Preventing town-dwellers owning second homes in the countryside
Sir Andrew Motion, head of the Campaign to Protect Rural England, has called for taxes that will put countryside second homes beyond the reach of all except the very rich. His motivation is very clearly expressed. These second homes are:
"… very often lived in by people who scoot down in their cars, see their smart friends, don't join in the life of the community and don't feed into it. They're townies in the countryside, they make sure they're back in London in time to catch the 10 o'clock news on Sunday night."
Clearly Sir Andrew does not like these people or their lifestyle choices, and does not want them in the countryside of rural England. The total number of people with 'weekend second homes' is put at over 165,000. Of the 25 million homes in Britain this represents less than 1 percent of the total. A somewhat larger number own a second home, but let it out for income instead of using it themselves.
Small though the number is, it clearly represents a problem for Sir Andrew, who does not like what these townies are doing. For the townies themselves this is not a problem, since they are making the choice to live in this way, and enjoying that choice. Sir Andrew and his CPRE think it quite legitimate to use the power of the law to prevent others making choices that they themselves disapprove of.
As times change, so do lifestyles. Affluence and mobility have given some people the option to enjoy the countryside at weekends or during holidays, and Sir Andrew and his friends want this stopped. They think it reasonable to use the law to make the world the way they would prefer it to be, rather than the way others prefer it to be. He doesn't want second homes to be illegal, just "very expensive."
This calls to mind the CPRE's ongoing campaign to prevent more housing in the countryside, keeping its pleasures confined to those who already enjoy living there. Sir Andrew and the CPRE should investigate whether it might be a lot cheaper simply to use barbed wire to keep townies out of the countryside. After all, similar measures have been used before in other countries.
Basic budget blunders
Worryingly many commentators repeatedly make two basic budget blunders. Firstly, ‘deficit’ and ‘debt’ are not the same. Secondly, this government is not cutting spending. Neither point is original. Both should be simple to understand. Given consistent misinformation these both need clarification.
Debt is an obligation owed by one party (the British Government, i.e. the taxpayer) to a second party, the creditor (owners of British government bonds). The national debt is the total amount our government owes. It is different from the budget balance. That is the gap between what the government spends and what it receives. The budget is in deficit when the government spends more than it receives.
So what are the numbers? According to latest estimates from the Office for Budget Responsibility, public sector net debt for 2012-13 is projected at £1189 billion. By 2017-18 this is expected to reach £1637 billion. So when David Cameron said earlier this year, “…this government has had to make some difficult decisions, we are making progress. We are paying down Britain’s debts”, he was wrong. No. We haven’t paid down debt and will owe more.
It is the deficit that is projected to fall. For 2012-13 the deficit is forecast at £120.9 billion. However, the coalition no longer expects to meet pledges to balance the budget. Even by 2017-18, government will spend more than it takes in (with an estimated £43 billion deficit). High deficits will remain and the Government will add to the amount we owe every year.
Surely we've been cutting spending? No, again. The OBR neglect to mention how much the government spends for most of their report. Yet on page 123, they note spending is rising. For 2012-13 they forecast government spending of £673.3 billion, increasing to £765.1 billion by 2017-18. So in absolute terms expenditure is rising, not falling. Even accounting for inflation (using their inflation projections) expenditure rises significantly. The Coalition have only reduced the amount by which government planned to grow expenditure. Nevertheless, this brings pain, from pay freezes to programme closures, because budgets assumed even more profligate spending. Now that expenditure is growing more slowly than previously planned, some old commitments have lost out to new sources of expenditure.
Debt is rising, expenditure continues to outstrip receipts, and the Government is increasing not shrinking spending.
James was a founder of the Liberty League, who are hosting the upcoming Freedom Forum.
Abandon hope all ye who enter this immigration debate
Immigration is good for us. With every major party now promising to ‘get tough’ on immigration, it’s easy to forget that immigrants bring new skills to the country, allow for more specialization, tend to be more entrepreneurial than average, pay more in to the welfare state than they take out, and make things cheaper by doing the jobs that Britons won't.
No political figure of any stature will say any of these things. Instead, people like David Cameron and Ed Miliband and Nick Clegg focus on the two potential problems with immigration: that, other things being equal, immigrants may push down average wages, and that an unrestricted welfare state incentivises immigration by people who want to draw benefits instead of working.
