Tessa and the tax avoidance man

In the absence of even the thinnest evidence that Tessa Jowell has done anything illegal;  or has breached the ministerial code of conduct;  or failed to record anything in the register of MPs’ interests that she ought to have done; or lied about anything she has done; — in the absence indeed of the slightest plausible excuse for seeking to pull her down, the slavering witch-hunters of the media and (I’m sad to say) the blogosphere are now lambasting her for having married a man who earns his living, perfectly legally as far as all available evidence shows, by advising others on how to ensure that they are not paying any more tax than is legally necessary.  Mr Mills’s other offences are apparently (a) to make, and sometimes lose, quite a lot of money — and no-one has even charged him so far with having made it illegally, still less convicted him of illegality;  (b) to move money around from place to place in order to maximise the return on it;  and  (c) periodically to borrow money in the course of these transactions by means of loans and mortgages and other devices in order to enable him to use his capital and investments in the most productive ways.

Here, for example, is Roy Hattersley (with whom I agree more often than not, but he sometimes goes woefully astray) in the Times on Tessa’s husband:

The analyses of his activities, which have preoccupied the newspapers recently, have all described him as a specialist in tax avoidance, hedge funds and off-shore investments. Such is the transformation, for which Tony Blair must take credit, that not one commentator has expressed surprise that the husband of a Labour Cabinet minister should earn his living in this fashion.

Can it be that Roy Hattersley, with all his long experience of the world, including the management of his considerable and well-earned income, doesn’t know the difference between tax avoidance (i.e. avoiding paying unnecessary tax) on the one hand, and tax evasion (illegally dodging one’s legal tax liabilities) on the other?   If he is so disapproving of tax avoidance specialists, are we to take it that he himself is quite content to pay whatever the Inland Revenue demands, without checking their figures and questioning any apparent exaggeration of his tax bill?  Doesn’t he employ an accountant to advise him, among other things, on how to make sure that he doesn’t pay more tax than necessary?  You need to be pretty well heeled to be able to afford not to bother about such trivia. 

There’s something unsavoury about socialists denouncing other socialists for having money and managing it sensibly, even insinuating that such antisocial behaviour is incompatible with holding socialist views and espousing socialist values.  Now we’re to understand that you can’t even be a socialist and be married to someone who has money and manages it sensibly.  It isn’t hard to imagine what Nye Bevan, whose status as a genuine socialist is rarely questioned and who was no stranger to the good and expensive life, would have thought of such distasteful Pecksniffery.

Personally I’m glad to campaign for more progressive income tax rates and higher taxes on the relatively better-off, even if that means an increase in my own tax liabilities:  but it seems to me infantile to suggest that this opinion imposes an obligation on me to add a voluntary contribution to the Treasury on top of the tax that I already willingly pay.

Can this be the same Roy Hattersley who began his column in today’s Guardian thus? —

Were I still a member of parliament, I would vote for the second reading of the education bill.

I don’t for a moment blame him for not flaunting his membership of the Upper House of Parliament, but he goes a shade too far in seeking to deny it. 

Here’s Dickens on Mr Pecksniff, in Martin Chuzzlewit:

Mr. Pecksniff was a moral man: a grave man, a man of noble sentiments and speech…Perhaps there never was a more moral man than Mr. Pecksniff: especially in his conversation and correspondence. It was once said of him by a homely admirer, that he had a Fortunatus’s purse of good sentiments in his inside. In this particular he was like the girl in the fairy tale, except that if they were not actual diamonds which fell from his lips, they were the very brightest paste, and shone prodigiously. He was a most exemplary man: fuller of virtuous precept than a copy-book. Some people likened him to a direction-post, which is always telling the way to a place, and never goes there: but these were his enemies, the shadows cast by his brightness; that was all.

Mr Pecksniff would no doubt have issued the severest of reprimands to anyone richer than himself who stooped to the caddishness of minimising his or her tax bill, while discreetly making very sure that he himself didn’t pay a penny more in tax than he had to. 

