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Is Green the ‘Topman’ for the job?

24th Aug 2010
Deputy Editor Sift Media
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Does the government really need another ‘celebrity’ telling it how to spend our tax money?

Sir Philip Green has been announced as the latest ‘celebrity’ entrepreneur to join the government’s stable of advisers, but ministers are now calling for his own tax affairs to be investigated.

Having been away on holiday last week, I missed the hoopla that surrounded Sir Philip Green’s appointment as the government’s new ‘efficiency tsar’, but it seems I’ve arrived just on time for the fireworks concerning his tax affairs.

As a regular reader of the style and society pages, the name Sir Philip Green certainly rang a bell – not only did he steer high street behemoth Topshop/Topman to success, but he’s mates with the likes of Kate Moss and Naomi Campbell (they regularly hang out on his 200ft super yacht, I hear).

What, then, can he teach the government about making efficiency savings? Well, like Lord Sugar before him (who enjoyed a short-lived reign as enterprise tsar to the previous government), Green is an East End bloke made good, having built up an estimated £4bn personal fortune in the retail industry. His Arcadia group currently employs some 45,000 people, and Green himself is reported to have paid £400m in tax over the past five years. Perhaps he does have what it takes to show the government how to save a bob or two.

However, the appointment was not without its controversies. Many ministers are questioning his commitment to the cause given that in 2005, Green’s wife received a £1.2bn dividend – the largest ever in corporate history - as nominal owner of Arcadia, the umbrella company that incorporates Topshop, Burton and Dorothy Perkins. Since Mrs Green lives in Monaco, she saved some £300m in tax – money that the UK Treasury missed out on. Clearly, Green didn’t get Cameron’s memo about us all being “in this together”.

In the same week as he appointed Green to conduct an efficiency review, deputy prime minister Nick Clegg asserted that the government was committed to pursuing tax evaders, telling journalists: "We are looking at the case for an anti-avoidance rule to ensure that wealthy individuals pay their fair share of tax".

His backbenchers think he needs to look a bit closer to home, however. Roger Williams, Lib Dem MP for Brecon and Radnorshire, said that while Green was "very capable", the reports of his tax arrangements should be "looked at" by HMRC and the Treasury.

"We are very keen that artificial arrangements are minimised," he told the Guardian today. "What it brings home to me and my constituents is that rich people can arrange their financial affairs with a great deal more latitude [than poorer people]."

"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," said Mike Hancock, lib Dem MP for Portsmouth South in an interview with the Guardian.

Of course, the opposition wasted no time sticking the boot in.

“During the election campaign Nick Clegg told the country he would crack down on people who use ‘football teams of lawyers and accountants’ to avoid tax,” said Labour leadership candidate Ed Miliband.

“Just when it looked like Nick Clegg’s willingness to sign up and defend Tory decisions couldn’t drag his reputation any lower, Philip Green’s appointment as a key government adviser humiliates him again.”

Tax evasion dramas aside, one wonders what will come out of this efficiency review. While no one will argue that the government is in dire need of some private sector style discipline when it comes to managing its finances, how will it ensure that the most vulnerable in society are protected and how well are ‘celebrity’ entrepreneurs like Green primed for this huge responsibility?

 

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