These are both valid points, but insignificant ones. Ben Powell points out that the wage-depression claim ignores the fact that immigrants demand goods and services (raising wages for those things) as well as supplying them. It also assumes that immigrants always directly compete with indigenous workers for jobs. If immigrants are doing jobs that indigenous workers will not (or cannot) do, like highly unskilled service industry work, then they are not outcompeting indigenous workers.
There is quite a bit of evidence to suggest that this is the case in Britain. Fraser Nelson has shown the high effective marginal tax rates that people on welfare face if they want to enter the workforce. If these Britons are unwilling to take low-paid jobs, then there is no harm to them caused by immigrants taking these jobs. On the contrary, the fact that these jobs are being done by someone adds to the number of goods and services that everyone in Britain can take advantage of. (There is one other point: if people’s lives are getting better overall, who cares where in the world they happened to be born? Not me. But even I do not expect any politician to go so far as to say that all men are created equal.)
The second point against immigrants is usually the one focused on by politicians. The problem here is that a valid theoretical point is assumed to be a significant problem in actual fact. Here, the numbers simply do not bear the theory out.
As it happens, we don’t actually have an unrestricted welfare state – most major forms of welfare and state services are limited to UK residents. And, if anything, the evidence suggests that immigrants are less likely than Britons to draw out of work benefits – according to Jonathan Portes, “migrants represent about 13% of all workers, but only 7% percent of out-of-work claimants”. What a surprise: the people leaving behind their friends, family and communities are the ones who most want to make better lives for themselves. Again and again, empirical studies have shown that immigrants pay more in than they take out.
In any case, if we have a benefits system that is open to exploitation, why only worry about it being exploited by non-Britons? Conversely, if benefits are necessary to maintain a basic standard of welfare, why doesn't the welfare of non-Britons matter? There is a good case for reforming benefits so that they complement work instead of substituting it, but that has nothing to do with immigration.
Like most ‘major policy announcements’, the specific proposals outlined by the Prime Minister today will probably be forgotten soon enough. Even if they do end up becoming law, they will not affect many people. But what David Cameron and Ed Miliband and Nick Clegg have achieved is to throw out any chance of a policy line that, however unpopular, has the rare political virtue of being right.
Budget 2013: The good, the bad and the ugly
It’s not saying much, but this was George Osborne’s best budget yet. These tax cuts are long overdue, though they are not significant enough to solve Britain’s growth problem. Cutting taxes for businesses will stimulate investment and job creation, and reducing the tax burden for low- and middle-income earners will make life easier for them.
But government spending is still rising by £20bn this year. The government’s plans to meddle in the housing market are staggeringly misjudged, and we risk repeating exactly the same policy mistake that led to the US subprime mortgage bubble. And we’re still going to be borrowing £108bn this year – that’s £295m a day, every day, with no end in sight.
The Good
Personal allowance raised to £10,000 by 2014. Income taxes are smothering workers. The taxman takes more than 30p out of every pound earned by low- and middle-income workers above the personal allowance. Raising the personal allowance to £10,000 ahead of schedule is a significant step to reducing the tax burden for low- and middle-income workers, and creates the tantalising prospect of the personal allowance being pegged to the minimum wage rate in 2015.
Corporation tax to be cut to 20% by 2015. At last, an encouragingly bold tax cut for business. The corporation tax rate will be falling from 28% to 24% this April, then from 24% to 21% next year, and finally from 21% to 20% in 2015. Although this does indeed put Britain ahead of other ‘major economies’, small countries like Ireland (which has a corporation tax rate of just 12.5%) will still be able to outcompete Britain in attracting investment from multinational corporations.
Employers’ national insurance bills cut by £2,000 for every firm. Employers' NICs are a direct tax on jobs, so tax relief should allow some businesses to take on extra employees. The cut will have the most pronounced impact on micro-businesses, 450,000 of which will reportedly be taken out of tax altogether.
Beer duty to be cut by 1p, and the ‘beer duty escalator’ to be scrapped. Two weeks ago the government was pushing for minimum alcohol pricing, and now it’s cutting the price of beer. It might not be cutting duty by much, but it’s a welcome change after years of miserable, anti-poor paternalism. And scrapping the outrageous ‘beer duty escalator’ is long overdue. No Chancellor should be able to pretend that a tax hike is out of their hands.
