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Why ask a billionaire about being economical?

Robert Peston | 13:17 UK time, Sunday, 10 October 2010

Why did the government ask Sir Philip Green to look at whether he could find some significant savings in the costs of providing public services?

Sir Philip Green

 

After all, the billionaire commuter between Monaco and London sells blouses, knickers, cuddly toys and table lamps; and the public sector educates our children and removes our gall stones.

Some would say that asking Green to advise on making the public sector more efficient is like asking the manager of a highly successful football team to run the Red Cross: it might work, but the difference in culture, scale and complexity between the business of government and the business of business presents significant challenges. 

There is logic, however, to seeking his counsel.

Green is a leading exponent of buying big businesses that have been losing ground, and then making a fortune out of them by improving their productivity - which means both cutting costs and growing sales. In fact, in the UK, he is the non-pareil of stabilising and extracting cash from retail brands that are going a bit brown around the edges.

Arguably, David Cameron and Nick Clegg can be seen as having executed a similar takeover, that of the debt-encumbered apparatus of the British state.

They would certainly argue that their need to cut public expenditure and improve the efficiency of public services is as great as his need was at Bhs,Top Shop and Burton to boost the return on sales and invested capital.

Or to put it another way, the driving forces for Green and Cameron/Clegg are the same: the imperative of reducing the burden of debt.

Green finances his takeovers with colossal amounts of debt that have to be paid off as quickly as possible; Cameron/Clegg inherited national debt that is rising unsustainably fast because of the huge gap between what the government spends on public services and what it receives from tax revenues.

So why not ask the private-sector maestro of paying off takeover debt how he thinks the gap between spending and revenues can be closed without damaging the quality of the services provided?

After all, many of the overheads of his businesses are the same as the public services' overheads: they include everything from property, to telecoms, to travel, to power, to IT, to paper clips.

We'll know tomorrow how much wasted spending he thinks can be eliminated in a sprawling public sector from eliminating unnecessary expenditure and striking better deals on necessary purchases.

There is however one cost of doing business, tax, that Green and most private-sector enterprises strive to cut - and where their effectiveness in doing so can be seen as running counter to the interests of the public sector.

He famously saved £300m in tax in 2005 on a £1.2bn dividend from his company, Arcadia - because Arcadia is registed as owned by his wife Tina, who is resident in the tax haven of Monaco.

These days he likes to accentuate the substantial tax paid to the Exchequer by his businesses.

But (to state the obvious) if all businesses and wealthy individuals could somehow be persuaded to devote less time and effort to minimising their British tax payments, rather smaller cuts in public services would be required to restore the health of the public finances.

Perhaps the enlistment of the likes of Sir Philip Green to advise on remaking the public sector will persuade business leaders that paying taxes represents reasonable value for money. We'll see.

Update 0800, 11 October: There is a paradox at the heart of the short preview - published overnight - of Sir Philip Green's recommendations to make the public sector a better buyer of goods and services.

He argues that the government purchases too little centrally, which means it doesn't use its buying power and doesn't get the keenest terms from suppliers of everything from travel, to IT, to telecoms, to stationery.

The retailing billionaire also says that the public sector doesn't take full advantage of its AAA credit rating - which implies, somewhat controversially, that it pays its suppliers rather quicker than it needs to do.

If ministers follow up on what he recommends, that'll help them close the yawning unsustainable gap between what they spend and tax revenues.

Who'll be the losers? Well in theory they'll be the private sector suppliers to government, who have both been arguing for the government to become more efficient and whose profit margins would be quite considerably squeezed.

I'll be getting more detail on all this in an interview with Sir Philip later this morning.

Comments

Page 1 of 3

  • Comment number 1.

    > persuade business leaders that paying taxes represents reasonable value for money

    He forces the businesses he buys to re-pay the debts he saddles them with. Let's just force him to pay his taxes, in the same way.

  • Comment number 2.

    Robert wrote;

    "Green is a leading exponent of buying big businesses that have been losing ground, and then making a fortune out of them by improving their productivity - which means both cutting costs and growing sales."

