Prince Charles aide to be quizzed by MPs over Duchy of Cornwall tax affairs

From: http://www.guardian.co.uk/uk/2013/jun/28/prince-charles-duchy-of-cornwall-tax-status

Private secretary to defend tax status of estate from which prince received record personal income of £19m last year

The Prince of Wales's most senior official is to defend the tax status of his £763m Duchy of Cornwall hereditary estate before the Commons public accounts committee, which has already scrutinised the tax affairs of Starbucks, Google and Amazon.

As Clarence House revealed Prince Charles received a record private income of £19m from the duchy last year – a 4.1% increase on the previous year – his principal private secretary, William Nye, said: "Naturally we are happy to appear before the PAC if they would like to see us."

Nye and the estate's finance director, Keith Willis, have been summoned before the committee on 15 July. MPs on the committee have questioned whether the tax status of the hereditary duchy – which saw its capital value increase by 4.9% last year – "remains defensible". It pays no corporation or capital gains tax.

The duchy, which has a portfolio of land, property and investments and published its annual accounts late on Thursday evening, provides income for the heir to the throne.

Nye stressed that the prince "voluntarily" paid income tax on the surplus of his duchy income after official expenses had been deducted. His tax bill fell sightly last year by £70,000 to £4.26m, a drop of 1.5%.

But it is not income tax that interests the PAC who have noted public concern over the duchy's exemption from corporation and capital gains tax. Any change to the duchy's tax status threatens to reduce the annual surplus paid to the prince for his private and official spending.

Charles's annual accounts show that he spent more than half – £10,952,000 – on official expenditure. He is also believed to have spent at least £1m on official activities carried out by the Duke and Duchess of Cambridge and Prince Harry, including covering their office staff costs, though their official travel, security and refurbishment of the Cambridges' Kensington Palace apartment are met by the taxpayer. A breakdown of the young royals' costs was not revealed, but they are said to be "a significant element" of the £2,088,000 Charles paid out on "other expenditure."

His funding from the British taxpayer fell by 47% from £2.1m to £1.1m, but officials admitted this was due in large part to his travel costs visiting the realms of Australia, Canada and New Zealand where the Queen is also head of state, being met by the host countries.

Charles's expenditure includes the costs of 125.4 full-time official positions plus eight personal staff, including secretaries, chefs and valets, and 15 estate, farm, garden and stable staff. He also funds the 10.5 full-time staff employed for the Duke and Duchess of Cambridge and Prince Harry.

At a briefing on the prince's finances, Nye said that "special rules" applied to the duchy. "The Prince of Wales gets the income from the duchy but he doesn't have access to the capital. That has always been the case," he said.

"The duchy is a unique organisation. And, because it is unique, it isn't completely straightforward. We can explain it but it takes a little bit of explanation and we're happy to provide that explanation."

The duchy, founded in 1337, was not a corporation, so did not pay corporation tax. And to pay capital gains tax would undermine the reason behind it being set up, he said.

"The whole point about the duchy is that it is set up specifically, and indeed is required by law, to maintain its capital, to roll over and maintain its capital and to invest in the future so as to generate income for the future.

"Indeed, the only reason why accounts are put before parliament in the first place is because there is an obligation to the treasury to produce those accounts to demonstrate that the treasury is doing its job of checking that the duchy is maintaining its capital . So whatever the duchy sells, any asset, it has to put the money back in to maintain the capital.

"Of course, parliament could legislate to require the duchy to pay capital gains tax if they wish to, but that would completely undermine the point of why it evolved in the first place."

Why do we have to trawl for the facts about Britain and the EU?

From: http://www.guardian.co.uk/commentisfree/2013/jun/02/eu-fishing-policy-british-interests

Finally, the absurd fishing quota policy that sometimes results in 50% of the catch being discarded is going to change.

With fishing policy, as with Italy's attempt to ban plastic bags, our government is terrified of appearing to allow the EU to undermine British 'interests'

For years, campaigners have been fighting against industrial fishing in European waters and last week, at long last, they had something to celebrate. Their target has been the huge factory ships that hoover up everything in their wake, discarding the dead fish they don't want – often half the catch – and returning to port with their quotas met the most profitable way. The result has not just been dwindling fish stocks – the entire marine ecosystem is under assault, including the coastal fishing communities that depend on it for their livelihood.

No one European country can make a difference by itself: fish do not respect borders. In any case, the danger for any one country acting unilaterally to husband fish stocks and ban the practice of discarding dead fish is that if others do not follow suit it will be the sucker. It will have hurt its own fishing interests just to benefit others. This is a problem that can only be solved by European countries acting together.

