Osborne's legal opinion casts doubt on Brown's latest tax

A legal opinion commissioned by George Osborne suggests that Gordon Brown's doubling of air passenger duty may be unlawful and passengers can refuse to pay it (Daily Mail).  Mr Osborne said:

"The increase in air passenger duty is an additional tax that adds to the already high cost of living and the rising tax burden, and because of the way it has been introduced retrospectively the increase has caused confusion and may even be illegal.  Indeed the legal opinion we've received says there is no legal basis to collect the increase in tax."

British Airways has itself absorbed the cost of the increase but most airlines are attempting to force customers to bear the retrospective tax.

Comments

[Zorro]

So much for all his big talk about "green" taxes.

Could Ryanair be donating to Tory funds I ask?

Arise Lord Ryan of Heathrow!

[Richard Carey]

So cynical, Zorro - but then I would expect nothing less from a self-professed opposition troll...

This isn't at all incompatible with the Conservatives' stance on environmental issues - quite the reverse. We've always been clear that using taxation as a tool in environmental policy must be about shifting the burden of taxation from things that are good and help strivers - hard work, enterprise, families - to things that are bad - activites that pollute, that emit too much carbon etc.

I grant you that we haven't been good enough at getting the balance of this message across at ground level, something I've written about here before. But there's no balance in Brown's proposals - he's just taking, taking, taking as usual, seeing no distinction between our money and his.

Interestingly I seem to recall that when there was a debate at last year's Party Conference on aviation taxation, the floor vote was split virtually 50-50 (perhaps someone else will have the numbers...) Taxation on environmental grounds to try and change behaviour will always be controversial, but Brown's "clunking" (excuse the soundbite!) approach to this is damaging the future potential of it as a policy tool for any of the parties.

[david]

I seem to remember that when the last Conservative government, attempted to put 17.5% VAT on domestic fuel, the reason given for that was a 'green one' Still putting VAT on domestic fuel, could hardly be called a tax on hardworking families: could it?

[Editor]

We're banning Zorro - mainly for his comments on the adoption thread and for his troll-like behaviour.

[Praguetory]

Feel free to delete my responses to his inane comments.

[Denis Cooper]

A tactical cock-up as I see it. If Osborne wanted to raise a valid and important question about the legality of increasing the tax from today, he should have done that without confusing the issue by saying "The increase in air passenger duty is an additional tax that adds to the already high cost of living and the rising tax burden". Suppose that there had been a Parliamentary resolution to approve the increase in the tax, which way would he have voted? Apparently he's caught out the Labour government in another bit of illegality, but by giving them an opening to immediately counter-attack he's thrown the point away.

[James Maskell]

There must be better arenas to kick off the argument about the legality than a statement, surely? This will get press attention for a day then thats it. Use it in Parliament and you hit a whole lot further.

[Angelo Basu]

The legality point sounds right but it is a bit clunky to use it to criticise the principle of a tax which Osbourne himself would probably have to introduce were he to be Chancellor. Then again, good politics to get the Mail to write a piece making us out as anti-tax. However, I suspect that they and the electorate will throw the same story back at us if we raise similar green taxes even if we do it legally.

[Michael McGowan]

Tim, when are you going to organise that debate in a pub? Graeme and I are thirsty!

[David Boothroyd]

As anyone who has ever commissioned legal opinions knows, the Barrister doesn't attempt a balanced judgment but just produces a legal argument backing up the interpretation favourable to the people commissioning the opinion. Don't take this as any sort of indication that a court is going to rule the APT rise illegal.

[Graeme Archer]

Michael is right! I think we should start a formal Conservatives-Not-At-Home branch, for a more traditional avenue for political discussion, aka going to the pub.

This story (flight taxes illegal) is great bit of opposition politics from Osborne. I'm sure I keep reading on here that we'd all like a bit more fight from our front-benchers: I think organising a legal review of one of Brown's taxes, finding it to be illegal, and heading a media-call for people to refuse to pay it, is classic and effective opposition-ry.

I just seen that Blair was re-interviewed by the Met last Friday. I wonder if DC had a sniff of this? And this has led him to start the more frontal "stand not on the order of etc" attack on Blair?

[Mark Williams]

David Boothroyd:

I have it on the authority of a Privy Councillor that he has spoken to the lawyers in the Houses of Parliament, and they believe that the Treasury have screwed up on this one.

The legal analysis is very simple. You just have to look at (i) the case law Boles v Bank of England, (ii) the Provisional Collection of Taxes Act 1968 and (iii) the normal Budget procedures. When you can display some familiarity with that, then we might listen to your snide remarks about barristers.

[TaxCutter]

Good work by the Shadow Chancellor. I think Iain Dale raised this point sometime ago. There's comedy value to be had given Gordon banging on about unacceptable tax planning, when he can't even do the simple thing of making sure his tax rises are legal himself.

There is a wider issue in that many changes to tax law are operative from the date of government press release, and not from the often later enactment of the Finance Bill, or at least the Budget date (when HM Treasury issue details but they rarely make Gordon's speech). This is potentially both contrary to UK law and the European Court of Human Rights rules. Its also just plain undemocratic for tax law to be effectively passed prior to parliamentary discussion.

Expect one of the airlines to litigate.

[Richard]

If you offset green taxation by tax reductions elsewhere then people may just choose to spend the tax cuts on the green taxes. The only solution to this is to maintain a higher overall tax burden - which I'm sure all good Tories will oppose. So is there really any point to a Tory policy of green taxes? It might please the Independent but will it actually make a difference?

[Ali T]

No taxation without representation

Who on earth are these loonies who seem to think that questioning the legitimacy of the introduction of a new tax is incompatible with the Conservative’s current stance on so called green issues?

I am afraid to say that these people have clearly missed the point, which is that the concerns which are currently being expressed are about the way this tax has been introduced without being properly scrutinised and approved by Parliament not about the principle of the tax.

It has been a fundamental part of the British Constitution for hundreds of years that taxes must be approved by Parliament. Nothing has changed so why are there suddenly all these whinging lefties saying that the Conservatives have abandoned there position on green issues?

Dare I suggest that the reason for their chorus of criticism is really down to the fact that the Conservatives have dared to criticise this undemocratic and unaccountable move by ‘El Gordo’ would be PM and now it seems also aspiring dictator. Why have Parliament when you can rule by decree?

The simple fact about this is that if this is not challenged as is currently being done we, (that’s all of us) are accepting the most significant blow to the power of Parliament since the monarch could disband Parliament as they saw fit. The only difference here is that it will be by Gordo and not by Charles I.

There were some who mistakening thought it was only Tony who had those sorts of absolutist tendencies…it appears that Gordo is going in exactly the same way…so much for devolving power!

So to all those whining, I say look at the real issue here and to all those who are doing their very best to protect the power of Parliament, including many Conservative MPs I say well done and I am sure you have the backing of the British People.

[Denis Cooper]

But if "... these people have clearly missed the point" that's because Osborne didn't stick to the point about illegality. As I said, a tactical cock-up.

[boring]

What a gigantic chasm there is between the two parties on this, both in favour of increasing taxes on consumers in this way, disproportionately hitting the poorest (but hey the Osbornes will still be able to fly).

One party complains it hasn't been put through parliament yet and the other supports the same policy but realising their error will now put it through parliament.

[Matt Davis]

"One party complains it hasn't been put through parliament yet and the other supports the same policy but realising their error will now put it through parliament."

Which then raises the interesting question of how Conservative MPs will be whipped on that vote.