    No, Robert, as Jacques was quick off the mark in pointing out at 1., Green's strategy is to load up the businesses he buys with debt borrowed from third parties.

    Anyone can create what looks like, on the face of it, a seemingly 'successful' business if you can borrow enough. My business could easily dominate the world market in its field if it borrowed £5bn.

  • Comment number 3.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 4.

    I think this will emphasise the difference between micro and macro policies. Closing down hundreds of shops, buying out the competition and soon closing them down or at best merging them into current operations may well be profitable business for the individual but is actually extremely damaging for the country. its like taking council from the banks, big business is something to be avoided

  • Comment number 5.

    Why pay them if you can avoid doing so?

    How many well known BBC faces are actually working "freelance" to minimise those pesky taxes?

  • Comment number 6.

    Let's get real here. Tax evasion makes benefit fraud seem like a drop in the ocean. So why are government so much more interested in benefit fraud?

  • Comment number 7.

    For me the tax issue is a bit of a red herring as avoidance is an age old subject and has been raised lately more as the politics of envy to put off the subject of cuts.
    The cuts coming whatever they say will put the country back into the middle ages as opposed to the mean and fitter economy that Mr Cameron keeps harking on about. And cutting public services will inevitably mean that when it is gone, is gone for good and will never be replaced. I know that nothing is know about the cuts but then again why go on about them for months and months if it is good news?

    It is for me government attempting to squeeze a stone dry. With more people out of work and no jobs being created by the private sector (who would be a supplier to the local or national government to take on the duties when contracts are going down the pan?) where will the extra cash come from? The Lottery?

  • Comment number 8.

    There are some very silly comments in today

    #2 "Anyone can create what looks like, on the face of it, a seemingly 'successful' business if you can borrow enough. My business could easily dominate the world market in its field if it borrowed £5bn"

    No they could not for two reasons: (a) you could not borrow because the banks would not trust you whereas Philip Green has a history of borrowing large amounts and paying them back (b) you would be unable to reduce the running costs and increasing sales sufficiently to generate the cash flow to pay off the debt. Green's expertise is not merely about reviving brands but also about maximising cash flow which sadly many if not most British businesses are poor at.

    #3 "I don't think that any government should take recommendations from a tax evader"

    Have you any evidence that he is a tax evader? I doubt it but if you have give it to HMRC. My understanding is that Philip Green is tax residence in UK and pays all the taxes due on his income. The fact that his wife in not tax residence and does not pay UK tax is not evasion unless you would like to go back to the old rules where all income of a wife is deemed to be her husbands - I know my wife would violently disagree if someone told her that the income she earns is technically not hers but mine

  • Comment number 9.

    In the public sector increased demand is bad, it requires more resources.

    In the private sector increased demand is good, it means more profit.

    In the public sector costs are offset against income, which increases as you become more successful.

    In the private sector costs are offset against income, which are on the decrease regardless of success.

    In the private sector you can divest elements of your business you no longer wish to participate in.

    In the public sector you must always invest in elements of your business if they are in the public interest.

    It will be interesting to see how Green's previous strategies and experiences will apply given the huge difference between operating models in public sector and retail.

    Lets see. Tory rhetoric suggest he will 'transform' the sector ... not just cut funding. With targets being removed of course, it will be difficult to measure the outcomes. How convenient.

  • Comment number 10.

