The media in the UK have been commenting much upon the latest utterances from our Chancellor of the Exchequer, George Osborne. Briefly, Osborne has said he was "shocked" to discover that some of the wealthiest people in the country pay "virtually no" income tax and he had seen "anonymised" tax returns submitted by multimillionaires using aggressive avoidance schemes to dramatically reduce their tax bills. The general feeling across the nation appears to be that at best Osborne was showing huge naivety quite unbecoming a government minister and especially the Chancellor. At worst, it is suggested, he looks an absolute fool. For me it is much more than that.
George Osborne is not my favourite character but leaving that to one side I am of the view that the episode highlights how out of touch many (most?) of our politicians really are. I’m sure that the same might be said of politicians in other countries. Osborne, himself, is a millionaire, as are most of the present UK government. It may well be that he does not play the tax game but if he finds it shocking and surprising to discover that other wealthy people do he is indeed naive and out of touch – and, I believe, much worse.
Those of you who have read my blogs on tax before will know that this is painful subject for me. Without going into too many details, my childhood was littered with often violent and painful rows between my parents – virtually always about money. We were not well off and by the end of the week, despite her best efforts, my mother was often running out of money. My dad was a lorry driver and each week gave my mother his unopened wage packet and she would give him a few shilling back to buy his lunch when he was out in the road. He didn’t ask much from life, didn't drink or go the pub but he did enjoy his cigarettes. I don't remember him ever having a day off work, he never took industrial action and in short, I think, worked hard for his pay. Rows, however, were frequent and unpleasant and always at my mother’s instigation. They always ended by her beating my dad with her fists and he would stand there and be hit. I stood and screamed in the corner or sat on the stairs listening to them arguing long into the night. Although I knew my mother had a hard time making ends meet I felt bitterly sorry for my dad – and still do today.
When I was eleven I was ready to go to secondary school and had to have a school uniform. My mother applied for a grant towards this from the local council. I can still remember and feel the pain of the morning that she got a letter back explaining that she was "not eligible" because my dad “earned too much”. She went berserk shouting that dad had been cheating on her all these years, earning more than he told her and threatening to kill him when he returned home after his latest lorry trip. For two days while dad was away on his travels I was terrified knowing that a terrible row would occur when he returned. Even though I was only eleven I could, I believed, see what had happened. The amounts of money quoted in the letter were my dad’s gross earnings – but of course when he handed over his unopened wage packet it was after tax had been deducted. I desperately tried to explain this to my mother but she was having none of it – and when dad at last walked through the door all hell broke loose. The memories of that night are still very much with me. Even today, when a letter from my tax office drops through my letter box my heart races. After a lifetime of work when each month my salary was paid into my bank account my wife was the one who always “managed” how we spent and what we spent. And the reason? – the fear of getting into a row about money - and bringing back the pain of sixty years ago. Deep down I never want to return to that terrible night. I will never argue or dispute about money with members of my family – I am, I know, “a soft touch”.
Years later, when I went to teacher training college one of my first experiences brought it all back again (see blog “Taxing Times”). Like most students I received a grant which was calculated on parents’ income. My parents were not well off but they were still required to make a donation and they did. Each Monday morning I would receive from my mother a rolled up copy of the previous Saturday night’s “Football Post” (so that I could read the reposts of how my beloved Preston North End had played!) and hidden inside was a letter of all the family news and two pound notes. I know that the £2.00 mother sent me each week was a significant bit of the family’s cash and I also knew I was lucky since many of my peers did not have such supportive parents.
In the next room to me was a blunt, plain speaking Yorkshire guy. Terry and I got on well and soon after we started the course we happened to be discussing grants. Terry was mean with money (a Yorkshire man!) but never seemed short of it. He told me that he got a full grant plus other benefits - a clothing grant, an extra payment for books, a travel grant so that he could travel home for free – all things that had been denied me because my parents earned “too much”. At first this meant nothing to me - I felt sorry that Terry was obviously from such a poor background that he got the maximum grant and all these other awards to help him so that his poor parents did not have to contribute. I felt quite well off! But then, after a few weeks, his parents came for a visit and I discovered that I was terribly wrong and very naive . His dad drove a very posh car – a Humber, the equivalent in those days of a top of the range BMW. I looked at this wonderful machine and thought of the "old banger" my dad drove and desperately tried to keep mechanically sound. His mother was obviously very well and expensively dressed - and I thought back to my mother sitting at night after a day working as a weaver in the local cotton mill from 7.00 am to 5.30 pm unpicking old clothes to repair or to re-use the wool from old jumpers and cardigans to knit something new. I learned that Terry's dad owned a chain of gents’ outfitters in West Yorkshire – they were very well off! When I queried his grant Terry was perfectly honest - explaining that his dad had an accountant who made sure, by using every tax loophole, that his dad’s income appeared minimal as far as the grant was concerned and that despite the booming business he rarely paid any tax anyway! Terry was, therefore, the happy recipient of a full grant and every other available benefit - all so far as I could judge obtained pretty dishonestly!