Stick it out, Tessa!  Nil illegitimibus carborundum! 

— Brian (who is happy to disclose that he applies for Milton company payroll outsourcing, not only because he can’t understand his annual tax return form sufficiently to fill it in himself, but also to make sure that he ‘avoids’ paying more tax than he has to on his modest but very adequate public service pension and even more modest savings, preferring to leave a few quid to his children and to spend some of them himself while he can, rather than make a voluntary present of them to the Inland Revenue.  So expel him from the party in disgrace.  At least he’ll be in excellent company.)

11 Responses

  1. Phil says:

    I think your righteous ire is misplaced. I too retain the services of an accountant, for very similar reasons, and I’m quite unapologetic in maintaining that David Mills is a wrong ‘un. More here and here.

  2. Brian,But I doubt whether you or your accountant would forget to disclose income of  $600,000.00 as Mills managed to. (source)"Never wrestle with a chimey sweep!" t

  3. Brian says:

    In his comment above on my ‘righteous ire’, Phil of Actually Existing has helpfully provided a couple of links to pieces on his own blog, including a spectacularly diligently researched investigation, in one of them, of the byzantine financial dealings of David Mills, Tessa Jowell’s husband.  As this piece also includes a generous link back to this post, I am reproducing here the comment I have posted in Actually Existing, although in doing so I wouldn’t want to discourage anyone from reading Phil’s detailed dissection of the Mills financial record, if anyone should happen to find it interesting.  My comment follows:

    I’m afraid almost all of this is irrelevant to the question whether Tessa Jowell, as a cabinet minister and MP, has behaved improperly in either capacity.  Despite the feverish diggings in the cesspits and sievings of the gutters, no-one has so far come up with a solitary nugget of mud to stick on her.  It could well turn out that Mills has crossed the fuzzy borderline between propriety and impropriety, but no-one has so far succeeded in pinning anything on him or even formally accused him of anything.  If and when someone does, it will remain entirely irrelevant to Ms Jowell’s position unless she can be shown not just to have known about the impropriety but actually to have been involved in it.  To say that a gift to Mills was also in some weird extra-planetary sense a gift to Jowell just because it was used to pay off a mortgage on a house which she happened to co-own is, frankly, stretching the meaning of words beyond breaking-point.  The particular mortgage involved was one of (I think) eleven which Mills had taken out and repaid over a period of several years on the two houses, and not in any way comparable with the kind of once-in-a-lifetime burdensome debt that the rest of us associate with a mortgage which we take out to enable us to buy a house (pace the good Craig).  No-one has suggested that the mortgage was improper or that Ms Jowell had an obligation to mount a forensic investigation of Mills’s reasons for needing it before she signed.  Tessa Jowell has enough to keep her occupied for around 23 hours a day as a cabinet minister without wanting, or even needing, to spend her remaining hours trying to follow the minutiae of her husband’s byzantine financial dealings, themselves probably little different from those of any other financial consultant, lawyer or fund manager.

    One other point.  Just supposing that Ms Jowell had discovered, by asking questions or by chance, that Mills’s activities had involved some impropriety.  What do the witchhunters suggest she should have done about it?  Shop her own husband of 27 years to her permanent secretary, or the parliamentary commissioner, or the register of MPs’ interests?  To whom did she owe her primary loyalty?  How would you feel if your own wife or husband took action against you that could land you in prison?  But the question is academic, for we have not a jot of evidence of Mills’s impropriety (not yet, anyway): and even less evidence that his wife knew about it even if there was any.

    I suppose that trying to unravel the tangled knitting of the Mills finances is a tolerably harmless hobby for those who have time for such things; but please don’t let’s pretend that it’s of the slightest importance or indeed interest to anyone except Mills and his clients.