The Bad
The Bank of England’s 2% inflation target to stay in place. Inflation targeting has failed. It creates invisible excess inflation during boom periods (by keeping prices rising by 2% when prices should be falling because of productivity gains) and cannot offset changes in velocity in bust periods, leading to secondary deflations that amplify the damage caused by the initial bust. An alternative, rules-based system (such as an NGDP target based on a futures market instead of the discretion of the Monetary Policy Committee) would be a much less harmful mandate for the Bank of England. Mark Carney had indicated that he was sympathetic to this kind of reform. By giving up the chance to rethink British monetary policy, the Chancellor has snatched defeat from the jaws of victory.
20% tax relief on childcare vouchers up to £6,000 per child from 2015. Expensive childcare is a consequence of the costly regulations, such as mandatory maximum children-to-staff ratios (3:1 for under-5s and 1:1 for infants under one year old). If the government wants to make childcare more affordable, cutting these sorts of regulations back would be a better place to start than using taxpayers’ money to pay for childcare for parents earning up to £300,000/year.
Tax avoidance and evasion measures aimed at recouping £3bn in unpaid taxes. Tax avoidance is a legal and legitimate response to the perverse incentives of a complex tax code created by politicians trying to exempt a pet project or special interest that they favour. Tax evasion, too, is a rational response to high taxes and is only possible because of the complications in our tax code. The best way to reduce evasion is to simplify the tax code, not to persecute people taking advantages of a corrupt system.
£3bn extra for new projects every year from 2015-16 until 2020, totalling £15bn. Capital spending projects are always popular with politicians who want to leave a expensive railway line, bridge or motorway as a legacy, but there is a long history of infrastructure projects doing little help their flagging economies. Barack Obama’s $800bn stimulus package, launched in 2009, focused on ‘shovel-ready’ projects and did virtually nothing, as did successive Japanese stimulus programmes in the 1990s and 2000s. Any extra money from spending cuts should be given back to the private sector through tax cuts, where it can do the most good.
…and the Ugly
Bank guarantees to underpin £130bn of new mortgage lending for three years from 2014. Apparently the Treasury has not learned the lesson of 2008: injecting taxpayer money into the housing sector will simply inflate prices, distorting price signals and stoking the housing bubble that already seems to be growing in the housing sector. Houses are expensive because supply is restricted by the planning system. Instead of throwing money at the problem and driving prices up even more, the government should have the courage to liberalize planning to allow more development, including on green belt land.
Government ministers picking winners. Fiddling with tax breaks for specific industries is a mug’s game. There is no way the government can know which industries to promote, and these projects inevitably collapse into a mess of overcomplicated grant schemes and politics-driven bailouts of failing firms. Only consumers can pick winners.
Government spending is still rising. Despite all the talk of cuts, the government will still be spending £761bn this year, nearly £20bn more than last year. By leaving healthcare alone and failing to carry out the big structural reforms needed to reduce social security spending, the government is not matching its rhetoric on spending with the action needed. We’re still going to be borrowing £108bn this year – that’s £295m a day, every day, with no end to the borrowing in sight.
Budget 2013: Six pro-growth policies from around the world
Ahead of tomorrow's Budget, we look at six pro-growth policies from around the world that we'd like to see the Chancellor follow.
1) Abolish capital gains tax, like Singapore
For the meagre revenues it raises, Capital Gains Tax (CGT) is possibly the most economically harmful tax in existence. High CGT rates depress economic activity and prevent the flow of capital to where it can be most productively used. This lowers both economic growth and government revenue. We have found that there was a 76% drop in normal disposals in the period following the government’s CGT hike from 18% to 28%, a clear sign that the government’s high taxes are costing it money.
A model for Britain to follow is Singapore. Singapore has no CGT and has proved to be a magnet for foreign investment. The Asia Pacific region attracted 33% of global foreign direct investment (FDI) in 2011, up from 18% in 2005. Thanks to its low tax regime, tiny Singapore attracted 13% of all FDI into the Asia Pacific region.
To restore Britain’s status as a global leader in competitiveness, the Chancellor should follow the Singaporean example and cut CGT back to pre-2010 rates. In the long-term, the government should aim to abolish CGT altogether.
2) Cut spending faster, like Canada
The Coalition is losing control of its deficit reduction strategy because of its overreliance on growth that has not materialized. Government spending cuts do not need to hurt the economy. Economists at Harvard University, Alberto Alesina and Silvia Ardagna (2012), have found that fiscal contractions paired with structural reforms, such as labour and goods market liberalizations (see below), can be expansionary if they signal a “decisive” change in government policy.
