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Livingstone campaign calls for “full household income disclosure”

April 5, 2012 12:13 pm

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Following last night’s Newsnight debate, Ken Livingstone’s campaign has argued that that “full disclosure” on an agreed basis between the main campaigns is needed.

In a letter sent this morning to the agents of the other campaigns, Ken Livingstone’s campaign director Patrick Heneghan has written:

“We believe household publication is necessary for full disclosure as the question of Ken’s income and his wife’s income and their tax has been central the coverage of this issue. Publication of Ken’s returns alone will not address many of the questions that have been raised.

“The only way to answer all the questions about this issue and to move the debate on the real issues facing London is for full household income disclosure. This should apply to all the candidates equally to avoid any further questions about the income and tax affairs that may or may not be applicable to them through their households. The same principles need to be applied to all the candidates if this process is to be seen as open and fair.”

Aerh

Erm, no, returns please…
Pingback: Ken’s tax silence. | Boris Backer.
http://twitter.com/Boris_Backer Boris Backer

This is a wind-up, right? He’s not actually trying to get out of this?
- John Ruddy
  
  No, he’s not. Probably because he has nothing to hide – unlike Boris, who as we saw on Newsnight seems VERY reluctant to discuss his tax affairs.
  - Hugh
    
    He’s published his income and tax payments. Livingstone is refusing to. So run by me how it looks like Boris is hiding something?
  - GuyM
    
    He’s fallen back into the usual “class” type attacks:
    
    “Boris earns more than me, I’m just a poor working class boy made good and even then I can’t earn as much as silver spoon boy Boris, so don’t worry about all my hypocrisy, lies and dodgy Islamic mates…. vote Ken because I don’t earn as much as him”
    - derek
      
      Clearly the hypocrisy lies with Boris, he campaigned for a tax cut for the rich while the low and middle incomes will be reduced through less tax credits and benefits.Out of the four candidates only Boris refused to say he wouldn’t commit to a second income. Ken is leading the positive campaign for London, Boris is silent on any London initiatives other than citing religious hatred.Do Londoners really want to give a part time politicians like the greedy Boris another chance to build more funds so he can disappear more often to the ski slopes while Londoners get an unfair deal.
      - Hugh
        
        ”Clearly the hypocrisy lies with Boris, he campaigned for a tax cut for
        the rich while the low and middle incomes will be reduced through less
        tax credits and benefits.Out of the four candidates only Boris refused
        to say he wouldn’t commit to a second income”
        
        The word “hypocrisy” has a particular meaning.
      - derek
        
        Yes! in short “Boris”
      - Hugh
        
        The problem is, Derek, that campaigning for a tax cut for the rich while the low and middle incomes are reduced isn’t hypocritical; nor is refusing to commit to abandoning a second income (though criticising others for having a second income when you’ve had three, like Ken, is); nor is being silent on London initiatives other than citing religious hatred.
        
        Really to make a credible charge of hypocrisy against someone does involve coming up with an example of something they’ve said that is hypocritical.
      - derek
        
        “A tax cut of £1000 for low earners through rising the point of which tax is paid”(not so say the tax credit department)
        
        “Gaining an additional £12,500 from a tax cut for the rich and high earners”
        
        To suggest low income have gained anything is wrong and it’s hypocrisy when Boris himself has gained more than the majority of the people he represents…..Yes!
      - Hugh
        
        No! Derek, it’s not. An exclamation mark isn’t sufficient to change the definition of the word.
      - derek
        
        Err, Yes an exclamation mark doesn’t define the action but the action I gave does define the word….surely you agree?
      - http://twitter.com/davidbeandotorg David Bean
        
        Do consult a dictionary. Even if your allegation is correct, untruth is not the same thing as hypocrisy.
      - derek
        
        Mr Bean, was that a comic intro? blah!!!!
        
        Boris said he did campaign for a personal tax cut.
      - http://twitter.com/davidbeandotorg David Bean
        
        I knowhe did. Sowhat? Youdon’t get tomake upyour ownmeaning for r the words youwant tothrowaround, youknow.
      - Hugh
        
        Given that the word means stating you believe in values that your actions contradict, it’s hard to see how it can.
        
        “Suggesting low income [earners?] have gained” isn’t a statement of values.
        
