Lib Dems face a rift over Green

NICK Clegg pledged to crack down on tax avoidance yesterday, in a desperate bid to quell Liberal Democrat dissent over the government’s decision to appoint Sir Philip Green as a public spending tsar.

The deputy prime minister, who is holding the fort while David Cameron is on holiday, used a high-profile speech to say the coalition would “ensure that wealthy individuals pay their fair share of tax”.

Lib Dem MPs interpreted the comments as a sign of Clegg’s disquiet over the appointment of Green to head a review into government efficiency. Although the deputy prime minister has publicly backed the appointment, he has told colleagues he thinks Cameron was wrong to give the Topshop tycoon such a politically sensitive job. An aide to Clegg pointed out the deputy prime minister has been a long-standing opponent of tax avoidance. “What he said yesterday was in our manifesto, it was in the coalition agreement, and it was in the Budget red book,” he said.

In the past, Green has come under fire for his tax arrangements. The biggest shareholder in his Arcadia empire is Taveta Investments, a UK-incorporated company controlled by his wife, a Monaco resident. In 2005, his family saved a significant amount of tax relating to the payment of a £1.14bn dividend through a series of complex tax planning arrangements.

Last week, City A.M. revealed that Vince Cable, the business secretary and a long-standing opponent of tax avoidance, was not consulted over the decision to make Green a government adviser. Cable refused to back the Topshop tycoon’s appointment and made it known he was disgruntled by the snub. He has since asked for a meeting to discuss the billionaire’s tax affairs. Green has refused to take questions since we asked him last week whether his tax affairs had been discussed with the government ahead of his appointment.

Last night, Lib Dem MP Mike Hancock said it was important that Green had a “clean bill of health”, saying it would look hypocritical if a businessman associated with tax avoidance had a hand in public sector job losses.