Conservatives and Labour trade celebrity blows as ‘Carr tax’ row escalates

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By Andrew Barr 

Prime Minister David Cameron has come under criticism for leading personal attacks on comedian Jimmy Carr for tax avoidance whilst refusing to condemn Tory party donors allegedly benefiting from similar schemes.

The political row follows comments by Mr Cameron who said that comedian Jimmy Carr’s use of a tax avoidance scheme in Jersey, whilst legal, was “morally wrong”.

However Labour have hit out at the UK PM claiming that Mr Cameron was being selective in his criticism by singling out the comedian whilst refusing to comment on the tax affairs of Take That star Gary Barlow, a prominent Tory backer.

Labour MP and Shadow leader of the House of Commons, Angela Eagle, criticised the personal nature of the attack on Mr Carr, saying:

“The prime minister rushed to the TV studios to condemn the tax avoidance scheme used by Jimmy Carr but he did not take the opportunity to condemn as morally repugnant the tax avoidance scheme used by Conservative supporter Gary Barlow, who’s given a whole new meaning to the phrase ‘Take That’.

“If it’s all so morally repugnant, why has he just been given an OBE in the birthday honours list?

“Why is the prime minister’s view of what’s dodgy in the tax system so partial? Sir Philip Green has interesting tax arrangements but far from being labelled morally repugnant in a Mexico TV studio, he’s got a government review to head up.”

Another Labour MP, Catherine McKinnell demanded that the former Take That star return his OBE if he used similar methods to pay less tax.

Several Lib Dem MPs have also asked questions about the appropriateness of Mr Barlow being awarded the honour last weekend when he had not paid the full rate of tax.

http://www.youtube.com/watch?v=KJFt6Imr5uk

Labour leader Ed Miliband commented on Mr Cameron’s comments by insisting that it was not the Prime Minister’s place to “lecture people about morality.”

He said: “I’m not in favour of tax avoidance obviously, but I don’t think it is for politicians to lecture people about morality.

“I think what the politicians need to do is – if the wrong thing is happening – change the law to prevent that tax avoidance happening and I think that is the right course the Government should take.

“Instead they are taking the wrong course which, as I say, is cutting taxes for millionaires.”

It is predicted that over 1,000 people use the K2 scheme, sheltering a total of £168 million per year from the UK Treasury.  Mr Carr is believed to be one of the largest beneficiaries of the scheme.

However critics have claimed celebrities like Carr and Barlow are small fry compared to businessmen like Sir Philip Green who ‘avoids’ tax of over £200 million per year through a system that has his wife, domiciled in Monaco, registered as the owner of his business empire.

The row also saw Lib Dem MP Danny Alexander defend the attack on Mr Carr in a BBC Scotland interview.

Mr Alexander, who is chief secretary to the Treasury, reinforced the Prime Minister’s attack on Mr Carr by himself threatening: “No matter how rich or famous you are, we are coming to get you.”

However, on Radio Scotland’s Newsdrive program yesterday afternoon, Mr Alexander refused to clarify whether or not UK Government ministers and their own tax affairs would be put under an equal level of scrutiny.

Asked whether he could give assurances that no UK Government ministers have taken part in tax avoidance, a flustered Mr Alexander told Radio Scotland:

“What I can certainly talk about is the policies that the government is pursuing.  I recently for example announced new rules to clamp down on potential tax avoidance in the public sector.

“I think that was the right thing to do. I’m very sorry that the Scottish Government has not yet gone public with its own efforts on that front and I think that they really should do so now.”

Mr Alexander was pressed by interviewer Ken MacDonald again for an answer, this time being asked whether the UK Government would release information in the public interest if ministers had indeed avoided tax.

“People’s tax affairs are confidential,” said the Lib Dem MP.

In a series of messages on Twitter yesterday Jimmy Carr issued a public apology for taking part in the K2 tax avoidance scheme.

In a series of tweets he said:

“I appreciate as a comedian, people will expect me to ‘make light’ of this situation, but I’m not going to in this statement.

“As this is obviously a serious matter. I met with a financial advisor and he said to me ‘Do you want to pay less tax? It’s totally legal’. I said ‘Yes’.”

“I now realise I’ve made a terrible error of judgement.

“Although I’ve been advised the K2 Tax scheme is entirely legal, and has been fully disclosed to HMRC (Her Majesty’s Revenue and Customs).

“I’m no longer involved in it and will in future conduct my financial affairs much more responsibly. Apologies to everyone. Jimmy Carr.”

Hear Danny Alexander being interviewed here: