Our guest writer is Tamasin Cave, of the Alliance for Lobbying Transparency

“I believe that secret corporate lobbying, like the expenses scandal, goes to the heart of why people are so fed up with politics” – so said David Cameron, just last month, in a call for the “light of transparency” to be shone on lobbying, adding: “We don’t know who is meeting whom. We don’t know whether any favours are being exchanged. We don’t know which outside interests are wielding unhealthy influence.”

Yet, as the Observer reveals this weekend, some of his party’s current crop of prospective MPs are hiding their links to the lobbying industry from voters. Today, 38 Degrees, has teamed up with the Alliance for Lobbying Transparency to launch a campaign for lobbying transparency – targeting the prospective MPs revealed in the Observer investigation.

Take Cameron’s former press secretary, George Eustice, standing in the Cornish three-way marginal of Camborne and Redruth. Mr Eustice’s campaign website talks in detail about his parents’ farm (in his constituency), which has “a farm shop providing quality local produce” and “a herd of British Lop pigs – a rare breed native to Cornwall”.

It fails to mention, however, his current job as a lobbyist for a large consultancy that lobbies for, among others, supermarket giants Tesco and Morrisons. “There are lots of things that you don’t mention,” he says by way of explanation.

Another is Priti Patel, Conservative party candidate for the notionally Tory seat of Witham in Essex. She claims that her experience outside politics means she has “an innate understanding about the issues faced by small businesses”. Like Mr Eustice, she doesn’t disclose that her current employer is the UK’s leading public affairs (aka lobbying) firm, where her clients include a bankers’ lobby group.

Parliamentary candidates working as lobbyists aren’t confined to the Conservative party, but they do make up the majority. Lobbying firms hire parliamentary hopefuls not only to open doors now, but also to secure a direct line to any future government. It makes sense then that Conservative candidates would be more sought after than their rivals. Ms Patel, for example, is described by her employers as “a great hire… powerfully connected within Cameron’s Conservatives”.

The issue of secretive lobbying among Tories isn’t just confined to Parliamentary candidates either. Conservative peers Lords Bell and Chadlington both head up lobbying firms that refuse to disclose their clients. Lord Bell’s firm, Bell Pottinger Public Affairs, says the public has “no right to know” who it is lobbying for. Lord Chadlington’s firm, Quiller, puts it rather more politely; “we understand the importance of discretion,” it says.

Then there are the many former MPs that now work in the influence industry, who still have access to the House of Commons, as the Sunday Times revealed last weekend. Again, the majority of them are ex-Conservative MPs. Put in this light, Mr Cameron’s pledge last month to be the party that “sorts all this out”, makes sense. Secretive lobbying, at the moment, is predominantly a Conservative affair.

What neither of the main parties has done though is to support the one concrete solution to an opaque influence industry: a compulsory register of lobbyists. This would require all lobbyists to make public who they are, who they are lobbying for and which areas of public life they are seeking to influence. A register would provide the much needed public scrutiny of who has the ear of this or any future government.

All of which is why 38 Degrees is supporting the Alliance for Lobbying Transparency’s campaign for a compulsory register. Take action now by emailing your parliamentary candidate, whether they’re involved in lobbying or not, to press them to pledge their support for new transparency rules for lobbyists.

Liam Fox has this afternoon admitted to Cathy Newman of Channel 4 News that David Cameron knew that Lord Ashcroft was a non-dom “within the last month”. But he refused to set out when William Hague first found out.

Watch it:

Last night, William Hague admitted on the Radio 4’s The World Tonight that he “found out in the last few months about Ashcroft”. It is unclear whether this was before or after he told Andrew Marr that Ashcroft “fulfils the obligations that were imposed on him” in November last year.

As covered on this blog yesterday, Hague also told Jeremy Paxman in June, just nine months ago, that “I have no reason to think he hasn’t complied”.

UPDATE 16.05

The Guardian has five questions for the Conservatives on the Ashcroft affair including “When exactly did [William Hague] discover your party’s deputy chairman was a non-dom?”

A decade ago William Hague assured Tony Blair that upon becoming a peer, Michael Ashcroft would pay “tens of millions a year in tax”. As it emerged yesterday that Ashcroft had, in fact, been a ‘non dom’ during this period and avoided £127 million in tax, Left Foot Forward wonders why the shadow foreign secretary told Jeremy Paxman repeatedly in June last year that he had “no reason to think that he’s not complied with the commitments that he gave.”

