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OSBORNE George official

Before the leak of MPs’ expenses to the Daily Telegraph, the Commons dragged its collective feet over publication.  In 2007, there was an attempt to exclude Parliament from the Freedom of Information Act.  In 2009, Harriet Harman tried to exempt the expenses from the Act.  In between, there was a long-drawn-out legal struggle involving the Commons authorities, MPs, the Information Tribunal and the High Court.  At the time of the leak, the principle of publication had been agreed, but a date for it had not.

The comparison between MPs’ expenses claims and MPs’ tax avoidance is in nearly every way a bad one, because the worst of the expenses scandal was criminal, and tax avoidance is always legal.  Furthermore, it is often encouraged by government (as in the case of, say, the new Lifetime ISA) and often the right course for taxpayers to take.  There is no obligation on people who fill in a tax return to maximise their return to the Exchequer, and those who suggest otherwise are not always in the best position to do so.  Consider the Guardian‘s long history of tax avoidance, which stretches all the way back to its foundation.

None the less, the parallel is in one sense suggestive.  David Cameron’s decision to publish his tax return was not simply an individual one.  It has implications for all Government Ministers, and perhaps for all MPs too.  So it is that the consequences of publication are now rippling out from Number 10 to disturb other Ministers and Parliamentarians.  George Osborne is now under pressure to make his own tax return public.  As I write, he is stalling – or, if you prefer, dragging his feet.  This gambit is unlikely to be successful.  If the Chancellor publishes, his Cabinet colleagues will surely have to do so as well, and probably all MPs in due course.

There is a case either way.  On the one hand, it can be argued that the time has come for all Parliamentarians to publish their tax returns, for the simple reason that voters now expect it.  On the other, it will be said that a man or woman’s tax return is private business, and that the publication of MPs’ returns has ominous implications for everyone else – let alone for the willingness of able people to stand for Parliament in the first place.  Our view is that even if these are over-hyped or don’t exist at all, the privacy principle is paramount.  But whatever your view, the political implications for Cameron and his government of the events of the last week are baleful.

As with expenses, the Government is stalling. Amber Rudd was sent out yesterday for this purpose.  Penny Mordaunt has indicated that MPs may indeed have to publish.  Ruth Davidson has done so already: our columnist of course is not an MP, but is no less senior a figure within the Party than its leader in Scotland.  But it is certain that not all MPs will agree with Mordaunt or sympathise with Davidson.  As Mark Wallace wrote yesterday, many Conservative ones will grumble that the prospect could have been avoided had Cameron not bungled his response to the leak of the Panama Papers.  That they may be wrong makes their resentment no less real.

This is a dangerous position for the Prime Minister to be in, amidst a referendum campaign in which roughly two in five of those MPs oppose his own position.  There is more.  MPs are already being caught up in preparations for the fourth Money Laundering Directive.  The details are complex, but the point is simple.  Some MPs and their families are already being treated as “politically exposed persons” by banks in anticipation of the directive coming into force.  During a recent Commons debate, Pauline Latham complained of being obliged to provide proof of her address, Craig Mackinlay of being subjected to an intrusive interview, and Heather Wheeler of having two bank accounts closed.

“Today I am discussing politically exposed persons,” Charles Walker told the Commons, “but tomorrow I could just as easily be discussing the aggressive application of these requirements in relation to my constituents, their businesses and their families. The Government must act now to end this nonsense across the piece.”  The department responsible for implementing the directive is the Treasury.  Osborne will be thus be held responsible by his colleagues for the implementation of what Harriet Baldwin, the Treasury Minister who replied to the denate called, “extend[ing] the regime so that domestic PEPs will also be subject to enhanced due diligence across the board”.

To put it plainly, many Tory MPs will not thank Cameron and Osborne if there is a push to force the publication of their tax returns while some are hassled about their banking facilities, with their families feeling the same pressures.  During the expenses scandal, the leadership was in a strong enough position to demand repayments and even compel MPs to stand down.  Matters are different now.  Any attempt by Downing Street to compel Conservative MPs voluntarily to publish their returns would be resisted.  Legislation would surely drag other “top people” – judges, generals, civil servants, and the like – into the net. This one will run and run, or rather stagger, lope and crawl.

150 comments for: Cameron, Osborne, Ministers, MPs, tax returns – and the fourth money laundering directive

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