This issue – or confusion of issues – has been troubling me for some time. Let me start with three declarations. First, I used to be a tax lawyer. Second, for me, the obligation to pay tax can ultimately only be a legal one, and not a matter of morals. Third, I’m not in favour of complex, elaborate, or artificial, tax avoidance schemes.
“If we truly believe in the rule of law, there can be no residual notion of a moral obligation to pay tax.”
First, some basics. The purpose of taxation is to finance the State. Indeed, the origins of tax lie in raising money to finance wars. (As an aside, because of the unwillingness of earlier generations to contemplate a permanent state of war, even today income tax is only an annual measure which has to be confirmed and reimposed by Parliament every year, hence the need for an annual Finance Act. So what irony, then, that although we raise more than enough money each year through taxation to finance our defence, governments of all persuasions in recent years have so cut back on defence funding in their allocation of tax revenues raised that our ability to defend ourselves effectively must now be questionable.)
If we are to make the most of the opportunity presented by the Legal Education and Training Review, we need to be clear about the background against which it is conducting its work. We also need to acknowledge the nature of some of the fundamental issues which must be addressed if the review is to be effective and command respect for its conclusions and recommendations.
Having spent more than 25 years of my life promoting the idea of ‘the business of law’ and the role of professional management in it, I commend the Institute of Legal Finance & Management for its mission and work. I also very much hope that its members share my excitement and enthusiasm as we approach 2012.
Interestingly, what we might describe as ‘the post-LSA world’ is not specifically driven by the Legal Services Act. The legislation and accompanying changes in regulation are now part of a much broader and deeper shift in the nature of 21st-century legal practice. The shift reflects fundamental changes arising in a mature legal economy working its inevitable way towards a new bargain with increasingly well-informed and sophisticated buyers of services in an over-supplied market. This bargain – and the pace of change – is accelerated by the financial crisis and the Act’s liberalising impetus; but these are accelerators rather than drivers. The change would have happened anyway.