The exchange of letters in 1999 between Tony Blair and William Hague, reproduced in this morning’s Guardian, outline the then-Tory leaders’ assurances about Michael Ashcroft:

“He is, however, committed to becoming resident by the next financial year in order properly to fulfil his responsibilities in the House of Lords. This decision will cost him (and benefit the Treasury) tens of millions a year in tax yet he considers it worthwhile.”

But in June 2009, William Hague faced 17 questions from Jeremy Paxman on Newsnight about Lord Ashcroft including:

PAXMAN: Just one final point, in the current climate of suspicion about politics your deputy chairman Lord Ashcroft, a man whose peerage you lobbied for, saying that he would become resident in Britain for tax purposes, can you just tell us, is he resident in Britain for tax purposes now?

HAGUE: I’ve no reason to think that he’s not complied with the commitments that he gave …

PAXMAN: Have you asked him directly?

HAGUE: I have discussed it with him and I have no reason to think he hasn’t complied

Watch it:

• Join the facebook group and sign the petition demanding Lord Ashcroft pays back the missing millions

A petition has been launched demanding Tory deputy chair Lord Ashcroft of Belize pay back the £127 million he avoided paying in tax since his elevation to the Lords in 2000. Today’s Mirror has calculated the sum, and quotes Lib Dem home affair’s spokesman Chris Huhne, who said:

“He’s avoided vast sums in a non-dom tax dodge. Anyone who wants to pass laws about tax in this country should pay the full taxes and not hide behind the special offshore status of non-doms.”

The petition says:

“We, the undersigned, call on Lord Ashcroft to pay to the UK exchequer the tax for which he would have been liable had he not decided to be non-domiciled in the UK for tax purposes since 2000, so that it can be spent on the NHS, schools, police and other front line services.

“Commentators estimate that this sum could be as much as £127 million.”

It follows the highly-successful Facebook group, which now has more than 1,250 members.

This is how the Mirror calculated the £127 million figure:

“Lord Ashcroft’s fortune is estimated at £1,100 million by the Sunday Times Rich List.

“A 5% annual return is £55m. If he kept 80% offshore taxpayers would miss income from £44m.
He can split his tax between capital gains and income tax.

“At 18%, capital gains tax on £22m = £3.96m, plus 40% income tax on £22m = £8.8m. That’s £12.76m a year or £127.6m in 10 years.”

Earlier today, Left Foot Forward reported the huge influence Ashcroft has over the Tory party, and the potential effect he may have on the election. Ashcroft’s money pays for 78% of Tory spending in marginals, far higher than the 2% of donations the Tories have claimed.

UPDATE 2:40

John Slinger, who set up the petition, has just told Left Foot Forward:

“The Tories and Lord Ahscroft may think that they can put this story to bed with a belated Damascan conversion to transparency, but it won’t wash. I set up this petition because I hope that the British public will think long and hard about what the Ashcroft affair says about the modern Tories.

“Ordinary people are struggling in the current economic circumstances, paying their taxes and often relying on public services such as the NHS to improve their life chances.

“Yet the Tories have as their Deputy Chairman a billionaire who chooses to pay only a fraction of his taxes in this country yet seeks to influence the outcome of the next election. It may be legal, but it’s a disgrace.”

The spectre of sleaze returned to haunt Boris Johnson today as the police announced an investigation into another of the Mayor’s key aides, Bertha Joseph – his personal appointment as deputy chair of the London Fire Authority.

Joseph spent £900 of charitable donations on ball gowns while Mayor of Brent. She has been suspended from Brent Council for six months but Johnson has so far refused to condemn, much less dismiss her.

Today’s Evening Standard reports that:

“A judge said there was ‘more than a possibility’ that she [Joseph] had deprived two children’s charities, the Down’s Syndrome Association and Shooting Star, of extra income by spending the donations of £400 and £500 on dresses.

“A Brent council investigation found that Ms Joseph encouraged two businesses — a butcher and a car dealer — to sponsor the dresses she wore to two mayoral charity balls.