        Nor, even if he had argued that it was morally right that low income earners should gain, is simultaneously lobbying for a tax cut for the rich hypocritical.
      - derek
        
        I don’t think he said anything about moral rights? he certainly didn’t give a cohot about the pensioners short failings.
      - GuyM
        
        You really have got the meaning of the word badly wrong.
      - derek
        
        Tell me more? we seem to be talking a different language, you seem to be talking up tax cuts for the rich and talking down tax take on the poor, seem hypocritical to me.
      - Hugh
        
        Then, as I’ve already pointed out, you don’t understand what the word means.
      - derek
        
        No- I think you just used an idiom as opposed to my example?
      - Hugh
        
        You don’t know what “idiom” means either
      - derek
        
        Principle of Compositionality
      - http://twitter.com/davidbeandotorg David Bean
        
        What a dire mess this is.
      - GuyM
        
        Hypocrisy, telling people to do one thing whilst actively doing the opposite
        
        i.e. Ken’s call not to avoid tax via a company whilst doing it himself.
        
        It does not include organising macro tax schemes every time to ensure you always come out worst.
      - derek
        
        But where does Boris rise above his hypocrisy?
      - GuyM
        
        Why shouldn’t he have a second income Derek?
        
        MPs do, normal working people do.
        
        In free time why is playing golf, reading a book, gardening or something similar acceptable but writing a newspaper column isn’t?
      - derek
        
        He is actively concentrating on earning more? some may say he should be concentrating on helping Londoners, we all know the recession doesn’t effect Boris but his position as mayor did have a negative effect on the majority of Londoners.
      - GuyM
        
        So “actively concentrating” for say 40 hours a week is fine, so long as you don’t spend any other hours earning income?
        
        It makes no logical sense and looks much like a bit more envy from the left.
        
        I can’t see any reason why anyone, anyone…. should be banned from using their personal time profitably if it does not damage their professional responsibilities.
        
        I’m afraid this criticism goes to the heart of what is so unpleasant about socialism.
      - derek
        
        I think if you undertake a public sector position, then a certain amount of responsibility should apply, swanning off to earn more readies while people are being subjected to real terms loses isn’t leading by example OTOH Boris could just walk away and write till his pen runs dry.
      - GuyM
        
        “Swanning off to earn more readies” and paying a large amount of tax in the process.
        
        Again I can see no reason why anyone in their spare time can not undertake paid work, especially something like writing a newspaper column.
        
        All legitimate commercial activity is fine with me, Boris’ taxes help pay for the NHS, schools, welfare etc. so asking him to pay less tax seems bizarre as an argument from the left.
        
        Also strange is the idea that in order to lead by example we all have to live on as small a salary as possible. I’m afraid Derek you really are out of touch on this issue.
      - derek
        
        No given that paid position to another so tax could be collected seems about right and proper and would probably be read by a wider audience?
        
        If your mayor you can’t continually post a vacant stance on your responsibility.
      - GuyM
        
        Those paid positions include newspaper columns and I’d rather read Boris’ column than most others.
        
        The notion that all are equally able is a fallacy, you let the most able to do a job do it.
        
        Much as i think your idea of us all going part time is equally nutty.
        
        A position should be open to anyone with the time who is the best candidate, not have it divied up by some strange notion of sharing.
        
        I’d not share my job or jobs, I fail to see why Boris should.
      - derek
        
        And by what measure do you apply to say that Boris is the most able?
        
        Most people who come across an article or column which is written by Boris simply pass it by, it is of no constructive use with little to no imagination.
      - GuyM
        
        Whereas I’d rather read anything written by him over anything written by the two Eds
  - ovaljason
    
    Boris has put his numbers online this morning.
GuyM

So Ken makes a few hypocritical comments about people who use companies to minimise tax (whilst doing it himself), then tells fibs about Boris’ tax affairs on air (before claiming he doesn’t really know what Boris does or doesn’t do), claims his attack site if being taken down (because he’s getting a good pasting himself) and now, fater having lost control of message and being marked up as a hypocritical devious teller of untruths…… wants full income disclosure?

Presumably hoping Boris earns more and he can claim his couple of hundred thousand in income is more in touch with the man on the street?

