Beware politicians who avoid taxes

Populations of autocracies are invariably cynical about the financial behaviour of politicians. Each new revelation – such as those in the Pandora Papers just released about the King of Jordan, the President of Azerbaijan, the Prime Minister of Pakistan etc – comes as not the slightest surprise to the people of those countries. They have long ago given up on any illusions about their leaders and their friends.

Many will have taken the logical route in response and engaged in their own fiddles.

Tax avoidance is a corrosive activity that rots an entire system; nobody engages in it and is allowed to perpetrate it without it being a general and wider evil overlooked by the authorities. After all, it is avoidance, and not evasion, which is illegal and should indeed attract the attention of the authorities charged with enforcing criminal law.

This brings me to the disclosure that the Blair’s used a BVI company to acquire another company that owned an $11m property to save $507,000 in tax. Cherie Blair pointed out that this was a lawful transaction that brought the company owning the property into the UK space.

Two issues come to mind. The first is the obvious one, that people who are as wealthy as the Blairs and who make statements about the importance of paying taxes should not seek ways to avoid tax.

The second is that it puts the Blairs into the box called tax avoider occupied by oligarchs, arms dealers and property tycoons. These are individuals largely outside British law who use international havens to flee their jurisdiction of choice.

In short, Tony Blair (for the sake of a financial gain) has jeopardised  his position as a spokesman to the British people, whether it is about Brexit, the pandemic, Tory governance or whatever is of concern to Britain. And that at the moment is a lot.

Blair has made many sensible statements and rebuilt a reputation which was so tarnished by his proximity to George Bush’s Iraq project. By avoiding taxes, British or otherwise, those credentials, that reputation for sagacity and ethics is damaged.

Some people who might one day have paid heed to Blair will simply discount him; others more worryingly will take him seriously and find ways to avoid taxation, to the detriment of the very society Blair (in his wiser moments) claims to want to preserve.

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