Canada’s experience with spending cuts in the 1990s offer a useful example of how deep spending cuts can be implemented to strengthen the economy. Chris Edwards has described how in just two years between 1995 and 1997, Canada cut federal spending by 10%, including defence, business subsidies, local government grants and unemployment insurance, shrinking total federal and local government spending from 53 percent of GDP in 1992 to just 39 percent by the mid-1990s.
The Canadian government implemented a comprehensive ‘Programme Review’ of every department. This was a root-and-branch rethink, not just short-term adjustments like those being carried out by the UK’s Coalition government. Welfare was the biggest saving with 40% real terms cut 1990-99, and every dollar rise in taxes was accompanied by a six to seven dollar cut in government spending.
A 2010 IMF study has shown that a 10% lower debt burden correlates with 0.2% higher growth, and Canada’s economic boom following its cuts supports this. Unemployment plunged and the formerly weak Canadian dollar soared to reach parity with the U.S. dollar.
Canada’s cuts coincided with the beginning of a 15-year boom, and Canada has bounced back from the global financial crisis robustly. It is a model for true cuts to spending that leave no department untouched. The Coalition should learn from the Canadian experience and make deeper cuts to spending immediately.
3) Simplify taxes and regulation, like Georgia
While the UK remains a pretty good place to do business compared to most other Western European countries, by international standards it is slipping behind. In many categories of the World Bank’s Ease of Doing Business Index, the UK performs dismally, including basic things like registering property (where the UK is 73rd in the world), enforcing contracts (21st), dealing with construction permits (20th) and starting a business (19th). The Chancellor should commit to getting Britain to the top of the Ease of Doing Business Index within five years.
One model for a dramatic improvement in these rankings is Georgia. Georgia has climbed from 112th overall in the world in 2005 to 9th overall in 2012. To do this, Georgia sharply reduced the number of licence-protected professions, simplified its tax code and reformed property registration to reduce costs and waiting times by 70%.
Every politician claims to want to cut red tape for business, but by committing to improve on an independent measure like the Ease of Doing Business, the Coalition could signal a real commitment to reducing regulatory barriers to business.
4) Liberalize employment law, like Germany
Unemployment has been a persistent problem for the UK since the 2008 recession, particularly youth unemployment. By making it easier to hire and fire workers, and to take on temporary staff as self-employed under contract, the government would reduce the risks associated with hiring new staff, which can put many businesses off employing extra workers altogether.
Germany’s Agenda 2010 reforms, implemented during soaring unemployment in 2005, limited wage rises to regain competitiveness and liberalized temporary work regulations to allow more firms to take on short-term employees. By 2011, unemployment had fallen to its lowest level since the early 1990s. Encouragingly, the number of short-term employees has fallen without a corresponding rise in unemployment.
One notable point about Germany’s labour laws is that Germany does not have any minimum wage laws. This avoids a situation where low-skilled workers are priced out of the labour market altogether. Combined with the Agenda 2010 labour reforms, this has helped to make the German work force significantly more flexible and robust to downturns than other European countries.
5) Cut corporation tax, like Ireland
The government’s corporation tax reductions are a welcome step towards making Britain globally competitive, but the cuts should be faster and deeper. Corporation tax falls almost entirely on workers’ wages: a recent study of European countries by economists at the Universities of Warwick and Oxford found that, in the long run, 92% of any rise in corporation tax falls on wages, not profits.
In Ireland, corporation tax receipts more than doubled after it cut corporation taxes from 40% to 12.5%, thanks to big increases in foreign direct investment by multinational corporations. Ireland still has the lowest corporation tax rate in Western Europe, and even in its recession has attracted big name firms like Google, Amazon and Twitter to headquarter there instead of London. Ireland is making the strongest comeback from its recession of any Eurozone country, thanks largely to its business-friendly tax regime.
To attract investment from outside Europe and grow its tax receipts, the Chancellor should reduce corporation tax to 10%, making Britain the most competitive country in the world for business.
6) Cut taxes for the working poor, like Australia
A full-time minimum wage worker currently pays £1,588 of their £12,875 gross earnings in tax. If low-paid workers were lifted out of tax, every full-time worker in the country would earn an effective ‘living wage’. By making work pay, this tax cut would partially pay for itself by increasing the number of people in work and reducing welfare dependency.
In 2011, the Australian government raised the tax-free personal allowance to AUD$18,200 (£12,513). By letting its citizens keep more of the money they’ve earned and targeting tax cuts on the poor, Australia is mitigating increases in the cost of living that would otherwise hit its working poor hard.
