Week 16: Villain – Andrea Leadsom

by George_East on April 20, 2014

ToryExpenses_VillainThis Week’s Villain of the Week is the new Economic Secretary to the Treasury, Andrea Leadsom for her ‘creative’ tax arrangements for her property empire

With the resignation of Maria Miller, the government underwent a minor reshuffle.  The main news story that emerged from this was the right wing press wetting its knickers in excitement about Sajid Javid’s promotion to the cabinet.  Look they cried, this is not a government full of chinless public school boy millionaires at all – this is a meritocracy,  a son of an immigrant bus driver is in the cabinet.

What was skirted over in all of this was, of course, that Javid is a former banker who was at the peak of his banking career, just as the greed and incompetence of the bankers brought the financial system to the point of meltdown.  As George Eaton of the New Statesman also observed, for all Javid’s qualities, he is lucky his father wasn’t trying to emigrate to the UK under the government’s new immigration laws for which he voted, as Mr Javid senior would have been refused entry.

Lower down the pecking order of the reshuffle though was the promotion of another of the 2010 intake into the Treasury of Andrea Leadsom, another former banker.

One of the things that Treasury ministers are responsible for, of course, is the tax take.  We have the right to expect that such ministers have squeaky clean tax affairs and that those tax affairs are transparently squeaky clean.

Leadsom, who has well as being a former banker, built up a buy to let property portfolio worth over £1,000,000.  The shares of the company set up to own these properties, Bandal, are now in an offshore trust for the benefit of her children.  She has (as required) resigned as a director of this company, appointing her no doubt extremely experienced 18 year old son in her stead.   Such arrangements are commonly entered into with a view to avoiding or reducing inheritance tax. Until very recently charges over the properties were held by off shore banks.

There is no suggestion that anything illegal has gone on here, but like many corporate tax avoiders who structure their corporate affairs to reduce tax or even eliminate it altogether, Leadsom appears to have adopted sophisticated tax structures so that, although as her spokesman said she is, no doubt, paying all tax that is due, the question is whether she is paying all of the tax that ought to be due.

We are increasingly living in a country where for the wealthiest individuals and mist successful companies tax has become voluntary.   To have a minister in the Treasury, which is supposed to be responsible for clamping down on artificial arrangements to avoid tax,  with creative tax affairs of her own, just goes to show how much contempt this government has for ordinary folk who pay tax from their wages

Leave a Comment

Previous post:

Next post: