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”
Chris
@Mental Mouse
“In pubs people now say “They’re not Labour anymore, not the party my parents voted for”. And that’s South Wales.”
LOL, you’ve convinced me of the validity of your arguments. Your parents and the mentally ill I can ignore but no some bloke down the pub, I’m with you Mouse!!!
“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.”
It might help your arguments if you tried putting them in less absolute terms, which only re-enforce the suggestion that you’re either an egotist with an axe to grind. Or a common troll, polluting this site with endless criticisms of Labour and gushing praise for anything the coalition do.
Anon E Mouse
Since you’re into politics you realised at the European elections last year the Tories were the largest majority in Wales so it was confirming what you already knew.
I suppose the general election did that in May where Labour got the second lowest vote in their history, equal to Michael Foot’s days although how they actually got 28% of people in this country to vote for them is beyond me.
Still with no false election promises next time from the likes of the unelected cabinet member, Peter Mandelson, let’s see how Labour fare. They feel irrelevant already.
I have no shades of grey where hypocrisy, lies and general deceit are concerned – particularly where less fortunate people are dumped on by their government.
An egotist? Yes and with a BIG axe to grind about what these people have done to the Labour Party.
They deserve criticism when they behave as they do. You may be prepared to justify the unjustifiable Chris but I’m certainly not. I assumed Labour would learn a lesson from their defeat but judging by the leadership election and their supporters on this blog it appears, unusually for me, I’m wrong.
Have a nice weekend.
Anon E Mouse
Chris – Your knee jerk response about my parents was incorrect – I said “people’s parents” in the pub although my grandfather, a Labour councillor will be turning in his grave…
Chris
@Mental Mouse
“my grandfather, a Labour councillor will be turning in his grave…”
Oh this is so funny!!! Another relative adding their weight to your argument! But this one is doubly compromised by the fact he is dead, LOL a focus group of stiffs – did you conduct it by séance?
“Since you’re into politics you realised at the European elections last year the Tories were the largest majority in Wales so it was confirming what you already knew.”
The focus group of corpses would be a more accurate indication of political sentiment since the turnout in Euro elections is minimal. FFS the kippers got second highest percentage of the vote.
“I suppose the general election did that in May where Labour got the second lowest vote in their history, equal to Michael Foot’s days although how they actually got 28% of people in this country to vote for them is beyond me.”
Says it all really doesn’t it, you have no understanding of working people, what they care about and what they want from the state.
“Still with no false election promises next time from the likes of the unelected cabinet member, Peter Mandelson, let’s see how Labour fare. They feel irrelevant already.”
Oh, you can feel it in your waters can you? How much do you charge to conduct séances? Do you palm readings over the internet?
“I have no shades of grey where hypocrisy, lies and general deceit are concerned – particularly where less fortunate people are dumped on by their government.
An egotist? Yes and with a BIG axe to grind about what these people have done to the Labour Party.”
Interesting…
“They deserve criticism when they behave as they do. You may be prepared to justify the unjustifiable Chris but I’m certainly not. I assumed Labour would learn a lesson from their defeat but judging by the leadership election and their supporters on this blog it appears, unusually for me, I’m wrong.”
Lets just highlight the breathtaking narcissism at the end of that quote:
“…it appears, unusually for me, I’m wrong.”
Looks like a textbook example of it appears, unusually for me, I’m wrong..
Mouse, you arguments follow no logic and are incoherent. One minute you sound like a high tory, the next your a trot; you’re obviously not a serious contributor but rather a troll. You simply want to attack and trash the Labour party, I would suspect you of being a paid astroturfing troll but for the amateurish and childish nature of your posts. Inferring you have your finger on the pulse of the nation by constantly referring to your family, friends and blokes down the pub doesn’t fool anybody.
Go on come back at me with yet another quote from a relative, friend (real or imaginary), stranger or spirit. Better still just be quite like the men in white coats want you to be…
Chris
Damn digits!
Looks like a textbook example of it appears, unusually for me, I’m wrong..
Should read – Looks like a textbook example of NPD.