Row over peer's tax bill

Lord Levy is a close friend of Tony Blair

Lord Levy, one of the Labour Party's chief fund-raisers, has tried unsuccessfully to stop a newspaper printing his tax details.

The peer says he is the victim of a dirty tricks campaign and the details must have been obtained "unlawfully".

It is clear the information must have been obtained unlawfully

Lord Levy

An attempt to prevent The Sunday Times revealing his £5,000 tax bill was halted when the High Court ruled against him at a hearing on Friday.

The judge, Mr Justice Toulson, said there was a clear public interest in revealing Lord Levy's tax affairs because his party had repeatedly condemned tax avoidance schemes.

The Sunday Times says it has information showing that during the financial year 1998-99, multi-millionaire Lord Levy was a basic rate taxpayer who paid about £5,000 in taxes to the Inland Revenue.

Questions

This is about the same as someone earning the national average salary of £21,000.

Lord Levy, who received a letter from the paper on Friday telling him it had the information and asking for his comments, has fiercely denied any involvement in tax avoidance.

"I do not employ 'a highly sophisticated and effective tax avoidance strategy'," he said in a public statement.

"I devoted that period to political and voluntary activities, none of which produced any income for me. I was living off my own savings on which all tax owing had been paid," he added.

Apart from a holiday home in Israel and a small bank account, which was covered by UK tax laws, he did not maintain off-shore assets, he added.

He confirmed that he had applied, unsuccessfully, for an injunction to restrain publication of this information.

He said that he was not seeking to avoid embarrassment, insisting that the information obtained by the newspaper did not give rise to any.

The government has pledged to abolish tax loopholes

The peer has said he will report the Sunday Times to the Press Complaints Committee.

"I assumed, as I think any taxpayer would have done, that this sort of information would be known only to me, my accountants and the Inland Revenue," he said.

"It is clear the information must have been obtained unlawfully."

Later, The Sunday Times issued an account of the High Court ruling handed down by Mr Justice Toulson.

'Legitimate reporting'

The judge said: "If the individual had nothing to do with the Labour Party, I would have inclined to the view that the right to confidentiality should prevail.

"But if the individual has allied himself to the party to the extent of taking a peerage and taking the Labour whip, then I do see force in the point that his own conduct is a matter of legitimate public reporting.

"In terms of comment on the government's stance it is relevant and proper to put this before the public."

The judge added, however, that he had not found the decision an easy one, and gave Lord Levy permission to appeal.

The Tory Party said the matter should be looked into by Lord Neill's Committee on Standards in Public Life.

"Many people will find more than a whiff of hypocrisy in Labour's stealth tax increases on hard working families, while at the same time, appearing to benefit from secretive financial arrangements," said Andrew Lansley, Tory Cabinet Office spokesman.