Guido had long suspected it to be the case, but it seems like Total Politics have made it official. Well sort of, Antonello Sticca who has been heading up a redesign of the magazine and website, came over from lesbian lifestyle mag Diva. Guido reckons more covers like these would get copies flying off the shelves. Shiny new website here…

Earlier this month the Guardian front paged a story revealing that the City of London accounted for £11.4 million of the Conservative Party’s funding in 2009 – 10, in lurid terms we learned of the millions passed to Tory coffers by rich hedge fund managers. Guido can reveal that during that same period the Guardian Media Group’s coffers gained £39.3 million from investments in hedge funds. More than three times as much as they castigated the Tories for taking from hedgies…

GMG owns the Guardian and Observer newspapers, where journalists and columnists rail against the City, hedge funds and the short-termism of pin-striped financial traders. Documents obtained by Guido reveal that the GMG board approved investments now totalling £223.8 million in speculative funds in a range of assets. Alan Rusbridger, editor of the Guardian, sat on the board which approved the hedge fund investment plan, the board was at the time chaired by Paul Myners who also sat on the board of GLG partners, a hedge fund which is widely reported to have made big profits shorting UK banks.

The funds are traded by a number of specialist fund managers, overseen by the giant U.S. based asset manager Cambridge Associates. Cambridge Associates is a secretive, privately held firm with a client list which includes billionaires and government sovereign wealth funds. Guido has discovered that the £223.8 million is invested in emerging markets, bonds and hedge funds. The investments are principally in US Dollars and offshore from the UK.

In the small print of GMG’s 2009 Accounts

These short-term funds are in addition to the GMG assets held in Cayman Islands domiciled corporations where the rate of corporation tax is zero. Sources suggest that GMG has between £300 million and £500 million held offshore in these opaque special purpose vehicles. Such tax haven domiciled corporate vehicles are used to shield assets from tax. Guido has discovered that one GMG controlled Caymans corporation was incorporated as recently as March 2008, a mere 5 months before the banking crisis wreaked havoc on the global economy.

So far GMG has ignored embarrassing questions posed since the winding up of the old Scott Trust. What Guido and many confused Guardian readers would like to know is how the use of these opaque investment vehicles is compatible with the public positions taken by the newspapers and even members of the board. Will Hutton for example is a former editor of the Observer who sits alongside Alan Rusbridger on the board of the Scott Trust Foundation. Is Hutton, a noted campaigner against hedge funds, comfortable with GMG having hundreds of millions in assets both offshore and invested in hedge funds? Are the perennially loss making Guardian newspaper’s columnists like Polly Toynbee happy to have their six-figure salaries paid out of the profits of hedge fund raids on the currencies of emerging market countries? Isn’t it about time the Guardian’s senior executives explained openly and honestly to its readers how it really survives despite losing money every year?

It’s amazing what a former MP will do for money, especially one whose career ended in tatters. Jacqui Smith is taking part in a Radio 5 documentary about the nail in a her political coffin - porn.

“In the programme she will talk about her own attitudes to the industry. She also speaks to film-makers, actors, feminists and politicians, as well as men and women who consume pornography.”

Well it shouldn’t be too hard to find a consumer, she’ll just have to call downstairs to the sofa. At time of the scandal, word was put about to sympathetic ears that Smith’s researcher and husband Richard was covering for their son who was actually the late night viewer, but that has today been dismissed:

“Let me just say, I knew he had used porn. Did he use it very much? No. Having said that, there were two movies on the same week”

Smith apparently also claims “some people say to me, “Oh well, at least you didn’t have to leave because of a great policy ****-up”. Yes, because she was such a successful Home Secretary…

There has been a notable absence in the Telegraph newsroom recently. Many a hack has pondered what happened to the editor’s secretary cum beauty columnist Jane Cullen. Not only has she disappeared but apparently her desk has gone too. Jane’s vanishing act coincided with the hunt for the source of the Cable-gate tape leak, including his infamous “war on Murdoch” rant, to Robert Peston.

While Rob Winnett was suspected after vocally challenging the paper not revealing the whole story, what a coincidence that Jane was also secretary to the previous editor, and Peston’s mate, thirsty Will Lewis. Guido has noted Lewis and Peston’s mutually beneficial friendship before…

UPDATE : Other Telegraph sources insist it was a regular reorganisation redundancy.

As Cameron touches down in Egypt, it seems the root of all the Middle-East trouble and other problems to blight world leaders has emerged:

Pictured left-to-right: Egypt’s Mubarak (gone), Jordan’s Abdullah (forced to preempt trouble by sacking his entire government), Scotland’s Jonah (gone) and Italy’s Berlusconi (awaiting trial). Going well for all of them…

And after forty years of uncontested rule, it was never going to end well for Gadaffi after this:

The curse is never far away…

Guido’s student politics days are long behind him, but sometimes there is BS too good not to call out. A Labour hack to the core, NUS President Aaron Porter has announced he will not be seeking re-election less than 24 hours after his complete re-election plans were leaked, and subsequently shredded. He claims he was confident he would have won the April ballot, yet decided he won’t be running citing hard left bullying. Where have we heard the one about flunking “an election because he thought he was going to win it” before?

