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David Gauke is a “morally wrong” hypocrite

July 24, 2012 4:01 pm

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Tory minister David Gauke has gained plenty of attention for attacking the “morally wrong” practise of paying cash in hand, saying:

“Getting a discount with your plumber by paying cash in hand is something that is a big cost to the Revenue and means others have to pay more in tax. I think it is morally wrong. It is illegal for the plumber but it is pretty implicit in those circumstances that there is a reason why there is a discount for cash.”

He also said:

“When a tradesman says, ‘Here’s a 10%, a 20% discount on your bill if you pay me cash in hand’ that is facilitating the hidden economy. That’s as big a problem in terms of loss to the Exchequer as tax avoidance. Revenue is not being paid as it should be paid.”

I happen to agree that the hidden economy is a problem and costs the exchequer unknown billions. But if a discount of 10-20% is wrong – how about a discount of 100%. A payment of 0%?

David Gauke has no problem with that.

As the excellent David Hencke noted back in March, Gauke is apparently too poor to pay an intern despite earning £100k a year. Here’s the advert:

Earning £100k a year but hiring an intern to work for nothing? Sounds “morally wrong” to me. And if you don’t pay someone, the government loses out on tax and NI… 

Should we really be surprised though? As Guido Fawkes revealed this morning, Gauke worked for a tax avoidance firm. Hypocrite.

(Update: Also it turns out before Gauke worked for a law firm with expertise in “tax efficiency” – he was a parliamentary researcher for Barry Legg MP. I bet he was paid.)

(h/t: Jonathan Freedland)

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  • http://twitter.com/joshfg Joshua Fenton-Glynn

     Ether Gauke is being disengenuous and trying to muddy the issue of tax avoidence, or he does really think that the worst tax avoidence is by baby sitters, which as someone who has shaddowed and been in the treasury for a number of years now would seem suprising.

    • treborc

      House flip anyone.

    • Hugh

       Not that surprising; if memory serves self employed workers are a big, if not main source of tax avoidance.

      • treborc

        what you mean the estimated £2 billion…….
        The truth is tax avoidance has become its own economy. The Tax Justice Network recently estimated
        that at least £13tn worldwide is being hidden in offshore tax havens.
        To put this in context, the total wealth of the entire UK economy was
        last valued at £10.3tn. That means the value of all of our assets from
        property to pensions, stocks and shares is dwarfed by the amount a
        global elite has stockpiled in secretive jurisdictions away from the
        scrutiny of regulators.
        The companies that make millions of pounds
        each year from enabling individuals and corporations to avoid tax are
        not “cowboys” as suggested by the Treasury. From banks to accountancy
        firms and corporate lawyers, some of the biggest businesses in the world
        are part of the fabric of global tax avoidance. These companies are not
        moral entities that we can shame into paying their fair share; they
        exist to maximise their profits and those of their clients. Nor should
        we equate the small sums of money lost to HMRC through cash-in-hand
        transactions with the billions of pounds deliberately funnelled out of
        our economy each year through systematic corporate tax avoidance. They
        may be morally similar but their economic impact is worlds apart.

        http://www.guardian.co.uk/commentisfree/2012/jul/24/forget-cash-in-hand-tax-avoidance-systemic?newsfeed=true

        What did Vodafone get away with………

        • Graham Duke

           ’What did Vodafone get away with?’ Erm – nothing as the High Court ruled. Whether you think that is right or not is a different matter. Vodafone were entirely tax compliant within the law.

          Tax Justice Network is run by RJ Murphy who’s Guardian article in 2003 advised people to set up companies to avoid NI

          http://www.guardian.co.uk/money/2003/feb/16/tax.observercashsection

          Gauke should still STFU

          • jaime taurosangastre candelas

            The differences between tax evasion and tax avoidance are it appears getting deliberately conflated, as though some wish avoidance to become “as bad” as evasion.

            If governments wish to reduce the amount of tax avoidance, they should write clearer tax laws and guidance.  It is very simple.