    Green is the "pro" at stabilising and extracting cash from retail brands that are going a bit brown around the edges. Is Public Service stabilizing and cash extraction in any way comparable to retail? Is Public Service in the business of making a profit (as a first priority)?
    Well, I guess we'll find out. I can’t wait for the Green Report.
    Although I agree there's wastage in almost all Publuc Service areas (as there is in almost all retail areas), I don’t agree with The Coalition Government that the Public Service needs to improve efficiencies in the same ways that apply to retail.
    THE DRIVING FORCES FOR GREEN, CAMERON/CLEGG ARE THE SAME: THE IMPERATIVE OF REDUCING THE BURDEN OF DEBT.
    Green’s finances, his colossal amounts of debt, cannot be compared with Cameron/Clegg national debt which must (at the moment) be financed by from tax revenues and/or expensive and getting-more-expensive loans.
    How can a worthwhile report come TOMORROW? How relevant will Green’s suppositions be. We'll know tomorrow how much wasted spending he thinks can be eliminated in the sprawling public sector. If The Coalition Government buys into this, all I can say is green, green, green...I doubt that an experienced Government would proceed in this manner.
    All successful business men have just as succesful corporate lawyers who are good at moving the shell and avoiding tax, What will the Coalition Government learn from the Green Report? How to catch those business people who move the shell and evade their tax?
    I’m really negative about this Green move, most likely because I do not see the need for butcher-like cuts or squashing the average person under an undeserved tax burden.
    The EU is moving swiftly towards either a FTT (Financial tax on banking transactions) or a FAT (Fianncial activity Tax). One or the other (or both) is the answer. This demands that the investment banks that caused the economic problems in the first place, pay an ongoing transaction tax that will
    1. reduce deficits
    2. alleviate the tax burden
    3. allow for proper, slower and effective auditing of the public accounts all while
    4. applying a very minimal tax rate to banking transactions.
    You can mark my words that there are two (2) countries that will fight like cracy to stop one or both of these taxes; these countries are the United States (where the financial accounting is so loose, you can hear the rattle of the derivatives worldwide) and the other is the UK.
    Will Mr. Green mention either tax.
    Hmmmmm...

  • Comment number 11.

    'Why did the government ask Sir Philip Green to look at whether he could find some significant savings in the costs of providing public services?'

    Good Question!

    'Why did the Conservative Party provide the Rt Hon Gordon Brown with 90% of Labour's election campaign rhetoric ... by presenting Lord Ascroft as their main donor and election strategist ... a decision that probably cost them an overall majority in the last general election?

    Both are major strategic errors, I would say ... but at least Green is not a banker (but he might as well be with all that dosh).

    My problem with Green's appointment is that much or indeed all of his money would appear to have been made by him being a major middle man importer of cheap foreign goods and packaging them up for Brits to buy the stuff at inflated prices with our wadge of credit cards. To me, he appears to be one who would rub shoulders with the same ilk that also have major shareholdings in 'credit card companies' and own companies of baliffs and debt collection agencies, behind the scenes.

    Its certainly not a crime to do this ... but if he has been doing this ... it seems near nigh impossible that David Cameron will be able to get him to advise on e.g. cheap foreign imports flooding into the country and the need for import and other tariffs to stimulate the domestic productive economy and create margins and protect British jobs (and in the absence of a British constitution protecting the rights and privileges of UK stakeholders).

    Have a close look at the 'big UK retailers' ... they're the ones stacking up our balance of payments deficit and bringing in £ trillions of pounds of foreign imports ... Yes £'s Trillions over say a five year time period. This is what I say puts and keeps British workers on the dole

    While I'm one who was most relieved to see the back of the last Labour govt ... I'm not convinced that the Coalition govt is properly analysing and recognising Britain's economic problems ... and this means the strong radical action that is needed now ... is either unknown to them or is being ignored by them ... and this means stagnation for the Uk economy.

    You don't tackle and reform the 'vested interests' by appointing a prime example of a member of an elite, billionaire, vested interest, 'Labour tax anomoly and loophole club ...to be the UK government's private sector business advisor.

    I have to say that I am personally very disappointed with his appointment - but it could have been worse - e.g. Ashcroft again or a banker.

    This should help 'Sleepie Johnson' get his feet under the table as Shadow Chancellor.

    Ashcroft even thinks the Conservatives made a mess of their election campaign ... nothing to do with him of course.


  • Comment number 12.

    8. At 3:05pm on 10 Oct 2010, Justin150
    The arrangements of ownership of his UK businesses are perfectly legal but blatantly an arrangement to reduce UK tax liability. Lady Green only became the owner less than 3 months before they emigrated which was a stroke of luck for them , if you think these are coincidental then you do someone of Sir Philips obvious talent a diservice, it is tax planning pure and simple which allows him to run his businesses here and the family to retain the profits of that elsewhere.