I’m presuming Ken’s campaign team is made up of kids from the local infant school.
http://twitter.com/outofafrica46 Linda Le Roux

You must be joking. Get real.
http://twitter.com/NormaniusB NormainiusB

If he really believes that full household disclosure resolve the issue then he should take the initiative and do it himself, making the other look like the dodgy ones for not doing so.
Crying With Laughter

Oh, Labour Party! What a mess you’ve got into with this one! And how do you ever think you’re going to get back out of it????
Bill Lockhart

I’m reminded of Clinton and his torture of the English language in the cause of untruth. Do Livingstone’s handlers not understand the effects of his habitual casuistry? I do hope not- the tragedic completeness of him digging his own political grave is rather satisfying.
davidbeandotorg

From what I cab tell this statement fails on its own terms. Most comments seem to assume this is a stall, but that, presumably, is not the assumption Ken’s campaign wants people to work from. Taking his motivation at face value, his strategy is hard to fathom. Questions were asked about the tax affairs of candidates. In Ken’s case, the fact he paid his wife out of funds channeled through a personal company meant her tax affairs became significant. But the same isn’t true of the other candidates: questions about a partner’s income were limited to Ken. So that means there’s no good reason for other candidates to agree to his request – they can just shrug their shoulders and say, well, he agreed to do this on national television, and now he’s going back on it. According to the argument made in this statement, the logical course would have been to release his whole household income and tax affairs unilaterally, explaining that he felt the interests of full disclosure required him to do so. That way, assuming – as we are, according to his argument, to assume – the affairs are in order, he looks honest and honourable, and puts himself in a good position to demand similar disclosure from other candidates if he can make a reasonable argument for their necessity. So why wouldn’t he do that? The only reason I can see is that his argument is a sham.
KonradBaxter

It’s remarkable how he has let this issue dominate his campaign. He isn’t stupid or a political rookie but he seems…slow…in this election?
http://twitter.com/CllrJonSHarvey Cllr Jon Harvey

http://www.kenlivingstone.com/uploads/9ed45aea-c661-9044-5df9-f9a45647e85a.pdf
http://www.facebook.com/profile.php?id=697126564 Paul Halsall

I read the Guardian stories.

I am not a fan of Boris.

I would certainly vote for Ken.

His record on transport, gay rights, “Londonishness”, etc, is unparalleled.

And I think it ludicrous that that Boris can earn all that extra money while being mayor of London.

On the other hand, if the figures are correct, Boris does indeed seem to have paid his fair share of tax, and deserves some credit for that.

I am not sure Ken comes out this that well.
http://www.facebook.com/people/Mike-Homfray/510980099 Mike Homfray

I’m bored to death with the tales of London boss politics

It just proves why I have never believed in the mayoral system
http://twitter.com/davidbeandotorg David Bean

Incidentally, what sort of idiot designs a comments system where replies are indented in such a way that with enough levels of replies you end up with vertical strings of single characters squashed up to the right?
Bill Lockhart

Much comment in the blogo/Twattersphere about Livingstone’s apparent inebriation during the Newsnight debate. “I like a drink” quoth he. Wouldn’t be the first time his drinking got him into trouble. Does he remember promising to publish his income and tax liability? Do Labour have themselves a drunk for a mayoral candidate?
Blond Tory Boy has published his income tax figures. Where are Livingstone’s?
Chris Apostolou, Greenwich

So they both earn like £400k, but Boris pays £200k tax and Ken £5k tax … Alright if they’re running for nomination of the Republican Party. But not if you are pretending to have principles. KEN you have let everyone down, now you probably face a HMRC investigation for dodgy accounting
Bill Lockhart

When Mr. Livingstone gets round to publishing his income as promised, as Johnson has already done, will he itemise his earnings from the Iranian propaganda machine?

“Mr Livingstone first appeared on Press TV in March 2009, standing in for former Respect MP George Galloway.”

Small world.
Amber Star

Guardian interactive has a link to 4 years of Ken’s income & taxes; on a separate interactive there’s a link to 4 years of Boris’s income & taxes.

Ken £85k average income; 33% average income tax.
Boris £425k average income; 39% average income tax.

The above excludes NIC, which Ken will likely have paid a lot more of than Boris because Ken pays employer & employee conts. on any salary paid via a company whereas Boris pays minimal, Class4 conts. on his earnings. So that’s a calculation that needs to be done to make a better comparison.

