Conservative Party donors handed £15mn tax cut
Generous tax cuts for the rich have ensured twelve of the Conservative Party’s financial backers saved a total of £15 million, an investigation has found.
Many donors actually gained more from the tax cuts than they initially donated to the party, with one contributor alone saving nearly £5 million pounds.
Chancellor George Osborne lowered the maximum tax rate from 50 percent to 45 percent in 2012, a move the opposition Labour Party dubbed “the millionaire’s tax cut.”
The revelation comes as a report by the Resolution Foundation suggests 160,000 care workers earn below the minimum wage, meaning they are underpaid by £130 million a year.
Hedge fund manager Andrew Law could have saved up to £4.8 million thanks to the tax cuts, more than 10 times the £464,000 he has donated to the Conservatives since last April.
Law, who is chairman and CEO of Caxton Associates, is believed to have pocketed £97 million in profits from subsidiary Caxton Europe LLP, according to the Daily Mirror’s investigation.
Another top contributor who has donated £600,000 to the Tories since 2006 reportedly held off on collecting dividends until after April 2013, so that he could take advantage of the lower tax rate.
Income tax for earnings from dividends fell by 5 percent for the highest earners in April 2013 to 37.5 percent.
Tory donor Ayman Asfari, a Syrian-born oil magnet and chief executive of Petrofac, could have saved over £2 million last year because of the lowered tax rate.
The Mirror’s findings come four days after analysis by the Labour Party found nearly 50 percent of donations to the Conservatives were linked to hedge funds in the City of London.
Labour’s research discovered 27 of the party’s major donors have contributed more than £19 million since the last election in 2010.
Analysis by the Financial Times came to a similar conclusion when it found the City of London’s donations to the Conservative Party have doubled since the last election when compared to the period between 2005 and 2010.
Shadow Chancellor Ed Balls criticized Osborne’s tax break in a speech in Bedford last July.
“Having already cut taxes for millionaires in this Parliament, they're champing at the bit to do it again if they win the election – cutting the top rate of tax for people earning over £150,000 again from 45p to 40p – another tax cut worth £3 billion for the richest one percent for our country,” he said.
In response to the Mirror’s investigation, Trade Union Congress (TUC) General Secretary Frances O’Grady said: “This year ministers have found the cash to give their rich supporters a generous tax cut – and now these dozen wealthy donors are better off to the tune of millions.”
“But the Conservatives have done little to help working people struggling to get through the longest squeeze on their incomes since Victorian times.”
A report published by the Institute of Fiscal Studies last month found that young workers and men were hit hardest by falling wages. Women were protected because they tend to work in the public sector, the report said.
The average adult man’s wage fell by 7.3 percent between 2008 and 2014, while wages for young people aged 22 and 29 fell 10.6 percent.