‘The filthy, the rich, the ex-Lord and the ex-PM’

“We are intensely relaxed about people getting filthy rich” was the famous quote from Peter Mandelson, during his New Labour years under Tony Blair. It was carefully caveated with “as long as they pay their taxes”. Yet that qualification itself now feels revealing.

Corporations routinely insist they pay all appropriate taxes and obey all laws, as if this somehow merits a round of applause. This is exactly what the majority of the public do throughout their lives. The deeper question is not whether the rich technically comply with the law, but how wealth is built within systems inaccessible to ordinary taxpayers.

How do the filthy get rich? This has not been fully answered in respect of Jeffrey Epstein, in whose company Mandelson was perhaps too relaxed. Their relationship showed how easily politics, money and dubious elites were intertwined for years without serious challenge. 

READ MORE: ‘We need to confront the future and learn from the past. Tony’s essay did neither’

Labour would not have a “Scandelson” crisis but for so many political choices made over decades, with the first and most important original sin being the embrace of Mandelson by Blair.

Around 25 years ago, I was invited by one of the large accountancy firms to set up offshoring to avoid UK tax on my intellectual property rights.

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Money made in Britain can be pushed offshore through perfectly legal structures designed to shrink tax bills. Yet when this becomes widespread, ordinary taxpayers end up carrying the load while public services suffer.

Ultimately, I didn’t go through with their plan, but the same accountancy firm enjoys profits from multiple contracts across government.

When Mr. Blair intervened recently in the debate about the country and the future of government, he failed to mention inequality or the structural concentration of wealth designed into our economy. 

But inequality does not happen by accident. It is baked into the system by political and regulatory choices. Offshoring for tax avoidance is a primary mechanism for those doing the baking. 

Blair’s intervention drags old New Labour ghosts back into view. With further Mandelson scrutiny pending and the Makerfield byelection imminent, the timing is questionable.

If Labour wants to rebuild trust in politics and government, it must offer something new, not simply defend past assumptions. 

The 2005 Gambling Act is a perfect example of the Blair years, liberalisation for the sake of it, without regard for the consequences. It allowed operators locating offshore under lax regulation. It encouraged steering losing gamblers from land-based premises, where tax on gambling profits was paid, to online avoiding both gambling tax and UK corporate tax.

This analogue Act was identified as unfit for the digital age by Tom Watson before the 2019 manifesto. I am confident that a Labour government led by Andy Burnham would be willing to tackle this and similar issues. 

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