Today's papers were once again filled with stories of Lib Dem anger at Sir Philip Green's appointment as a government adviser, with The Times front page reporting demands from Lib Dem backbenchers that Nick Clegg - who is said to be privately "irritated" despite publically backing Sir Philip - instigate a review of his tax arrangements.
Today’s papers were once again filled with stories of Lib Dem anger at Sir Philip Green’s appointment as a government adviser, with The Times front page reporting demands from Lib Dem backbenchers that Nick Clegg – who is said to be privately “irritated” despite publically backing Sir Philip – instigate a review of his tax arrangements.
During the election campaign, the Lib Dems set out plans to raise £4.6 billion from “anti-avoidance measures”, while the deputy prime minister said that “those huge loopholes that only people right at the top, very wealthy people who can afford a football team of lawyers and accountants to get out of paying tax” should be closed; in November, he said the party’s tax plans would be “paid for by closing tax loopholes”.
It has been widely reported that Sir Philip’s primary means of avoiding tax, is by transferring control of the vast majority of his business empire to his Monaco-based wife, Tina. The arrangement is alleged to have saved the Green family £285 milllion in 2005 as she didn’t have to pay tax on the £1.2 billion dividend she received.
All perfectly legal, but what impact would that £285 million the government’s new efficiency adviser avoided paying have had in these straightened times? In 2009, annual gross median pay in the public sector was £22,405 – that’s 12,720 public sector workers employed for a year had he paid all his taxes.
In addition, according to the 2010 Budget red book, had the man now tasked with helping to cut public spending not been a tax avoider, the Government need not have had to do many of the following:
• Axing the baby element of the child tax credit (which is to be removed from 2011-12): £275m
• Cutting the child tax credit supplement for children aged one and two (which is to be reversed from 2012-13): £180m
• Extending the conditionality for lone parent benefits for those with children aged five and above (from October 2011): £180m
• Abolishing the health in pregnancy grant: £150m
• Reducing the tax credits second income threshold to £40,000 (from 2011-12): £145m
• Axing the Saving Gateway (which will not be introduced in July 2010): £115m
• Reducing housing benefit awards to 90 per cent after 12 months for claimants of Jobseekers Allowance: £110m
• Cutting the Sure Start Maternity Grant (which will now apply to first child only from 2011-12): £75m
• Cuts in the local housing allowance (with caps on maximum rates for each property size, with a 4-bed limit from 2011-12): £65m
• Cutting support for mortgage interest (set payments at the average mortgage rate from October 2010): £65m
• Not introducing video games tax relief: £50m
• Removing the 50-plus element of the working tax credit (from 2012-13): £40m
As Left Foot Forward reported last week, the coalition are making great play of their plans to crack down on benefit cheats, yet are silent on the problem of tax cheats, with HM Revenue and Customs (HMRC) announcing they will no longer produce some of their key stats on enforcement – since May they stopped publishing information on “the number of prosecutions against taxpayers and the success rate of court actions pursued by HMRC”.
This despite Clegg’s pre-election bluster and the evidence that the UK tax gap is estimated at up to £120 billion, dwarfing the welfare gap. Failure by the Lib Dem leader to deliver on his anti-avoidance rhetoric and ease Green into the shadows could lead to a battle with his backbenchers, the New Statesman’s George Eaton reporting:
A number of Lib Dem backbenchers, several of whom voted against the VAT increase, have publicly criticised Green.
Andrew George sardonically remarked that Green would have been “more useful in terms of advising on tax avoidance .. than deciding on the future job prospects of, particularly, the poorest paid public servants”.
While Mike Hancock, the MP for Portsmouth South, said: “I’m all in favour of anyone who avoids tax to be tackled firmly and I’m surprised that Clegg would want to appoint someone like that to advise him.” Together with Roger Williams he has called for a review of Green’s tax arrangements.
Lord Oakeshott, the Lib Dem Treasury spokesman, has encouraged the rebels, pointedly noting that: “Governments, like businesses, need to maximise their revenues. Tax cheats and benefits cheats both cost taxpayers dear.”
Conservative Home, meanwhile, has more on the significance of the developments, Paul Goodman explaining:
Nick Clegg said yesterday that the Government’s examining an anti-avoidance tax rule. It was this remark that gave journalists reason to ring up Liberal Democrat MPs to seek their views on Green.
The Deputy Prime Minister had an obvious reason to make it: his Party’s seen by many voters as a captive of the Conservatives, and has consequently plummeted in the polls – which, furthermore, are turning against AV, the Liberal Democrat’s main potential gain from coalition.
Clegg has to try to prove that Liberal Democrat ideas have leverage in government.
56 Responses to “More pressure on Clegg as we reveal real cost of Green’s £285m tax avoidance”
Step aside Sir Philip – government appoints ANOTHER tax avoider to advise on cuts « A Thousand Cuts
[…] billionaire Sir Philip’s (entirely legal) tax schemes meant that he avoided paying an estimated £285m in tax in 2005 after he transferred control of most of his business empire to his Monaco-based wife for […]
Chris
@Mental Mouse
Is that the best you can come up with, you must be under heavy sedation.
“Chris – Just a small point but the 2.5 million job seekers don’t actually pay tax. I never mentioned job seekers, you did. Please don’t do strawman on me…”
Oh, you got me, I didn’t realise that as a jobseeker you could apply for a VAT exemption card; making all purchases zero VAT rated. I’m out of touch I suppose being a multi-million area champagne socialist rather than a struggling graduate with no money.
