Until Lynton Crosby answers these questions on his tax affairs, David Cameron has zero credibility on tax avoidance

There are already enough suspicions that the Tory party is the political wing of the tax avoidance industry

Margaret Hodge
Friday 10 April 2015 16:07 BST
The Prime Minister with Lynton Crosby
The Prime Minister with Lynton Crosby (Andrew Parsons)

I rarely find myself agreeing with David Cameron. But when he told Starbucks to “wake up and smell the coffee, because the public who buy from them have had enough”, and when he described aggressive tax avoidance schemes as “quite frankly, morally wrong”, I thought the tide was finally turning on the Tories’ approach to tax avoidance.

But I should have known better. Actions speak louder than words, and today’s revelations about Lynton Crosby, the Tories’ election chief, show the reality.

Few people in the Conservative party wield as much power as Lynton Crosby. Yet this is a man who appears to be up to his neck in tax avoidance. Looking at the sheer complexity of his network of offshore interests, it is difficult to see what purpose these arrangements can possibly serve other than to avoid tax.

You can judge David Cameron by who his friends are. Crosby is just one of many. Take Lord Green, who Cameron appointed as a trade minister, despite clear evidence that Green presided over industrial scale tax avoidance and potential money laundering at HSBC. Take the many non-dom Tory donors who fund Cameron’s election campaign. Is it any wonder that the Tories attack Labour’s plans to tackle non-dom status and come down hard on those who shelter their money in tax havens?

We need to know whether the Tory campaign chief, the man telling you how to vote, has avoided any tax due here in the UK, either through his non-dom status or his complex web of Maltese companies.

We know that Crosby and the Tories are running scared on this. Yesterday’s Evening Standard reported that they are avoiding questions:

"The Standard put a series of questions to Mr Crosby’s spokesman, including whether he is still a non-dom, whether there was any reason for basing Rutland Ltd and Rutland Holdings in Malta other than to avoid taxation legitimately, and whether those arrangements had reduced his tax liability in the UK.

His spokesman gave a statement saying: 'Any claim, or attempt to claim, Mr Crosby has attempted to reduce his tax liability in the UK is malicious and libellous and will be treated as such.'

The Standard also asked the Conservative Party whether Mr Crosby was paid a salary or whether the party paid his company, Crosby Textor, for his services. A party spokesman declined to answer."

But we now need to know what his companies in Malta are for. We need to know why the Maltese company delayed filing accounts for 18 months. We need to know whether Crosby has personally gained from his status as a non-dom.

We have also now learnt that his Malta-based company, Rutland Ltd, has significant interests in other foreign countries – but we do not know where or what these investments are in. Are they, too, simply devices to avoid tax?

David Cameron will have zero credibility on tax avoidance for as long as these questions remain unanswered. He should order Crosby to answer them.

Given Lynton Crosby’s powerful role in the Tory party, it is inconceivable that David Cameron or George Osborne didn’t discuss the Tory response to Labour’s announcement yesterday with him. Do we have a Tory non-dom determining non-dom policy, and a director of an offshore company setting tax avoidance policy?

Cameron must also now come clean about what he knew and when about his key lieutenant’s tax arrangements and when. Failure to do so will only confirm suspicions that the Tory party is the political wing of the tax avoidance industry.

Despite the warm words and promises, under the Tories the gap between tax collected and tax owed has grown and loopholes which benefit hedge funds remain open.

This is more than an issue about money. It’s about fairness. It’s about making a fair contribution according to your means to the common pot for the common good. From the work I have done over the last five years, I know that the British public and British businesses are united in their anger against a system which allows the rich and powerful to avoid tax. They are demanding change. What has become clear is that only Ed Miliband and the Labour party can be trusted to deliver that change.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in