Corbyn the great tax hypocrite
Labour rents its HQ from offshore firm ... but still attacks the Royals
LABOUR was accused of hypocrisy last night after demanding an inquiry into the Queen’s tax affairs – despite questions over its own arrangements. Jeremy Corbyn suggested the monarch should apologise if £10million of her personal fortune had been invested offshore to avoid paying tax in Britain. The so-called Paradise Papers leak revealed the Queen’s estate invested the money in funds registered in Bermuda and the Cayman Islands, two British overseas territories at the centre of the offshore finance industry. Mr Corbyn and Shadow Chancellor John McDonnell demanded an inquiry following the revelations. However, yesterday it emerged that: A Labour council avoided paying millions of pounds in tax after it used an offshore company to buy a local park; The party’s London headquarters is rented from a tax-exempted property trust fund based in Jersey; and Mr McDonnell receives a Westminster Council pension which comes from a fund managed by a Guernsey-based firm. Last night, Tory MPs accused Labour of hypocrisy. Nadine Dorries said: ‘I’m very sure the Queen has no idea where her financial managers invest her money. However, given that Corbyn’s Labour Party rent Labour HQ for £1million per year from a tax-exempt offshore company, his comments do whiff of hypocrisy.’ Jacob Rees-Mogg called Mr Corbyn ‘ill-informed’, adding: ‘There is no advantage to offshore structures to honest taxpayers – of which I am one.’ The Paradise Papers link a string of companies and political figures to secretive overseas arrangements. They include claims that £10million of the Queen’s fortune was invested in offshore tax havens.
There is no suggestion that those involved acted illegally.
A spokesman for the Queen’s private estate, the Duchy of Lancaster, said: ‘We operate a number of investments and a few of these are with overseas funds. All of our investments are fully audited and legitimised. The Queen voluntarily pays tax on any income she receives from the duchy.’
Asked if the Queen should apologise, Mr Corbyn had told the Confederation of British Industry’s con- ference in London: ‘Anyone that is putting money into tax havens in order to avoid taxation in Britain ... should do two things: not just apologise for it, but also recognise what it does to our society.’
Later he called for an inquiry ‘into all the revelations about the Paradise Papers’. Asked if that included the Queen, Mr Corbyn told Bloomberg: ‘Everybody. The Royal Household are subject to taxation... these issues all must be part of that.’
His comments came despite the fact that Labour-run Warrington Council bought an offshore company that owned Birchwood Park. Local Labour MP Helen Jones has said this would see the council avoiding £10million in tax.
A spokesman for Warrington Council admitted that it had not paid stamp duty, but could not say exactly how much had been saved. The spokesman added that ‘the council agreed to leave the business offshore’ to ‘complete the acquisition in a timely and efficient manner’.
It also emerged yesterday that the Labour Party rents its London headquarters from a taxexempt property unit trust fund based in Jersey. The party is believed to pay almost £1million a year to lease the eighth floor of the Southside development. The building is owned by an investment trust established in Jersey, and managed by Schroder Property Managers (Jersey) Limited.
A Labour spokesman said the party ‘receives no benefit as a result of the financial arrangements of the building owner ... we remain committed to changing the current tax environment and to tackling tax avoidance’.
A spokesman for the Labour leader also insisted he did not demand an apology from the Queen. ‘Jeremy did not call for the Queen to apologise but said anyone who puts money into a tax haven to avoid paying tax should, and that they should recognise the damage done by avoidance to society,’ they said.
Mr McDonnell, 66, revealed he receives £14,421 from his council pension when he published his tax return and P60 last year. However, the cash from Westminster City Council comes from a fund that invested £100million in Guernsey-based global equity manager Longview in 2014.
Last night a spokesman for Mr McDonnell said: ‘This is a pension which is administered by a Tory council, regulated under a Tory government, and John is one of the chief campaigners to get the fund to bring the funds back onshore.’
‘His comments do whiff’
EVEN by his own low standards, Jeremy Corbyn’s contemptible attack on the Queen over her tax affairs plumbs new depths of hypocrisy. The Labour leader is demanding an apology from Her Majesty, after a huge data leak revealed that the Duchy of Lancaster – her private estate – had channelled money into investment funds based in Bermuda and the Cayman Islands.
So will he demand a similar apology from shadow Chancellor John McDonnell, whose pension fund also makes use of offshore accounts? Or his own party, which rents its headquarters from a tax-exempt trust based in the Channel Islands?
There’s no suggestion that Mr McDonnell knew the trustees of his Westminster City Council pension fund were funnelling money offshore.
And in that regard, he’s in exactly the same position as the Queen (which must feel strange to a committed republican who cites Marx and Trotsky among his guiding influences).
The Duchy of Lancaster – which owns rural estates, London property and assets as diverse as Pontefract Castle and Harrogate Ladies’ College – is headed by a government minister and managed by the Duchy Council, made up of experts in finance, property, accounting and law.
The idea that the Queen chooses where they invest the money is simply absurd, as Mr Corbyn knows full well.
The fact is that many respectable businesses – and the vast majority of pension funds – legitimately use offshore vehicles to reduce taxes and facilitate foreign investments.
But it’s also true that far too many very rich people and companies use these shelters to evade paying their fair share – to the disgust of the ordinary citizen who is squeezed by HMRC for every last penny.
Since 2010, Britain has tried to close the most egregious loopholes – with some success. The richest 1 per cent now pay 27 per cent of the total income tax bill.
Yes, there’s still a long way to go before all big corporations really pay their way – especially technology giants such as Apple, Amazon and Google. But the answer is more energetic enforcement and global cooperation – not more punitive tax rates.
In true Socialist style, Labour favours huge corporation tax rises and controls on the movement of capital.
As we discovered in the 1970s, this is a sure-fire way of driving industry and investment out of the country – and making everyone poorer.