Donation Number 1
The ancient non-domicile tax rule, can allow foreign business people living in Britain to avoid paying income or CGT on their earnings abroad by claiming that the UK is their second home. At the time of multi-billionaire Lakshmi Mittal’s 2002 donation of £125,000 to Labour he had lived in the UK with his family for seven years and claimed this status throughout that time. In 1997 Labour came to power claiming it would close the non-domicile "loophole".
In a letter that disgraced the UK (and whose contents Downing Street refused to disclose) Tony Blair wrote a forceful letter to the Romanian Prime Minister that helped Mittal secure a £300m steel company. In the letter, Blair stated that Mittal’s company is British. In fact, Mittal's parent company LNM Holdings is based in a Caribbean tax haven - the Dutch Antilles. Blair also got his facts wrong when he addressed MPs. Note – I could go on to describe the cheap loans organised at the British taxpayer’s expense. The whole saga was a disgrace.
The recent £2m donation by Mittal which brings the running total up to £4m in the last 3 years is posited as one of the major reasons for Gordon’s recent visit to India. The Labour Party was badly underpaid for their generosity the first time around, but will there be new favours for Mittal on the back of this financial lifeline? Whatever the case, it brings British democracy into disrepute - and is a case in point for why political funding needs reform. Meanwhile, an embattled Luke Akehurst (not the spoof!) suggests Mittal deserves a lordship.
In other news, earlier this week, the Czech Finance Ministry
cancelled a $110m fine on Mittal Steel for price-fixing.