“The judge added that Ms Joseph had shown a ‘repeated lack of credibility’ and that it would be wrong to expect her to serve as a borough mayor again ‘given the disrepute that she has caused to the office’. He ordered her to serve the remainder of her six-month suspension immediately.”

Shadow communities secretary Caroline Spelman has previously praised Joseph as a woman of “total integrity, honesty and courage”, welcoming her into the Tory party after her defection from Labour.

This is just the latest in a series of scandals to rock City Hall since Johnson came to power, and follows allegations against key advisers of racism, expenses swindling and financial misconduct, which Left Foot Forward has explored previously.

David Cameron’s MEPs last night voted against proposals to crack down on “those seeking to hide their money from the tax authorities” – tax dodgers.

In voting against the Domenici report on “Promoting Good Governance in Tax Matters 2009/2174(INI)”, Cameron’s MEPs sought to prevent the automatic exchange of tax information across borders.

The motion, however, was passed overwhelmingly – 553:93 (pp. 43-44).

The only opposition came from Cameron’s European Conservatives and Reformists (ECR) group, UKIP’s Europe of Freedom and Democracy (EFD) group, the Non-Inscrits (NI) - which includes the BNP’s Nick Griffin - nine members of the European People’s Party (EPP) group and a lone Alliance of Socialists and Democrats (S&D) MEP, Robert Goebbels.

The overall report on good governance, again opposed by Cameron’s MEP’s and their allies, was passed 554:46 (pp. 55-56).

In addition to cracking down on tax dodgers the report seeks to:

• Develop a co-ordinated strategy to improve the fight against fiscal fraud;

• Improve international cooperation within the EU and at international level in order to ensure that it is effective;

• Clamp down on multinational companies’ ability to make extensive use of tax havens and offshore centres as part of their tax avoidance strategies;

• Take decisive, effective and consistent action to deal with tax havens;

• Put an end to the use of artificial legal persons as a way to avoid taxation;

• Deal with the problem of bank secrecy, enabling the automatic exchange of information in all circumstances;

• Require companies to disclose in their annual accounts, on a country-by-country basis, accounting information relating to tax havens;

• Avoid the creation of further legal loopholes open to abuse; and

• Ensure consistency in the implementation at EU and international level of standards in the areas of prudential supervision, taxation and money laundering and counterterrorism.

As well as voting against them in yesterday’s full plenerary session, Cameron’s MEPs had earlier sought to water down the above proposals in committee.

David Cameron’s speech earlier this week to the University of East Anglia attracted flak yesterday for packing the crowd with ringers – young Tory activists not actual students carefully positioned behind him – but it now emerges that one of his key themes did not reflect the reality of the Conservative party.

The speech was expected to focus on the future of higher education but instead became a vitriolic and highly-personalised diatribe against Gordon Brown with a supplementary rhetorical attack on the lobbying world:

“[Lobbying] has tainted our politics for too long.

“In this party, we believe in competition, not cronyism. So we must be the party that sorts all this out. Today it is a £2bn industry that has a huge presence in parliament.”

But is Cameron heeding his own words?

Last year, The Times discovered that the lobbying and PR world is as strong as ever within the Conservative party, not only influencing and shaping the views of prospective parliamentary candidates (PPCs), but even going one step further – putting them on the payroll.

The investigation revealed 28 Conservative PPCs in winnable seats are working as PR consultants or lobbyists for public affairs firms. Tellingly, 25 per cent of them were hired after securing their nominations.

Indeed, some of the PPCs don’t even know they’re lobbying. Priti Patel, formerly press spokeswoman to William Hague, and now working part-time at Weber Shandwick, told the Times:

“I don’t do lobbying. However, that does not mean I won’t phone up a Member of Parliament and say this client or that has an issue and would you be willing to speak with them?

“I will also give my clients a particular insight into the party.”

Ms Patel should note that the in most widely used dictionaries, the definition of lobbying is:

“To try to influence the thinking of legislators or other public officials for or against a specific cause”.

Unless she was merely arranging a heart to heart conversation for her clients, we’re talking about one thing, and one thing only – lobbying.

And today, in another exposé, The Times reports that Andrew MacKay, who is standing down at the election over expense abuses, has joined a public affairs company. Mr MacKay, until recently a senior adviser of David Cameron, was last week ordered to pay back £31,193.00 by the Legg report.

