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Philip Green faces tax scrutiny in coalition job

By Channel 4 News

Updated on 19 August 2010

Following last week's appointment of Arcadia boss Sir Philip Green to oversee efficiency savings in Whitehall, Liberal Democrat MP Roger Williams tells Channel 4 News he must expect greater scrutiny of his tax affairs.

Sir Philip Green, appointed by the coalition to review efficiency in government (Getty)

Last week the government announced the appointment of billionaire Topshop owner Sir Philip Green as efficiency czar.

His review of government spending is due to conclude on 20 October, and will focus on Whitehall departments whose funding is not ring-fenced.

As Channel 4 News's Who Knows Who reported, Sir Philip's nomination surprised some commentators. One journalist remarked that the Arcadia Group's flamboyant boss "is to austerity what his friend Simon Cowell is to self-doubt".

More seriously, some asked why a coalition government committed to cracking down on tax avoidance – which is legal – had decided to use the services of a businessman whose tax arrangements have been the subject of scrutiny.

Sir Philip's wife, Tina, who lives in Monaco, is the named owned of Arcadia. In 2005 she was the beneficiary of a £1.2bn dividend payout from the high street retail group.

Who Knows Who articles featuring Sir Philip Green
- Sir Philip Green: the ego in Arcadia
- Cameron’s business backers

Interviewed on BBC radio on Friday, Sir Philip has stressed that "my wife's not a tax exile. My family do not live in the United Kingdom. It's somewhat different."

He told the Today programme: "We do pay all our tax in Britain. I think we've paid over the last five years some £300m or £400m of taxes (…) I'm a UK taxpayer. I work here every week."

But for some Liberal Democrat members of the coalition, Sir Philip's appointment has again focused attention on their party’s pledge to address the issue of tax avoidance.

Liberal Democrat MP Roger Williams told Channel 4 News: "I'm not against Sir Philip Green taking this work on. But like almost anybody in public life – which he will be if he takes this job on – he can expect a certain amount of scrutiny on his tax and financial situation.

“The issue is that people on high incomes have a huge amount more latitude to arrange their financial affairs than people on small incomes.

"As far as I'm concerned, what Sir Philip is doing is legal at the moment. But we would like to look at that type of arrangement to see that, in future, it is not allowed in our taxation system.

"I hope the government will look to altering the tax legislation to ensure that these artificial arrangements are phased out in the future."

His view was echoed by Lib Dem peer Lord Oakeshott, who told us: "As Nick Clegg has made clear, cracking down on tax avoidance is a very important part of the coalition agreement. The Conservatives have signed, just as much as the Liberal Democrats.

"It's important to send a strong message that aggressive tax avoidance, although it may well be legal, is not acceptable behaviour in this country. Tax avoidance and evasion cost the taxpayer far more than benefit fraud.

"Every pound the Treasury loses to tax avoiders comes straight out of ordinary taxpayers' pockets."

The Liberal Democrat Business Secretary Vince Cable, a vocal opponent of tax avoidance, was apparently not consulted and had no prior knowledge of the Arcadia boss's appointment.

"There is a lot I could say on this but I'd better miss this one out," he told City A.M. last week. "I'm tempted to comment but I think I'd better not."

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