The Icelandic PM…
Khan is no stranger to dodgy backers. In an attempt to clean up his murky image, his campaign released a list of 100 business backers in the Evening Standard last Friday. Most were drawn from the few business backers still loyal to Corbyn’s Labour. The list includes backers such as Saker Nusseibeh, CEO of Hermes Investment Management – a group that currently manages 15 offshore funds – as well as top RBS banker Martin Bailey and Bank of America VP Jacob Taylor. Taxpayer owned RBS shelled out €23.8 million to German prosecutors in December to settle a tax evasion investigation, and was lambasted for racking up £1 billion in tax breaks earlier this year, while Bank of America recently had to dismantle a special tax avoidance group in disgrace. Khan’s business support is drawn from the types of companies his leader wants to investigate…
Faisal Islam: The leader of the opposition has called for an investigation into your tax affairs for your own interests. Can you clarify for the record that you and your family have not derived any benefit in the past and will not in the future from the offshore Blairmore Holdings fund mentioned in the Panama Papers?
David Cameron: Sure. Look, the investigation we need, first of all, is for HMRC, our tax authority, to use all the information that is coming out of Panama to make sure that everything is done, to make sure that companies and individuals are paying their taxes properly.
In many ways what is coming out of Panama is what we are introducing in our own country, which is a register of beneficial ownership, so everyone can see who owns what company.
I own no shares. I have a salary as Prime Minister and I have some savings which I get some interest from and I have a house which we used to live in which we now let out while living in Downing Street. And that’s all I have. I have no shares, no offshore trusts, no offshore funds, nothing like that.”
As Guido pointed out this morning, it was always highly unlikely that he would benefit directly.
UPDATE: At this afternoon’s Lobby briefing No 10’s line is definitive: “To be clear, the Prime Minister, his wife and their children do not benefit from any offshore funds.”
This is a pretty brave attack line from John McDonnell over Tory party donors who may have avoided tax:
“Is the Prime Minister happy to receive money from big donors who are accused of tax avoidance?”
Especially when you consider that Labour’s biggest donor Unite paid no corporation tax in 2011 and 2012, despite earning £5.78 million from their £51.6 million investment portfolio. The GMB union paid zero corporation tax on its investment income of £1.6 million, neither did the Community union on their income of £4.1 million for the period. McDonnell himself received £3,000 from Unite in 2014. As of last year who were Labour’s biggest non-union donors? Accountancy firm PricewaterhouseCoopers, who have been slammed by the Public Accounts Committee for “promoting tax avoidance”. To paraphrase, is the Shadow Chancellor happy to receive money from big donors who are accused of tax avoidance?
The news that David Cameron’s father ran an offshore fund which avoided paying UK tax is not new – four years ago the Guardian published an almost identical story revealing the existence of the “entirely legal network of offshore investment funds set up in tax havens such as Panama City”. The old Guardian story noted that since Ian Cameron passed away “it is unclear which family member owns them” because offshore investments are not included in the family will. Then, as today, Downing Street would not comment as it was a “private matter for the family”.
The ‘new’ information in the Panama Papers is just finer detail on the old story, though Cameron’s spokesman still refuses to comment on whether the PM has money invested in the fund, because they have “responded to these allegations in the past”. That isn’t true, last time they refused to give an answer. It is unlikely that Dave is a beneficiary – that would have been a risk tantamount to political suicide and we know he has since not exactly been rolling in it, the Camerons have largely been supported by Samantha’s father’s money in recent years. In the unlikely event it does emerge that the PM is the direct beneficiary of offshore money he would find himself in a situation similar to the Icelandic premier – he would have to go. It’s no good pretending he addressed this in the past, Cameron has the chance to clear this up once and for all…
On last year’s £27 billion OBR windfall:
What Mr Osborne didn’t tell us yesterday is that rather than finding £27 billion the OBR lost £56 billion down that same sofa. As it happens, the total loss to the sofa across the two fiscal events is £29 billion.
That loss largely arises from changes in assumptions about future productivity growth feeding in to lower economic growth over the rest of the parliament. If the OBR is right about that we should all be worried. This will lead to lower wages and living standards, not just lower tax revenues for the Treasury.”
