Abhishek Majumdar: Avoiding tax avoidance and restoring confidence to the UK

Abhishek Majumdar is an Oxford graduate and sometime corporate financier who lives in London.

A Conservative Prime Minister once remarked at a party conference that he would define Conservative party policy as ‘the upholding of confidence’. The speaker was the Marquess of Salisbury, and he was speaking in 1889. Much has of course changed since then; including the Conservative party itself, but the idea of restoring and upholding confidence is still crucial, especially with regard to the current economic crisis.

Arguably the most vital task of the Conservative party in government, should it win the next election, will be to maintain investor and business confidence in the UK. Without this, the nation faces the very real and serious threat of permanent decline, as capital flies to other destinations and job creation grinds to a halt.

Bearing this is in mind, the Guardian’s latest crusade against ‘tax avoidance’ is as destructive as it is misguided. A word of caution is necessary. Nobody is accusing anybody – yet – of tax evasion, which is a crime. What is being alleged is that companies are exploiting loopholes in the law in order to pay as little tax as possible.

The Guardian is exercised over this because it has assumed that everybody has a duty to pay as much tax as possible (what is usually referred to as a ‘fair share’) to the State. The principle of private property, however, is completely ignored. If property is sacrosanct, as it should be in a sovereign democracy, then each individual or association of individuals is entitled to try and make their finances as tax-efficient as possible. This is only ‘avoidance’ if one considers, as many on the political Left do, that the redistributive affairs of State take priority over individual freedom.

Furthermore, to accuse a company – a voluntary and entirely consensual association of autonomous people – of avoiding tax is like accusing a football team of trying to score goals.