September 7, 2011 10:45 pm

Tax and banking in the national interest

Robert Shrimsley finds patriotism can be the last resort of the high net worth individual

It’s 10 minutes past eight here on Radio 4 and there’s no hotter topic at the moment that whether the chancellor should axe the 50p top rate of tax. Tories, business leaders and even some economists are calling for the abolition of the top rate, saying it is damaging our competitiveness and ability to attract wealth creators. We’re joined now by Sir Reg Croesus, former chairman of Wongabank. Sir Reg, why do you feel that you should pay less tax?

Because it’s my patriotic duty.

I beg your pardon.

It’s my duty and as such I feel it’s time to speak out. There are too many people trying to stop me expressing my love of my country.

A love you’d express by paying less tax?

Exactly. Look if this were just about me, I would willingly pay up, but it is clear that taxing me at this rate is against our national interest. We are sending the wrong message to wealth creators who can go anywhere. Indeed, it’s got so serious that several of my non-domicile friends have told me they are considering not domiciling themselves somewhere else instead.

This sounds like special pleading? Only last month week we saw Warren Buffet saying the super-rich should pay more tax.

Yes, but who’s Warren Buffett? I’ve never seen him at Annabel’s. The man still eats at Piccolo Pete’s in Omaha; not exactly spreading the wealth, is he? It’s true that some of us are paying less than you might imagine but that’s not because we want to. Yes, cutting the top rate of tax would happen to benefit us personally and maybe that’s embarrassing. But I won’t let my embarrassment stand in the way of doing what’s right for the country.

Banx cartoon

Some listeners will struggle to understand how paying less tax shows your patriotism.

Look, John, I love this country; I can’t imagine living anywhere else for 91 days of the year and I won’t stand idly by and be forced to leave. I’ve spent years constructing a number of tax-efficient shelters precisely so that I and my business can stay here for the good of the nation. But now even my ability to help the country in this way is being threatened by vindictive assault on tax loopholes and offshore accounts. This can only deter people from coming here. And all for an extra £2.4bn a year.

But what about the argument that the rich have to do their bit, take their share of the pain?

I understand this – of course I do – after all we are all in this together. But a public sector worker is not a wealth creator. I spend a small fortune on accountants alone – and these are not wealthy people, some of them are on six figure salaries. That’s trickle-down in action.

But it’s not just personal taxation that’s worrying you. You’re also angry about the looming bank reforms, which you think, some might say conveniently, are also against the national interest.

There’s nothing convenient about it. These plans will damage the country at a time when we need all the help banks can give us. But in our desire to prevent another crash we are in danger of preventing all the years of prosperity that helped cause that crisis. We value the small but honest profits from lending to business, but how can we do that if we are being forced to cover the bets we’ve made on the futures markets? Unspectacular growth is not all it’s cracked up to be.

But surely if it’s the national interest you’re concerned with you’d be putting the money into good national businesses.

Come on; is it really in our national interest for one of our leading banks to tie up its capital on some boring manufacturer when we could be risking the lot betting against the Swiss franc? If we push too far and too fast with higher capital buffers and ringfencing retail banks, on top of whacking individuals with higher personal taxes, some of our best banks will go abroad. As a patriot, I ask you, do you want to see our great British banks having to be bailed out by a foreign government?

But that’s the kind of argument you made over the past 20 years when you were telling us we needed more light-touch regulation.

And under that regime we enjoyed years of prosperity, right up till the moment when it destroyed the entire financial system.

But if you take all these arguments to their logical conclusion we’d have no personal taxes for the rich and no regulations for banks.

Funnily enough, that’s just what I said to the chancellor. Do you think it’s a runner?

Copyright The Financial Times Limited 2014. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.

SHARE THIS QUOTE