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‘We’re all in it together’ means working to close down tax havens, says Cable

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Tax havens are ‘sunny places for shady people’, Vince Cable, the Business Secretary, has told delegates at the Liberal Democrat conference.

‘We want the costs of the current crisis to be fairly shared,’ the party’s former Deputy Leader said. ‘We’re all in it together … means cracking down hard, not just on criminal tax evasion but on abusive tax avoidance. It means working with our allies to close down tax havens, because nobody thinks they’ve cash in tax havens for the quality of investment advice.’

‘These are sunny places for shady people,’ he said.

Cable sought to reinforce his party’s commitment to progressive taxation. ‘We’ve lifted tax thresholds, taking 2m low paid workers – mainly women – out of income tax, and cutting taxes for 20m on average pay.’ The very wealthy had ‘got off lightly’ so far, he said. But very high marginal rates of income tax were ‘counter-productive’.

The proposed mansion tax was ‘core Lib Dem policy’ and a first step to the ‘proper taxation of wealth and land’.

He added: ‘The super-rich can’t move their chateaux to Monaco or Switzerland, so let’s get on with it and tax them here.’

Yesterday’s Sunday Times quoted Cable as saying: ‘There is a very blurred boundary between tax avoidance, which is legitimate but often unethical, and tax evasion that is criminal, and the boundary between the two isn't always clear’.

Miles Dean, Founder of Milestone International Tax Partners, said in a press release issued in response to Cable’s speech that he would be ‘deeply offended’ if he lived in a place such as Monaco. ‘Raising taxes to affect those that create wealth is ridiculous. It will only make places like Monaco more popular,’ he said.

But Cable’s words will be welcomed by tax justice campaigners who argue that tax havens, many of which have links to the UK, erode the tax bases of other jurisdictions and hinder the efforts of developing countries to escape poverty.