IFS: Parties 'just making up numbers' on tax avoidance

Posted On: 
13th April 2015

The three biggest Westminster parties are "making up" figures on how much they would raise from clamping down on tax avoidance, the head of the Institute for Fiscal Studies has claimed.

The Conservatives, Labour and the Liberal Democrats have all pledged to raise billions of pounds by closing down loopholes, but IFS director Paul Johnson said the claims had little foundation. 

His contention that the figures are "not at all credible" throws serious doubt on the parties' fiscal projections, which all rely on raising a substantial amount through tackling avoidance and evasion.

Asked about the parties' plans, Mr Johnson told BBC News: "Frankly, they’re not at all credible, I mean all of the three main parties are just making up numbers, quite honestly. I mean the Conservatives have made up a £5bn number, the Liberal Democrats a £7bn number and Labour a £7.5bn number."

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He also argued that it would not be possible to work out which rules changes had raised a particular amount of money.

"They’ve essentially said ‘these are targets for what we want to get from tax avoidance’ – who knows whether that’s feasible, who knows whether that’s the kind of money which is actually achievable and, frankly, we’ll never know because you get these kinds of statements in all the budgets for the last 15 years and more, saying that each Budget will raise £1bn or £2bn from clamping down on tax avoidance.

"Actually, you look back at these, first of all you add them all up and you get to a completely implausible number and secondly you actually look back and say ‘that measure actually raised that amount of money’."