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Barlow and the tax-dodgers rock on

16 May 2014

Britain is turning into a questionable tax haven, says Paul Vallely

GARY BARLOW and the Tax Dodgers may sound like the name of a pop group from the 1960s, but the phenomenon is altogether more contemporary. The singer-songwriter from Take That is having to repay about £20 million to HM Revenue, after the courts ruled that his legal tax-avoidance scheme was in fact an illegal tax-evasion one. Yet an opinion poll suggests that the public feel that Mr Barlow should not be required to hand back his OBE along with the lost lucre.

There is an intriguing ambivalence here. Only six out of ten of those questioned in the same poll consider that rich people have a moral duty to pay their fair share of tax and not to use artificial avoidance schemes. Quite what the other 40 per cent think is unclear - perhaps Take This rather than Take That.

Even the Prime Minister - who did at least think that Mr Barlow should pay back the missing millions - insisted that the singer need not hand his medal back to the Queen. The PM argued that his gong was for something unrelated, Children in Need, which is a peculiarly divisible idea of what honour constitutes. One would hope that a fair chunk of the £20 million would have been spent by the Government on preventing children from getting in need in the first place.

It also stood in stark contrast to what Mr Cameron said when another celebrity, the comedian Jimmy Carr, was found in 2012 to be involved in a similar fiddle, albeit to the tune of a mere half million. The PM called that "morally wrong". But then Mr Carr is an edgy, cynical character, where Mr Barlow is much more cuddly - the Cliff Richard of the 21st century, as one reviewer called him. He also masterminded the Queen's Diamond Jubilee concert, and, coincidentally, campaigned for the Conservatives at the last General Election.

But ambivalence about tax goes deeper with this Government than concern with celebrity dodgers. It has done little to curb the activities of big transnational corporations such as Starbucks, Google, and Amazon - all of whom go to great lengths to pay as little tax as possible on their huge profits. Amazon had £4.3 billion of sales online, Parliament heard in 2012, and paid tax of just 0.1 per cent on this.

Tax is at the heart of the bid by the US drug firm Pfizer to swallow up the British pharmaceutical company AstraZeneca (AZ). The takeover will not evidently enhance innovation by AZ. It will bring no new life-saving compounds to the market. It will not improve competition in the sector. But it will allow Pfizer to avoid $2 billion in taxes, which would otherwise fall due to the United States government.

All this - and there at least 90 other foreign companies also considering "shifting their tax domicile" to the UK - comes about because of changes to tax law made by Mr Cameron and his Chancellor George Osborne. Their efforts to make Britain's tax regime the most attractive of any large industrialised country have turned the UK into the world's "biggest, most developed tax haven", the boss of one big global bank recently told Robert Peston from the BBC.

No wonder Mr Barlow is considered a "national treasure" in such a place.

Paul Vallely is Visiting Professor in Public Ethics and Media at the University of Chester.

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