He will be a “strategic adviser” to the lobbyists Burson-Marsteller – whose chief executive is Matt Carter, former general secretary of the Labour party. The company said it means they are now “uniquely placed to advise clients whatever the make-up of the new government after the election”.

Following news that the SNP had auctioned a lunch with Alex Salmond at Holyrood at a cost of £9,000 and one with his deputy, Nicola Sturgeon, for £2,000 as a means of fundraising, it has now emerged that the pair have previously held six such lunches, leading to allegations that the SNP are abusing their position in government to allow cash for access.

The allegations have promoted a Labour party member from Edinburgh to report the First and Deputy First Ministers to the Scottish Parliamentary Commissioner for Standards, Stuart Allan.

Furthermore, the Parliament’s Corporate Body will investigate the matter to determine whether Parliamentary facilities have been used improperly for party political activity or gain.

Sir Alistair Graham, former Chairman of the Committee on Standards in Public Life has said:

“It’s very important for public officials to keep their public duties quite separate from their party political fundraising activities … at first glance it looks like a clear breach of the rules.”

In an attempt to take the initiative, Alex Salmond has now written to the Parliament’s Officer, Alex Fergusson, to make clear that he would cancel any outstanding lunches until the Corporate Body had reported. He continued:

“I have identified four such lunches, and Nicola Sturgeon has identified one lunch and a tour – since none of them have taken place, there is therefore no difficulty in the Corporate Body considering the issue as a matter of principle. Nor indeed have any of the donations been given.

“Many other members will be in a similar position, and what I propose is that the Corporate Body, at its meeting on Wednesday, consider issuing interim advice that charity lunches can continue until such time as the whole matter can be fully discussed and comprehensive new advice issued to members.”

The First Minister’s moves, however, have not served to dampen criticism from opposition parties.

In what is described as an exclusive, The Herald’s Political Editor, Brian Currie, quotes what he says is as a source close to former Labour First Minister, Jack McConnell, as saying:

“The more serious charge is cash for ministerial access and private meetings.

“Ministers should not auction off their diary time to the highest bidder. They have to adhere to the highest standards to maintain the integrity of the office.”

The developments come just over two years since allegations of sleaze were made over how the Scottish Government handled a planning application for a golf resort by US billionaire and presenter of The Apprentice Donald Trump.

Similarly, on Wednesday, Left Foot Forward reported concerns by Scotland’s Information Commissioner over the Scottish Government’s handling of Freedom of Information requests, which he said “threatens to undermine the right-to- know regime”.

Whilst we await a report from the Parliament’s corporate body on the matter, Mr Salmond must surely understand how the events discussed at length in the Scottish media look to the world outside the First Minister’s Official residence at Bute House.

Scotland’s Corporate Body and standards watchdogs will have to ensure that any action that might be required is taken quickly to ensure Holyrood does not become embroiled in the sort of mess that many in Westminster have found themselves in.

Boris Johnson has used his weekly Telegraph column to rail against Peter Mandelson and his entourage’s decision to travel to the World Economic Forum in Davos by business class.

Johnson writes:

“Mandy and his entourage, of course, were flying sharp end; and as we struggled on down the aisle they subjected us to a certain amount of jocular raillery. They would send us some food, they scoffed, and perhaps a glass of champagne.

“In a spirit of glorious self-righteousness, we shouted back over our shoulders that this was the difference between Labour and Tories. Ours, I bragged, was the approach that the recession-battered public wanted to see. We were the ones who were being frugal with taxpayers’ money.”

Was Boris really annoyed about the additional expense the taxpayer would incur? Or the insult that being forced to accept a lower status during his 100 minute flight to Switzerland.

Never mind that Lord Mandelson denied this morning that the plane had first class, is this the same Boris Johnson that spent more than £4,500 of public money on taxis – including one bill for £237, during his first year in office?

Figures released in June 2009 revealed Johnson’s taxi claimed fares of more than £100 between May 2008 and May 2009. The receipts he submitted included one for £237.50 for a 7.5 mile journey across London – at £31 a mile. Other claims included a £99.50 return taxi from City Hall to Elephant and Castle, which are approximately a mile apart. And another expenses claim included a £99.75 cab from the Red Lion pub in Westminster to the City and a £101.83 return cab from City Hall to the Stock Exchange, just 2.4 miles away. There were many more examples of Boris’ taxi habits and how he is “being frugal with taxpayers’ money.” It is also worth noting that Mayor Johnson can travel for free on the tube.