    After all if Lady Green is the key person driving the businesses would not the government have asked her to look at this efficiency exercise rather than her husband.

  • Comment number 13.

    I wanted to raise some of my points on another BBC forum but unfortunately it’s now ‘no longer accepting contributions’ (have some moderators already been victims of the cuts, perhaps, as a result of Mr Greens advice?!). I’ve therefore tailored my thoughts to try and remain relevant to RP’s initial blog!

    There are urgent questions that I think need to be asked now regarding all of the UK’s mainstream political parties that wish to gain power. These questions are in direct relation to what the true nature of their relationship will be, now and into the future, with the entity known as the ‘Private’ sector (if and when any of those parties gain political power).
    Here is one of the most important questions that I feel is most relevant as follows: -

    - Who is going to govern who? For example, the financiers/ bankers/ CEO’s control unimaginable quantities of wealth and resources (natural, manmade or human).
    In this society access to wealth equals POWER. Who, therefore, is more powerful the UK government or these others in the Private sector?
    Who is really ‘bossing’ who? For example, did Brown, as Chancellor, ‘boss’ the likes of Goodwin and Applegarth or vice versa?! Does any Chancellor, or ‘regulator’, in modern times have any chance to effectively and successfully regulate these powerful ‘private’ interests? Did Murdoch ‘boss’ Blair or vice versa?!... Did Rothschild interests ‘boss/ manipulate/ control’ Mandelson? What considerable influences do these sorts of interests continue to have upon Dave, Nick and Gideon?
    In return for his ‘advice’ what favours will Billionaire Mr Green be receiving from the coalition government in the near future..?)

    Any answers Robert?

    One other thing:

    'Cameron/Clegg inherited national debt that is rising unsustainably fast because of the huge gap between what the government spends on public services and what it receives from tax revenues.'

    I suggest that the above factor is as a result of the ‘deal’ that developed out of the 'compromise' between Blair/New Labour and the City/ Private sector in 1997. This 'compromise', or pact, broke down when the crisis hit and that's why all the panic has ensued from 'the City' about the 'urgent' need to rein in the public sector.

    A while back, on 25/05/10, I proposed, on another BBC forum, that ‘New Labour’ appears, in hindsight, to have done some kind of a ‘deal’ that goes something like as follows. It would appear that the ‘deal’ they made was done in the realisation that the key/ prominent power brokers, who form the apex of the UK financial/ corporate ruling ‘elite’, had supported Thatcher’s ‘pro-corporate’ neoliberal revolution implicitly and had no intention of going back (perhaps until forced to reconsider by some new catastrophe some time in the future…).

    ‘New’ Labour apparently made a ‘deal with the devil’ of Big Capital? Something like this: -

    Allow ‘the City’ to follow their Neoliberal philosophy as much as it liked as long as it paid enough money back through taxes to provide for some sort of half decent public sector in service to the bulk of the population, providing services and even large amounts of jobs to help to fill the void left when Thatcher’s Tories de-industrialized the UK (in order to allow said Big Capital to seek obscene profit margins by tapping into dubious cheap labour/ resources elsewhere on the globe…Globalization)

    Who, may I ask, bought and paid for ‘New’ Labour? Big money capital

    And who did so in order to allow the continuation of the ‘free’ market, neo-liberal mania started by Thatcher/ Reagan et al in order to let corporate capitalism of its leash? Big money capital

    And who then followed the extremist right wing mantras of the likes of Milton Friedman/ Ayn Rand to drive the global economy off the ledge? Big money financiers/ bankers!

    And who is obviously pulling the strings of the current coalition regime? Big money capital

    Who now wants ‘freedom’ for big capital and ‘discipline, austerity and RESPONSIBILITY’ for the economically deprived, the Public sector and the unemployed? BIG MONEY CAPITAL!!!

  • Comment number 14.

    Forgot to mention is that while tax avoidance is not illegal some of the tax anomolies that do exist are politically corrosive such as the tax exemptions, anomolies and loopholes that Gordon Brown maintained for the very rich in the form of family tax trust/ estate trusts etc which go against the grain of every decent socialist.

