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Intense relaxation: John McTernan and the freedom to not pay tax

Businessman pocketing cash - Image Copyright: <a href="">zestmarina / 123RF Stock Photo</a>Peter Mandelson famously declared himself “intensely relaxed about people getting filthy rich, as long as they pay their taxes”. His successors now appear intensely relaxed about the wealthy not paying their taxes at all. Senior Blairite John McTernan has responded to last weekend’s Panama Papers revelations by reassuring Telegraph readers that “tax avoidance is an expression of basic British freedoms.”

It also appears to be an expression of the basic Russian oligarch freedom to transfer huge kickbacks out of their country, and the inalienable right of dodgy Middle East politicians to set up shell companies in jurisdictions with banking regulations so light touch that they would make Gordon Brown blush, but let that pass. 

What really shocks is the way that a former senior aide to Tony Blair opens his piece with an approving quotation from Robert Nozick. In case that name doesn’t mean anything to you, let me offer some context here. A generation ago, the ideas of American philosopher John Rawls – translated into a British context by then-deputy leader Roy Hattersley – provided the underpinnings of the Labour right’s critique of the Labour left.

Young Bennites of the time scorned Rawls as a milquetoast who condoned continuing vast social inequality, on the grounds that in some circumstances, this was actually beneficial to the worst off. The response from the extreme free market right was to promote instead the ideas of Nozick, an off-the-scale libertarian wingnut who was Rawls’ main intellectual opponent within academia.

In his main work, Anarchy, State and Utopia, Nozick called for a minimal state “limited to the narrow functions of protection against force, theft, fraud [and] enforcement of contracts”, and the reintroduction of slavery, provided it was on a consensual and non-coercive basis.

Now the debate has come full circle, with McTernan openly bigging up Nozick as a means of undermining Jeremy Corbyn’s response to the Panama Papers issue. Of course, many articles from his quill evince an impish sense of humour, and I half suspect this outburst to be a deliberate wind-up, undertaken for the sheer pleasure of watching lefty heads explode. He would no doubt have been suitably amused at watching the contents of my cranium decorate the ceiling as I read the rant this morning. Either that, or he has twigged that Nozick is a name to reckon with in the Telegraph editorial offices, and he did it for the dosh.

But make no mistake of the significance of the name check. If McTernan was being remotely serious, he has sundered any meaningful claim to be a social democrat, and he may wish to reconsider whether Labour is the best vehicle to implement his philosophical vision. Thus we are told:

The left, traditionally, have believed that you can build a consensus of support for public services or specific institutions like the NHS and in that basis justify and raise taxation. The problem has been that for at last 40 years voters have disagreed with them. (…)

It is in this context that the leak of documents from Panama’s Mossack Fonseca should be understood. For all their harrumphing about illegal money laundering and tax evasion, the political classes see this as a chance to attack tax avoidance – or tax minimisation as it should really be called as it merely operates in those areas where paying tax is optional.”

Tax avoidance, McTernan avers,”is not merely legal, it is an entirely understandable human instinct.” What the “moralising left” is really exercised by is the desire for more power and “intimidation”. This is classic outer shores free marketeer stuff.

Instead, the non-moralising left – perhaps we might use the expression ‘the immoral left”? – should uphold “the expression of basic British freedoms” not to give the Inland Revenue a penny.

And of course, nobody likes paying tax. But what is missing from the analysis is any class dimension. In case McTernan hadn’t noticed, the positions of Nozick are not widely espoused by the UK electorate, which actually does want the state to do more than enforce contracts.

It wants governments, and in particular, Labour governments, to provide health, education and a welfare state, and accepts that taxation is needed to pay for it. The crux of the matter is, who stumps up?

Accordingly, there is widespread support for making the wealthy hand over more money. A YouGov poll in 2014 found that 61% of those questioned backed shadow chancellor Ed Balls’ advocacy of a 50% rate for those earning over £150,000. This was actually a highly popular policy, and I suspect similar numbers would be in favour of attempts to clamp down on tax avoidance.

The point here is that the ordinary voter gets tax and national insurance stopped from her pay packet. The double standard sticks in the craw, and the general feeling is that rich aren’t paying their fair share. This is a sentiment that Labour can and should tap, maybe even until the pips squeak.

After all, once the Mossack Fonseca papers are published, it is unlikely that British call centre workers, white van drivers and cleaners will feature heavily among that esteemed firm’s clientele.

In short, McTernan’s polemic represents more vapid nasty signalling of a very high order. His stance is not some mythical Third Way between untrammelled free market capitalism and the Old Left, it is highway one First Way politics that have little electoral appeal.

Next stop would appear to be Mr McTernan telling us he is intensely relaxed about Nozick’s desire for a return to slavery. Elvis has well and truly left the social democratic building.

Image Copyright: zestmarina / 123RF Stock Photo


  1. Danny Nicol says:

    Nozick espoused a theory whereby the justice of social arrangements has nothing to do with the way in which the total wealth and power of a society is distributed. He would presumably approve, therefore, of the EU’s liberalisation directives whereby the electricity sector, gas sector, postal sector, telecommunications sector and soon the railways too, cannot be renationalised. These directives could be repealed only by all 28 Member States acting together, which isn’t going to happen.

  2. who is John McTernan? It may be obvious to readers of the Daily TOrygraph, but for the rest of us knowing who their columnists are cannot be taken for granted.

    Trevor Fisher.

    1. David Pavett says:

      John McTernan was Tony Blair’s Director of Political Operations from 2005 to 2007. He was also a special advisor to Ministers in Gordon Brown’s Cabinet. He is known for his right-wing views and aggressive manner of putting them.