He closes his opinion piece with this statement:

“The servants of the people should travel with the people.”

Quite.

Our guest writer is Peter Carrol

Boris Johnson is under mounting pressure to explain precisely why he has stepped down as chair of the Metropolitan Police Authority (MPA) – just 15 months into the role and less than two years after being elected on a manifesto which pledged to “provide strong leadership” by “taking responsibility and chairing” the MPA.

It was one of five pledges made by the Mayor, the failed fulfilment of which calls into question his ability to meet the other four promises he made, to make public transport safer, tackle gun and knife crime, help the victims of sexual violence ,and provide an accountable police service.

Questions will also be asked as to how, if he’s too busy to chair the MPA, he is able to write a weekly column for The Daily Telegraph – at a salary of £250,000 – a point made by Liberal Conspiracy and in a comment on The Guardian:

“Isn’t the important point that Boris spouted on about how he would chair the MPA in his manifesto and has now gone back on that promise? Not enough time indeed? He manages to find the time to write his chicken feed Telegraph columns doesn’t he?”

Last week, the Mayor’s ‘island airport’ idea was slapped down by David Cameron, who said it was “not our policy”, adding:

“Building airports is not his responsibility”

And yesterday he refused a Freedom of Information Act request to release secret correspondence between himself and Prince Charles regarding “hugely sensitive planning decisions and major financial and political deals”, with today’s Standard asking:

“What’s to hide?”

Ministers in Scotland have confirmed that they will enforce pay freezes for top public sector managers and civil servants in order to keep public spending under control as the financial squeeze begins.

Commenting on the move, a spokesperson for the Scottish Government said:

“Scottish ministers have already taken a pay freeze, which will also apply to senior civil servants. The Scottish Government has agreed to extend that approach to the highest-paid people across the public sector whose pay arrangements come under our control.”

The news came just days after the Liberal Democrats called for a pay freeze as a condition for support of the Budget. Since the SNP govern as a minority administration, Lib Dem support will be crucial to see their spending plans passed.

The developments came as news emerged that half of all quango bosses in Scotland have failed to commit to forgoing their bonuses for next year, despite calls for them to do so by Finance Secretary, John Swinney last year.

Among some of the most controversial bonuses are:

The Sunday Herald quotes a source close to Mr Swinney has saying:

“John has now written twice to public bodies calling on their bosses to waive any bonus. In our view, the momentum will build and the more who agree to do it, the more people will expect the others to follow suit. John is on the case, and already significant progress has been made.”

Scottish Labour’s Finance Spokesman, David Whitton concluded:

“Any chief executive who has taken a bonus in these particularly difficult times will have to answer in the court of public opinion.”

For the Liberal Democrats, their Finance Spokesman, Jeremy Purvis said:

“It’s unacceptable that any high-paid public sector worker should receive a bonus this year. The government has had ample time to sort bonuses out and needs to get a grip. The public won’t understand why quango bosses and top civil servants are getting bonuses during the worst economic situation since devolution.”

Earlier last week, Conservative Leader in Scotland, Annabel Goldie announced her party’s proposals for a pay freeze for all public sector workers earning more than £18,000 which, they believe would save thousands of jobs during the recession. Ms Goldie said:

“The freeze is not about penalising people – it is about saving people’s jobs. A pay freeze on this scale is the equivalent of saving 10,000 jobs.

“I would rather people were in work with a pay freeze than out of work with no pay at all. We are all in this together and when I say ‘we’ I mean the public sector and the private sector, I mean Scotland and England, I mean the politicians and the people.”

Reacting, Scottish Labour Leader, Iain Gray attacked the plan:

“The Tory plans will actively damage the economy by taking the money out of the pockets of hard-working Scottish families.”

As this week we brace ourselves for the New Year round of announcements on UK bank profits (which will be kicked off by JP Morgan this Friday), it’s significant that over 100 MPs have now signed up in support of Early Day Motion 191 that calls for a High Pay Commission.

JP Morgan are expected to report bumper profits coupled with plans for excessive bonuses (despite the Bankers’ Windfall Tax), with other banks bound to follow suit. Soon after, a number of things will begin to become very clear.

