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.

Getty
Show Hide image

Theresa May’s stage-managed election campaign keeps the public at bay

Jeremy Corbyn’s approach may be chaotic, but at least it’s more authentic.

The worst part about running an election campaign for a politician? Having to meet the general public. Those ordinary folk can be a tricky lot, with their lack of regard for being on-message, and their pesky real-life concerns.

But it looks like Theresa May has decided to avoid this inconvenience altogether during this snap general election campaign, as it turns out her visit to Leeds last night was so stage-managed that she barely had to face the public.

Accusations have been whizzing around online that at a campaign event at the Shine building in Leeds, the Prime Minister spoke to a room full of guests invited by the party, rather than local people or people who work in the building’s office space.

The Telegraph’s Chris Hope tweeted a picture of the room in which May was addressing her audience yesterday evening a little before 7pm. He pointed out that, being in Leeds, she was in “Labour territory”:

But a few locals who spied this picture online claimed that the audience did not look like who you’d expect to see congregated at Shine – a grade II-listed Victorian school that has been renovated into a community project housing office space and meeting rooms.

“Ask why she didn’t meet any of the people at the business who work in that beautiful building. Everyone there was an invite-only Tory,” tweeted Rik Kendell, a Leeds-based developer and designer who says he works in the Shine building. “She didn’t arrive until we’d all left for the day. Everyone in the building past 6pm was invite-only . . . They seemed to seek out the most clinical corner for their PR photos. Such a beautiful building to work in.”

Other tweeters also found the snapshot jarring:

Shine’s founders have pointed out that they didn’t host or invite Theresa May – rather the party hired out the space for a private event: “All visitors pay for meeting space in Shine and we do not seek out, bid for, or otherwise host any political parties,” wrote managing director Dawn O'Keefe. The guestlist was not down to Shine, but to the Tory party.

The audience consisted of journalists and around 150 Tory activists, according to the Guardian. This was instead of employees from the 16 offices housed in the building. I have asked the Conservative Party for clarification of who was in the audience and whether it was invite-only and am awaiting its response.

Jeremy Corbyn accused May of “hiding from the public”, and local Labour MP Richard Burgon commented that, “like a medieval monarch, she simply briefly relocated her travelling court of admirers to town and then moved on without so much as a nod to the people she considers to be her lowly subjects”.

But it doesn’t look like the Tories’ painstaking stage-management is a fool-proof plan. Having uniform audiences of the party faithful on the campaign trail seems to be confusing the Prime Minister somewhat. During a visit to a (rather sparsely populated) factory in Clay Cross, Derbyshire, yesterday, she appeared to forget where exactly on the campaign trail she was:

The management of Corbyn’s campaign has also resulted in gaffes – but for opposite reasons. A slightly more chaotic approach has led to him facing the wrong way, with his back to the cameras.

Corbyn’s blunder is born out of his instinct to address the crowd rather than the cameras – May’s problem is the other way round. Both, however, seem far more comfortable talking to the party faithful, even if they are venturing out of safe seat territory.

Anoosh Chakelian is senior writer at the New Statesman.

0800 7318496