            We all do it.  I tax my car for a year a a time because it is cheaper than 2 separate 6 month tax discs.  The government allow this – even encourage it.  It is legal.  I could avoid much more tax if I choose to trade in my 1989 Volvo for some form of electric car, or one of the modern super mini cars with very low emissions.  I avoid Cambridge’s parking tax when I take the Park and Ride for half of the price.  This is tax avoidance, and it is not wrong if that is what the government allow and intend.  It is because governments use tax regulations as a lever to encourage certain behaviours – taxing cars for a year reduces by some proportion the number of untaxed cars on the road, giving a tax discount on Park and Ride reduces by some proportion the amount of cars on the city streets.

          • treborc

            Jesus car tax says it all

          • Hugh

             Yes, sorry, I meant evasion.

          • John Dore

            Simpler laws yes, its just to easy with tax planners to manipulate the system to screw everyone. 

            I took a slating 4 weeks ago when I raised my support for cash in hand as a way for the working man to get a little extra. Some people say cash in hand is wrong because if you take two people earning the same, one can illegally avoid tax. Those who typically work the trades where CIH is possible, generally dont earn that much, suffer injuries, dont have holiday pay, have to buy tools, run a van etc.. 

            There is exploitation though and it is endemic in our society, that of firms avoiding tax and VAT but taking on jobs where part payment are made CIH.

        • Hugh

           No, I mean the £5.8 billion HMRC reckons is teh result of inaccurate self assessment returns by individuals (excluding large parnterships); plus up to £8 billion as a result of cash in hand payments both as part of the “hidden economy” – ie those not declared self-employed – and those who are registered as self employed but don’t declare work paid in cash.

          To put the £13tn worldwide in context, you’d want to compare it to cash in hand payments and individual evasion worldwide. Since we’re only talking about the UK, that’s not really relevant (even if the Tax Justice Network was a credible source).

          To put it further in context, if legal tax avoidance by the global elite is morally wrong, I’m unclear why illegal tax evasion by a plumber isn’t. I’m all for prosecuting genuine avoidance schemes (rather simple relocation and tax competitiveness between countries), and I object to the differing treatment you’ll receive from teh HMRC if you owe £1,000 than if you owe £1 million (although I suspect much of that is inevitable). It doesn’t change the fact that, first, the morality is the same whoever is doing it; and, second, evasion by individuals is significant.

  • Hugh

    Whether he’s a hypocrite or not, if you believe tax avoidance is morally wrong then his logic is unarguable. 

    • http://twitter.com/mistyblulabour dave stone

      Can’t imagine a Conservative from the Thatcher era coming out with something like this – then they were very keen to win the support of the self-employed.

      This outburst will have cost them thousands of votes. They’ve made themselves look even more like the top people’s party where only the top people are welcome.

      • Hugh

        Well I’m not a Conservative from the Thatcher era.

        Do you believe tax avoidance is morally wrong?
        What about being a plumber makes it right?

      • Hugh

        Well I’m not a Conservative from the Thatcher era.

        Do you believe tax avoidance is morally wrong?
        What about being a plumber makes it right?

        • http://twitter.com/mistyblulabour dave stone

          “Do you believe tax avoidance is morally wrong?”

          I’ve made use of duty-free opportunities when traveling abroad – all within the stipulated limits of course. And I have never felt guilty about it.

          The Conservatives are out of touch. They’ve scuppered the recovery with their reckless mismanagement of the economy and now, instead helping the hard-working families who are doing their best to make a living they’re scape-goating them.

          The Conservatives Party stands naked as the political wing of the banking industry and corporate interests.

          If I were a Conservative I’d follow the increasing number who are joining, and will vote for,  UKIP. You should do the same.

          • Hugh

             Well, leaving aside the fact that I think a sensible definition of tax avoidance doesn’t include using duty free or your ISA allowance, let me rephrase: Do you believe tax evasion is wrong?

            Thanks for the advice on how I should vote; I’d take it better from someone whose own principles were consistent.

