finance

Labour calls for ‘transparent’ lobbying inquiry after Dyson texts revealed


The UK opposition Labour party has called for a full and “transparent” inquiry into lobbying after it was reported that Boris Johnson told the industrialist Sir James Dyson last year that he would “fix” a tax issue for him.

The BBC revealed that the prime minister assured Dyson in text messages that his employees would not have to pay more tax if they came to Britain to make ventilators for the NHS.

The conversations appear to be a potential breach of the ministerial code, which suggests that an official or private secretary should be present for all discussions of government business by a minister.

Dyson, who relocated his company’s headquarters to Singapore two years ago, wrote to the Treasury seeking reassurance about his staff’s tax status and then texted Johnson directly in March 2020. The prime minister replied: “I will fix it.”

The revelation comes amid a storm about the sometimes cosy relations between the business world and senior political figures, sparked by the Greensill scandal.

The Financial Times revealed in March that David Cameron, the former prime minister, had directly lobbied senior figures in the Treasury and Downing Street to seek changes to Covid-19 loan schemes that would have benefited his employer, Greensill Capital.

A Labour party spokesperson described the Dyson story as “jaw-dropping revelations”, adding that “Tory sleaze has reached the heart of Downing Street”.

“The prime minister appears to have used the power of his office to personally hand public money to a billionaire friend in the form of tax breaks,” the spokesperson said. “The stench of sleaze has been building up around this Conservative government for months. Boris Johnson must now agree to a full, transparent and independent inquiry into lobbying.”

But Oliver Dowden, the culture secretary, said on Wednesday that in the circumstances, when the government saw itself in a race against time to secure effective equipment, Johnson’s action was the “right thing to do in a national emergency”.

“This was at the height of the pandemic, this was in a situation where we had a massive shortage of ventilators,” he told the BBC’s Today programme. “James Dyson came forward with a proposal that didn’t benefit him and it certainly didn’t benefit the prime minister personally and said look if we can get our people across here and they are not penalised for it they will be able to help with the ventilator challenge.”

Dowden argued that the circumstances surrounding Dyson were not unique.

“This was a wider concession for a short period of time that applied to a range of people involved in medicine, in ventilator production, engineers and so on for that short period in the crisis, which basically said if you are coming to the UK to help with this crisis you are not going to be disadvantaged in tax terms,” he said. “It expired very shortly afterwards and was subject to parliamentary approval.”

At the time the government was calling for a “national effort” by business to produce new types of ventilators, given a desperate shortage in the NHS. The Department of Health believed that it needed 20,000 additional ventilators, beyond the 5,000 it already had.

Dyson spent £20m developing its own design which ultimately was not used.

The billionaire said it was “absurd to suggest that the urgent correspondence was anything other than seeking compliance with rules” and that his company did not receive “any benefit from the project”.

The company said it had sought clarification on a range of technical issues “as well as tax and legal issues” that it said had relevance for many of the people engaged in the early days of the crisis. It insisted that it had not sought any benefit or advantage beyond “ensuring that neither the company nor its employees would be inadvertently penalised for their work on the national emergency”.

The texts show Johnson messaged Dyson to say “[Chancellor] Rishi [Sunak] says it is fixed!! We need you here.” Asked for more reassurances, he added: “I am First Lord of the Treasury and you can take it that we are backing you to do what you need.”

Just two weeks later Sunak announced that people who came to the UK to provide specific pandemic help would not see their tax status change.

Last week it was reported that Johnson took action after Mohammed bin Salman, the controversial Saudi crown prince, warned him in a text message that UK-Saudi relations would be damaged if the government did not compel the Premier League to allow a £300m takeover of Newcastle United last year.

The prime minister subsequently asked Lord Eddie Lister, his special envoy to the Gulf, to take up the issue, prompting Lister to reply: “I’m on the case. I will investigate.”



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