Miliband attacks Tories as "party of hedge funds"

Ed Miliband has tried to deflect business criticism of Labour by claiming that the Conservatives are keeping open a City tax loophole because they are financially dependent on "Mayfair hedge funds".

Mr Miliband claimed that David Cameron's party had received £47m from hedge fund donors and challenged the prime minister in parliament five times to end a stamp duty exemption which he said cost the taxpayer hundreds of millions of pounds.

The Labour leader's attack at prime minister's questions was often drowned out by mocking Tory laughter, after a week in which the Monaco-based boss of Boots, Stefano Pessina, claimed that a Miliband government would be "a catastrophe".

Meanwhile Ed Balls, shadow chancellor, failed to remember the names of any high-profile Labour business backers in a television interview, offering only "Bill Somebody" - a reference to Bill Thomas, a Cooperative Bank non-executive director and chair of the party's small business taskforce.

Tory MPs bayed "Bill" at Mr Miliband, and Mr Cameron quipped: "Bill Somebody is not a person: Bill somebody is a Labour policy." But the Labour leader decided to go on the attack, labelling the Conservatives as "the party of Mayfair hedge funds and Monaco tax avoiders".

He claimed that George Osborne, chancellor, had failed to end so-called intermediaries relief, a tax device by which hedge funds can avoid paying stamp duty on share purchases.

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The Treasury says the £500m figure is based on "static modelling" and did not take into account behavioural change, including the prospect of some funds moving their operations abroad.

Treasury officials say removing the exemption would save "little or nothing" but Mr Miliband says it would help to fund Labour's investment in the NHS.

Mr Miliband announced the stamp duty reform in his party conference speech last year; Labour said it would end an exemption on paying stamp duty when market makers such as investment banks deal in shares on behalf of hedge funds.

The party said the change would have no impact on pension funds or other investors. But Aima, the hedge fund lobby group, disputed that last September. "It is misleading to describe this as a measure targeted specifically at hedge funds," said Jack Inglis, Aima chief executive.

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