Dyson texts seem low-level sleaze but still raise lobbying questions

Any tale involving the words “James Dyson” and “tax” is guaranteed to raise UK hackles.

The country’s best-known inventor has largely manufactured his eponymous vacuum cleaners and appliances overseas since 2003. A vocal proponent of Brexit, in 2019 he moved his company’s headquarters to Singapore, a shift the company said was not tax driven. The charge of hypocrisy is given extra grit given that his farming interests have benefited handsomely from EU agricultural subsidies.

Now, it seems, the price of Dyson’s involvement in the push to develop ventilators was tweaks to the tax rules governing when non-residents are caught by the long arm of HM Revenue & Customs. 

The question Dyson asked was not unreasonable. But the messages between the entrepreneur and UK prime minister Boris Johnson raise more questions for a government consumed by scandal over lobbying and private influence after the collapse of Greensill.

It was typical that a government preoccupied with notions of Britain’s buccaneering spirit did not just procure more ventilators in the panic of March 2020, it launched a “ventilator challenge”. But the problem was real — as were fears about overwhelmed hospitals and rationing of intensive care. 

In that context, Johnson contacted Dyson. Involving one of our foremost engineering brains was not unhelpful to the national branding effort, especially someone considered “one of us” as a Brexit supporter. (Ultimately, it should be said, the ventilator challenge was dubbed a “significant achievement” by the public accounts committee.)

Dyson’s first approach was uncontroversial. He wrote to the Treasury requesting clarification that the tax status of those coming to the UK on the project would not be affected. Non-residents are limited as to how many days they can be in the UK, and when they can work, without being subject to tax. The Treasury receives such self-serving letters all the time, says one old hand.

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But Dyson then texted the prime minister: the HMRC move, which had clarified that unplanned stays for reasons such as quarantine or travel restrictions would count as exceptional for tax residency, was not sufficient. The Treasury also needed to make clear that work on the Covid-19 response was permitted. The chancellor subsequently did just that, in early April, a change that later went in the finance bill. 

Was this a special favour, a case of privileged treatment for a billionaire with the PM on speed dial? It’s hard to be sure. Other countries also modified residency rules — and the UK changes, which exempted healthcare professionals and developers of medical products, were broad enough to help others involved in the pandemic response. 

The Treasury should be candid about what other representations, if any, it received to tweak the rules to allow work on the Covid-19 effort. HMRC, when the data is available, should say how many people made use of the change.

Dyson, which still employs 4,000 people in the UK, is not willing to say how many of its overseas staff actually spent time in the UK on the project. It had 450 employees, split between the UK and Singapore, involved. The company incurred costs of £20m on its ventilator design, which was not eventually needed: that goes some way to cleansing the distasteful impression that Dyson, worth £16bn, was nitpicking over his personal tax affairs before getting on a plane. 

Did the messages between Dyson and the prime minister risk giving the impression of a special favour? Absolutely: “I will fix it tomo!” “Rishi says it is fixed!!” “I am first lord of the treasury and you can take it that we are backing you to do what you need.” 

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Rules about the proper channels, the presence of officials when discussing government business, about objective decision-making and transparent, documented communications are as much about avoiding the impression of undue influence as anything else. 

Yes, text and WhatsApp have changed the way people communicate, even prime ministers. But one can imagine a response here, in tone and substance, that would not have smacked of an unappealing eagerness to make things happen for a chum. And the immediacy of access offered to those with the right phone numbers is all the more reason to have robust procedures around those interactions.

If this is sleaze, as Labour alleges, it seems low-level sleaze at best. The policy change was, arguably, the right one in the circumstances. But on the back of the extraordinary revelations about David Cameron and Lex Greensill, it emphasises the need for a proper examination of who has the ear of our political leaders, and how those conversations are handled.




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