Instead of going with grace and dignity after a student was sent to prison for  nearly killing a policeman on a march that was poorly planned by Porter he shirked responsibility. Subsequently humiliated to the point of being taken into police protection from a crowd of students he later smeared as anti-Semites. The makings of a true Labour politician. So while Porter waltzes off into management consultancy or the like, hopefully we will see the NUS rightfully taken back by the loony-left and used as a mouthpiece for their bonkers plans.

On Saturday morning The Guardian decided to give UK Uncut a front page boost.  The protestors managed to shut down three dozen of the 1,720 branches of Barclays bank. Surprised they found any branches to occupy given Saturday opening hours.

The gist of the shabby story was Barclays bankers are evil tax dodgers. The evidence was a hatchet job with the paper making the spurious claim that Barclay’s only paid 1% tax on their £11.6 billion profits. In arriving at a profit before tax figure of £11.6 billion, The Guardian has added the profit from the ongoing business (£4.5 billion) to profits from a disposed business (£726 million) and the gain made on disposal of that business (£6.3 billion) to reach a total of £11.6 billion.

What they chose to ignore however was the total tax take Barclay’s had to pay; payroll taxes, bank levy, non-recoverable VAT, employers NI, SDRT and so on. Over the weekend Tim Worstall and the FCA Blog tore chunks out of the piece:

The article compares the cash paid to HMRC in respect of UK corporation tax in 2009 (£113 million) to the profits generated by the consolidated Barclays group worldwide in 2009. In the UK, tax is paid in arrears, so 2009 taxes would relate to widespread 2008 losses, not 2009 profits.

Multinational companies such as Barclays pay tax in a number of jurisdictions. Generally speaking Barclays only pays UK corporation tax on profits it generated in the UK.  Anything earned outside the UK doesn’t get taxed here. So it’s a howler to compare the UK corporation tax payment to the global consolidated profit. Most of those profits were taxed where they were made.

In 2002 (under Gordon Brown, Chuka), the UK government introduced the substantial shareholdings exemption, a corporation tax exemption for UK businesses disposing of a substantial shareholding in a part of their business. The idea was that businesses should be able to restructure their businesses without having to worry about chargeable gains implications. Barclays are heavily criticised by The Guardian for using it.  The last time that Guido saw this being used was by the, err, Guardian Media Group to save themselves some £60 million of taxes in 2008:

“In 2008 GMG sold half of Auto Trader publisher Trader Media Group and made an exceptional (one-off) profit of more than £300 million. No tax was payable on the return from that sale because under UK law GMG qualified for SSE”

In 2008 The Guardian made £302 million in profits and paid no corporation taxes. The CEO, Carolyn McCall, was paid an £827,000 package. Yet we don’t see the UK Uncut crowd kicking up a stink about The Guardian’s tax structures or their fat cat pay and bonuses.

Over the weekend the Guardian editor Alan Rusbridger (half-a-million a year since you asked) tweeted about Barclay’s offshore holding corporations. Guardian Media Group holds hundreds of millions in assets in a Caymans Island domiciled offshore corporation.

Guido put it to the GMG press office that GMG has £223.8 million invested in an overseas/offshore hedge fund managed by Cambridge Associates which trades currency derivatives. They don’t deny it and have declined to confirm the fund’s structure for tax purposes.

Guardian readers seem to be under the illusion that it is owned by a not-for-profit charity. The Scott Trust was wound up in October 2008 and the Guardian is a for-profit-privately-owned media business, the well paid directors of which confirm in their annual accounts that they operate tax strategies in line with their fiduciary duty to the shareholders – just like any other business.

The old Scott Trust was set up in 1936 to avoid inheritance taxes and wound up in 2008 so that GMG could cynically exploit the SSE capital gains tax shelter to pay 0% in corporation taxes on their £302 million in profits that year. GMG claim that it was about modernising the holding structure, in fact it was a disingenuous cover for corporate venality.

For three quarters of a century the The Guardian has been shirking taxes, Guido has no problem with them acting in their shareholders’ best interests. The hypocritical cant from them however about others doing the same is beyond contemptible…

Matt Hancock, George Osborne’s former economic adviser, has written to Ed Balls demanding that he doesn’t use taxpayers’ money to extricate himself from his personal financial mess which has seen him end up in Court over unpaid debts related to damage done to his former constituency office premises. Hancock observes wryly “At a time when the Coalition is trying to deal with the unpaid bills left by the last Labour Government, it damages the credibility of the official opposition to be leaving unpaid bills of their own.” Worth reading in full:

Click to Enlarge

Best comic line in the letter:

As the country knows only too well, this is not the first time you have vacated an office leaving behind you a shockingly poor state of repair.

Ed Balls, such an omnishambles…

See also: Balls Denies Debts in Court