Heather Stewart, the Observer’s economics editor
I’m usually the last to argue that any woman should be defined by what her partner says or does. But David Cameron is a public figure, who has made a very public fuss, quite rightly, about the questionable morality of firms that do lucrative business in the UK – and in this case claim the kudos of being a “British” brand – while paying little or no taxation here, and keeping their financial affairs secret. Samantha Cameron is not a humble backroom toiler at Smythson: she has acted as a public face for the firm, which we now discover is ultimately controlled by a trust based in the notorious tax haven of Guernsey. She should step down.
Eamonn Butler, director, the Adam Smith Institute
Stop beating up innocent people. David Cameron is not his wife’s custodian, nor she his. She should be commended for going out and getting a job, where she at least might pick up some understanding of the issues facing business and the everyday tribulations of people in work – useful, given how insulated our politicians are. She is an employee, a creative adviser, not one of the bosses who makes decisions about her employer’s finances. No doubt if she worked on the checkout in Tesco you’d be telling her to resign over the company’s financial fraud investigation or the moans about how it treats its suppliers. Smells like pure politics. Focus on the real issue. What’s wrong here is our high and complicated taxes that drive firms to base themselves abroad. It’s a free world and that’s perfectly legal, but who can blame them?
HS How much understanding of real life does Samantha Cameron gain from working for the retailer of £1,000 handbags? Setting that aside though, the partner of a political leader is in a privileged position, which carries responsibilities – dare I say it, even moral ones. Like it or not, receiving the plaudits on stage at Tory party conference, she’s part of her husband’s political project. Which in recent years has (admirably) involved a keen interest in ensuring companies pay their fair share of tax. I saw him deliver a memorable speech at Davos a couple of years ago in which he called for “proper companies, proper taxes, proper rules”. That makes it highly questionable for his partner to occupy a senior position – snipping the ribbon at store openings – in a firm that appears anything but proper. You’re right that the real issue here is tax reform, which I’m glad to say is firmly on the domestic and international agenda. But for too long we’ve accepted the argument that “everyone does it”. That’s not good enough.
EB Samantha Cameron is as low-profile as the spouse of a prime minister can be: rarely gives interviews, never talks politics – I don’t think we even know what her views on tax and politics are. Let her get on with her life without being hounded by a partisan press. I noticed the dig: is your real gripe that she designs £1,000 handbags? Frankly, if anyone is daft enough to spend £1,000 on a handbag, it’s no skin off anyone else’s nose. In fact, lots of people gain – the retailer, the leatherworkers, the dyers, the shippers, the artisans, the toolmakers (even the odd creative consultant) – most of them probably in Britain.
Complain instead about David Cameron – or the coalition – for being too slow to replace corporation tax with something lower, more world-competitive, more effective and fairer. After all, companies don’t pay tax: people do. About 57% of corporation tax falls on employees as lower wages, and another 10% on customers as higher prices. Only a third of it hits company owners (who include millions of small savers like you and me). If companies move HQ to cheaper places, it’s workers, customers and the rest of us who gain.
HS That is absolutely not my gripe: if anyone is potty (and rich) enough to spend a grand on a handbag, that’s fine by me— and you’re right, all power to the craftsmen and everyone else involved. I was merely questioning whether flogging high-end leather goods on Bond Street(or consulting about how best to do so) represented the kind of insight into ordinary working life that might inject a sense of proportion into the Camerons’ kitchen table chat. After all, the average weekly wage is less than half that.
And for all its flaws – which the OECD [Organisation for Economic Cooperation and Development] is battling to correct – corporation tax is an effort to capture where economic activity is taking place, and profits being made. Would you have the entire burden of taxation shifted to income tax, so that it all falls on employees? Or VAT, which is hugely regressive, hitting the poorest hardest? And if your solution is to slash taxation across the board, how would you fund the health service, the welfare state and the public services which many believe to be fundamental to a wealthy, civilised society?
EB OK, a posh bag maker is far from factory grime, but in any job you have to deal with people of all kinds. And you learn about the pressures on businesses, from regulation to rates. Small plus, maybe, but still a plus.
Oh yes, the OECD would love to “harmonise” taxes, wouldn’t they? Then governments could tax with impunity. They already spend half the national income: if it wasn’t for the threat of folk moving somewhere cheaper, they’d extort even more. Britain’s not broke because we aren’t taxed enough but because our politicians spend too much. And what does it buy us? Sclerotic healthcare, failing schools, dysfunctional welfare and armies of state nannies telling us what we can and can’t smoke, drink, eat, watch, say and (if they could) think. High taxes are counterproductive. You don’t need to cut a thing (though you should). Abolish corporation tax and we’d all be better off. Businesses would relocate here, investment would boom, companies could pay their staff higher wages. What’s not to like?
HS You’ve revealed your ideological colours. Your opposition to taxation actually stems from a deep suspicion of the state – the social contract under which we protect the weakest, educate all our children and care for the sick. No doubt some public spending is wasteful – but the alternative is unthinkable. And the idea that hordes of global companies would come stampeding to Britain if we just agreed not to tax them is surely undercut by the fact that we already have one of the lowest rates in the rich world. It was the prime minister himself who said recently, ‘We’ve cut the rate of corporation tax down to 20%, we’re the most competitive place to come and start a business, but here’s the deal – if they have a low tax rate, those companies have damn well got to pay it.” Perhaps he should mention that to his wife.
EB Don’t get dewy-eyed about the state. We could have all you mention for a lot less money. And it’s not just waste – a lot of our taxes, extorted at the point of a jail summons, are spent on things your readers would think grossly immoral (think Iraq War).
The PM’s wrong to say Britain is ultra-competitive. That is why so many firms base themselves abroad. But you can’t blame their employees for that. The low-tax jurisdictions you despise are a long-stop against ruinous over-taxation. They attract capital from all round the world and send it to London, creating jobs and growth for Britain. Instead of complaining about businesses moving to them, we should become one of them. We’d have better government, and lower taxes.
