Fair Tax Mark: Westminster Hall debate and ‘inequality of opportunity to avoid tax’

Caroline Lucas MP and David Gauke, the exchequer secretary, debated the Fair Tax Mark in Westminster Hall yesterday. The debate was sparsely attended but that is not necessarily a sign of a lack of interest. MPs as well as everyone else can now watch debates live – or later, on demand – on the Parliament TV website. Yesterday’s first transcript was published within three hours.

Here is the Hansard transcript of the short debate, which gave us the first indication of the government’s stance on the FTM initiative.

Gauke said, among other things:

“I welcome any contribution that informs and progresses the debate about transparency and a better understanding of the taxes paid by companies. We welcome any business moving to improve the transparency of its own tax affairs. Indeed, as a Minister I have made the point for at least three years that companies must do more to explain the tax that they pay and some of the complexities of their situation, which can be lost in a febrile public debate. They must be much more open and transparent in explaining their arrangements, because it would be to the benefit of all companies if people understood such matters better. Often, companies’ silence leads to suspicion, whether well-founded or not.

“The specific proposal for a fair tax mark is a new initiative – let us see how it works. I generally welcome anything that progresses the debate. If such an initiative is to work effectively, clear and objective criteria must be in place and must be applied fairly and objectively by informed and credible experts who are well respected by business and the wider public. There must also be a governance structure that addresses any concerns about conflicts of interest and ensures independence. If the fair tax mark can meet those tests, it will be a particularly valuable contribution to the debate.”

Meanwhile, on the L4BB (Lawyers for Better Business) blog David Quentin, a tax barrister and a member of Fair Tax Mark’s advisory panel, argues that “ideals such as ‘equality before the law’ need to be properly contextualised in a world where wealth and power are unequally distributed”.

He adds: “It is worth bearing in mind the inequality of opportunity to avoid tax when you hear someone say that tax avoidance is ‘legal’ and that the ‘rule of law’ is the paramount consideration when addressing it.”