Battle lines have been draw before the impending UK elections, with Labour targeting the Tories on hedge fund tax avoidance .
Labour leader Ed Miliband launched an attack on Prime Minister David Cameron during prime minister’s questions, even hinting that Cameron’s wife may work for a company that is dodging its tax bill. Samantha Cameron acts as an adviser to luxury stationer Smythson, which recently moved its headquarters to Luxembourg, writes Patrick Wintour of The Guardian.
Hedge Funds – Economic smokescreen?
Labour has set out to deflect criticism of its economic policy by launching an offensive against a perceived lack of action on tax avoidance by the Tory-led government. Miliband has come under fire from business leaders for his apparently anti-business rhetoric, but came out all guns blazing on the issue of hedge funds and tax avoidance.
“This is the difference: this is a PM who won’t tackle tax avoidance for the simple reason that too many of his friends would get caught in the net. They’re the party of Mayfair hedge funds and Monaco tax avoiders,” he said.
Miliband hammered away at his point, with each of his questions dealing with the link between tax breaks for hedge funds and the level of donations from hedge fund managers to the Tory party. “Everyone pays stamp duty on stock market transactions except hedge funds, who are allowed to avoid it, costing hundreds of millions of pounds. You have been funded to the tune of £47m by the hedge funds,” he continued.
Milband attacked one of the tories asking “You are bankrolled by the hedge funds, you claim you want to act on tax avoidance, why won’t you act?”
Labour released an analysis of Tory donors who feature in the section of the Sunday Times list which focuses on hedge fund managers. This found that 27 of the 59 managers are Tory donors or work for funds that have made donations.
The top donor on the list is Sir Michael Hintze, head CQS fund, who is in fourth place in the section and has donated £3.2m to the Tories, and Lord Fink, the head of the Mayfair-based ISAM hedge fund, who is joint 42nd on the list. He has given £3.1m to the Tories.
Hedge Funds – An issue for the chancellor?
Despite his insistence, Cameron refused to address the issue, stating only that if Miliband had suggestions to make for the Budget, he should talk to chancellor George Osborne.
Shadow chancellor Ed Balls was roundly ridiculed for being unable to name a business leader who supported Labour’s economic policy. He was asked on BBC Newsnight to name the business figure that he had dined with, and could only name him as “Bill somebody.” Cameron seized upon this absentmindedness with relish, quipping that “Bill Somebody’s not a person; bill somebody is Labour’s policy.”
The mood in Parliament will surely become even more fractious as the elections draw closer.