Boris Johnson Defends Text Exchange With Dyson Over Tax Treatment

U.K. Prime Minister Boris Johnson said he makes “absolutely no apology” for promises made to billionaire James Dyson over the tax treatment of staff developing ventilators at the height of the coronavirus crisis.

The BBC on Wednesday published a text exchange between the two men in March last year in which Dyson appeared to seek a tax waiver for workers he was bringing in from abroad to work on the government’s ventilator challenge. Johnson replied that he would “fix it” tomorrow, before later saying “Rishi says it is fixed,” a reference to Chancellor of the Exchequer Rishi Sunak.

The latest revelation comes as the relationship between government and business is coming under scrutiny after the collapse of lender Greensill Capital pulled back the curtain on the kind of lobbying that goes on. It’s given the opposition a line of attack ahead of local elections next month.

Coming face to face with Johnson in Parliament, Labour Party leader Keir Starmer asked: “What does the prime minister think is the right thing to do if he receives a text message form a billionaire Conservative supporter asking him to fix tax rules?”

“If he’s referring to the request from James Dyson, I make absolutely no apology at all for shifting heaven and earth and doing everything I possibly could,” Johnson replied. “Any prime minister would in those circumstances, to secure ventilators for the people of this country and to save lives.”

Asked later by the Scottish National Party’s Westminster leader, Ian Blackford, whether he would reveal how many Covid contracts he “personally fixed,” Johnson replied “there’s absolutely nothing to conceal about this and I’m happy to share all the details” with the House of Commons.

Dyson Responds

The Times newspaper also reported late Wednesday that Johnson had rejected the advice of Britain’s top civil servant to change his phone number, amid concern about him being too easily contacted and lobbied over policy decisions.

On the Dyson issue, Johnson said the government had gone into the pandemic with just 9,000 ventilators and that its ventilator challenge had procured another 22,000. At the time, ministers fast-tracked new designs in a rush to secure ventilators that saw them enlist manufacturers ranging including Airbus, Siemens, Smiths Group Plc and the Mercedes and McLaren Formula 1 teams.

In the text exchanges published by the BBC, Dyson told Johnson that his Singapore-based company needed a response from Sunak, who he said had freed up the ability of Dyson staff to be in the U.K., “but not to work there.”

Dyson, who spent 20 million pounds ($28 million) on developing a new ventilator in 30 days that ultimately the government didn’t need, said his company hadn’t benefited from the work. He said in a statement that it was Johnson who had initially rung him to ask for help developing ventilators, and that “it is absurd to suggest that the urgent correspondence was anything other than seeking compliance with rules.”

“It is utterly misleading and false to imply that any benefit or advantage was being sought beyond ensuring that neither the company nor its employees would be inadvertently penalized for their work on the national emergency,” Dyson said. “Clarification was sought on a range of technical issues as well as tax and legal issues that had relevance for many engaged in the early days of the crisis.”

Sunak, for his part, in April wrote to the Treasury committee outlining changes to tax legislation “to allow highly skilled individuals from across the world,” including anesthetists and engineers working on ventilators “to come to the U.K. and help us respond to this unprecedented health emergency.”

“Under normal circumstances, the actions and presence of these individuals in the U.K. could affect their own tax residence status, potentially bringing their global earnings within the purview of U.K. taxation,” Sunak wrote. He proposed time-limited changes to the tax legislation to accommodate for the necessary workers.

©2021 Bloomberg L.P.

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