First, that the popular one-off Bankers’ Windfall Tax, first championed by Compass and others, will almost certainly raise billions in extra revenue for the Treasury, not the modest £500 million originally forecast in the pre-Budget report in December – this is good news for the government in clawing back some of the hundreds of billions spent in bailing out the banks.

Secondly, however, and perhaps more important is that as a short-term, one-off measure, the Bankers’ Windfall Tax is likely to have largely failed to curb the culture of excessive rewards in the City – which the Chancellor, Alistair Darling, stated in December was the chief reason for introducing the one-off levy. This should worry us all.

We literally cannot afford as a country to allow the City to go back to business as usual – because if the government fails to act and we allow the culture of excessive rewards to continue unchecked then watch out for another financial crisis – something we would be unable to pay for.

As a result there is now a more compelling case than ever for the government to urgently establish a public High Pay Commission. Only then will the government be able achieve the aim of a lasting and long-term settlement to the issue of high pay and excessive rewards and effectively tackle the bonus culture.

That is why growing numbers of MPs, from a range of parties, are supporting the call for a High Pay Commission and the reason why the number will only keep growing in the days ahead as we hear of more windfall bank profits coupled with plans for exuberant and largely unearned windfall bonuses.

So while we should all be delighted that the Bankers’ Windfall Tax will raise billions of extra revenue for the government to use for socially useful purposes, not least in helping our unemployed young people, we must now see the government take further action to curb the excessive bonus culture. It would make a very good start by committing to establishing a public High Pay Commission so we can find a lasting solution to the problem of excessive pay.

Our guest writer is Gavin Hayes, General Secretary of Compass

David Cameron’s reverse gear swung back into action last night as he hastily withdrew an amendment to the Constitutional Reform bill which he claimed would force all Parliamentarians to be full UK taxpayers.

The amendment would have applied only to MPs and Peers “treated by Her Majesty’s Revenue and Customs as being domiciled and ordinarily resident in the UK” – crucially exempting Tories like Lord Ashcroft who, by classifying themselves as merely “resident” and not “ordinarily resident” could avoid paying UK tax on their overseas earnings.

Though undefined in the Tax Acts, HM Revenue & Customs document HMRC6 – “Residence, Domicile and the Remittance Basis” – outlines the difference between “resident” and “ordinarily resident” status:

Resident but not Ordinarily Resident:

“You can be resident in the UK but not ordinarily resident here. When we talk about someone being ‘not ordinarily resident in the UK’ we mean that although they are resident in the UK for a particular tax year, they normally live somewhere else.

“For example, if you are resident in a tax year because you have been in the country for more than 183 days but you normally live outside the UK, it is likely that you are not ordinarily resident.”

Ordinarily Resident but Not Resident:

“You can be ordinarily resident in the UK but not resident. For example, if you normally live in the UK but, during a tax year, you have gone abroad for a long holiday and you do not set foot in the UK in the tax year. This is very rare.”

Prior to the volte-face, Justice Secretary Jack Straw had said:

“Read the small print of the Tory amendments and you’ll find a loophole that would enable individuals to escape UK tax on their foreign earnings. It looks like Lord Ashcroft clicked his fingers, and Mr Cameron jumped.”

He later added:

“It is deeply embarassing not to say inept that they couldn’t even draft a simple amendment which made sense – either that or they hoped no-one would notice an extraordinary attempt to keep Lord A out of this issue.”

Mr Cameron had hoped the amendment would draw a line under a series of damaging stories about Tory tax avoidance. Yesterday Left Foot Forward highlighted the Conservative leader’s poor response to the scandals, and on Sunday the Observer calculated that Zac Goldsmith “avoided £5.8m tax” as a non-dom – this despite him claiming his nom-domiciled status “delivered very few benefits”.

UPDATE 12:15

Labour Deputy Leader Harriet Harman, standing in at PMQs, has just said that all lawmakers who are “domiciled, resident and ordinarily resident”, would have to pay tax, saying there should be “no representation without taxation”, and for the Liberal Democrats, Vince Cable has demanded Lord Ashcroft be disbarred from Parliament.

Hundreds of public sector fat cats received inflation-busting pay increases, according to data prepared by the TaxPayers’ Alliance.

