On a day when taxation, and varieties thereof, dominated every news outlet, you might have expected Ken ‘tax-avoider’ Livingstone to keep his head down. Not so. A couple of hours after the Budget speech was over, Ken popped up on Twitter to attack George Osborne for cutting the top rate of tax, even implying that it was in some way Boris’ fault. To clarify, Ken is complaining about a cut to a tax that he himself is refusing to pay. You couldn’t make it up.
This evening on Newsnight, Rachel Reeves proved the problem Labour now have, in attempting to attack the Tories on tax, whilst defending their tax-avoiding mayoral candidate. At the very mention of Ken Livingstone’s name, Paxman leapt on Ken’s tax avoidance and left a flustered Reeves insisting she couldn’t comment as she doesn’t have the full details…
On LBC97.3 earlier, Ken pledged that he would start paying his full tax dues if elected in May…
“If I’m elected Mayor on May 3rd, I will have no other income, so the taxman will take it straight out the salary at City Hall. We’ll just close the whole thing down.”
Firstly, Ken, for you to have no other income, are we to assume that sales of your recently-published autobiography have already completely dried up? Secondly, this scenario which you optimistically envisage is a hypocritical world away from the
five six seven (?) jobs you juggled when mayor last time (variously Mayor of London, MP for Brent East, Independent columnist, Evening Standard columnist, Morning Star columnist, after-dinner speaker, Have I Got News For You contestant etc.). Thirdly, this promise sounds just a little bit like blackmail. How about you start paying your full taxes now, and then Londoners can decide whether they want you back?
There are now a number of substantive issues concerning Ken’s ownership of Silveta Ltd, the personal company through which he has channelled over £750,000 of income since Londoners kicked him out of City Hall in 2008:
Tax avoidance. According to most estimates, Ken’s saved around £50,000 in tax, by paying just the 20%/21% corporation tax rate rather than the 40%/50% top rate of income tax. Although not illegal in any sense, it smacks of hypocrisy that a man who has argued that “rich bastards who avoid tax should not be allowed to vote”, and that top earners should pay income tax at 80%, has himself been avoiding his tax obligations.
Tax deductible expenses. One of the many excuses Ken’s tried using for the tax avoidance is that he’s spent some of the company’s money on staff for his election campaign, and that he thus doesn’t have to pay tax on that expense (he’s said it here, here and here). That’s a claim he might come to regret. As anyone who’s ever worked in business will know, there are strict and lengthy HMRC rules (see here) about what you can and can’t deduct from profit for tax purposes. Expenses are only deductible if incurred “wholly and exclusively” for the purposes of the business. So, for example, business insurance is allowable, but life insurance isn’t.
Silveta Ltd exists to handle Ken’s personal earnings. Its Articles of Association make no reference to politics, campaigning or the mayoralty. As such, the cost of Ken’s staff, or the economist he claims he employed for a while, had no relation to the purposes of the business, and can not be deducted for tax purposes. Unlike the legal-but-hypocritical tax avoidance mentioned above, the over-stating of expenses for tax purposes is illegal tax evasion.
It’s this second issue which is now getting Ken into trouble. The Taxpayers’ Alliance have rightly reported Ken to HMRC over ‘tax irregularities’, and we await the outcome of the inquiry with interest…
Before you scroll any further down the page, I urge you to cover your children’s eyes.
As it emerged today that Ken has been revealing more than he ought to his poor neighbours, Boris has been revealing the extent of Labour’s lies over Ken’s tax scandal. Ken’s immediate riposte when challenged over his extensive tax avoidance was that everyone does it and that “Boris Johnson had exactly the same arrangements to handle his earnings from television”. Elsewhere, when challenged by Harry Cole at a press conference earlier, Ed Miliband echoed Ken’s line – Boris, he said, has a similar tax arrangement.
In a letter to Guido, Boris has angrily denied the Labour smears.
“My salary as Mayor is taxed as an employee of the GLA. In the same way as when I was an MP my salary was taxed as an employee. Any other income that I have received from outside endeavours has been received on a self-employed basis, to me as an individual (no company or other structure has been involved). No income earned by me has ever been paid to a “service” company, through which a person or person’s freelance earnings can be channeled so that they pay corporation rather than income tax.
To suggest otherwise is a complete and utter fabrication.
