After unveiling an anti-tax avoidance deal with the Swiss two weeks ago, the day before the budget, with the self-righteous puff “I regard tax evasion as morally repugnant”, Osborne is now under pressure to backtrack fast. What he did not say is that the tax rate he negotiated with the Swiss authorities that would be payable by rich UK nationals hiding their gains in Zug and other Swiss tax havens would be between 21-34% and that he would accept that HMRC would continue to be denied access to details of the owners and size of these accounts.
The Swiss finance authorities, not to mention the super-rich UK account holders, must have been laughing all the way to the bank. Now it is revealed that the German government, forced by SPD-run regional parliaments, has obtained a deal with the Swiss whereby rich German nationals with accounts in Switzerland will have to pay tax at 41%, nearly double the UK rate.
You might have thought that Osborne, though embarrassed, would be delighted at the bigger tax take for the Exchequer that this would generate since a clause in the current tax agreement with Switzerland allows the UK to benefit from better terms negotiated by Berlin. You would be wrong. It is clear from initial Treasury comments that Osborne is wriggling to find a way to get off this pin, even though the Treasury has itself estimated that taxes on Swiss accounts could raise no less than £5bn for the UK Exchequer even if the anonymity of UK account holders remains undisturbed (when of course a pincer movement with the Germans and other countries should be relentlessly exerted against the Swiss government to force them to open up).
That should not surprise anyone. Osborne has been the most pro-rich Chancellor in modern British history. He gave away £3bn to the UK 1% richest, even at the high political price of making 4.5 million pensioners pay for it, and has made clear he intends, as they say, to go all the way – with another 5% cut to 40%. He has doubled the Corporation Tax cut which is mainly a gift to large corporate shareholders (since companies already have £700bn in cash, unused).
He has blocked any meaningful banking reform and has postponed the feeble action he is taking to 2019, no doubt because half of all Tory funding comes from the banks. And as we now happen to learn from the regulatory filings by Amazon.com with the US -SEC (what other mountain of relevant detail is still kept secret by other companies?), Amazon generated £7-10bn sales in its UK market over the past 3 years, yet paid no Corporation Tax. Why? Because Amazon moved the ownership to a Luxemburg company in 2006. Did Osborne chase this (or no doubt hundreds of other similar cases? You must be joking – if he had done that and recouped the revenues due, the Tories would have had no excuse to skin the poor and shrink the welfare state.