          • http://twitter.com/mistyblulabour dave stone

            I heard Nigel Farage interviewed yesterday. He’s running rings round Cameron. Farage has got the common touch – something that Cameron and Osborne will never understand and, even with all the pint-drinking spin, will never possess.

            The Conservatives need to bring Liam Fox back, and soon. If they don’t then the steady stream of Conservative refugees heading for UKIP to escape Cameron’s idiocies will quickly become a deluge.

          • treborc

            So long as they are not colour blind and head for labour.

          • Hugh

             Fascinating.

    • Mickelmas

      Sorry, but you are missing the whole point. If you believe that all forms of tax avoidance is morally wrong you have to therefore accept that ANY activity that results in minimising tax exposure is morally wrong, such as ISA’s, all cash payments etc. The fact that Gauke does NOT practise what he preaches makes him a hypocrite. QED. 

      • Hugh

         No, because, first, there’s clearly a difference between exploiting an inadvertent loophole in the tax system (a la Jimmy Carr) and taking advantage of the allowances the system explicitly provides. It’s the difference between obeying the spirit and letter of the law. It’s not very bright when the right wing lumps ISAs in with tax avoidance; it’s all the more surprising when the left does it to.

        Moreover, while I referred to tax avoidance (since the likes of UK Uncut and its fans on these pages primarily seem to concentrate on that) what Gauke referred to is actually tax evasion, which is another order of difference again, in being illegal. His logic is therefore correct.

        As for his hypocrisy, I allowed for the possibility that he is a hypocrite in my comment. Although taking on an unpaid intern isn’t evidence of it, his previous work may well be.

        • Mickelmas

          “Exploiting an inadvertent tax loophole”? “Taking advantage of the allowances system”? Essentially, you are claiming that “taking advantage of” is morally OK but “exploiting” is immoral! You are making the fundamental error of attaching ‘moral’ attributes to particular words and phrases that do not exist – in the same manner that the words ‘moral’ and ‘immoral’ have no meaning in tax law. The only options are ‘legal’ or ‘illegal’. Gauke’s campaign to add a moral dimension to paying tax is nothing less than a desperate Tory attempt to ‘muddy the waters’ and divert media attention away from Osborne’s blunders. It transfers public attention away from wealthy Tory donors and directs it to the ‘cheating poor’.

  • AnotherOldBoy

    Oh dear, so every person who works for a City solicitors’ firm is promoting tax evasion now?

    If you asked any government minister of any party whether it was OK to negotiate a discount for cash with, say, a plumber, what answer do you think you would get?

  • http://twitter.com/mistyblulabour dave stone

    Typical Tory snob – wants feather bedding for himself but doesn’t think others, particularly manual workers, deserve the same.

  • http://twitter.com/tristanpw1 TristanPriceWilliams

    I’d never heard of him before, but like so many of them my sole  impression is of an incredibly stupid little man who didn’t think consider his previous job (or the current job of his wife) or of the house flipping he did to avoid stamp duty or CGT or whatever it was when he decried people who pay the plumber cash, because it’s cheaper.  (He might like to take into consideration that as a lot of people don’t earn over £100,000, and indeed  live in poverty, it is the only way they can afford to get their toilet fixed!)

    OK, I can get angry that he, like so many of the rest of them, was fiddling expenses, but I’m more dismayed that someone with his career background was stupid enough to highlight tax avoidance in the little man.

    We depend on people like this to make our laws. No wonder the deficit is not being reduced if we have prats like him working on it

    • treborc

       If any one said describe what a Tory looks or sounds like, this chap would hit the nail on the head, just one look at him you would think yep Tory.

      Then he opens his mouth and all doubt has gone.

  • Timb0

    For me the issue is very definitely whether discussions about tax avoidance and evasion on a massive scale to be sidetracked by these silly opinions.

  • JoeDM

    The man is a complete prat.

    • Brumanuensis

      We agree on something!