Also worth calculating how much the cut in the 50% tax rate will benefit Boris, based on that average income of £425k.
- Hugh
  
  ”because Ken pays employer & employee conts” No, he doesn’t since he took his payment in dividends rather than a salary (to avoid employee NI), so what employee conts? One suspects his wife did too.
  
  Ken’s “income” is also massively understated; he invoiced £238,646 for his services in the year to June 30. Had he taken that in one go, rather than leaving it in the company to pay out gradually over years (being careful to keep himself under the 100k mark) he would have paid massively more in tax.
  
  The idea that structuring this way didn’t reduce his tax bill is laughable.
- GuyM
  
  The whole point about using a company to charge and provide income is you can offset a lot of “expenses” that don’t get taxed or get viewed as “income”. Plus you can then defer income through dividends at a time suitable.
  
  Very easy for Ken to lose tens of thousands as non taxable expenses and also defer income until after the election (which may well prove to be his last win or lose).
  
  Plus you really don’t get the company structure do you? Dividend payments don’t draw any NI contributions at all.
  
  Standard practice would be to draw “income” sufficient to use up personal tax allowances and maybe the 20% band, thus ensuring enough class 1 NI payments are made for state pension provision.
  
  Then take a full set of expenses and tax relief before corporation tax kicks in (at a rate below income tax) with any divident payments requiring capital gains (again below income tax rates and not requiring employees or employers NI contributions).
  
  So when Ken posts not only “income” but also expenses, tax relief and dividends plus retained profit held for a future dividend stream (in effect a revenue stream deferrred across tax years) then we can get a better picture.
  
  Until all that comes out I’m afraid anyone who has used such mechanism themselves will likely conclude Ken Livingstone is being less than honest once more.
- jaime taurosangastre candelas
  
  I’m not an accountant, but even I know that for tax purposes Ken’s personal income (salary, interest, dividends and pensions) should be treated separately from the corporation tax his company pays. And yet, in Ken’s figures, the income tax paid and corporation tax paid are added together to calculate the percentage of tax paid. That’s wrong, and I believe deliberately calculated to give a beneficial but false impression.
  
  If Ken thinks everyone is so stupid to fall for that then he deserves no one’s vote. If on the other hand, he genuinely believes it is OK to mix the two together he is dangerously inept with money and should be allowed nowhere near to the London budget.
  
  There is also an anomaly: he declares “corporation tax paid on dividends”, and yet that is not how corporation tax works. Corporation tax is payable on company profits after some allowable deductions. Dividends are a separate matter.
  
  It may have escaped anyone’s notice, but for this year the rate of income tax paid on dividends up to £150,000 is 32.5%, which is 17.5 pence less than the old 50p tax rate, or 7.5 pence lower than the higher rate of tax. Truly, Ken is not in this together with everyone else.
  
  Ken still also has to answer questions as to why (it is alleged) 2 of the 3 members of staff of his company were running his political activities, which is not allowable as company expenses under company law, and why he has not to date declared the cash equivalent contributions these two employees have made to the electoral commission. That seems like two very difficult questions for him to answer.
  - jaime taurosangastre candelas
    
    …More than just an allegation of employing people through his company. It is the subject of a formal complaint by the Taxpayers’ Alliance to HMRC it seems:
    
