British Conservatives in Paris Blog

A division has emerged in the coalition over the appointment by David Cameron of Sir Philip Green as an unpaid financial trouble-shooter, tasked with making recommendations on how to make the public sector more efficient. Lib Dem MPs who campaigned against tax avoidance in the election are demanding a review of the tax arrangements of this businessman who has avoided tax on the personal fortune made from his business empire by handing ownership to his wife, now living in the tax haven of Monaco and legally avoiding tax on dividends from his companies.
Under pressure from his MPs, Nick Clegg has said that they are looking at the case for an anti-avoidance rule to ensure that wealthy individuals pay their fair share of tax. Lib Dem MPs add that tax avoidance costs the Country far more than benefit fraud, the latter of such major concern to the Conservatives.
In defence of Sir Philip his companies are registered to pay tax in the UK, his large number of employees all pay tax and his personal tax avoidance scheme via his wife is not illegal. He and his team will also only be making recommendations and he will not be in government making laws. He is unfortunately like Lord Ashcroft a prominent example of the flexibility that wealthy individuals have to minimise their tax exposure under the current UK
tax laws. However, the Coalition agreement also commits the government to make every effort to tackle tax avoidance including detailed development of Liberal Democrat proposals, although in principle no decision has been taken on whether to support a general rule outlawing tax avoidance.
It is good that the Coalition is pulling in such experience and talent to help sort out the Country and also moving away from the dogmatic politics of yesterday by inviting others such as Frank Field and Alan Milburn from the Labour party to provide their expertise e.g. on respectively poverty and social mobility. However, a further question has now been raised on the judgement of David Cameron with the resignation of David Rowland the new Conservative party treasurer, who was only appointed in June having returned from tax exile last year and given £2.7 million to the Conservative election campaign. Apparently Mr Cameron ignored warnings that he was not the man for the job. Whether the internal strains within the Coalition from the appointment of Sir Philip Green will prove to be worth it should be judged together with the practical effectiveness of the actual recommendations resulting from the efforts of him and his team.

This entry was posted on vendredi, août 20th, 2010 at 2010-08-20T14:06:43+02:000000004331201008 and is filed under Chairman''s blog, Sir Philip Green. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.