Meet Mel J Stride, the ‘Right Honourable’ MP with a controversial association with the loan charge scandal. A member of the Conservative Party, he has been the Member of Parliament for Central Devon since 2010.
What is the Loan Charge?
Sixty-seven thousand people are being pursued by HMRC (HM Revenue and Customs: the tax office) under a piece of legislation – the Loan Charge – introduced in the Finance Act of 2017 as a result of the Rangers FC vs HMRC case. This law is designed to recover tax retrospectively from people who signed up to ‘Disguised Remuneration’ either through their employer, or schemes which were sold to them by a promoter via ‘umbrella’ companies who charged a fee or earned commission on the sales. It’s important to note that loan schemes have not been proven to be illegal in any tax tribunal or court or to have been designed to avoid tax. They were marketed as being legal and tax efficient. The government and HMRC, have used behavioural insights and nudge theory to change what was known as ‘tax planning’ into Disguised Remuneration, to make it sound like victims are tax dodgers
The loan charge ‘looks at’ the amount of loan outstanding as on 5 April 2019 and treats it as an additional amount of taxable income for the 2018-19 tax year. For many participating in these arrangements for several years, the loan charge aggregates sums received in different tax years, with the consequential impact on marginal tax rates and the loss of personal allowances amounting to a huge, unpayable debt to HMRC.
The loan charge is controversial primarily because it targeted 67,000 individuals who participated in what they believed to be legal tax planning involving loans. Many people involved in these methods of payment were not aware of the potential consequences or the retrospective nature of the charge. This has led to financial distress and in some cases, bankruptcy and harm; in fact, HMRC has reported that there have been 10 suicides, 13 attempted suicides and 24 serious injuries (self-harm) – all connected with the loan charge.
Critics argue that the retrospective nature of the charge is unfair and that it penalises individuals who acted in good faith on professional advice at the time. Additionally, some have criticised HMRC for its handling of the situation, alleging aggressive tactics and insufficient communication. The controversy has sparked significant debate in the House Of Commons, and calls for reform to tax legislation and enforcement practices.
Mel Stride
Mel Stride has served as Secretary of State for Work and Pensions since October 2022; he previously held various senior posts with Theresa May’s government and was Finance Secretary to the Treasury and later Chair of the Treasury Select Committee from 2019 to 2022..
Pushing the loan charge through parliament
Stride played a significant role in pushing the loan charge legislation through parliament while serving as the Financial Secretary to the Treasury from June 2017 to May 2019, during which time the loan charge legislation was introduced and implemented; but MPs on the-then Finance Bill Committee were not given adequate time to consider it, and even less adequate information. Stride became infamous for evading scrutiny and for failing to give straight answers on this subject.
Even before Stride was at the helm, Kirsty Blackman MP said during a debate on the Finance Bill:
“I appreciated receiving the Government’s notification that they would withdraw some things last night, but that was very little notice to allow us to go through all these matters properly. It has been difficult to operate under these circumstances and to provide the appropriate scrutiny, given the lack of time.”
On 24 October 2017 after a debate by the Finance Bill Committee, Stride himself acknowledged the speed of the process; addressing the Chair of the Committee Charles Walker, he referred to having
“rocketed through this Bill … in near-record time”.
It is clear that HMRC managed to blindside MPs by omitting the true impact-analysis of the loan charge, and detail on how it would be implemented to maximise revenues. During the loan charge debate on 18 January 2024, John McDonnell MP said:
“I also think that we need to look at the process whereby ministers and opposition are able to question impact assessments and how they are developed, as well as the independence of those assessments. I still find it problematic that impact assessments are prepared largely by the department and the ministerial team that are promoting the legislation involved, rather than its being done independently. Had there been an independent impact assessment in this case, and time for a proper debate and for amendment as well, the House would probably not have agreed to take this course”
Stride the avoider
Stride then dodged scrutiny, refusing four times to appear before the House of Lords Economic Affairs Committee and earning strong criticism for not abiding by the Ministerial Code. During discussion in the House of Lords which examined the powers of HMRC and resulted in the report Treating Taxpayers Fairly, Stride was explicitly criticised for his conduct over the loan charge, and was variously described as having failed in his “first duty to Parliament”, as having prevented peers “from holding the executive to account” and having treated the Committee with a contemptuous disregard for serious issues”.
The Loan Charge and Fairness All-Party Parliamentary Group (APPG) was similarly damning, saying that, in their view, Stride
“has given partial and misleading answers to parliamentary questions” and has “given deliberately misleading answers to journalists.” (As also reported in PRSD.)
In March 2019 Stride refused three times to answer a question live on BBC Radio 4’s Money Box when interviewed by respected finance journalist Paul Lewis, who later dubbed him ‘Misleader of the House’.
In April 2019, Stride also refused to give evidence to the Loan Charge and Tax Fairness APPG Loan Charge Review, raising eyebrows among campaigners and MPs alike, who again accused him of breaking the Ministerial Code.
Blocked by Stride
Stride has been slammed on social media and news outlets for ‘blocking’ the brother of a suicide victim, as well as blocking journalists who dare to write about the loan charge. As someone who is supposed to be a champion of scrutiny, to be so unwilling to be scrutinised himself is a farce.
Stride’s conflict of interest
In 2018, The Mirror broke the “EXCLUSIVE” news that Stride had a “controlling stake in Venture Marketing Group, which provides “exhibition, publication and online services”… and whose current or previous clients include Amazon – which has been repeatedly accused of legal tax avoidance – HSBC, Lloyds and City fat cats JP Morgan”. The Mirror went on to point out that all these firms “have an interest in tax policy, which is Mr Stride’s responsibility as Financial Secretary to the Treasury.”
In 2019, The Telegraph cast further shadow over Stride’s role in the Treasury, explaining that he was the government’s main spokesman on the controversial loan charge policy, and bravely linking(£) him to a firm profiting from tax investigations: “A tax avoidance crackdown is being spearheaded by a Treasury minister whose father sells insurance to those being targeted by HMRC”.
In October 2019 the campaigning Loan Charge Action Group wrote to the Cabinet Secretary and other members of the All-Party group: “There is very clearly a potential (and we believe an actual) conflict of interest between Mr Stride’s controlling interest of Venture Marketing Group … and his role as a Treasury Minister.”
Stride the gatekeeper
Stride was elected chair of the Treasury committee in October 2019. At the time, William, the brother of a man in his mid-forties who killed himself after receiving tax demands from HMRC, told BuzzFeed News he was “gobsmacked”. [We have changed his name at the family’s request.] He said,
“There is something wrong with the system when the architect of something as controversial as the loan charge gets to scrutinise his own policy decisions”.
It is self-evidently inappropriate for a recent Treasury minister to be elected to chair the Treasury select committee, and ‒ worse still ‒ a mere matter of months after leaving the ministerial role. Stride’s appointment as chair, a very influential post, inevitably called into question the impartiality of the Treasury committee.
If the public want to know what a conflict of interest looks like, then look no further.