    So why do these anomolies, exemptions and loopholes exist? It may be that this is the deal between sucessive governments and the super-rich for maintaining the 'establishment' and in return being suitable for favours and political donations.

    Yes, I know its a bit cynical ... but it probably has an element of truth in it somewhere.

  • Comment number 15.

    Barry White (#7) - complaining about tax avoidance is 'the politics of envy' eh ? I presume you agree that complaining about public sector pension schemes is likewise 'the politics of envy' ? No ? Thought not !

  • Comment number 16.

    I wrote:

    In the public sector costs are offset against income, which increases as you become more successful.

    In the private sector costs are offset against income, which are on the decrease regardless of success.

    ---------------------------------

    Of course, I mean't:

    In the private sector costs are offset against income, which increases as you become more successful.

    In the public sector costs are offset against income, which are on the decrease regardless of success.

  • Comment number 17.

    No:11
    Why are you suggesting the cheap imports are putting and keeping British workers on the dome? Are you yourself not part of the problem, why because when you go to buy your underwear, do you buy British made or made in China?
    And you television, where was that made and your car and where do you go for holidays?

  • Comment number 18.

    15
    Barry White (#7) - complaining about tax avoidance is 'the politics of envy' eh ? I presume you agree that complaining about public sector pension schemes is likewise 'the politics of envy' ? No ? Thought not !

    Pensions have been hard fought for those who have worked in public service. Most of public servants are low paid and have hard jobs. It seems to me that it is the ones who are in the press are the civil servants based in that there London who have the high pay or so it seems to me. Is this a case of the press repeating the line from the press offices of both the conservatives and the liberal democrats without checking?

    And no. I am not in the service of the government or public service just a freelancer attempting to make a living with most of my clients winding up or not spending on services it is more than a difficult time.

  • Comment number 19.

    The problem with the public sector is lack of incentive which makes for inefficient use of resources. This is justified by the "we have to do it" mantra.
    The problem with the private sector is too much reliance on bonuses, thereby encouraging short termism.
    Either way, it's down to poor management and we don't need Philip Green to tell us that.
    Health and safety has encouraged too little risk taking, too much reliance on anyone but oneself to overcome problems, and the blame culture means everyone is too busy covering their own backs to be productive.

  • Comment number 20.

    This article fails to mention the biggest portion of government spending is the wages of the millions that are employed by the state. Any businessman will know that to reduce employee numbers is the first priority. As to Sir Philip Green minimizing his tax liability surely that is what every citizen of this overtaxed country would do in his position? I certainly avoid paying as much tax as possible as I do not want MY money wasted by politicians on public spending.

  • Comment number 21.

    The private sector is effective at cutting non-productive staff and reducing costs. Given that public sector was grown significantly during the Labour years with minimal (if any) improvement in services provided, it could do with a dose of the same treatment.

    Labour won't do it as they're in the unions' pockets and the huge centres have been created in their northern Labour strongholds. Hopefully the coalition will slash the waste and increase productivity so what we do pay in taxes is value for money, the deficit is cut and any surplus directed at projects where real jobs can be created which generate economic growth.

  • Comment number 22.

    First of all I have to say that I respect Phil Green for the way he makes his businesses work. He makes every pound spent work for its living. What is more he puts a lot of those pounds back into his business and thus creates jobs and develops expertise. Men like him who put their money where their mouth is are always worth a hearing. In this he is head and shoulders above all the corporate retailers.

    However, how will this play in the public sector? The mandarins are going to look down their nose at him as one such as he could never be one of them, make a few polite noises to placate Cameron et al but go on much as before.

    With regard to tax, all governments in recent decades have sought to maximise their return whilst allowing the remainder of the profits to leave the country. This seems to be the pay off; so long as some tax is paid the real wealth can go offshore. It is money made here that is going offshore which is the problem, as it is never ever going to be spent or invested and thus to trickle down to the less well off in the UK. This removes all the arguments about not taxing the rich at 98% for fear they go elsewhere as the money is going elsewhere anyway.