On Osborne’s golden public finance rules:
“Mr Osborne had three fiscal rules – the welfare cap; the rule which said debt should fall as a fraction of national income every year; and the rule to get to budget surplus by 2019-20. He broke his welfare cap in November, and it is now broken by a bigger margin. He told us yesterday he is on course to break his debt rule by the end of this month. The surplus rule is the last rule standing.”
On that same subject Dan Jarvis has a good line that “I’ve had goldfish that have lasted longer than Osborne’s rules”….
The EU-enforced tampon tax causing a cross-party rebellion isn’t the only example of Brussels stealth tax imposed in this Budget. Following a decision by the Court of Justice of the EU in June last year, the 20% VAT rate was also forced upon “energy saving materials”, previously taxed at just 5%. People who want to insulate their homes are being whacked by an EU tax hike. Worth reading John Redwood on this – it has gone down like a cup of cold sick with Tory backbenchers.
Other areas covered by the EU’s barmy VAT rules include digital services like Netflix, now charged at the place of purchase. Not only this, British digital businesses selling products in EU member states are subject to local VAT rates, for example Croatian, Danish, and Swedish VAT rates of 25%, or even sky-high Hungarian VAT at 27%.
Osborne announced yesterday “We understand that tax affects behaviour. So let’s tax the things we want to reduce”. By his own logic, the EU wants to reduce energy efficiency and online businesses…
Former Olympic rower James Cracknell, the thinking man’s Sol Campbell, has put his name to a new Policy Exchange report calling for a tax on sugary drinks. Cracknell, PX’s “Senior Research Fellow for Obesity and Physical Activity”, praises Mexico’s tax on sugar-sweetened drinks which caused purchases to fall by 12%, concluding:
“The human misery and drain on the public finances is so great that the government has no option but to intervene… [a sugary drinks tax] is on balance a sensible intervention to help prevent the rise in obesity”
Ironically this nannying tax would hit Cracknell himself. Three years ago, the failed Tory candidate confessed to Men’s Health his two “worst vices“:
“I used to put ketchup on everything… Now I just drink a lot of coke.”
Of course, a tax on sugary drinks would disproportionately hit poorer families. And wouldn’t be noticed by multi-millionaire coke fiends like Cracknell…
Anglia Ruskin University are very excited to announce a series of free public lectures taking place on campus this autumn, where Corbyn economics guru and Cameron joke fodder Richard Murphy will “share his Joy of Tax”. According to the press release, loony left blogger Murphy “is credited with shaping Corbyn’s economic strategy, also advises trade unions on tax policy.[…] Read the rest
“We believe that we can tackle the deficit by halting the tax cuts to corporations,” says Labour’s new Shadow Chancellor John McDonnell. So Guido is not sure what he is going to make of his party supporting the Tories’ corporation tax cut in the Finance Bill debate last night.[…] Read the rest
Obscure tax blogger and Twitter eccentric Richard Murphy is now unofficially advising Corbyn on his economic policy. Readers will remember Guido’s past stories on the hypocritical ‘tax justice’ campaigner, well today he got Brillo’d on the Daily Politics:
Including such gems as:
“One of the ideas I’ve got is to create modest amounts of inflation…
At the moment I would add to the deficit…”
Coming soon to a Tory attack ad near you…[…] Read the rest
Osborne’s Budget announcement that green energy producers will no longer be exempt from the Climate Change Levy is driving the renewable industry into meltdown. The levy used to only apply to non-renewable energy but, in a spectucular trolling exercise, now businesses have to pay this green tax even if they are purchasing green energy:
[…] Read the rest
Caroline Lucas: “We’ve seen yet another example of reckless short-term policy making that prioritises the profits of polluters over the public interest in a safe and habitable climate”
RenewableUK: “It’s another example of this government’s unfair, illogical and obsessive attacks on renewables”
Greenpeace: “This will make it more expensive for business to buy electricity from renewable power.
The cut in housing benefit for under-occupied state housing was mis-named by Labour as the ‘Bedroom Tax’, for want of a snappier description. The official title of ‘Spare Room Subsidy’ was by comparison an also-ran. Despite being a benefit reduction the ‘Bedroom tax’ became the standard title used by the BBC…
Labour might call George Osborne’s proposal to make higher earners living in state housing pay market rates a ‘tax on success’ or an ‘aspiration tax’ or some such.[…] Read the rest