The cost of living is rising quickly in Britain too. Though this could be significantly mitigated by liberalizing planning regulations, allowing workers to keep the first £12,875 they earn every year and taking minimum wage workers out of income tax altogether would go a long way towards ensuring a basic standard of living for all workers in Britain.
The budget we need
This is a waste of breath, because there is no Plan B and no Plan A+ (and therefore no prospects of the Conservatives being part of the next UK government), but here goes.
The policy of letting public spending drift slowly upwards, hoping it will be outpaced by growth, is shot. There is no growth. Our trading customers (mainly US and EU) are floundering, and domestic investors, businesses and customers are in lock-down, waiting to see what happens.
The Bank of England tries to cheer things with rock-bottom interest rates and money-printing, to no avail. Vince Cable wants us to go into debt to build roads. Another hopeless cause.
When you have had a long cheap-credit boom as we have, you must expect a long recession as resources are reshuffled back to where they ought to be. We have to liquidate all those boom-time investments that are simply unsustainable in normal times. But we haven't had much of a recession. The authorities are trying to re-stoke the boom. We need to let the market do its job of reallocating assets to better uses.
Regulation deadens the market. We need radical pruning. Why not take small firms out of employment regulation completely: make them more confident to hire and expand.
Tax kills economic activity too. We need a corporate tax rate lower than Ireland's and to scrap capital gains taxes, which just lock people into outdated investments. We need to move swiftly to take everyone on minimum wage out of income tax entirely, to encourage people off benefits and into work.
To balance the short-term loss of tax revenue, we need expenditure savings. But not salami-slicing. We should focus on what the state really needs to do and cut out whole programmes and departments (like Vince Cable's Business Department) that nobody would miss.
And we need to let the private sector into everywhere that it is excluded: into education, infrastructure, healthcare, public and local services, and much else. Stand out of the light, and watch the economy grow.
A libertarian solution to the welfare state we’re in
The Coalition's welfare reforms are too timid, says economist Peter Hill. Welfare-to-work schemes have failed, and adding more state intervention will only compound the problems. What is needed is a reform package that time limits out of work benefits, turns benefits into a genuine unemployment insurance scheme, and more.
Given all the bold statements of Iain Duncan-Smith about restoring fairness and making work pay one could easily be swept away by the hype. The reforms set out by the coalition include the introduction of the ‘Universal Credit’ in an effort to streamline the cacophony of benefits and tax credits inherited from Labour, the introduction of a benefit cap of £26,000 for families on benefits, and a tightening of conditionality surrounding disability to ensure that all those capable of work do seek it.
With this swathe of seemingly radical reform taking place one would expect spending by the Department for Work and Pensions to soon reverse from the relentless upward trends seen under Labour. Sadly, this will not be the case with spending set to increase by an average of £4.29 billion per annum over the course of this Parliament comparing on marginally better than £4.43 billion per annum increase during Labour’s time in office. According to ONS data unemployment has also only fallen from 2.51 million to 2.49 million since the coalition came to power and growth remains stagnant.
Capital Gains Tax hike led to falling revenues
The Adam Smith Institute is calling on the government today to slash CGT rates in next month’s Budget in order to boost revenue and economic growth. 2010-11 figures now released by HM Revenue & Customs (HMRC) show that the rise in Capital Gains Tax (CGT) was a failure. Meant to raise more revenue, in fact it raised less.
CGT was raised from 18% to 28% for most taxpayers (entrepreneurs’ relief stayed at 10%) in June 2010, nearly three months deep into the tax year. This unusual timing allows economists to see the impact of the rate changes during the year.
Comparing the 78 days from 6th April 2010 to 22nd June 2010, and the 287 days from 23rd June 2010 to 5th April 2011, shows a marked fall in revenues. The annual equivalent CGT revenues under each system are:
There was a 76% drop in normal disposals (taking 18% and 28% together for post-23rd June figures, because figures are not available for the equivalent split for pre-June). Clearly, many people sought to realise gains before the rate increased, knowing that the Coalition Agreement committed the Government to a sharp increase in CGT rate. There was also a 34% drop in 10% ER disposals, probably because entrepreneurs feared further tightening.
However, this highlights the fact that CGT is effectively a voluntary tax, paid only when people choose to dispose of assets. If they perceive rates to be too high, they choose to keep assets rather than dispose of them. Only a few people are forced to sell assets – many of them elderly people who build up assets throughout their lives and then cash them in to live on.
