Contractor hopes that MPs would deny today’s government and those of the future the right to set retrospective legislation were dashed last week.
The Section 58(4) amendment, which would have put over 1,900 contractors facing huge tax bills in the clear, was withdrawn without a vote by the Public Bill Committee last Thursday afternoon, 20th June 2013.
The date is significant because it was the day that the government decided, according to David Gauke, the Exchequer Secretary to the Treasury, that it “must reserve the right to use retrospection in wholly exceptional circumstances, in line with the protocol we have introduced”.
According to the Conservative minister, the government’s 2011 Budget document “Tackling Tax Avoidance” gives it all the rights it needs to trample over centuries of legal precedent. No longer, it seems, are your net earnings after tax your money; the Coalition has given itself the right to raid taxpayers’ pockets years later.
And what’s shocking is that 35 MPs, our elected representative supposed to be putting our interests first, just sat there and let it happen.
Gauke delivered a long-winded speech about all the measures the government is taking to tackle tax avoidance and evasion, including legal avoidance that is perfectly legal today. In the case of those 1900 contractors singled out for what may be the first wave of retrospective taxation, he was off-hand. Gauke implied that those affected are earning so much they probably won’t notice the government dipping into their pockets. He also noted that there are only a couple thousand of them, presumably signalling to colleagues that they needn’t worry about losing too many votes.
And then Steve Baker, the Conservative MP who proposed the amendment in the first place, just rolled over, telling the committee that Gauke had “explained in very good faith where he is coming from, and I respect his decision.” That was it. With a whimper, the fight to amend Section 58(4) and make a stand against retrospective legislation was lost. And this coming from an MP whose website boasts on its home page that Steve Baker stands “for peace and prosperity through liberty under the law.”
This meek acceptance of his Conservative colleague’s trampling on centuries of precedent – and the principal of fairness – was particularly striking considering Baker’s earlier rousing defence of his amendment. Virtually wrapping himself in the Union Jack: “In this mother of Parliaments, it ought not to be necessary to have to move an amendment to defend that most fundamental of our institutions, the rule of law, but that is the essence of the new clause.”
This was followed by: “One of the key points is that the situation needs to be tested in the courts, without the benefit of retrospective legislation.” That seemed eminently fair.
And then: “The rule of law is supposed to avoid tyranny. Tyranny is when the sand shifts under someone’s feet and conduct they thought lawful is suddenly punished.”
And even: “It is a hallmark of despotism to have these things happen to people.” Quite right too.
So, Steve, what happened when your Conservative colleague David responded, and said in as many words, “Nah, pants to that!”?
Something clearly occurred behind the scenes to make Baker withdraw his proposed amendment without even putting it to the vote. We may never know what that ‘something’ might have been, but as a result we are now left with a government that has unchecked self-appointed powers to set retrospective tax legislation at will, and without the courts being used to test the law.
This will be dressed up as a victory for ‘hard-working families’ who pay tax via the pay as you earn scheme. In truth, it appears to be more of a victory for even greater state control over our lives.