    We have to find a way to get the rich to invest their profits here. For that they will need a return but with interest rates at next to nothing and more QE likely, there is no hope for any such investment.

  • Comment number 23.

    @ 5. At 2:28pm on 10 Oct 2010, not_Shakespeare wrote:


    > How many well known BBC faces are actually working "freelance" to
    > minimise those pesky taxes?


    One (at least) set up a studio in Manx, so he could beam his BBC radio
    music show to us from the tax haven! The BBC must hang its head in shame.

  • Comment number 24.

    Much of the "success" of business strategies like Green's has involved dumping costs outside the company:

    - in-service training replaced by further education courses
    - "jobs-for-life" replaced by short contracts underpinned by welfare
    - tax credits to subsidise uneconomic labour rates
    - manufacturing moved overseas, UK workers now long-term unemployed

    Mostly, those costs have been dumped on the taxpayer. Where is the taxpayer supposed to dump the costs, if he tries to follow this approach in the public sector?

  • Comment number 25.

    17. At 3:58pm on 10 Oct 2010, 10bobnote wrote:

    No:11
    Why are you suggesting the cheap imports are putting and keeping British workers on the dome?
    ...........................
    A) Yes ... they have put and do keep British workers on the doLe
    ............................................................
    Are you yourself not part of the problem, why because when you go to buy your underwear, do you buy British made or made in China?
    .........................................
    A) Yes ... and I have been conditioned by consumerism and British government policies and import practices i.e. 'to be part of the problem' owing to the decline in the UK manufacturing/industrial/productive sector ... and when did you last see any British made underwear.
    To remove us all from being part of the problem requires a paradign shift in our thinking, behaviour, spending choices, govt tax, industrial and other policies and our UK political constitution.
    ..................................
    And you television, where was that made and your car and where do you go for holidays?
    .....................................
    A) Yes ... You're good, really good ... you're making my point for me ... my TV was made in Japan and I don't holiday in China ... as I can't afford it.

  • Comment number 26.

    20 - Keith
    So you are happy to live here in the UK and enjoy the benefits of life here but, ideally, you don't really wish to contribute substantially financially towards the maintenance of this society?
    Of course I'm sure there's lots of other people who survive on the income from a modest weekly/ monthly wage, who are taxed at source, and I'm sure they'd love to be able use an accountant to help them to be able to manipulate the rules and then choose how much tax they pay! Of course there are numerous significant consequences should that become a reality aren't there? Would you still want to live in the UK if it was a place no longer maintained as it's been up to now, eg: with help from the tax system.

    Keith you sound like you are a Libertarian. Would you say that accurately describes you? If the UK has politicians that spend public money in such a disagreeable way to you then is there somewhere else (another country) where public spending is carried out more to your satisfaction? If so could you share your knowledge about that place? Or would you prefer, perhaps, to abolish 'the state' completely and encourage some kind of 'free for all'?

  • Comment number 27.

    What could Sir Philip Green do to help reduce the deficit?
    Return his tax status to the uk and repay all past taxes that would become due He could then carry on paying his Tax over here. After all he is advising the Government of the UK not Monarco.

  • Comment number 28.

    Just a little anecdote about art in government offices. The primary school where I taught decided to do some paintings using really good quality materials on large canvases. Our local MP who was a Treasury minister saw photos of some of these and asked if they could be hung in her office. I went up to London with some of the children to deliver the these paintings. (They were there for about a year as we needed them to celebrate the children's work in our school hall.)

    Inside the Treasury the corridors had many pictures of living artists (the pictures were accessible and the children found them interesting). The civil servant laughed and told us you could tell which party was in power by the art that was displayed on the corridor walls. Art was needed on the walls to soften the long corridors, but I wonder whether the pictures have been changed to reflect the tastes of the new chancellor and his team, or whether the need to save money means that they will live with the taste of the previous ministers.

  • Comment number 29.