High CGT rates depress economic activity and prevent the flow of capital to where it can be most productively used. This lowers both economic growth and government revenue. This is why the Adam Smith Institute is urging the government to slash CGT rates to their pre-2010 levels, which would raise more revenue for the Treasury and also stimulate growth.
For example, if someone owns a buy-to-let flat and is thinking about selling it to raise seed money for a new business, the fact that a large chunk of the proceeds has to be paid in tax will deter them. They may well decide to keep the flat and not start the business, thus depriving the state not only of the CGT revenue, but also the taxes that would be paid by the new business and its employees.
People’s reluctance to pay a large cheque to the state is increased by the knowledge that much of their capital gain is actually due to inflation. Indeed, roughly half of taxable gains are attributable to inflation .
Dr Eamonn Butler, Director of the Adam Smith Institute says: “The coalition policy of a sharp increase in CGT rates has failed. Not only has it raised less revenue, it has also reduced the available capital in the economy. That is the last thing businesses need at a time when bank loans are so difficult to get.”
International companies stand between us and tax tyranny
The OECD is very worried about the erosion of different countries' tax base, they say. The acronym (everything needs a catchphrase these days) is BEPS - Fiscal Base Erosion and Profit Shifting. I guess the full acronym, FBEAPS, just wasn't so trip-off-the-tongue.
The target, of course, is international companies who choose to base themselves in low-tax countries even as they operate in high tax countries. Now I can see why people in high tax countries might get irritated when companies do this. And no doubt there are moral abuses of international tax differences. But it isn't against the law for companies to set up where they choose, nor to manage their affairs in such a way as to keep their tax burden under control. And, for the time being, it isn't against the law for countries to try to attract business into them by keeping down their taxes.
What would be the alternative? All countries getting together and adopting identical tax codes, so that no one location would be more tax-favourable than any other? That would put all of us at the mercy of high-taxing, high-spending governments. They could jack up tax rates as high as they liked, and there would be no escape. They already have huge power to do this, as most of us aren't mobile. International companies are mobile, though – and they are the only ones standing between us and tax tyranny.
It is not obvious, by the way, that companies automatically choose to locate where taxes are lower. Companies have to hire people, and their bosses have to live near their HQ, so what they actually look for is good value for money. If there is good healthcare, good education, and good infrastructure, those are benefits that they put into the equation along with the amount of tax they could be liable for. So the fact that they can shop around between tax jurisdictions puts a pressure on governments, not to be low tax, but to provide good value for money. Isn't that what we want?
A number of countries with few other things going for them have chosen to make themselves very favourable to companies with low taxes and with regulations that are not as labyrinthine as ours. I respect their right to do so. But I feel the high-tax, high-regulation countries in the world fear that competition and would like to kill it. We should not let them do so.
Don't name and shame tax avoiders
British MPs say that tax avoiders should be 'named and shamed' to discourage people from using legal loopholes to reduce their tax bill. It shows just how much of a careless disregard for the rule of law our politicians now have.
Let's get this straight. Evading taxes – fraud and lies to understate your income or your tax liability – is illegal, and people should be prosecuted for it. Tax avoidance is not illegal. It is arranging your affairs in such a way as to reduce the amount of tax that you have to pay. In one way or another, we all do this. Many of us pay into pension funds, which have a special tax treatment. Or we save in a tax-free Individual Savings Account (ISA). We put some of our assets into trust so we don't have to pay 40% on absolutely everything when we die.
Of course, many people come up with much craftier ruses than these. They set up all sorts of vehicles in order to minimise the tax they pay, or maximise their access to tax reliefs for things like business start-ups, research and development, or investing in particular industries. Some of these have little real substance and are designed solely to reduce the taxpayer's bill. That may be morally reprehensible, but it it not illegal.
So the MPs are saying that they are quite prepared to 'name and shame' people who may be stretching the spirit of the law but are obeying it to the letter. We all know people whose acts and lifestyles we might regard as odious and immoral in a hundred and one different ways. But providing they respect the law, our political and judicial authorities really have no right to single out any of those individuals and then vilify them and try to stir up public prejudice against them. Our authorities should enforce the law – the law that they themselves have created. Once we permit them to take action against law-abiding citizens they don't happen to approve of, then liberty will truly have disappeared in this country.
If our taxes are so high that people resent paying them (and remember that high earners now pay two-thirds of their income in tax and national insurance); if people regard their taxes as mis-spent (no shortage of examples there); and if our tax rules are so byzantine that people can find places of shelter within them – well, then our lawmakers have only themselves to blame. They certainly should not be picking on law-abiding private citizens.