Multinational Chairman's Group

Referred to by the Daily Mail in 2003 as 'discreet', the Multinational Chairman's Group is extremely obscure.

The Guardian has reported that the group was the means for British American Tobacco to prise open a meeting with Stephen Byers over the issue of smuggling:

A few days later, however, everything changed. Mr Broughton was able to go over Mr Byers' head, as a member of a shadowy group of privileged lobbyists - the "multinational chairman's group", whose members include BP, Shell, the drinks firm Diageo, Unilever, and Vodafone.

Mr Broughton was on the shortlist of those invited to eat bacon and eggs with the prime minister in the Downing Street stateroom overlooking the rose garden.

Mr Byers, too, had been summoned to the breakfast table by Mr Blair on March 14. The company chairman seized the opportunity, button-holing the minister who had been avoiding him. After shaking hands in No 10, Mr Byers was left with no alternative but to change his tune. "In the margins of that breakfast briefing," as an official note records, "the secretary of state agreed to [a] meeting".

That afternoon, BAT's lobbyists rang the department in triumph: "Mr Broughton has secured a meeting with the secretary of state".

Mr Millson later boasted : "It was said we have been very successful in getting the one-to-one meeting with Byers ... There are few companies that have achieved this."

"Dear Martin", Mr Byers wrote back, in warmer nomenclature than before. He apologised for the "error" in redirecting his earlier letter.

The secretary of state had been pressured into a private meeting with a firm into which he was trying to order an official inquiry. By contrast, ASH, the anti-smoking campaigners, say they asked for a similar meeting with Mr Byers, and were refused.

Mr Broughton followed up with intensive lobbying of No 10, sending Mr Blair a long letter demanding that he cut taxes on cigarettes, and hinting that smuggling would continue unabated into Britain if he did not cooperate: "The chosen tax policy contains within it the seeds of its own destruction."

In April, he told BAT shareholders at the annual general meeting: "There is really no need for a DTI investigation."

Whitehall refuses to release the minutes of the subsequent meeting with Mr Byers. But we obtained BAT's version from their archive, which they have been forced to disclose in settlement of a US lawsuit.

As reported in the Guardian, after a two-year battle over freedom of information Downing Street has eventually disclosed the prime ministerial documents revealing that the executives of the Multinational Chairman's Group "outmanoeuvred Gordon Brown, then chancellor, to shield "fat cat" pensions from his proposals to tax them more heavily; wanted Tony Blair, then prime minister, to lobby George Bush to treat corporations more favourably in return for supporting the invasion of Iraq; and lobbied for less "burdensome" red tape so multinational corporations would continue basing themselves in Britain."

Concerning the pension tax it is mentioned that:

Originally Brown proposed a 60% tax on pension pots above £1.4m. The Treasury had estimated the new tax would hit only 5,000 wealthy people, although others argued many more would be affected.

Seemingly impervious to the business arguments, Brown was refusing to water down his proposals. So nine businessmen in the group sought to go over the chancellor's head at one of the meetings with Blair on September 2 2003. [...]

The lobbying, allied with protests from other business groups, forced Brown to rethink. Within a few months, he had loosened the proposed cap on their pension pots so that more of their money would escape the tax net. The extra tax will only be payable on pension savings over £1.8m, not the originally proposed £1.4m, and will not come in until 2010.

He delayed the start date of the new regime to give the rich more time to re-arrange their finances. He also reduced the tax rate from 60% to 55%. The super-rich can thus shelter an extra £400,000 from the taxman - at Brown's original proposed 60% tax, that sum would have incurred a £240,000 tax bill.

People

Lord John Browne (BP)

Arun Sarin (Vodafone)

Sir John Bond (HSBC)

Sir Christopher Hogg (GlaxoSmithKline)

Niall Fitzgerald (Unilever)

Resources

Multinational Chairman's Group