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:
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
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.