LCAG: No chancellor, there are no loan charge scheme promoters here

For the second time in two appearances before the Treasury Select Committee, the chancellor of the exchequer, Philip Hammond, made a false statement regarding the loan charge, writes Steve Packham, contractor and founder member, executive committee member and spokesperson for Loan Charge Action Group (LCAG).

Once could be excused as careless, twice suggests something much more sinister. And ‘sinister’ is a word that has been used about the extraordinary campaign of misinformation peddled by HMRC and the Treasury over the loan charge.  

Yet, as if a reward for being the front man for this dishonest propaganda campaign, the government yesterday announced that Mel Stride, the Treasury Minister synonymous with the widely-denounced loan charge, has been promoted to become Leader of the House of Commons. And people wonder why so many have little faith in politics!

The loan charge was introduced with scant – and wholly inadequate – parliamentary scrutiny and with a grossly flawed impact assessment. So initially the Treasury, led by Mr Hammond, and HMRC will have thought that this draconian policy would be allowed to pass into law with little criticism.

Instead, as hard-working people realised they faced ruin and lawyers baulked at the chilling manner in which this draconian policy sweeps away basic taxpayer protections and undermines the rule of law, more and more parliamentarians have raised concerns. The more the reality of the loan charge – and the conduct of HMRC around it – was exposed, the more the concern grew into strong criticism until it was clear that this is a scandal of poor policy-making and institutionalised disinformation.   

Stung, and rightly tarnished, by the criticism, the chancellor tried to throw mud back at those who have campaigned to highlight the loan charge scandal. However, in doing so, he has made yet another false statement. Mr Hammond falsely accused one of the people acting as the Secretariat of the Loan Charge APPG of being involved in promoting tax avoidance schemes, which is absurd as well as false.

The chancellor (no doubt aided by less than scrupulous figures within HMRC) has also tried to indirectly attack the Loan Charge Action Group. Well, LCAG is simply a campaign group, of people facing the draconian loan charge, with the sole purpose of campaigning to raise awareness of and seek change to this disproportionally punitive legislation. We have no financial links with any advisers or firms and LCAG has not, and will not, endorse or recommend any companies or schemes seeking to circumvent the loan charge. So Mr Hammond and HMRC can attack us all they like, but we are exercising our democratic right to campaign against illegitimate legislation and exposing dishonesty and dishonour in public office.     

It is shocking just how consistently as well as how cynically the Treasury and HMRC have peddled misinformation throughout this whole policy-making fiasco. It is clear that this started at HMRC, presumably as an attempt to cover up both the dangerous human outcomes the loan charge would inevitably lead to (and tragically has already led to) and also the historic, chronic failure of HMRC to tackle these loan arrangements. An award-winning tax barrister, Keith Gordon, actually wrote to the Treasury in January about HMRC’s extraordinary attempts to mislead, stating: “In short, it is my view (as unpalatable as it sounds) that no-one (taxpayer, minister, judge, journalist or indeed anyone else) can safely rely on the veracity or accuracy of any statement uttered by HMRC on the mere basis that the statement is being made by a public servant”. 

What is perhaps even more extraordinary is it turns out that the two responsible ministers – Mel Stride and the chancellor himself – have also been regularly issuing misleading and in some cases false statements about the loan charge. The 91-page report of the Loan Charge APPG’s Loan Charge Inquiry examined the statements made by HMRC and the Treasury, including both the ministers and concluded: "There has been a systematic campaign of misinformation by HMRC and the Treasury over the loan charge. This is a blatant attempt to airbrush the reality of what is a deeply questionable policy and also cover up the likely impact of the loan charge on individuals…this is deeply worrying for a public body and government department”.           

We have seen the latest cynical attempt to mislead when it comes to the announcement of six arrests by HMRC. These arrests are based on a suspicion of fraudulently promoting solutions to avoid the loan charge, ‘solutions’ that may in fact not even exist. They are not action against promoters of the historic arrangements now subject to the loan charge and there is still no evidence that HMRC are going after the promoters of these older and now closed down arrangements.

Yet, inevitably, Mel Stride cynically and wilfully conflated these things on the floor of the House of Commons this week, to give the false impression that HMRC are pursuing promoters of historic loan arrangements. The reality is that HMRC, while failing to recover any money from loan arrangement promoters, are ruthlessly pursuing ordinary people to the brink of suicide for retrospective tax that was not due at the time. This government and these ministers think this treatment of taxpayers by HMRC is acceptable.

It was also shocking that Phillip Hammond thought it was acceptable to openly laugh about the loan charge in the House of Commons while attacking MPs who oppose the government’s policy. This has caused outrage to the many people suffering mental illness and family breakdown caused, in part, by the loan charge. As cold and calculating a politician as they come, this is a chancellor who has lost – if he ever had one – his moral compass.

As for Mel Stride, who has misled MPs and journalists over the loan charge again and again, Keith Gordon started his letter, “I write on the assumed basis that you are a politician of integrity and principles and one who respects the concepts of fairness and the rule of law”. Alas, Mr Stride – and Mr Hammond – by their consistent attempts to mislead, have shown that this assumption was misplaced. Yet Mr Stride is now Leader of the House of Commons, having serially misled it and flagrantly ignored its majority view. Let’s hope his replacement, Jesse Norman, can bring some desperately needed integrity to the Treasury. 

The Loan Charge Action Group will not be deflected by these attempts by the chancellor and others to attack us. We will expose any further false statements. We will continue to campaign against the grossly unfair and retrospective loan charge, a policy that has already been linked to bankruptcies, family breakdown, mental illness and suicides.

We will also continue to expose the disgraceful lack of integrity that underpins the policy and the cynical campaign to try to distort the reality of the loan charge. This lack of integrity shames HMRC and the Treasury and it is time, this having been exposed, that it is properly challenged. Public confidence in the Treasury will not be restored unless and until it is.