Westminster blog

What exactly was George Osborne thinking when he condemned Lord Myners for his past involvement in tax havens?

Osborne is considered a hugely sophisticated politician. As shadow chancellor, he should be aware of just how much of Britain’s financial services industry has offshore operations. From this he should have been able to deduce that plenty of the Tory donors, and maybe even some of the party’s senior MPs, would have links to such companies. As such there were obvious merits to keeping silent on the issue.

Instead he rushed to put the boot into Myners after newspapers reminded readers that the City minister had held roles at Aspen Insurance, Ermitage and Gartmore – all of which have used offshore tax havens.

“It is difficult to see how Gordon Brown can claim he is cracking down on offshore tax havens and at the same time keep as a Treasury minister someone who appears to be involved in them,” Mr Osborne told the Times this week.

This morning we reminded him of the following:

* Ken Clarke was until recently paid by a hedge fund, Centaurus Capital, whose main fund was based in the Cayman Islands.

* The Conservative party has taken large donations from hedge funds and their owners, including Paul Ruddock, founder of Lansdowne Partners.

* Stanley Fink, former chief executive of Man Group, is co-treasurer of the party.

* The office of William Hague, shadow foreign secretary, is partially funded by Merebis Capital Management, another hedge fund. (Incidentally Hague also advises Terra Firma, whose chief, Guy Hands, threatened to move part of his private equity group offshore last year).

I didn’t have enough room to mention all the other links between the Tories and the City; it would have taken all night to research.

Denis MacShane, Labour’s MP for Rotherham describes Osborne’s comments as “shrill hypocrisy”.

“To avoid this kind of controversy in future, the Tory frontbench needs to drop all their second jobs, whether the companies are paying UK tax or not. But given the the Tories’ funding arrangements, can David Cameron guarantee that his party has not accepted money that has ultimately come from offshore?”

Pot calling kettle, kettle calling pot.

This doesn’t mean there is no suspicious whiff emanating from Gordon Brown’s attempts to clear up tax havens.

Baroness Noakes, Tory Treasury spokesperson in the Lords, told me yesterday that the government’s attempt to crack down on tax havens ahead of the G20 was “just a distraction” from the real problems facing the economy. It’s hard not to agree. After all, Brown has had plenty of time as chancellor to tackle the issue.

But if he is serious about cleaning up the City, it would be hard to do so without help from poachers-turned-gamekeepers; a point made in an erudite FT editorial this morning.