Of course the real point is not about my tax arrangements. It is about the hypocrisy of a man who for years has railed against those who use special arrangements to reduce their tax and who has then been caught – bang to rights – doing the very same thing himself.”
Presumably we can now expect an apology from Ken and Ed?
Dan Hodges hits the nail squarely on the head with his piece on Ken Livingstone:
“It’s not about the – perfectly legal – tax chicanery. It’s about the hypocrisy. The staggering, copper-bottomed, butter-wouldn’t-melt-in-my-mouth, tacky, two-faced double standards of the whole thing. The man banging the drum against tax avoidance to get himself elected Mayor has been paid hundreds of thousands of pounds through a personal private company, leaving the matter of how much tax he pays largely up to him. To borrow a phrase from a much more eloquent wordsmith than myself – you literally couldn’t make it up.
But Ken does. He makes a lot of it up. It’s his modus operandi. Say one thing. Do another. Campaign against tax avoidance. Flirt with tax avoidance. Hold more than one job as Mayor. Campaign against people having more than one job as Mayor. Champion gay rights. Embrace a Muslim cleric who advocates the murder of homosexuals.
It could be Ken’s campaign motto. Do as I say, not as I do.”
Read the full article here.
Ken Livingstone recently wrote to the government requesting a change in the law meaning the Mayor of London can only hold one job, due to Boris spending an hour on his Sunday afternoon off writing a column for the Telegraph. This despite Ken having juggled the mayoralty with his position as MP (for over a year), columns variously with the Independent, Evening Standard and Morning Star, Have I Got News For You appearances, and the running of a company into which he channelled money from paid media appearances and speeches.
To exacerbate the hypocrisy, he’s already hoping to juggle the mayoralty, if he wins in May, with a position on Labour’s National Executive Committee, which, as I explained last week, involves half-day meetings, away days, meetings throughout conference, established sub-committees and panels, ad-hoc committees and panels, policy commissions and the joint policy committee, as well as other work, reports and communication on a near-constant basis between meetings.
Grant Shapps’ response to Ken’s letter is truly hilarious. Head over to Guido to read the full thing, but the best bits are as follows:
“the effect of your proposed regulations would have meant you were unable to serve as Mayor of London when you were first elected in 2000, since you were a Member of Parliament, had paid columns in The Independent and the Evening Standard, had a book contract with Victor Gollancz, and received five-figure sums from after-dinner speaking agencies.”
“I view your new-found interest in this issue to be wholly inconsistent and a further argument against ill-thought-out regulation. Calling for regulation on ‘full-time mayors’ whilst running a part-time company is as consistent as calling for a clampdown on tax dodging whilst using a company to avoid paying income tax.”
I wonder who Boris was thinking of when he wrote this about non-doms:
“At least they are frank about what they are doing. They are not hypocrites, like some people, ahem, I could mention – no names, no pack drill – who foamingly denounce tax avoidance, and call for bankers to be hung, and who then turn out to have elaborate schemes to avoid paying the full whack of income tax on their earnings.”
I mentioned the other day that Ken is attacking Boris for having a Telegraph column which takes him no more than an hour to write on his Sunday afternoon off. This is despite Ken having juggled the mayoralty with his position as MP for Brent East (for over a year), a column for the Independent and a column for the Morning Star. Today it emerged that, for six years of his mayoralty, Ken had a company which he channelled money into from paid media appearances and speeches. Someone else reminded me that he even found time for the odd Have I Got News for You appearance whilst mayor. By my rough calculations that made him ‘Six-Job Ken’.
I mentioned, too, that Ken has pledged to hold just the one job if elected in May, despite already standing for a position on Labour’s National Executive Committee, which is a demanding and time-consuming role. But what would it involve exactly? Helpfully, Luke Akehurst has given an overview of the role:
The full NEC meets every two months for at least half a day, with an extended “Away Day” (actually held at Party HQ!) after Annual Conference each year to look at the year’s objectives. There are multiple meetings during the week of Annual Conference. During Conference week NEC members also chair conference sessions and introduce and respond to each debate.
In practice a lot of the NEC’s business is transacted in committees and panels, which usually meet in the months in between full meetings. This is essential as a 33 member NEC is too large to consider every issue in detail.
There are a number of ad hoc panels and committees to deal with particular tasks, for instance I am serving on one about implementation of the Refounding Labour changes.
