, so let’s be careful to examine what does emerge for real substance.
He’s an intriguing fellow Cameron. Those issues on which he performs best are often ones that should be more comfortably the territory of the opposition.
Some Tories may be concerned about the Prime Minister going after tax avoiding companies. That’s understandable. But they should be patient because Labour is the party with most to lose from David Cameron’s crusade.