Will Cameron and Osborne remain silent over Goldman Sachs's tax ploy?

Having denounced "aggressive tax avoidance", Osborne is under pressure to respond to the bank's plan to avoid the 50p rate tax by delaying bonus payments.

Update: It appears that the adverse publicity has prompted a rethink at Goldman. The bank has dropped plans to delay bonus payments and, consequently, will pay the 50p rate. Before the announcement, the Treasury said simply: "We do not comment on the tax affairs of individual companies, but we are clear that everyone must pay the tax they owe."

As Alex reported yesterday, mega-bank Goldman Sachs is considering deferring bonus payments for its UK employees until April in order to benefit from the reduction of the 50p tax rate to 45p. The proposed tax dodge has already drawn criticism from Labour, with shadow Treasury minister Chris Leslie declaring that "banks need to think carefully about their own reputations if they seek to avoid tax in this way" and the redoubtable Margaret Hodge accusing Goldmans of not giving "a toss about collective responsibility".

This morning, Bank of England governor Mervyn King added his voice to the protests. During his appearance before the Treasury select committee, he commented:

I find it a bit depressing that people who earn so much find it would be even more exciting to adjust their payouts to benefit from the tax rate, knowing that this must have an impact of the rest of society, which is suffering most from the consequences of the financial crisis. I think it would be a rather clumsy and lacking in care and attention to how other people might react. And in the long run, financial institutions do depend on goodwill from society.

King's intervention prompts the question of whether David Cameron and George Osborne will have anything to say about the matter. In last year's Budget, Osborne memorably denounced "aggressive tax avoidance" as "morally repugnant". And if Cameron is prepared to take the time to attack Jimmy Carr for tax avoidance, one might expect him to comment when one of the world's largest investment banks deploys similar chicanery. The numbers involved are not insignificant. Goldman paid out £8bn in bonuses last year and a similar stunt by the bank and others in 2010 (when they brought forward income in order to avoid the rise from 40p to 50p) cost the Treasury £16bn.

Labour is keen to take every opportunity to remind the public that the government is choosing to cut taxes for the top 1.5 per cent of earners this April. With the additional chance to protest at "aggressive tax avoidance", don't be surprised if Ed Miliband raises this issue at PMQs tomorrow.

Lloyd Blankfein, Chairman and CEO of Goldman Sachs. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty Images
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The buck doesn't stop with Grant Shapps - and probably shouldn't stop with Lord Feldman, either

The question of "who knew what, and when?" shouldn't stop with the Conservative peer.

If Grant Shapps’ enforced resignation as a minister was intended to draw a line under the Mark Clarke affair, it has had the reverse effect. Attention is now shifting to Lord Feldman, who was joint chair during Shapps’  tenure at the top of CCHQ.  It is not just the allegations of sexual harrassment, bullying, and extortion against Mark Clarke, but the question of who knew what, and when.

Although Shapps’ resignation letter says that “the buck” stops with him, his allies are privately furious at his de facto sacking, and they are pointing the finger at Feldman. They point out that not only was Feldman the senior partner on paper, but when the rewards for the unexpected election victory were handed out, it was Feldman who was held up as the key man, while Shapps was given what they see as a relatively lowly position in the Department for International Development.  Yet Feldman is still in post while Shapps was effectively forced out by David Cameron. Once again, says one, “the PM’s mates are protected, the rest of us shafted”.

As Simon Walters reports in this morning’s Mail on Sunday, the focus is turning onto Feldman, while Paul Goodman, the editor of the influential grassroots website ConservativeHome has piled further pressure on the peer by calling for him to go.

But even Feldman’s resignation is unlikely to be the end of the matter. Although the scope of the allegations against Clarke were unknown to many, questions about his behaviour were widespread, and fears about the conduct of elections in the party’s youth wing are also longstanding. Shortly after the 2010 election, Conservative student activists told me they’d cheered when Sadiq Khan defeated Clarke in Tooting, while a group of Conservative staffers were said to be part of the “Six per cent club” – they wanted a swing big enough for a Tory majority, but too small for Clarke to win his seat. The viciousness of Conservative Future’s internal elections is sufficiently well-known, meanwhile, to be a repeated refrain among defenders of the notoriously opaque democratic process in Labour Students, with supporters of a one member one vote system asked if they would risk elections as vicious as those in their Tory equivalent.

Just as it seems unlikely that Feldman remained ignorant of allegations against Clarke if Shapps knew, it feels untenable to argue that Clarke’s defeat could be cheered by both student Conservatives and Tory staffers and the unpleasantness of the party’s internal election sufficiently well-known by its opponents, without coming across the desk of Conservative politicians above even the chair of CCHQ’s paygrade.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.