The Finance Bill 2013 – How to promote special interest lobbying

Atlas, who really ought to shrug

Atlas, who really ought to shrug.

Yesterday, I spoke against Clause 35 and schedules 15 to 17 of the Finance Bill 2013. They introduce tax relief for “high-end” television production (that is, posh drama and comedy) and video games development.

They’re industries I’d like to see flourish but not by granting special privileges. It’s special privilege which is the most egregious objective of lobbying: it represents a subsidy for a preferred group at everyone else’s expense.

I began by provoking laughter, for this kind of measure deserves to be mocked,

This clause will stand for ever as a magnificent rebuff to all those in Opposition who have said that this is a laissez-faire, liberal Government. [ Laughter. ] At the beginning of this Parliament, a number of Opposition Members described the Government as Hooverite. I might say that this clause is Hooverite, but only in so far as Opposition Members have misunderstood Hoover’s legacy; he was an interventionist to whom—of course—FDR attributed many of his own policies.

Later, I continued,

The clause is very timely because we are in the middle of a lobbying crisis. It is just this kind of special privilege that leads to lobbying, because not only has a privilege been obtained, it is bound to inspire other groups to lobby to obtain similar privileges. It has also created some special interest groups that will lobby in order to retain privileges.

Some would argue that it would make us terribly unpopular to say that these privileges should be taken away, but if we lowered tax rates for everybody and took away the special privileges, I think they would all be rather happier.

This is the root cause of the lobbying crisis: government intervenes too much in business, taxes are too high and people want relief from it all. The excuse this time is international competition: that we must subsidise these industries or they would depart.

The root problem is faith in government power. The answer is the doctrine that was once called “liberalism”. Unfortunately, today’s liberals are interventionists, despite their protestations. Indirectly replying to their defence of this measure, I intervened on David Gauke:

Notwithstanding my hon. Friend’s remarks [John Pugh had attacked me for not being pragmatic]—I of course understand the pragmatic point about the world that we live in—I wanted to observe that the dominant ideology around the world during this country’s greatest period of industrialisation was once known as liberalism. It was at that time that the Liberal party actually defended liberalism like it meant it.

This is the problem. As I have written before, classical liberalism died in the first half of the twentieth century to be replaced by variations on the theme that we could all be better off if only wise politicians interfered more in our lives.

It is that interference which creates lobbying. Lobbying for tax relief. Lobbying for regulatory favour. Lobbying for more funding, often in good causes like fighting terrible diseases. And, perhaps even honourably, lobbying to try to stop government doing too much damage, often as a result of giving in to other lobbyists. Look at those schedules to the Bill and you will see what a miserable farce it creates, how much scope for fruitless discussion pops into existence and how much time and money is being wasted doing damage.

Patrick Mercer has brought further shame on Parliament. The greater shame on our country is that we have allowed the doctrines of state intervention to ruin our politics, our economy and increasingly our lives. We will only begin to do better when the electorate demand their liberty.

I did not bother dividing the Committee. All three parties were united in support.

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Comments & Responses

3 Responses so far.

  1. Rachel Addison says:

    Hi Steve,

    I believe you are currently being lobbied by member of the No To Retro Tax group to support an amendment to the finance bill (specifically the abolotion of retrospective application of section 58(4))

    I’m sure the lobbyists have done a good job in convincing you that Section 58 is unfair however i’m concerned you may not have been given all the details.

    I was fortunate enough to work as an IT contractor, making between £100,000 adn £200,000 a year. I paid around 50% in taxes though PAYE and NI.

    The members of No To Retro Tax consist of IT contractors like myself, Doctors and Property developers who earn way in excess of me.

    By entering into the double taxation treaty abuse peddled by Montpelier they have only paid an annual figure roughly equal to 3.5%. There were around 3000 members of the scheme which operated for quite a few years so you can see how this adds up to a substanital amount.

    Not only do i find this type of highly aggressive abuse abhorrent especially given the current economic climate (like the majority of your voters i suspect) but it also affected me directly. My business could not compete with colleagues on similar rates but who could reduce their overheads by almost 50% and as a result i no longer work in the sector.

    If the amendment is successful, then it will mean that 3000 wealthy individuals will get away with retaining the £200,000,000+ they have, in my opinion (And the opinion of the judge when this went to the court of appeal .. see reference below), unfairly “stolen” this money from the the majority of people who earn far less but who choose not to greedily exploit loopholes in the law for their own personal gain.

    Please don’t fall for their sob stories. These guys knew EXACTLY what they were doing and they chose to take the risk. My colleagues would often remark that they knew the scheme would eventually be shut down but then they’d just move onto the next loophole in a perpetual game of cat and mouse)

    Your’s Faithfully,


    Court of appeal ruling:

    • Steve Baker says:

      I feel sure you will enjoy my speech.

      • Rachel Addison says:

        Thanks Steve,

        But just to make sure, i am saying i think the NoToRetroTax campaign is wrong and Section 58 should remain unchanged and the money reclaimed.