Mayoral debate could increase scrutiny of politicians' tax affairs


LONDON LETTER:QUEUES FOR debates between politicians are a rarity, which made the numbers in line outside the Emmanuel Centre on Marsham Street in Westminster on Wednesday night noticeable.

Inside, the hall was full to the rafters for a debate between candidates for the London mayoralty election on May 5th, an increasingly bitter and personal combat.

Hosted by the Evening Standard, much of the debate centred on the city’s transport and housing needs, but the real meat came during questions about the candidates’ tax affairs.

Labour’s Ken Livingstone has been accused of hypocrisy for setting up a company to take hundreds of thousands of pounds of earnings over the last four years.

During rambunctious exchanges, Livingstone was uncomfortable, and was heckled vigorously when questioned about his relationship with Her Majesty’s Customs and Revenue.

Last week, Green Party candidate Jenny Jones urged, during a BBC Newsnight debate, that all candidates should publish their full tax figures.

On Wednesday night, she admitted she had blurted out the idea under questioning by Jeremy Paxman, without thinking through the consequences.

In fact, Jones, a former deputy mayor of the city, had to rush home afterwards and rake through files to find her own tax declarations because, she said, “I don’t have an accountant”.

However, her idea may well have changed British politics. There are signals that candidates for future Commons elections may have to do just that from 2015.

Taxation has become a key issue in British politics, following the decision of the chancellor, George Osborne, to cut the 50p tax rate to 45p and evidence of widespread aggressive tax planning by the rich.

Since Jones’s action, all the main candidates in the race have revealed figures, but questions still arise about Livingstone, amidst charges that the details he produced are incomplete.

Ignoring a heckler who accused him of “champagne socialism”, Livingstone insisted that he had “lanced the boil”, adding that he was surprised by just how much tax he had paid.

“I immediately discovered I have been paying 35 per cent – so much bloody tax the government should have been able to get another one of these aircraft carriers without planes,” he declared.

In fact, he published his own statement – and not one from his accountant – showing that he earned £94,000 only after Conservative Boris Johnson and Liberal Democrat Brian Paddick had produced accountants’ returns.

Johnson, on the other hand, earned £473,280 last year: £133,000 as mayor of London and, extraordinarily, £339,625 from freelance earnings, mostly his £5,000 a week column for the Daily Telegraph.

Within weeks, the London mayoralty race will be over, but politicians and would-be politicians everywhere in Britain are pondering the fall-out.

Osborne has already spoken about mandatory tax declarations for candidates, while prime minister David Cameron says he is relaxed about publishing his own.

However, Cameron has entered caveats for others, indicating that disclosure may only come after their appointment to “the highest offices”.

Osborne himself raised eyebrows after he revealed that he did not pay the 50p rate, despite a £134,000 salary and his ownership of a £2 million home which is rented out while he lives in Downing Street.

Some fear that greater demands for transparency will hurt rather than help British politics, driving it ever more in the direction of personality – as has happened in the London race.

Equally, there are doubts that transparency would achieve much, unless the spouses and partners of candidates were also to be included, since ownership of assets can be easily transferred.

Nick Clegg, for example, is happy to declare his one salary, but little new will be learned from that; but he balks at the idea that his successful lawyer wife, Miriam Gonzalez Durantez, should be covered.

MPs are currently required to register payments to the Commons register of members’ financial interests. Some, such as Labour’s Tristram Hunt, declare everything. Others register donations and the fact that they have some outside earnings but not the amount of the latter.

Conservative MP John Redwood believes that politicians should be required to declare that they pay their taxes and do not use foreign hideaways, but no more.

The American experience does not impress him, particularly the difficulties suffered by the wealthy Mitt Romney who was eventually forced to publish his figures. “I would like to know more about what he might do in Afghanistan or how he might change tax rates for all were he the president. It appears he paid all the tax he had to. I have no problem with the fact that someone managed his tax affairs well, if he behaved lawfully,” says Redwood.