NEC members also serve on each of the NPF’s Policy Commissions and on the JPC, which has strategic oversight of policy development in the party through overseeing the rolling programme of Partnership in Power. The JPC acts as the steering group for the National Policy Forum. It is therefore a joint committee made up of NEC, Government and National Policy Forum representatives.
So that’s half-day meetings, away days, meetings throughout conference, established sub-committees and panels, ad-hoc committees and panels, policy commissions and the joint policy committee – and that doesn’t even touch on the work, communication and reports that have to be undertaken on a near-constant basis between meetings.
That Ken is standing for a position that involves that much work, whilst attacking Boris for doing some writing on his Sunday afternoons off, is nothing but shameless hypocrisy.
Under the Evening Standard article on Ken’s tax avoidance – in which they rightly mention the frankly innumerable accusations of hypocrisy – one reader comment made me laugh…
While on the subject, Guido has noted the complete silence on the matter from those left-wing blogs which normally vent a collective spleen at the slightest whiff of tax avoidance. Their hypocrisy is almost as grave as Ken’s.
Having had his pledge to cut fares proven to be an unfunded sham, and having admitted that his pledge to enforce a rent cap is entirely unworkable, it seems Ken’s already running out of ideas. His big announcement today was that Boris writes a column for the Telegraph (I may have paraphrased a bit there, but not much). Boris, so Ken says, should not be writing this column, and the fact that he does is clear and obvious evidence, so Ken says, that Boris doesn’t care about London.
Let’s critique this argument. It seems to me that there can be three possible objections. Firstly, that the column is for the nasty Telegraph, which is read by nasty, evil Tories etc. Secondly, that Boris is paid £250,000 a year to write the column. Thirdly, the amount of time that Boris spends writing it.
I’m going to dismiss straightaway the Telegraph objection. Given Ken has proudly written for the Sun (only to subsequently insist he hates News International, when a convenient bandwagon approached) and presented for Mahmoud Ahmadinejad’s Iranian state television, I’m going to trust that even he wouldn’t be so hypocritical as to criticise Boris for his choice of media outlet.
So, is Ken’s objection that Boris is a respected journalist and is thus paid lots to write the column? Would Boris’ critics be less bothered if he was paid just £50,000 – or even £8,500 (the amount Ken earnt from his job on Press TV)? Would earning a smaller figure in some way enable him to do his job as mayor better? Clearly not. Any objection at that level is nothing but jealousy dressed up as inverted snobbery.
What’s more, friends of Boris have today confirmed that, unlike Ken ‘tax-avoider’ Livingstone, the current mayor pays income tax on all his earnings. A £250,000 payment for the column means £125,000 straight to the taxpayer.
So perhaps the objection is that Boris writes the column at all? There are a number of responses to that. Firstly, a short article each week would take a seasoned journalist like Boris less than an hour to scribble up. He writes it on his Sunday afternoon off. Even his most ardent critics wouldn’t deny him a few hours of his own time each week.
Secondly, there’s an obvious comparison to be made with Ken’s time as mayor. As we were reminded today, Ken also had a column – for the Independent – when mayor. Furthermore, unlike Boris, who quit his position as MP as soon as he became mayor, Ken doubled up both jobs for over a year in 2000-01. ‘Three-jobs Ken’, he should’ve been known as. Added to that is the amount of time Ken spent out of the country appeasing his socialist chums rather than getting on with his job – remember how he visited Havana more often than he visited Hillingdon during his eight years as mayor? Remember Ken visiting Bexley just once in eight years? Remember those stats back in the autumn which showed Boris had visited almost every borough in London more in three and a half years than Ken did in his eight years? Ken was the part-time mayor, not Boris.
And what of the future? Ken has grandly signed a pledge saying he’d take on no other job other than the mayoralty if he wins in May. Yet already, he’s standing for a position on Labour’s National Executive Committee – a position which, if he’s to perform it properly, would easily take up more time than Boris’s column does.
This latest attack is nothing but Kenpocrisy from someone who’s rapidly running out of ideas.
[UPDATE: I've just been reminded that Ken also wrote a column for the Morning Star. 'Three-jobs Ken' is actually 'Four-jobs Ken'. At one point, he was simultaneously Mayor of London, MP for Brent East, Independent columnist and Morning Star columnist.]