The government has been criticised over lobbying once again after the BBC revealed texts between Boris Johnson and Sir James Dyson, in which the prime minister said he would “fix” a tax issue.
In March last year, after the government launched its Ventilator Challenge initiative, Sir James wrote to the treasury asking that his staff not face a tax bill for coming to the UK from the company’s base in Singapore to work on the project.
A few weeks later the chancellor changed existing rules to mean that anyone who came to the UK to work on Covid projects would not face additional tax.
It has now emerged that this change came after Sir James exchanged texts with the prime minister, requesting that this change be implemented.
Pushed on the text exchange at Prime Minister’s Questions, Johnson said he makes “no apology at all for shifting heaven and earth” to aid with the production of ventilators.
What are the tax rules - and how were they changed?
Sir James sought a change to the UK’s tax system which means that companies and people that aren’t based in the UK are only able to work here for so long before facing a tax bill.
The existing rules would not have prevented Dyson from working on the ventilator scheme, but they would have meant his staff and/or firm being liable for a tax bill.
Dyson did not end up producing a suitable ventilator as part of the scheme, and were removed from it just over a month after the change to the tax rules.
A Government spokesperson said: "At the height of the pandemic, there were genuine fears that we would quickly run out of ventilators, leaving the NHS unable to treat patients and putting many lives at risk.
"As the public would expect, we did everything we could in extraordinary times to protect our citizens and get access to the right medical equipment.
Who is Sir James Dyson?
Sir James is a British-born businessman and inventor, best known for creating the Dyson vacuum cleaner.
A billionaire who is a regular feature on lists of the richest Brits with a net-worth of around £16billion , Sir James was a vocal supporter of Brexit who has donated to the Conservative party in the past.
After backing the UK’s exit from the European Union Sir James attracted criticism when he revealed that his firm would move its headquarters from the UK to Singapore.
The company did retain its UK operations, with most of their products designed here, although their manufacturing facilities are in Asia.
Sir James also moved to Singapore, reportedly purchasing the most expensive penthouse in the country in 2019, though he sold it the following year and has now moved back to the UK.
Responding to these texts being revealed, Sir James said: "When the prime minister rang me to ask Dyson to urgently build ventilators, of course I said yes.
"Our ventilator cost Dyson £20m, freely given to the national cause, and it is absurd to suggest that the urgent correspondence was anything other than seeking compliance with rules, as 450 Dyson people - in UK and Singapore - worked around the clock, seven days a week to build potentially life-saving equipment at a time of dire need.
"Mercifully they were not required as medical understanding of the virus evolved. Neither Weybourne nor Dyson received any benefit from the project, indeed commercial projects were delayed, and Dyson voluntarily covered the £20m of development costs."
What did the texts say?
The BBC has published the following exchange between Johnson and Dyson, which took place in March 2020.
James Dyson: “We are ready. But nobody seems to want us to proceed. Sadly, James”
Boris Johnson: I will fix it tomo! We need you. It looks fantastic
BJ: Rishi says it is fixed!! We need you here
JD: Thanks! I will give the ventilator our all. James
JD: Dear Boris, I’m afraid that we need a response to our letter below from Rishi please? We really need Rishi to answer the letter we sent (attached) - now. Or to make the position clear. Rishi has fixed the Country Day Count issue but not Work Days. The former is covered under an ‘Exceptional Circumstances’ umbrella, Work Days are not. So, he has freed up your ability to be in the UK but not to work there - even in support of this National Emergency.
BJ: James I am first lord of the treasury and you can take it that we are backing you to do what you need
What has been the reaction to the story?
Labour described the revelations as “jaw dropping” and called for a “full, transparent and independent inquiry” into lobbying.
They said: “Boris Johnson is now front and centre of the biggest lobbying scandal in a generation, and Tory sleaze has reached the heart of Downing Street.
“The Prime Minister appears to have used the power of his office to personally hand public money to a billionaire friend in the form of tax breaks.
“If true, it is clearer than ever there is one rule for the Conservatives and their friends, another for everyone else.
“The stench of sleaze has been building up around this Conservative Government for months. Boris Johnson must now agree to a full, transparent and independent inquiry into lobbying - and end the scandal of Conservative politicians abusing taxpayer money.”
However, former Labour prime minister Tony Blair said he does not see a major issue with the exchange of messages.
Speaking to BBC Radio 4, he said he finds it “hard to get worked up about this” because “we were in the middle of a pandemic.
Barrister and anti-corruption campaigner Jolyon Maugham has speculated that the story may have been planted to provoke sympathy and support for the Prime Minister.
He shared a message on Twitter which he claimed came from a “senior comms professional” which said: “They will have focus grouped the Dyson stuff and it will have gone down well, PM moving mountains to keep people safe etc - then leaked”.
Referring to the message, Maugham tweeted; “(1) this was my immediate reaction; (2) the below has come to me (quite independently) from a senior comms professional; (3) the BBC's story doesn't identify where the texts came from; and (4) the BBC story was pushed by a BBC journalist closely aligned with Govt comms.”