And as I listened to Terry - and now half a century later to George Osborne - I thought back to the frequent violence that there had been at home between my mother and dad about money, I thought of how much it “cost” my parents to send me the £2.00 each week from their meagre income and especially I thought about the basic dishonesty of a system that allows someone to play it and reduce their financial responsibilities by clever accountancy. But most of all I thought about that terrible night when my dad came home and I screamed with absolute terror as my mother tore into him and accused him of cheating and taking the food out his family’s mouth. I thought of my dad as he stood there crying and let my mother beat him and throw things at him – he never responded. He tried to explain about the tax being taken out of his wages but to no avail.
So, when I read of George Osborne’s "shock" when he discovers that wealthy people play the tax system I find the admission quite loathsome and obscene - especially coming from one of the most powerful men in the world and someone who has a direct influence on all our lives. It is also very revealing about how little he knows of everyday life and people. I wonder how many nights the young Osborne cried himself to sleep because of the financial worries of the family. How many times his mother beat his father – all because of a tax deduction – and young George stood in the corner and screamed. Indeed, it seems to me that Osborne is showing more than just naivety he is showing total insensitivity and lack of understanding of the lives of very many people in the population – and that for a politician is a terrible indictment.
Moving away from Osborne, however, this lack of understanding and insensitivity to the needs and lives of the ordinary population by politicians is a worrying trend. Most of the present government are millionaires. Well, it is a Conservative government and so that is no big surprise – and I would argue that it has always been largely thus. Indeed, over the past centuries the great politicians of every party were invariably from privileged backgrounds - but in my view there was more of an awareness of the lives of the ordinary and a real desire to improve things. One can see this in some of the comments of the day - for example, the great business man and statesman Joseph Chamberlain who famously said "My aim in life is to make life pleasanter for this great majority;I do not care if it becomes in the process less pleasant for the minority". Sadly, however the balance has tipped and times have changed. This sort of comment is unlikely to be heard today from any of our major parties. None actually sees or comprehends the "great majority." Like the Conservatives, much of the Labour leadership too is increasingly from a privileged background and seems increasingly to be on the "gravy train". One factor in this is, as the Guardian recently commented, the demise of the trade union movement. In the past ordinary men and women got their first taste of politics and representation via their trade unions and they then moved into politics and thence the Labour Party and ultimately Westminster. They were ordinary people who eventually found themselves in government. They brought the ordinary man and his ambitions, needs and life into Westminster corridors - but no longer. Increasingly it is the life and ambitions of the public school educated elite that walks the corridors of power - and the result is that those who are in power can have no empathy with those that put them there. George Osborne is a prime example of this.
I don’t particularly like Osborne nor do I like his politics but at the same time I don’t think he is any worse than many others - of both the left and the right. He has all the right qualifications for leadership – money, powerful friends, excellent education and the like. What he doesn’t have is compassion and understanding. If he did he would not have made the unthinking comments he made a couple of days ago. Is he so blind and ignorant of life that he has never realised that people try to maximise their wealth by minimising their tax responsibilities? If he is what is he doing in government? Does he ever lie in bed at night and try to reconcile two conflicting points of view in relation to tax? Firstly that tax is the price we pay for a civilised and caring society and secondly that his own party's (and now the Labour Party's) mantra to endlessly repeat "we want to lower tax so that you keep more of your money in your pocket" is really a euphemism to justify mankind's basic greed; "I've got lots and I want more!" If he finds the behaviour of his own kind, the wealthy, “shocking” I wonder what he must think of the behaviour of ordinary folk like me. Does he know about it? Would he approve? Would that, too, shock him? Could he understand and empathise with it? Would he understand that a sixty seven year old ex teacher still gets pangs of dread when tax and money are the subject of discussion or dispute? I think not. And if he (or indeed any other politician of any party) cannot relate to these sorts of questions and feelings what the hell are they doing governing us?
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