    I find this widespread vindictive animus against Tessa Jowell hard to explain except as a way of trying to get at Blair and perhaps Berlusconi, those hate-figure bugbears of the sententious left.  Doesn’t the effort to discredit them by using Tessa Jowell as surrogate fox strike anyone else as even slightly distasteful?  I stand by the views I expressed last night [in the post above].  The Culture Secretary is a victim of a certain kind of malicious envy on the part of an old-fashioned form of distorted leftism which can’t accept that anyone else on the left should have a different kind of life-style from one’s own.  She is entitled to the presumption of innocence until some kind of guilt (not guilt by association or matrimony) has been proven against her.  So, come to that, is Mills, although his guilt or innocence, and the fine detail of his financial dealings, are of no more than passing interest. A fixation with them verges on the prurient.  Finding oneself with the Daily Mail as fellow huntsman should perhaps give the serious seeker after truth cause to stop and reflect.

  4. It
    doesn’t matter a hoot whether m/s Jowell and/or her husband have committed any
    offence criminal or otherwise. She is a politician, and the judgement will be
    that of the politicians. I’m not sure how she can head up the Labour local
    council election campaign in London. Right or wrong, the only questions most of
    the press will be asking is about her hubby, the mortgages and Il cavaliere

  5. Brian says:


    You seem to be saying that (a) it doesn’t matter whether Tessa Jowell or David Mills have done anything wrong or whether they are innocent of any wrong-doing, (b) all that matters is how the politicians judge her, and (c) she’s politically disabled because the press will go on asking questions ‘right or wrong’.  (I hope and assume that you aren’t also saying that this is an acceptable or satisfactory situation.) Someone else has written in a comment on another blog, in reply to a comment of mine, that:

    Jowell lost her right to be taken at her word when, as part of the UK cabinet, she took us into a war based on lies. The woman has a record of complicity in fraud. 
    It is not our job to presume innocence – that’s the job of a judge and a jury, and given the power of the Blair cabal I doubt we’d ever see Jowell or Mills face such a process whatever they have or haven’t done. 
    If it wasn’t for the fact that Jowell is part of a government already tainted by fraud and corruption, which is trying systematically to corrupt and obfuscate the institutions designed to prevent government corruption, I would agree that we should give her the benefit of the doubt…

    Do you not begin to detect in these and other comments on this affair, in blogs and the media, the unmistakable smell of incipient McCarthyism?  The untroubled acceptance of trial and punishment by public opinion, the media and the politicians?  The cavalier dismissal of the sacred principle that everyone is entitled to be presumed innocent until proven guilty — not just by a court of law, not by innuendo and association but by hard facts submitted to an independent tribunal?  The assertion that membership of a government judged by some to have been guilty of deceit is enough to deprive a person of his or her basic rights, even if s/he has never been accused of involvement in that deceit?  Even if s/he has been?

    The government has shown a culpably careless disregard for our fundamental rights: and now its fiercest critics are in serious danger of following suit.  Tessa Jowell won’t be the last victim of a mob bloodlust demanding its human sacrifice.  Who will be next?

    It’s time for those who care about human rights — even the rights of a loyal Blairite politician — to stand up and be counted.  How depressing that so few commentators are doing so!


  6. It may be depessing, it may be unfair and it may even be cruel, but if Jowell becomes the story, she will simply not be able to perform her job-remember my criticism is of her ability to head up Labour’s London local election campaign.It’s a rough trade! And those who pass through their apprenticeship are daft not realise that. After all, Mandelson, Byers and Blunkett were dismissed without ant proof of guilt. It’s unusual for politicians to be hauled off to clink!  

  7. Brian:There’s no better bloodsport than to see the two most despised trades — I won’t dignify them by describing them as professions — going at it ‘hammer and tongs’.  I refer, of course, to politicians and journalists.  Politicians know the score and can hardly complain when they give something that the ‘gentlemen of the press’ can raise hue and cry over.  If you believe that it’s only because TJ is of the New-Labour persuasion I say this then you’d be wrong.  They’re all a pack of mongrels, whatever their inclinations.