Last Thursday at 3am, EU members states finally agreed the outlines of a tough Common Fisheries Policy. First, there was a commitment for the first time to set quotas – based on hard scientific advice – that aim to go beyond stabilising fish stocks to achieving growth. Crucially, from 2015, boats will be forbidden from discarding unwanted dead fish, starting with species such as mackerel that live in the upper oceans, and extended to all fish types by 2020. Every country will have to submit a detailed plan for how it intends to meet its quota, but making its own decision about which types of fishing it will favour. But with discards effectively banned – inevitably, under British pressure, boats will still be allowed to discard 5% of their catch after 2020 – there will be an inbuilt bias against industrial fishing. This is a major move to help stocks.

Battle-hardened campaigners could only blink in semi-disbelief. Hugh Fearnley-Whittingstall, the leader of Fish Fight, who has signed up more than 860,000 supporters to work for tougher quotas and a ban on discards, hailed the deal as a "tremendous achievement". Even Greenpeace managed a grudging congratulation: "For all its loopholes and sluggish timelines the policy has the potential to turn Europe's destructive and oversized fishing industry into a sustainable, low-impact sector." The fishing industry acknowledged a corner had been turned.

It was a great example of an increasingly democratic EU beginning to work rather well. For the policy to become law, the European parliament will have to give its assent – and on this question it is very radical. EU fisheries ministers, managed cleverly by EU Commissioner Maria Damanaki, knew they had to come up with something strong, or parliament's endorsement would be impossible. But equally, the deal is only sellable domestically if governments accountable to national parliaments and electorates work out exactly which parts of their domestic fishing industry are going to shoulder the pain. Here is a policy that is democratically legitimate at EU and national levels, respects national sovereignty and solves a problem that no one country could solve itself.

However, this will be news to almost every reader of this column. No national newspaper printed it. It did break at 3am, but apart from the FTthere was not even online coverage and no follow-up the following day. Intriguingly, even the BBC's Today programme felt the story could be ignored; the juicy European news of the day was a BBC scoop that the EU Commission is going to take Britain to court over the government's alleged discriminatory withdrawal of welfare benefits from EU nationals. It was a good story, but listeners might also have been interested in hearing the fishing deal discussed – or even that it had happened. After all, the news was only hours old. Fish Fight does have 860,000 supporters: the effective ending of discards was hardly marginal news.

But the story did not fit the narrative. The British view, hardwired into the political and media class's DNA, is that the EU is a mess about to disintegrate under the weight of its absurd, anti-democratic ambitions to become a superstate, with its even more absurd single currency. It does nothing worthwhile, harms all British interests and we must stay disengaged or, at best, leave altogether. Every editor knows that no positive stories emanate from Brussels, and even if they do, there are no penalties for ignoring them.

It is utterly disabling. The technical reason why Britain fought so hard to continue to allow boats to discard 5% of their catch after 2020 is that allegedly in British waters, shoals of fish are more intertwined than in other waters, so catching fish that have to be discarded is more likely. Really? My hunch is that without the concession officials and ministers were terrified of Nigel Farage and Eurosceptic Tory MPs lining up with some disgruntled fishermen to claim the big bad EU had undermined British "interests".

Certainly, that was why Britain last week blocked Italy from implementing a ban on single-use plastic bags as discriminatory under EU law against British plastic bag manufacturers. Now no EU country can adopt what is clearly a sane environmental move – at one time supported by the prime minister – because of a reflex terror of a complaint by "wealth-creating" business that EU regulation is undermining British interests. (Both Wales and Northern Ireland have introduced a plastic bag levy.)

Nor will anybody have juxtaposed the richly comic spectacle of the British government prosecuting Italy for being discriminatory under EU law even as it protests against the injustice of being called discriminatory itself over welfare. Instead, there is synthetic outrage about Britain being singled out by a mutton-headed and politically insensitive European Commission. Yet the entire EU is based on the principle that there are common European interests, extending from how we fish our seas to how we explore space, that are underpinned by the notion that member states do not discriminate against each other. The rule of European law is universal, as it should be in rule-of-law societies. The Commission has no option but to uphold it.

This is a club worth staying in. It is much better for Britain's fishing industry – along with every other industry – that we are in the EU as it makes its rules. If the British are to make an informed choice about their destiny in any future referendum, then at least they deserve to know the facts. Judging by last week they will not be able to rely on their media for those or on their terrified politicians.