Bloomberg News

Cameron Says It’s Increasingly Likely He’ll Publish Tax Returns

April 11, 2012

David Cameron said it’s “increasingly likely” he’ll publish his tax returns, becoming the first British premier to do so as he seeks to defuse accusations that he’ll benefit personally from an income-tax cut next year.

Chancellor of the Exchequer George Osborne said in his March 21 budget that he’s reducing the top rate to 45 percent from 50 percent starting in 2013, arguing that the higher levy generated little revenue and encouraged avoidance.

Cameron, who’s in Jakarta today on a four-day trip to Asia, has spoken to Osborne about publishing their tax submissions to prove that they won’t profit from the change. The prime minister’s salary is 142,500 pounds ($226,500), below the 150,000-pound top-rate threshold. The premier said no decision had been taken yet.

“I won’t say for all politicians but, if you are running for the highest office, I think it is a legitimate question for people to ask,” Cameron told Sky News television in Jakarta. “It’s important to weigh up the pros and cons. I don’t want to put people off going into politics and there are arguments that need to be made, but personally I’m very relaxed.”

Cameron’s Conservative Party is suffering a backlash from voters who see the tax cut on the highest earners as unjust at a time when living standards for most families are falling and the government is scaling back services in the biggest public- spending squeeze since World War II.

‘Advantages and Disadvantages’

Osborne told the Daily Telegraph newspaper last week that he favors publishing his tax statements and is looking at whether it is feasible, given that it would mark a break with long-established principles of keeping the tax affairs of individuals private. Business Secretary Vince Cable said he is also in favor.

“When it comes to publishing tax returns personally, I don’t set my face against it,” Osborne told the Telegraph. “But we have to think through the issues. You have to think through the advantages and disadvantages.”

Politicians’ tax records have also become an issue in the campaign for the May 3 London mayoral election. The Conservative incumbent, Boris Johnson, and his Labour challenger Ken Livingstone agreed to publish some of their tax records after trading accusations during a live radio debate that they were paid through companies to minimize their income-tax liability.

Osborne said in the budget that he will squeeze tax avoiders in return for having cut the top rate. Cameron said today he had not knowingly avoided tax.

‘I’ve Always Tried’

“No, I don’t think I have,” he said. “The issue I think for lots of people has been, have you paid VAT on things and all the rest of it. I’ve always tried to pay all my taxes and I think it’s very important that people do.”

Cameron defended moves to limit tax relief for the highest earners, a change that charities say threatens to cut their income from donations.

“There do need to be some limits because there is no doubt in my mind that some people are abusing the system, using allowances to drive their effective tax rate right down so it is not 50 percent, or 40 percent, or 30 percent or even 20 percent,” the premier said. “Some very rich people are paying single-digit tax rates.”

Osborne said after the budget that he won’t benefit from the lowering of the 50 percent tax rate because his ministerial salary is 134,565 pounds a year, below the top-rate threshold. He hasn’t commented on whether he is receiving an income from the rental of his house in Notting Hill in west London since moving to the chancellor’s official residence in Downing Street.

‘All Astonished’

Angela Eagle, a senior Labour lawmaker, told the House of Commons the day after the budget that “we were all astonished to learn from the chancellor this morning that he was not a top- rate taxpayer. The hunt is now on for the name of his accountant, who will surely find himself in spectacular demand.”

She called for lawmakers to be told “which members of the Cabinet have benefited from the cut in the 50p rate.”

Conservative support has dropped since the budget, also reflecting voters’ opposition to moves to tax pensioners more and allegations that Conservative Party officials offered rich donors the ability to influence policy in return for cash.

A poll by Survation for the Mail on Sunday newspaper published April 8 showed 35 percent of voters would back Labour in a general election while 30 percent would back the Conservatives. Survation interviewed 1,039 people online on April 5 and 6.

To contact the reporter on this story: Gonzalo Vina in Jakarta on gvina@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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