Nadhim Zahawi, previously the Chancellor of the Exchequer, now the Conservative Party Chairman, has, it appears, agreed to pay over three million pounds in tax. According to the Sun on Sunday, he used an offshore company – Balshore Investments, a family registered trust- to hold shares in YouGov, a company he co-founded. Zahawi’s spokesperson states: ‘Mr Zahawi’s taxes are proper; declared and paid in the UK. He is proud to have built a British business that has become successful around the world’. True, he is awfully proud. We’ve met. I find him entitled, also smooth, smarmy and affable. The MP of flexi-loyalties has got himself top jobs in government. When entangled in murky scandals – e.g. claiming a heating allowance of £5,822.27 for his stables in 2013– he flicks the dirt off his tailored suits and moves on. If he was a character in a Dicken’s novel, there’d be comeuppance. Life, alas, is more messy.
This settled tax bill raises many questions: What is the money for, exactly? Did Zahawi evade paying the tax he originally owed,? What were the negotiations between HMRC and him? Why the secrecy? In 2011, the Public Accounts Committee criticized HMRC for doing ‘sweetheart deals’ with big businesses and powerful individuals and demanded more transparency. To fulfil that obligation, the guardians of our tax system should write to this paper and tell us more about the Zahawi deal.
On BBC Radio4’s Today programme on Tuesday, the Education Secretary was asked a random question about Zahawi’s tax affairs. That’s it folks. No sustained reporting, no Chris Mason ( thus far) energetically questioning the posh Tory chairman. On fervid social media platforms and radio programmes, once again, that charge: ‘It’s one rule for them and one for us’. Not quite. When it comes to tax, most Britons hate paying up and, if at all possible, pay less than they owe. That is because everything in our culture pushes people to resent and evade state dues. This was Liz Truss’s mission. She wanted us to ‘keep our money’ and the rest be damned. Our PM and his billionaire wife are thought to have avoided paying £20 million in tax until April 2022, when this was uncovered and they started coughing up.
Upper classes and we middle class people employ tricksy accountants to reduce their liabilities; working classes use other informal methods, like cash payments. Only PAYE workers are locked into a tight system which cannot be fiddled. Most public sector workers are on PAYE. Government ministers are too, but they can, and many do, take up other work and, I reckon, find ways to pay as little as they can in taxes. All legit, but socially irresponsible. Our services need resources. Most Britons depend on those services. Public institutions are falling apart; citizens are scared and desolate. But the bias against taxes is immutable. Germans and the French have their tax dodgers too, but the majority in both countries, are happy to pay for good state facilities and provisions.
Way back in 2008, Nicholas Aylott, a British lecturer in political science at Stockholm university, accurately observed, ‘If you start talking to someone in Britain, they will end up saying that taxes are too high. Swedes are very attached to the idea of the state as the People’s Home. Everyone is under the same roof. Everyone will be protected’. It took decades to reach this state of mutuality and shared understanding. In the UK, our people have not been educated to understand and value the welfare state and empathetic bonds. More’s the pity.
The UN’s world happiness reports consistently show that the happiest counties in the world are Finland, Iceland, Norway, Sweden, the Netherlands, Canada and New Zealand.
They’re all highly taxed and better managed than the UK. Their populations, on the whole, are content to pay high taxes, because their children get free care, great education, healthy open spaces and adults sleep easy because they know they can depend on fair wages, medical and social care.
Norway prudently saved and invested its oil revenues to create an economically sustainable and equal nation; Margaret Thatcher used the UK’s oil wealth to cut taxes paid by the well off and on other Tory obsessions. Sukhdev Johal, of Queen Mary university, estimated back in 2014, that had our government been as prudent and savvy as Norway’s there would £450 Billion pounds would accumulated by 2008, enough to give every adult in the UK, around £13,000.
The money was squandered. That was ruinous. Worse, though, in my view, was the deliberate and wanton demolition of the ideals of the welfare state, by Thatcherites and, now, their contemporary disciples, like Sunak, Raab, Grant Shapps, Zahawi and others. By underinvesting in schools, colleges universities, the NHS, the infrastructure, green energy, our rivers and seashores, they have ensured that our collective assets deteriorate and the UK becomes a jungle where only the greediest survive and the rest go to hell.
I newspaper January 2023