Private Eye Attacks Hypocrisy of Non-Dom Tax Dodging Press Barons

Five years ago in 2015 the then leader of the Labour Party, Ed Miliband, outraged the press barons in Fleet Street by suggesting the abolition of non-dom tax status for people actually living in the UK. This frightened them, as many of them, such as Evgeny Lebedev, the owner of the I and Evening Standard, David and Frederick Barclay, the weirdo owners of the Torygraph, and Heil owner Viscount Rothermere, also avoid paying British tax through non-dom status. There was therefore a flurry of articles in their papers scorning Miliband’s suggestion and declaring that if it came in, it would bankrupt Britain by forcing all the millionaires in London and elsewhere to flee the country. And the papers certainly did not tell their readers that there was more than a bit of self-interest behind their attacks on Miliband.

Private Eye, which, according to editor Ian Hislop, skewers humbug, therefore published an article in their ‘In the Back’ section, ‘Street of Sham’ in the issue for 17th to 30th April 2015 attacking this fine display of gross hypocrisy. The piece ran

So consuming was the Tory press’s rage at Ed Milibands’s plan to make Russian oligarchs and gulf petro-billionaires in London liable for the same taxes as British citizens, its hacks forgot to declare their interest.

“London backlash over Ed’s non-dom attack,” boomed the front-page of the London Evening Standard, as if a mob had descended on Labour HQ to defend London’s much-loved oligarchs and hedge-fund managers. “Attacking non-doms could backfire on us,” continued an editorial inside. Sarah Sands, the Standard’s Uriah Heepish editor, did not risk her career by saying who the “us” included – namely her boss, Standard proprietor Evgeny Lebedev, the Russian who last year dodged the Eye’s repeated questions over his own domicile.

Silence infected the Telegraph too, where not one of the reporters who warned that Labour’s “cataclysmic” decision would drive away “tens of thousands of entrepreneurs and business leaders” mentioned that their owners, the weirdo Barclay twins, reside in Monaco and the Channel Islands to avoid British tax.

Instead they quoted James Hender, head of private wealth at Saffery Champness accountants, who warned that the rich may leave. The Telegraph didn’t tell its readers that Hender boasts of his long experience ensuring that “the most tax efficient strategies are adopted for non-UK situs assets” for his non-dom clients.

It was the same at the Mail, which failed to declare that its owner, 4th Viscount Rothermere, is treated by the tax authorities as a non-dom. And at Sky, political editor Faisal Islam reported that “Baltic Exchange boss Jeremy Penn slams Labour non-dom plans” without declaring that his owner, Rupert Murdoch, does not pay UK tax and that Penn acts for super-rich shipping owners.

Jolyon Maugham QC, who has advised Labour and the Tories on tax reform, tells the Eye that any reader silly enough to believe the Tory press and tax avoidance industry should look at what they said in 2008, when Labour introduced the first levies on non-doms.

Back then the Mail then said the central London property market would crash as non-doms sold up and moved to Switzerland. In fact, between Labour introducing the levy and 2014, prime central London property prices rose 41 percent. At the end of 2014, Knightsbridge estate agent W.A. Ellis said 54 percent of sales were to overseas buyers.

The Mail was equally certain the City would suffer. On 8 February 2008 it cried that the levy “risks the City’s future”. The British Banking Association warned of “a devastating blow”. The Telegraph of 12 February 2008 said that “the country’s wealthiest individuals are being bombarded with leaflets and letters explaining how easy it would be to relocate to Switzerland, Monaco and a host of other countries”. Not to be outdone, Mike Warburton, senior tax partner at accountants Grant Thornton, said the levy was the “final straw”.

If a word of this had been true, there would be no non-doms left for Milband to tax. As it is, there are 115,000 because, as Maugham says, London remains a “very nice place to live, if you’re wealthy. And that won’t change.” Or as the Financial Times put it: “The many advantages of London as a financial centre do not dissolve simply because of a change in a hitherto generous tax treatment of resident non-domiciles.”

The pink ‘un has only recently realised the iniquity of the non-dom rule, with an editorial last month calling for its abolition. Editor Lionel Barber modestly claims some credit for Miliband’s stance. But as editor for almost a decade, why was he so late to the party? Surely not because, until 2013, FT owner Pearson was run by US-born Dame Marjorie Scardino, who would certainly have qualified for non-dom status and whose London flat, the Eye revealed, was owned via an offshore company?

The Daily Mail’s owner, Lord Rothermere, is a particularly flagrant tax dodger in this regarded. The current Rothermere inherited the status from his father, who really was not resident in the UK. He lived in Paris. But Rothermere junior appears very much to have made Britain his permanent or at least primary residence. He has a parking space in London, and the Eye reported a few years ago he was extensively renovating his stately home in the West Country.

The non-dom tax status, offshore banking and other ways used by the corporate and super rich to avoid tax are part of the reason for the increasing impoverishment of everyone else. They aren’t paying their fair share of the tax burden, but receiving massive tax handouts instead. Thus the NHS and other important services are deprived of money. The tax burden is then passed onto ordinary, working people. This reduction in taxes for the rich used to be justified under Thatcher with the argument that the money the rich saved would somehow trickle down to the rest of us. This hasn’t worked. It doesn’t encourage the rich to open any more businesses or employ more people. The money just sits in their accounts earning more interest.

It also doesn’t the rich closing businesses and laying people off either. This was shown a year or so ago in America, when one of the corporate recipients of the Republicans’ tax cuts closed a branch or a factory, laying hundreds of workers off.

And the purchase of London property by foreigners is also a further cause of poverty. Ordinary people in the Smoke can’t afford to buy homes as rich foreigners – not asylum seekers or migrants – push property prices up far out of their reach. Some of these homes are simply left empty as an investment in what is known as ‘land banking’. This has a knock-on effect for the rest of the UK. Here in Bristol property prices have also risen to extremely highly levels through Londoners forced out of the capital relocating to the city. And in turn, some Bristolians are looking for cheaper homes elsewhere in places like Wales.

London still is a ‘very nice place to live, if you’re wealthy’, but the tax cuts which make Britain so comfortable for the global rich are causing poverty, misery and homelessness for everyone else.

And this is applauded and cheered by hypocritical press magnates and editors.

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One Response to “Private Eye Attacks Hypocrisy of Non-Dom Tax Dodging Press Barons”

  1. A6er Says:

    Reblogged this on Tory Britain!.

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