News coverage this morning focused on the levels of pay with The Sun showing that “800 fat ‘crats earn £150k” and the Telegraph headlining that “300 public sector workers earn more than Prime Minister”. But the increases may come as a greater surprise, particularly against a backdrop of calls – from groups like the TPA – for a pay freeze on public sector workers and for restraint from bankers in setting bonuses.

Nearly two-thirds of the 648 high paid public sector employees for whom year-on-year data is available received pay increases above 3 per cent. Meanwhile, only 16 per cent of staff saw their pay decrease. Retail prices rose by 4 per cent in 2008 but are expected to fall in 2009. Consumer prices rose by 3.6 per cent last year and have averaged 2.2 per cent so far this year.

John O’Connell of the TaxPayers’ Alliance told Left Foot Forward:

“An average increase of 5.4 per cent would be very generous even when things are going well, and many of these rises are obscene. Given the state of the economy and the huge deficit, public sector workers in general should face pay freezes but the bosses at the top should be taking sizeable cuts. Whether you’re a banker or a quangocrat, taxpayers cannot afford to pay these massive sums, and it would be wrong to demand restraint from ordinary workers while those at the top get fatter and fatter.”

NB: Proportions are indicative because pro rate data for 2007/08 was not available in all cases.

As it was reported that some bankers could receive bonuses worth £15 million this winter with hundreds of the payouts expected to go to RBS, John Prescott’s website Go Fourth has relaunched its ‘Give Up the Bonus‘ campaign.

The main page of the website says:

“In February the Royal Bank of Scotland (RBS), which received £20 billion of taxpayers’ money, tried to pay out £1b of it in bonuses to bankers and traders. We believed this was morally and economically outrageous and had to be stopped. Thanks to 30,000 people signing our Give Up The Bonus petition, RBS reduced the payout from £1b to £175m. Now RBS reportedly wants to pay a total of £1.5bn in bonuses to investment banking staff, and the board has threatened to quit if the government blocks the move.”

The chart below from the House of Commons ‘Economic Update – October 2009‘ (p.8) shows that for much of 2009, wage increases have been accelerating only because bonuses have been increasing. The thicker black line which excludes bonus payments shows that wage increases have been decelerating. This pattern is unusual since the two lines normally move in the same direction.

Financial economist and Left Foot Forward contributor, Duncan Weldon, outlined on his economic blog yesterday that RBS are employees have not even put in a good performance this year with a return on total assets worth £464.6 bn of just 1.35 per cent, well below the return that would have been received had the bank bought “simple, risk free 10 year UK government bonds”

The Conservative party wish to charge non-doms £25,000 per year for living in the UK. Now that his tax status has been revealed, will Zac Goldsmith pay a flat annual fee for each of the 16 years that he has been a non-domiciled adult?

At Conservative party conference 2007, George Osborne said:

“There are currently a number of people living in Britain who register for non-domiciled tax status offshore. It is a good thing for Britain that they live here and bring their talent and their investment to our economy.

“I make this promise: I am not going to tax all that income as Gordon Brown has persistently threatened to do. But in return for that promise and the certainty it brings, we will charge a flat annual levy of around £25,000 for those who register for non-domicile status”

Mr Goldsmith, aged 34, has already contributed £264,179 towards the costs of his election campaign in Richmond Park as well as additional donations to the Conservative party worth £14,202. He is reported to be worth £200 million so a £400,000 payment for his 16 years of adulthood would appear to be a fair price.

Goldsmith speaks tonight at an event in central London titled “Call to Action” where among other questions, he will address “How do we spend our collective wealth?”.

UPDATE 18.00

The event tonight asking how we spend our collective wealth answers another question about how to amass it: charge £10 to get in.

The company founded by Conservative Treasurer Michael Spencer would gain £22.5 million from the corporation tax reforms he is advocating. The generous Tory donor believes that George Osborne may go further than the current Tory policy of slashing corporation tax rates from 28 to 25 per cent.

Spencer told the Financial Times:

“George Osborne – who I know extremely well and is indeed a friend of mine – has made it clear that the Conservatives will cut corporation tax to 25 per cent and potentially significantly lower than that.

