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19 August 2010

Lib Dem rebels circle Philip Green

Latest coalition appointment under fire over tax avoidance.

By George Eaton

Of all the appointments made by David Cameron, that of Philip Green was certainly one of the most eye-catching. So it’s no surprise that the pugnacious businessman has already divided opinion within the coalition.

Green has long been a bête noire of the liberal left, not least because of a Byzantine financial arrangement that allows him to avoid millions of pounds in tax each year. He achieved this by transferring ownership of his business empire to his wife, Cristina Green, who lives in the tax haven of Monaco.

Green’s appointment as an efficiency adviser would have been politically sensitive at any time, but the fact that it coincided with the announcement of a new crackdown on tax avoidance by Nick Clegg was particularly embarrassing. Today’s Times (£) reports that Vince Cable, who was not consulted over the appointment, has already signalled his unhappiness.

Meanwhile, a number of Lib Dem backbenchers, several of whom voted against the VAT increase, have publicly criticised Green. Andrew George, MP for St Ives, 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”.

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And Mike Hancock, 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, MP for Brecon and Radnorshire, he has called for a review of Green’s tax arrangements.

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Lord (Matthew) Oakeshott, the Lib Dem Treasury spokesman, has encouraged the rebels, pointedly noting: “Governments, like businesses, need to maximise their revenues. Tax cheats and benefits cheats both cost taxpayers dear.”

Taken alone, these disagreements and grievances aren’t particularly significant, but together they create a drip, drip effect that heightens the sense that the Lib Dems have traded their principles for power. Nick Clegg will have a tough job appeasing such concerns come the Lib Dem conference.