  8. Michael says:

    I agree that on present evidence Tessa Jowell and her husband have not acted illegally under English law, although I am not sure what his position is under Italian law. I also agree that citizens are entirely free to make arrangements to reduce their tax liabilities.
    The damage to the government lies in the general public feeling that the intense financial activities of the Jowell household are yet another episode in the line of controversies involving senior Labour people and their money and property since 1997.Why do they strive to acquire more and more? Ministers have good salaries, generous allowances, cars, drivers, sometimes officially provided flats or houses, status, overseas travel, very good pensions, and the prospect of well paid work on leaving politics.Yet some want more. Big loans, lucrative property deals, freebie luxury holidays, well paid speaking engagements, gifts. Harold Wilson with his pipe, sandwiches, and holidays in a bungalow on the Scillies seems a hundred years ago. The problem for the government is that many of their supporters are old enough to remember this time, when the party was seen as being on the same side as the disadvantaged and those on low incomes. It is this age group which makes the effort to vote, not young people.The perception among voters is that Tony Cameron and David Blair share the same values and the same approach to solving the country’s problems in the fields of healthcare, education, and housing. Solutions offered by Labour politicians who can and do buy their way out of these problems are not convincing.When Tessa Jowell takes on the role of leading the Labour campaign in the London local elections, how can she address with any credibility the acute difficulties experienced by young Londoners trying to get on the property ladder? 
    I think her days as a minister are numbered not because she has broken a ministerial code or because her husband is a city slicker under investigation, but because she no longer cuts any ice with the dwindling number of folk who vote Labour or who might vote Labour.

    Brian writes:  Your analysis is probably right, but if so it’s a pretty gloomy prospect for British politics.  There’s no evidence that Tessa Jowell’s life-style is particularly luxurious — or that, even if it were, she wouldn’t be "on the same side" as the poor and the disadvantaged.  No-one used to say that of Nye Bevan, who lived in considerable luxury.  Harold Wilson may have taken his holidays in a bungalow in the Scillies and flaunted his pipe and his pint of beer, but once out of sight of the cameras he used to chain-smoke large cigars and drank copious amounts of brandy. 

    The idea that a middle-class woman with one house (and a second one owned by her husband) can’t understand or be seen to understand the problems of first-time house buyers is really rather far-fetched, isn’t it?  Are we henceforth to be governed exclusively by black single teenage mothers living in flats in tower blocks provided by social services, because no-one else can understand or be trusted to address the problems of such people?  Even if one accepts that otherwise quite sensible people are irrationally prejudiced against accountants and tax lawyers regardless of whether they provide a legitimate and necessary service, and even if that prejudice spills over onto the spouses of such accountants and lawyers even if the spouses are blameless and idealistic members of parliament and ministers, it remains difficult to explain the vitriol and bile being expressed at the moment against Tessa J., not just in the toxic sewers of the Daily Mail and the Sun, but all over the blogosphere, too.  Even some of the comments here seem to imply that taking out a mortgage is roughly equivalent to boiling babies. 

    There’s something faintly distasteful, too, about telling the moderately well off that they have got quite enough money and that it’s pure greed to want more, even if they are doing an honest day’s work to get it.  Contrary to some of the comments flying around the blogs, ministers are abominably badly paid, and MPs even worse;  they work hideous hours at mostly dreary jobs with no security and mostly with no decent prospects.  People go into politics for mainly altruistic reasons:  they provide an indispensable service;  and very few indeed end their careers and lives with a fraction of the annual bonus of a thirty-year-old City banker who goes home every day at 4 pm.   It’s partly because we pay our politicians peanuts that we end up with so many monkeys.  Oh, and it doesn’t look as if David Mills is exactly made of money, either:  he’d hardly need so many loans and mortgages for his investments if he was.