“And I am hopeful that over the next Parliament (and I speak personally; I’m not speaking as an official spokesman for the Conservatives) that we will get corporation tax down towards the 20 per cent level under a Conservative regime. So that is good news.

“And the Conservatives have also made it quite explicit that this increase in the top rate of tax from 40 to 50 per cent, they see it as a temporary move. So I believe, and I hope, and I expect that that will be reversed in the foreseeable future.”

His company Icap posted pre-tax profits of £281 million in 2008/09. The existing Tory proposals to reduce corporation tax from 28 per cent to 25 per cent would save his company £8.4 million in tax over this period. A further decrease to 20 per cent would reduce Icap’s tax payments to £22.5 million in total. The Tory corporation tax cuts come at the expense of capital allowances, necessary to prevent further declines in investment.

Since the last election, Michael Spencer has given more than £100,000 to the Conservative party in individual cash donations as well as £86,464.50 in non-cash donations including travel. If a Conservative government were to bring in a 20 per cent corporation tax rate it would represent a 12000% return on his investment.

UKIP leadership candidate and West Midlands MEP Mike Nattrass is threatening to sue the Sunday Times over allegations he is being investigated by OLAF, the European Anti-Fraud Office.

Nine days ago, Daniel Foggo, an exert in UKIP sleaze, who first revealed the corrupt activities of convicted fraudster Tom Wise in 2005, and again in 2007, wrote:

“Michael Nattrass, who has represented the West Midlands in the European parliament since 2004, is the subject of an inquiry into whether Denis Brookes, one of his former aides, was paid through public funds while he was working as a regional organiser for UKIP. The EU does not allow taxpayers’ money to be used to pay party officials.”

He added:

“It has also emerged that Nattrass was using a business of which he was an equity partner as the ‘paying agent’ for all his assistants’ salaries provided by the EU. Between 2004 and summer this year, all of his assistants’ allowances were channelled through the business account of Nattrass Giles, a chartered surveyors in Birmingham which he founded nearly 30 years ago.

“Nattrass was a signatory to the bank account, although he insisted last night that the administration was handled by another partner in the firm who has since died.”

Nattrass’s threat is revealed by UKIP whistleblower “Junius” on his blog, and is rebutted emphatically. In a letter, Nattrass is reported to have said:

“I am pleased to say there is no truth in the Foggo article. Foggo knows this because we spoke prior to him going to press … but it made no difference … so much for the facts. There is no enquiry into paying agents. So there is no ‘Fraud Enquiry’.”

Nattrass ends his statement by saying:

“It appears the Times want to stop me in the leadership race. I like a challenge like this. But it may be time to go for damages against the Sunday Times…”

A spokesman for OLAF told Left Foot Forward:

“We do not comment on individual cases, we are only the administrators; we investigate, but we can’t prosecute. It is up to national authorities. I cannot tell you that we are not investigating Mr Nattrass.”

UKIP leader Nigel Farage has claimed his party is “absolutely ruthless” in dealing with sleaze – despite it taking them four years to get rid of jail-bound fraudster Tom Wise.

Speaking on yesterday’s Daily Politics (8:06), he said:

“When he came to Brussels in 2004, I put a code down, that I asked them all to obey by. He refused to do so. He then, when he was found out, lied to me, and for that reason I took the whip away from him.

“You know, in every party, in every company, there are bad apples, the question is how do you deal with them, and in UKIP we’ve been absolutely ruthless.”

However, Farage’s actions, as Left Foot Forward highlighted on Tuesday, appear to have been less than ruthless. Wise, who was sentenced to two years’ jail yesterday, first came to the attention of the authorities in 2005; he remained a member of UKIP until earlier this year.

Farage, who is standing down as leader, also derided all but one of the candidates vying to succeed him – including three of his colleagues in Brussels – West Midlands MEPs Mike Nattrass and Nikki Sinclaire and London MEP Gerard Batten.

He said (1:32):

“There are five candidates standing for leader of UKIP, only one of them is a serious and credible candidate, and that’s Lord Pearson, who has had major achievements in his life in business and in politics too. If Lord Pearson gets that job, and I’m still around leading our party in the European Parliament, I would argue UKIP is stronger and would be for several years to come.

“If it’s not Lord Pearson, things will be tricky, yes, but I think it will be Lord Pearson. I think he is so head and shoulders above all the other candidates.”