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3 December 2009

Tories, inheritance tax and the Sun

Those who stand to gain, and those who don't

By James Macintyre

A thought occurred to me this morning: how many Sun readers stand to gain from the the inheritance-tax policy of the party the paper backs? After all, as I wrote in September, “Sun readers are human beings, too, and must occasionally wonder in amazement at some of their paper’s pronouncements, such as those against the very rich paying 50 pence in the pound on income tax.”

Meanwhile, forgive me for pointing you to my column in today’s magazine, which highlights some of those who will benefit from the abolition of inheritance tax on estates worth less than £1m, or £2m for couples — the party’s donors.

The key bits of the piece are here:

Cameron and Osborne remain committed to the cut, from which some members of the shadow cabinet will benefit to the tune of approximately £7m, according to a recent report.

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Now, the New Statesman can also reveal that Conservative party donors stand to gain, too. There is no suggestion that the Conservative Party has shaped its inheritance-tax policy around the interests of its donors, or that donors had any direct input into, or influence over, the policy.

But perceptions matter in politics. One of the most loyal donors is Lord Harris of Peckham, the chairman of Carpetright. In May 2005, after the Tories’ defeat at the last election, Harris reportedly hosted a private dinner at which he urged Cameron to stand for the leadership. The Tory peer, whose wealth is estimated at roughly £285m, donated £90,000 to Cameron’s campaign. In 1997, he sold £23m of shares — shares that would have been liable for inheritance tax — and used the proceeds to buy artworks, which are exempt from inheritance tax. The Harris family now stands to gain £520,000-£540,000 more from the Tory tax policy.

Clear and present danger

Another donor to Cameron’s leadership campaign was Simon Wolfson, chief executive of Next and son of Lord Wolfson, the former chief of staff to Margaret Thatcher. Wolfson gave £10,000. In a 2007 “economic policy submission”, Wolfson called on the Tory party to abolish inheritance tax altogether. His report, co-authored with John Redwood, was welcomed by Cameron and Osborne, who less than two months later announced their cut in inheritance tax. Wolfson stands to reduce the inheritance tax liable on his estate by between £520,000 and £540,000 if Cameron wins the next election.

Then there is Michael Spencer, the billionaire Tory party treasurer and chief executive of the inter-dealer broker Icap who is Cameron and Osborne’s “link-man” to the City. Spencer helped the shadow chancellor devise his policy under which wealthy “non-domicile” foreigners based in the UK could pay £25,000 a year to fund the £3bn needed to pay for the abolition of inheritance tax on estates below £1m.

Spencer donated £10,000 to the Tories and also owns an estate that would eventually benefit by between £520,000 and £540,000 from a Tory victory and subsequent cut in inheritance tax.

Of course, the Tory policy will benefit all those whose estates are over the threshold, including donors to other parties, and non-donors. But the clear and present danger for Cameron is that the perception will remain, and grow, of a self-interested and out-of-touch party of the rich, for the rich.

Incidentally — and entirely separately — another guest at the dinner hosted by Lord Harris in 2005 was, reportedly, Andrew Feldman, Cameron’s old friend and tennis partner, and subsequently party treasurer, who himself donated to the Tory leader’s campaign through his family-owned, multimillion-pound womenswear firm, Jayroma. In 2007, I revealed that Feldman was using a parliamentary “research” pass alloted to Lord Harris, who ran no office and asked for no research.

On the subject of Conservative party donors, here, for reference, is a fuller list:

Philip Harris, carpet tycoon — gave £90,000 to Cameron campaign on 01/08/05 and his company provided helicopter rides worth £55,000 on 10/11/05

Simon Wolfson, CEO of Next retailers — gave £10,000 on 15/08/05

Andrew Feldman, key Cameron fundraiser, Oxford friend and tennis partner — his company Jayroma donated £10,000 on 20/08/05

Lord “Paddy” Gillford, Old Etonian — non-cash donation of £3,500 to throw a party for Cameron on 04/10/05

James Lyle, hedge-fund founder — gave £10,000 on 07/10/05

Michael Green, Cameron’s old boss at Carlton TV, where he was employed as a lobbyist — his company Tangent Industries donated £10,000 on 09/10/05

Michael Spencer, City “link man” — heads Icap money brokers, a company which donated £10,000 for leadership campaign on 09/10/05

Lord Sainsbury of Preston Candover — gave £5,000 on 12/10/05

Peter Gummer (Lord Chadlington), PR man and brother of the former Tory minister John Selwyn Gummer — gave Cameron £10,000 on 13/10/05

Trevor Pears, millionaire landlord — gave £10,000 on 13/10/05 and another £10,000 on 03/11/05

Malcolm Scott, Edinburgh grain merchant — his company Border Harvesters gave £5,000 to Cameron on 13/10/05

Peter Czernin, old friend of Cameron’s — gave £5,000 on 14/10/05

Dominic Casserley, UK managing partner of McKinsey — gave £10,000 on 14/10/05

Insinger de Beaufort, broker — gave £10,000.

Susan Anstey, wife of Lord Ashcroft — gave £10,000 on 17/10/05 and another £10,000 on 21/10/05

Irvine Laidlaw — his company Abbey Business Centres gave £10,000 on 17/10/05

Alasdair Currie — gave £5,000 on 17/10/05

Poju Zabludowicz, who owns 40 per cent of downtown Las Vegas, including casinos — his company Tamares Real Estate gave £5,000 to Cameron on 17/10/05 and £10,000 on 03/11/05

Mike Balfour, who founded the Fitness First chain of gyms — gave £5,000 on 21/10/05

Philip Mould — his Historical Portraits company gave £5,000 on 26/10/05

Jamie Borwick, businessman — gave £5,000 on 26/10/05

Tim Carrington, banker — gave £5,000 on 26/10/05

Firoz Kassam, former owner of Oxford United football club, built a fortune out of hotels, including housing 700 homeless in the Mount Pleasant hotel — his company Firoka gave £10,000 to the Cameron campaign on 26/10/05

Jonathan Green, hedge-fund founder — gave £10,000 plus £25,000 to party on 26/10/05

Paul Dominic Vail, banker — donated £3,000 on 26/10/05

Ian Livingstone (owns London & Regional Properties with his brother Richard) — his company gave £10,000 on 28/10/05

Michael Peagram — his CMS Chemicals firm gave £5,000 on 28/10/05

Stephen Barry, Notting Hill accountant — his company Murphshore gave £5,000 on 01/11/05

Adam Afriyie, former owner of DeHavilland, now MP — gave £5,000 on 03/11/05

Mark Foster-Brown, Notting Hill hedge-fund trader — gave £10,000 on 03/11/05

Edwina Herrmann, former colleague at Carlton, whose husband’s wealth was estimated at £70m — gave £10,000 on 03/11/05

Robert Fleming, a member of the Fleming banking family — gave £10,000 on 04/11/05

Lewis Chester, Oxford contemporary of Cameron, runs Pentagon Capital Management hedge fund — gave £10,000 to Cameron on 05/11/05

George Hollingbery, who sold off stake in chain of veterinary surgeries — gave £5,000 on 11/11/05

Ken Costa, banker — gave £2,500 on 17/11/05

Michael Pass, worth £51m from Derbyshire carpets business — gave £5,000 on 05/12/05

Peter Dubens (owns Pipex) — gave £5,000 on 13/12/05

As George Osborne likes to say, “we’re all in this together”. Some more than others, of course.


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