    BTW, Tony mentions in a comment earlier the sackings of Mandelson, Byers and Blunkett.  I think it’s right to distinguish between them.  Byers and Blunkett were both too badly damaged by their behaviour on the pitch (Byers) and off it (Blunkett) to retain sufficient credibility to be able to continue as ministers — and Blunkett’s record as home secretary was anyway abysmal.  Mandelson on the other hand committed no offence whatever on either of the occasions when Blair made him resign, sacking him on each occasion before he had bothered to establish the facts.  Blair rewarded the loyalty of one of his closest political and personal friends (and a first-rate Northern Ireland Secretary) by sacking him in a panic, out of his fear of being accused of cronyism.  On both occasions the sequence ran:  dismiss first;  then investigate;  then acquit.  Innocence and loyalty to this prime minister are no guarantee of loyalty in return.  Tessa had better watch out.

  9. Antipholus Papps says:

    I think you are living in an England that has gone the way of the dodo.  Yes, Tessa Jowell is entitled to presumption of innocence, just as we all are, but she is part of an administration that is actively seeking to destroy this principle of Common Law.  Well, it seems they are out to destroy every principle of Common Law, but that may be my descent into hyperbole. 
    The point is, Tessa Jowell and her husband have been engaged in shady deals with Berlusconi – one of Blair’s closest allies and by all accounts something of a right-wing extremist.  She states that she was unaware of the £600,000 ‘gift’ and found nothing odd about paying off a new mortgage with this sum.  I think she is a liar. 
    The whole affair appears to be typical of New Labour corruption.  I think you are assuming honour where there is none.

  10. Aidan says:

    Personally I can’t bring myself to exonerate her as thoroughly as you can. Tessa was presumably aware that her husband made a living setting up holding companies, transferring big chunks of other people’s money around etc. Given this, the chance of something needing to be declared in the gifts or investments section was high, and I think there is an implied duty on her to make reasonable efforts to check. It is possible that she did ask him, and he lied to her, which I think would be a valid defence, particularly if there was some evidence, but as far as I am aware the story is that she simply didn’t bother to check.
    If you or I filled in a tax return or benefit claim, and failed to mention a few hundred thousand of spouse’s income where relevant, I can’t imagine that simply saying you didn’t know about it would get you off scot free. You might say that in such a situation there is a greater duty to declare it, but if the register is to have any value at all, it must carry a similar duty.
    (This is all assuming that she is telling the truth, which is far from a given – we are reliant on the word of her and David Mills.)

  11. Michael says:

    The problem for the government is Tessa Jowell’s assertion that, even though in a long standing and happy marriage under the same roof, she was ignorant of the household’s finances. I think very few believe her. Her lifestyle may not be luxurious, but politicians involved with gifts,cars, money and mortgages catch the hostile attention of the  British public very quickly: heavy drinking is a human, even endearing, weakness in our culture ( unless it stops a politician from operating a la Kennedy) So Tessa Jowell who has been benefitting from a merry go round of mortgages for several years is not, in my opinion, well placed to deal with those who cannot secure even one mortgage. There will be envy, resentment and votes lost. I agree that logically her position as a multiple home owner does not  make it impossible for her to address the problems of the homeless or frustrated would-be home owners, but I think she will lack credibility.( It’s a great pity black teenage single mothers were not in charge in 2003 for we would not have been rushed into the disgraceful attack on Iraq: they would have had more sense.)
    I don’t agree that cabinet ministers and ministers of state are abominably badly paid. A cabinet minister is paid £133,997 a year and a minister £97,949, plus a menu of generous allowances, e.g. up to £84,000 a year for office expenses. Average male earnings are £31,500 a year. This figure includes London with its vast salaries and bonuses. Other parts of the country lag way behind, including Dunfermline where average earnings are £17,888. If Gordon Brown claimed he was abominably paid, then I can understand why Labour was booted out the other week. I agree ministers work very long hours, but I think for the most part the work of grappling with national and global has to be interesting. Better than struggling to increase market share of a firm’s widgets or cat food.
    I suspect that going into politics for altruistic reasons, has faded over the last 20-30 years, alongwith the number prepared to carry out voluntary work in local communities. Probably the desire to influence events and to become a public name remain the main reasons.