“Remember what you’ve been told Chris; Labour lost the election.”
Mouse, have they chemically coshed you? Because your arguments are becoming just plain lazy.
Anon E Mouse
Chris – Please don’t stop your posts dude – this is more comical than the Now Show!!(not hard)
To date on this blog you have derided me for misspelling the current chancellors name yet you misspelt a common noun in that very same post.
You have said you voted for Jack Dromey because he was a good MP – a position I explained he had never held – it was a Labour stitch up.
You have called me homophobic in the very thread that I explained I was not and anyway it was a post you cannot have read because Will Straw removed it.
(I accept Will Straw falsely assumed there had been homophobia since he was educated in the US).
You have claimed I am a Tory, even though I explained my whole family were lifelong Labour voters.
You have been openly rude and insulting in a typically Labour Party smearing manner and never once have you answered anything you have been asked.
You have criticised me for comments you have claimed I have made even though I have not and although I am not sure what a “multi-million area(?) champagne socialist” is at least I can rest easy knowing your degree can’t possibly be in politics.
Let me try again: As for staying below the poverty line remind me how Gordon Brown removing the 10p tax rate helped the poor?
If I had been chemically coshed how would I know Chris?
Remember Chris before you even press your first key in response: I must remember Labour LOST the election… I must remember Labour LOST the election… I must remember Labour LOST the election… I must remember Labour LOST the election… I must remember Labour LOST the election… I must remember Labour LOST the election…
Chris
@Mental Mouse
“To date on this blog you have derided me for misspelling the current chancellors name yet you misspelt a common noun in that very same post.
You have said you voted for Jack Dromey because he was a good MP – a position I explained he had never held – it was a Labour stitch up.”
You’re confusing me with another Chris who seems to post occasionally. You can spot the difference because I use capital letters and he generally doesn’t at the start of his posts. A conspiratorially minded person might think that it was in fact your sock puppet in an attempt to discredit me.
“You have called me homophobic in the very thread that I explained I was not and anyway it was a post you cannot have read because Will Straw removed it.
(I accept Will Straw falsely assumed there had been homophobia since he was educated in the US).”
That was me but I was going by what Will Straw said.
“You have claimed I am a Tory, even though I explained my whole family were lifelong Labour voters.”
You said you were a LibDem! Your constant attacks on Labour would make any reasonable person believe you were not a Labour supporter.
“You have been openly rude and insulting in a typically Labour Party smearing manner and never once have you answered anything you have been asked.”
Yawn, grow up Mouse. You attacked Joss Garman for being a nauseating apologist for the Labour party when he had never voted for them and been arrested campaigning against their policies.
“You have criticised me for comments you have claimed I have made even though I have not and although I am not sure what a “multi-million area(?) champagne socialist” is at least I can rest easy knowing your degree can’t possibly be in politics.”
My fingers didn’t type quite what I was thinking, a common occurrence, that line should read “multi-millionaire champagne socialist”.
Where I have I claimed you made said comments? Delusions can be a side affect of some psychiatric drugs.
“Let me try again: As for staying below the poverty line remind me how Gordon Brown removing the 10p tax rate helped the poor?”
It didn’t, it was a cock up on Brown’s part but he brought in other measures to compensate those adversely affected. This is well known, your racking it up doesn’t prove anything except your own hatred of the Labour party.
“If I had been chemically coshed how would I know Chris?”
Your previous reply was so lazy that I assumed you had been, your latest reply is much more energetic, if a little whiny. So, hopefully your just being physically restrained now rather than pharmacologically.
“Remember Chris before you even press your first key in response: I must remember Labour LOST the election… I must remember Labour LOST the election… I must remember Labour LOST the election… I must remember Labour LOST the election… I must remember Labour LOST the election… I must remember Labour LOST the election…”
Yawn, will you repeat to yourself that straw polls of family members are about as interesting and informative as a focus group of coma patients.
Anon E Mouse
Chris – You were “going by what Will Straw said”. Since you must have read my post and since you have no idea what I said why would you falsely call me homophobic without knowing either what I said or if I was?
You have also called me a Tory even though I have clearly stated I’m not. (I have voted Labour my whole life until the last election where I voted Independent. Ironically Labour won. I have stated that I do support the Lib Dems; to date I have never voted for them but certainly will do next time)
From those actions I can reasonably conclude you are smearing me in a typically Labour fashion.
The 10p tax fiasco was not a cock up – Brown controlled Downing St in a Stalinist way – it was intentional. I suppose now you’ll argue that not allowing soldiers who fought for us for over 100 years to reside here, the Gurkha’s, was a cock up as well.
As an ex Labour voter I can assure you that people who display the type of support you show, with your sneering arrogant attitude and inability to understand WHY Labour lost the last election will keep the party from power for many years in this country.
There was a time Labour used to represent the working classes in Britain but that seems a LONG time ago now and unless critics like me go on and on and on and on about what is wrong they will do nothing to put it right.
I could list hypocrisy by the bucket about this useless bunch and the public don’t like it. Where I work you could put a monkey in a red shirt and it would win but I detect a shift. In pubs people now say “They’re not Labour anymore, not the party my parents voted for”. And that’s South Wales.
I’m right Chris, you’re wrong and you can argue black is white until you’re blue, or in your case red in the face but Labour lost the election. Try asking why.
Now where’s that nurse….