    “I write to request that HMRC conduct an investigation into whether Mr Ken Livingstone, through his company Silveta Ltd, has been setting disallowable expenses against tax.
    HMRC rules state that to be set against tax, company expenses must be “wholly and exclusively incurred for the purposes of the trade.”In response to publicity about his channelling his earnings through Silveta, Mr Livingstone has stated that he has employed three people, two of whom remain currently employed. Mr Livingstone has made clear that he treats these expenditures as allowable expenses. On BBC London’s Vanessa Feltz show on Friday, 16 March, http://www.bbc.co.uk/podcasts/series/vanessa, he said:“I’ve formed a company, and you have company expenses, travel, research and you employ people. And I’ve employed three people at different times over this last four years. And after you’ve had all those expenses, then the money you pay yourself I’ve paid tax on.”One of the people he employed, he made clear, was an economist to work on his re-election campaign. He said: “Literally you can’t, if you’re running for mayor, off the top of your head come and say I’m going to cut the fares – you need to employ someone to go through their [TfL’s] books. I got a really well-established economist who’d worked in the public and private sectors, who spent a long time ploughing through – imagine the size of the accounts of TfL – who cam back and said, yes you can make a fares cut. It takes time to do that and you need to employ people to do it.”In an interview on BBC Radio Five Live, Pienaar’s Politics, on Sunday, February 26, Mr Livingstone said: “The other thing is I’ve used that [company money] to pay for people to work on the campaign for mayor.”In an interview on the Andrew Marr show, BBC One, on Sunday, March 11,http://news.bbc.co.uk/1/hi/programmes/andrew_marr_show/9704407.stm, Mr Livingstone said: “I employ people. I mean that fare scheme we’ve come up with, it took someone, a talented economist, to sit down and spend a lot of time going over the books. I’ve got people handling the media. I employ at the moment two people.”Mr Livingstone has declared to the Electoral Commission a donation to the Labour Party of staff time worth just over £19,000. His campaign states that this is for three months’ work of two staff. This implies that the staff were paid a total of £76,000 on a full-year basis.It is my belief that the employment of an economist to come up with policies for Mr Livingstone’s re-election campaign and the employment of “people handling the media” for the campaign cannot be expenses incurred “wholly and exclusively” for the purposes of Silveta’s trade.HMRC rules are clear that the purpose of the company is a matter of fact, determined by the revenues it raises and the objects set out in the Articles of Association. Silveta Ltd’s Articles of Association state that the Company’s objects are:(a) (i) To carry on business as a general commercial company. (ii) To carry on any trade or business whatsoever and to do all such things as are incidental or conducive to the carrying on of any trade or business by it.(iii) To undertake all or any of the following objects.None of the following objects (b)-(z) specify political campaigning, the promotion of candidates, or anything related to the London Mayoralty or tube fares. Nor, clearly, can a political campaign be defined as a trade or business.Silveta Ltd’s purpose is, as Mr Livingstone has stated, to handle his own personal earnings from “after-dinner speaking, TV stuff and all that” and not to further his re-election campaign. There is no evidence that Silveta Ltd received any revenues from its analysis of City Hall’s books, or the promotion of Mr Livingstone as mayor.It appears clear to me that the salaries of a media assistant and an economist/policy adviser are not allowable expenses under HMRC rules.”
- David B
  
  Ken pays himself by using dividends no NIC on dividends
treborc

t prompted a pledge from all four during a BBC Newsnight debate on Wednesday to make their records public.
In the 2010-11 tax year, Conservative Mr Johnson paid £210,410 income tax on an income of £473,280.

Labour’s Mr Livingstone paid £22,691 tax on an income of £94,568. He also paid £11,970 in corporation tax.

Liberal Democrat Mr Paddick paid £14,534 in tax on an income of £76,804.

And Green Party candidate Ms Jones paid £15,577 in income tax on an income of £63,028.
john_zims

Livingstone’s effective tax rate 14.5%, lower than a cleaner at city hall, says it all.
john_zims

The big problem for Livingstone is that he has been a vocal supporter of UK Uncut, which campaigns against not just (illegal) tax evasion but also (legal) tax avoidance
“These rich bastards just don’t get it,” Livingstone wrote in 2009. “No one should be allowed to vote in a British election, let alone sit in our parliament, unless they are paying their full share of tax.” He also called for everyone to “pay tax at the same rate on their earnings and all other income”.

Why is Livingstone still the Labour candidate?
Drewmac

So why doesn’t he do it then? The numbers he has posted are a bad joke simultaneously showing his lack of respect for the electorate and his lack of qualification to have any control of a public budget
JoeDM

Guido Fawkes had a graph showing the % income tax of each candidtate.

See: http://order-order.com/2012/04/05/compare-and-contrast-candidates-effective-tax-rates/
MonkeyBot5000

If Ken really feels that the candidates should provide more detailed information, the way to do it is by releasing that detailed information yourself and then challenging the other candidates to match you.

You don’t release less information than the others and then complain it’s not fair because the public have comparable information for each candidate.

As campaign director, Patrick Heneghan should know this.

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