  • Malcolm Rasala

    Labour must hit hard the morally corrupt behaviour of Libor manipulating banks sponsoring the Conservative Party. The ‘Conservative Party sponsoring banks caught mis selling to SME’s and individuals, the financial institutions caught trading oil to up the price to consumers and the raft of banks etc misbehaving illegally eg money laundering and terrorism fund laundering.  According to a C4 poll yesterday only 14% in Britain trust their bank. So this is a rich seam to exploit against the Conservatives. There should be a long term coordinated strategy to hammer home this ‘conservative behaviour/morality’. The Labour Party will win by doing so. 

  • John Dore

    Mark,

    Isn’t censorship two faced hypocrisy?

    • treborc

       God do not tell me you have been censored again.

      • John Dore

        Every time I raise the spectre of Unite’s documented political strategy, its deleted in milliseconds, kinda tells you something.

        • treborc

          well he’s  doing something right then.

          • 000a000

            I suspect I would disagree with this. But I want to hear it. I thought this site was set up for healthy debate?

            I post what could be construed as pro Tory opinions (I voted that way in the last election) and don’t get modded… I thought this was the point of LabourList: to provide a platform for all potential Labour voters and the future of the Labour party?

          • treborc

            Well I’m not the moderator and if I was moderated on an issues about Unions I would go to Labour uncut or Progress I’m sure they fall over them selves in laughter at his Union rants.

            You would have thought he would learn his lesson after being moderated  so many time, sadly these pretend labour socialist never learn.

            You can talk about Unions on here many people do, you can even state you disagree with Union many do, but when you try to write total fiction about a Union you will get moderated, and rightly so as well, but you would think a manager with four people under them would learn from it happening once but this many times.

             I do think he is not a manager  but is in AA with four others.

          • John Dore

            Is this fiction?

            http://www.scribd.com/doc/97870410/Unite-Political-Strategy  

            Moreover is it not hypocrisy to decry the fixing of candidates and then to ignore whats going on under the covers, where the Union Bloc are trying to fix things by freezing out opinions they don’t like? 

            I’m not anti Union, I am anti what they’re doing. As Ed said concentrate on your members and leave the politics to me (paraphrased).

            You can read the posts that were deleted by clicking my avatar, they do not get deleted by the server.

            Unlike your name calling crap I’m just citing a bit of reality.

          • treborc

             Rubbish your on a rant mate a childish rant over Union as you do often

  • Alan Giles

    I think any MP, of any party, who figured in the 2009 Daily Telegraph Hall of Shame should refrain entirely from lecturing anybody on the ethics of spending money,  or commenting on the “morals” of how  they spend it. It is grotesque and shows, yet again, that the motto of many MPs and ministers is do as I say and not as I do.

  • 000a000

    Guido was bang on here (I know many here don’t like him, but you can’t accuse him of giving the Tories an easy ride). No excuse applies as far as I can see.

    I know you want to make this story your own, but I don’t really think the intern was a big issue. Everyone does it, that’s life. The tax advisor stuff is the dynamite.

  • Amber Star

    This is Gauke’s back-handed way of saying: Everybody is guilty of tax dodging, so nobody is. It’s a tactic which has worked in the past but not this time, it seems.

  • https://mikestallard.virtualgallery.com/ Mike Stallard

    Gordon Brown put in a lot of very complicated new taxes to try and engineer a better society. OK, that was the way he promised to do things and that is what we expected from a true Scottish Socialist.
    As a Tory Troll, I do not approve, but life is life.

    Now George Osborne, from the Top Drawer, has instituted many, many more taxes and made the whole thing much more complicated. That I did not expect.

    If you make the rules more complicated, it just makes it much easier to cheat. and getting round a very complicated law is too easy for even a run of the mill accountant.

    PS Cash is still legal tender in this country.

  • Ouen

    Ha ha ha ha ha ha ,  a lecture on economic moral ethics from a politician…..  Ha ha ha ha ha!!!!!

  • Mickelmas

    Gauke’s comments (widely aired in the news) should have been the perfect opportunity for Labour to expose his hypocrisy, so why no opposition front benchers appearing on TV quoting any of the above? Labour are not aggressive enough in opposition and consequently are failing to win back sufficient voters.

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