Debating the tax bill

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There is nothing at all unreasonable about a departing member of any organization arguing about the legal basis on which outstanding debts should be settled.  Money is either owed or it isn’t, and there is little doubt in my mind that the EU27 have a reasonable basis for demanding that the UK meet the obligations to which the country has committed.  I’m equally clear that the UK can, if it wishes – and this is what the extreme Brexiteers are saying, simply renege on previously-made commitments and walk away, although I don’t share their optimism that those left with a hole in their budgets will simply shrug their shoulders and place their trust in any commitments that the UK Government makes in the future.

I doubt, though, that many of us would find our banks terribly understanding if we went to them and said, in effect, “We’ll offer to pay you part of what we previously committed to pay you, but only on condition that you allow us to dictate the terms under which we’ll bank with you in future”.  That, though, seems to be roughly the position of the UK Government in relation to settling debts with the EU.  In fairness, it is an approach that most of the extremely wealthy individuals and the biggest multinational companies would recognise, because it is precisely the approach which the UK Government adopts when it comes to taxing the rich and powerful.  They are allowed to pluck a figure out of the air, negotiate around it and arrive at a settlement under which they pay as much as they agree to pay, regardless of their actual tax liability, basically because that makes things easier for HMRC than having to go through all the bother of making a proper assessment.  So I can see why ministers might believe that it can work, although I’m far from certain that the EU27 will roll over as easily as HM Treasury does.

Underlying all this is that, instead of trying to debate and agree what the UK actually owes by considering the elements of the ‘bill’ carefully and reasonably, the UK government – egged on by a media which has little interest in facts or details – is obsessing over the total sum, and trying to create a spurious link between meeting agreed obligations on the one hand and demanding favourable future treatment on the other.  And they wonder why the EU27 are losing patience with them.