      While McTernan was employed as a special adviser to the Secretary of State for Scotland he sent an email to the then Labour MSP Karen Gillon, who was about to make a trip to Sweden in which he said

      If you’ve not been to Sweden before, I think you’ll really like it – it’s the country Scotland would be if it wasn’t narrow, Presbyterian, racist etc. etc. Social democracy in action.

      McTernan described the nomination of Jeremy Corbyn by Labour MPs as ‘self-indulgent’. He didn’t think Corbyn could win but nevertheless said that if he did

      I can’t see any case for letting him have two minutes in office, let alone two years in office because I think the damage that will be done to the Labour party in that period makes it incredibly hard to recover …

      He doesn’t think much of grass-roots democracy either. As he put it

      Yeah but who cares about the grassroots? The leader is one who determines the saleability of the Labour party. Nobody is voting for Tumbleweed CLP. They are all voting for the leader, they are voting for a potential Prime Minister and a leader who can’t control the party, can’t control conference isn’t fit to run the party yet alone the country, but obviously if you get a strong leader, it doesn’t really matter what the grassroots say. (Interview in the Spectator)

      He has already tweeted about David Osland’s article above to say

      In which Mr Osland is unable to demonstrate that tax avoidance is illegal. So he smears me instead. LOL

      All in all he seems to be a thoroughly nice chap who has a deep respect for mass of ordinary members who keep the LP going and who care about what its stands for.

      P.S. McTernan has re-tweeted the view that “The Panama Papers actually reflect pretty well on capitalism” since we should “Note which nations’ citizens hold offshort accounts: The least capitalist societies, not the most”. Just the sort of man, in other words, who could take Labour forward to a more equal world in which the voices of ordinary people are not drowned out by the rich and powerful.

    2. James Martin says:

      John McTernan is a professional eejit who was once paid by New Labour for advice on how to lose elections (most recently in Scotland), and when he is not speaking at Tory conferences praising Thatcher and advising them how to beat Labour, he sometimes appears on the telly and pretends to be important.

      1. thanks for this. David is the only one who actually explains who he is and one of the few who puts is writings into context – he writes for the spectator, as well as the Torygraph.

        Alas its not possible to use some of the material unless it is dated and sourced. Without dates and sources the comments are not very useful. The comments about his personality are not relevant. What is important is discovering where and when he makes his argument.

        I except Osland’s comment about impish sense of humour. the wind up is a tactic much used by the better right wingers, as it does get anger going as a response. That aspect of the personality is worth noting and the response is always the same.

        Don’t get mad, get even.

        Trevor Fisher.

  3. Mick Hall says:

    McTernan is a reactionary brown noser who will do almost anything to self promote, a rent a quote who will get up at 5 in the morning for a four minute slot on breakfast TV. Mentally he long ago left the LP and come the next general election he and his fellow Toads will resign from the LP in the hope of damaging the party with electorate.

    The term yesterdays men fits his type perfectly, better to ignore him as he influences no one, the right hates a turn coat as much as we do.

  4. Richard Tiffin says:

    McTernan is merely the most rabid of the ‘Labour’ right but he does make a very valid point, as do the rest of the right wing.
    Reformists, gradualists, Bennites call them what you will, they are socialists who are wedded to the economic system as it stands and have no desire to challenge it in any fundamental sense any time soon.
    Yet, at the same time this particular variety of left left wish to improve the lot of the lower sections of our society, improve our NHS, improve public services and so on.
    As McTernan points out this requires an increase in taxation, even more the case when the global economy is in the economic impasse it currently finds itself in and the increase in wealth on a capitalist basis cannot be brought about by a growth in the economy.
    McTernan also points out that ever increasing taxes, both stealth and open, increases in VAT and so on are simply unpopular and fall mostly on the poor and less well off.
    So what next? How can a reformist Labour Party square this circle.
    Clearly, the Panama papers are an opportunity for reformists. They can claim that a Labour government will end many of the tax avoidance schemes and claim that the increased revenue from the rich as they pay their fair share will plug the gap for any spending plans. They can claim, in short, that Britain is wealthy enough to ensure all have a good living as the economy stands, no need to worry.
    The trouble is, if that is the plan then all stops will be out to stop Labour. Think you have seen a rabid attack since Corbyn was elected, just you wait. The elites are those who run the levers of persuasion, the media. They are also amongst the ones who benifits from tax avoidance schemes. There won’t be a Labour friendly organ left, even the half hearted ‘friendliness’ of the Guardian, the Mirror or the BBC as they try to protect their interests.
    We are back to the point that the Blairites or the older more traditional right have always made in opposition to the reformist left. Don’t scare them off. Be reasonable. We need a Labour government for ‘our’ people so be sure we are gradual, reasonable, so that the elites are not ‘provoked’.
    I hope that Corbyn proves stronger than Tsispris did in Greece, I believe he is a man of principle. But the reason the right laugh at the reformist left is clear, as McTernen is now, they always end up in a contradictory bind.

  5. Tony says:

    McTernan is absolutely beyond the pale.
    No surprise, therefore, that Jim Murphy should have appointed him to be chief of staff of the Labour Party in Scotland.

    “Murphy gives Blair aide top job in election campaign”, The Herald, January 9, 2015).

    Here’s McTernan on Trident:

    “If we didn’t have Trident we’d be Belgium. Some people would find that a comfortable place to be. I wouldn’t. If Britain is going to be a major power, Britain should have the kinds of weapons a major power has.”

    “Who Needs Trident?” BBC Scotland, 23 February 2011

  6. This is disgraceful and to think that Mc Ternan has had the effrontery to campaign to oust Jeremy from the Leadership. McTernan is widely disliked not only in the UK Labour Party but in the Australian Labor Party since he advised Julia Gillard.

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