50p tax letter business leaders gave £776,000 to the Tories

Of the 24 signatories to the letter attacking Labour's plan to reintroduce the 50p tax rate, eight have donated to the Conservatives.

As headlines go, "High earners sign letter against paying more tax" ranks alongside "Turkeys sceptical ahead of Christmas vote", but that's the essence of the Telegraph's splash today. The paper has published a letter from 24 business leaders declaring that Labour's pledge to reintroduce the 50p tax rate is "a backwards step which would put the economic recovery at risk and would very quickly lead to the loss of jobs in Britain". It reads:

Dear Sir,

We are concerned to see Ed Balls and the Labour Party calling for higher taxes on businesses and business people.

We think that these higher taxes will have the effect of discouraging business investment in the UK.

This is a backwards step which would put the economic recovery at risk and would very quickly lead to the loss of jobs in Britain.

The paper notes that one of the signatories, Richard Caring, the owner of Le Caprice and the Ivy restaurants, has an outstanding £2m loan to Labour but, oddly, doesn't mention the large number of Conservative donors on the list. Of the 24 signatories, eight have donated a total of £776,111 to the Tories. Here, courtesy of the Electoral Commission, are the full details of their donations. 

Richard Caring - £222,000.75

Neil Clifford, Chief Executive, Kurt Geiger - £12,000

Peter Cullum, Executive Chairman, Towergate - £15,000 from Towergate to the Conservative 1922 Committee

Michael Gutman, Chief Executive, Westfield Group - £211,570 from Westfield; Gutman has attended Conservative Leader's Group dinners

Mike Lynch, Chairman, Invoke Capital; Founder, Autonomy - £50,000

Tim Oliver, Founder and Chairman, Hampden - £12,940 from Oliver, £54,600 from Hampden

Paul Walsh - £10,000

Will Wyatt, CEO, Caledonia - £188,000 from Caledonia to Conservative associations/candidates

Total: £776,110.75

Also on the list is Karren Brady, the vice chairman of West Ham, who introduced George Osborne at last year's Conservative conference and was recently appointed as the party's Small Business Ambassador (and is spoken of as a potential London mayoral candidate). 

Why might the Tories not want these details to be known? Because it undermines the intended impression that this letter emerged spontaneously from "independent" business leaders and is suggestive of favours for favours. Few doubt that the ire of Conservative donors over the 50p tax rate was one of the factors that lay behind its abolition by the coalition last April. Indeed, anyone who doubts their influence over Tory policy should read Matthew d'Ancona's In It Together: The Inside Story of the Coalition Government in which it is revealed that David Cameron vetoed the proposed introduction of a mansion tax on the grounds that "our donors would never put up with it". 

After this letter, one wonders whether their next demand will be that the Tories formally pledge to reduce the top rate from 45p to 40p if still in government after the next election (Cameron and Osborne have already hinted that they would like to do so). In his column in today's Telegraph, Boris Johnson writes: "The government should open up some more blue water, and cut the top rate back to 40p."

Finally, while most of the signatories have long opposed the 50p rate, it's worth noting how one of them has changed his tune. Former M&S boss Stuart Rose, the chairman of Ocado, says that the measure would "put at risk all the good work that has been done to put the economy back on track". But back in 2011, before its abolition, he said: "I don't think that they should reduce the income tax rate. How would I explain to my secretary that I am getting less tax on my income, which is palpably bigger than hers, when hers is not going down? If, in the short term, a case was made for me to pay more than 50 per cent tax, which would help UK plc, I personally – Stuart Rose – would be prepared to pay more tax." Since austerity is going to continue for the entirety of the next parliament, it remains to be seen how he will justify this volte-face.

Conservative ministers at the party's conference in Manchester last year. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.