Embarrassingly for Mrs Hodge, Vodafone has benefited from changes to the tax laws made in 2002 by a Labour government, which state that companies returning cash from large disposals outside the UK can do so without paying capital gains tax.
Introduced by then Chancellor Gordon Brown to bring the UK into line with its continental neighbours, the rules were designed to provide flexibility for multi-national businesses, and ensure that large British employers remained just that.
Vodafone is no stranger to controversy when it comes to tax; wrangling with the Indian government over its Essar deal and in the UK pilloried for revealing it had paid no corporation tax here for the past two years because operating profits have been dwarfed by interest costs on 3G spectrum payments and capital investment.
But its critics are quick to forget one simple fact: Vodafone makes a significant contribution to the UK economy – £338m in direct tax and £523m in indirect tax contributions last year, not to mention £727m of infrastructure investment. And then there are the benefits that will flow to the wider economy from yesterday’s deal as a result of 71pc of the net proceeds being handed back to shareholders.
It is absurd to berate a company for using an 11-year-old tax exemption for the deal when it has stood by the letter of the tax law. Vodafone’s success in extracting a high price from Verizon should be applauded, not maligned by the usual suspects.
Factory figures make welcome reading
Life keeps getting better for George Osborne. Second quarter GDP growth has been revised up from 0.6pc to 0.7pc, business confidence is building, employment rising, consumers are spending and factories are clanking back into life.
With economists upgrading their growth forecasts almost weekly, Labour is finding it harder to land any blows. Critics who claim the recovery is being fuelled by another housing bubble on the back of Help to Buy have to explain away the fact that, in the three months to June, the recovery was driven by exports and business investment rather than spending. And yesterday’s manufacturing PMIs suggested Britain may finally be “carried aloft by the march of the makers”, as Osborne dreamed in his 2011 Budget.
Manufacturing is roaring back to life. For the past four months, manufacturers have been hiring; new orders and total output levels have rocketed to near 20-year highs. Export demand for UK goods is at a two-year peak, and climbing.
Signs of economic improvements in the eurozone and China will only help Britain’s manufacturing base. UK exporters are building their presence in China and the other BRICs; exports to the four key emerging nations were up by a fifth in the second quarter compared with 2012. The 20pc fall in the sterling since 2007 is providing a useful tail-wind.
There is plenty still to do. Manufacturing, which still accounts for a tenth of total UK output, is about 10pc smaller than before the crisis and reshaping the economy was never going to be as easy as the Chancellor’s rhetoric suggested. But the signs are encouraging.
‘Mansion Tax’ just wouldn’t be fair
The “Mansion Tax” has been sold as a way of targeting the ultra-rich but, like so many hastily-conceived means of raising revenue, it falls apart on closer scrutiny.
Labour and the Lib Dems both want owners to pay an annual 1pc on the value of any property over £2m. The Lib Dems claimed that would raise £1.7bn each year; Labour suggest £2bn.
Estate agent Knight Frank has done its own calculations, based on HMRC and Land Registry figures and its own experience at the top end of the UK’s housing market, and believes £1.3bn would be nearer the sum raised. To raise £2bn, Knight Frank estimates the threshold would have to drop to £1.25m.
This question of revenue benefit aside, there are unaddressed practical difficulties in collecting a tax where everyone implicated will be anxious to down-value their properties.
There is also the issue of fairness. The tax falls squarely on London and the South East, with three quarters of potentially taxable homes located in these two regions. There are many retired professionals living modestly in homes they bought in the 1970s and 1980s. If these once-affordable homes are redesignated as “mansions” and taxed accordingly, their owners would have to sell.
The tax also takes no note of mortgages, so a family which has borrowed heavily would still be penalised. An investor, on the other hand, who owns any number of properties valued at below the threshold, would not be taxed at all. By what definition can that be described as fair?