    #20 Keith stated:

    As to Sir Philip Green minimizing his tax liability surely that is what every citizen of this overtaxed country would do in his position? I certainly avoid paying as much tax as possible as I do not want MY money wasted by politicians on public spending.
    -----------------------------------------------------------------------
    So it seems your happy for Green and yourself to have roads, hospitals,nurses, police officers,fireman all paid for by other taxpayers, for "YOUR" benefit.If this is your concept of a cilvil society,perhaps you can take your money somewhere else. Preferably where you can can "pay" the full cost yourself.

  • Comment number 30.

    26. At 5:07pm on 10 Oct 2010, Politicalgoose2 wrote:
    20 - Keith
    "So you are happy to live here in the UK and enjoy the benefits of life here but, ideally, you don't really wish to contribute substantially financially towards the maintenance of this society?"

    Do you have an ISA Politicalgoose2?

  • Comment number 31.

    I remember back along when a chap called Dr Beeching who i understand was from the private sector was brought in to "report" where savings might be made on the railways and look what happened there... Would it be possible that they bring these people in to divert the intention away from from the fact that they were intending on making cetain cuts anyway. When the "report" finally comes in from a person such as Sir Philip Green it will then have a more authentic "it was not our idea" feel.

  • Comment number 32.

    Parasite spongers advising the government?

    Disgusting.

    And transparent.

  • Comment number 33.

    17. At 3:58pm on 10 Oct 2010, 10bobnote wrote:

    No:11
    Why are you suggesting the cheap imports are putting and keeping British workers on the dome? Are you yourself not part of the problem, why because when you go to buy your underwear, do you buy British made or made in China?
    And you television, where was that made and your car and where do you go for holidays?

    Can you still buy made in the UK underwear? I doubt it.

  • Comment number 34.

    Frogmarch Sir Philip Green and his missus to the airport, slap a 100% wealth tax on them, rip up their passports, strip them of their titles and kick them out.

  • Comment number 35.

    20. At 4:25pm on 10 Oct 2010, Keith wrote:
    Any businessman will know that to reduce employee numbers is the first priority.


    Wrong. That's all a *bean counter* understands.

    A *businessman* is entirely different.

    Easy mistake to make if you don't know any real business people. It relates to *creativity*.

  • Comment number 36.

    "Perhaps the enlistment of the likes of Sir Philip Green to advise on remaking the public sector will persuade business leaders that paying taxes represents reasonable value for money. We'll see."


    That's the whole problem. For the last 13 years, money has been squandered on various schemes, pet projects and quangos. Anyone who wants to pay more tax knows where to send the cheque.


  • Comment number 37.

    30
    No I don't have an ISA! Why are you going to try to sell me one Spike? It's no use anyway as I'm not interested. Or are you trying to 'catch me out' and, perhaps, suggest I may be a hypocrite?
    It's amazing how divisive an issue tax is in this country. I can see why many are so critical of it but what's the alternative if you want some level of civilisation to live in? It may only be limited for sure but we do, despite all the barriers and problems, have some encouraging levels of civilisation in the life of this country believe me!
    What I object most to is that the current situation means that, instead of being invested in, for example, Hospitals, Schools, Transport, plus Doctors, Nurses, Teachers, Firemen, Libraries, and many other essential public services now all our tax money is, apparently, needed elsewhere to satisfy the desires of the Bond markets (who Dave and Gideon are so keen to satisfy) and to pay the bailed out Bankers for their much deserved Bonuses..! Bailing out the banks has turned tax payers into debt slaves!

    I can see why so many are feeling so critical about tax but if we don't COLLECTIVELY maintain and develop our community and contribute appropriately then this place will be no place worth living in will it? What do you suggest as an alternative? Shall we all ferret our incomes into ISA's instead? What will that achieve? We'd then be giving banks even more money that's not theirs to speculate with and squander surely as ISA's too are involved/ invested with the stock market aren't they?
    Why do we always seem to allow the Bankers, in the private sector (usually!), to waste 'other people's money'? People are so much more critical when politicians 'waste' public money aren't they? What's so different about when bankers and financiers in the private sector do EXACTLY the same thing by wasting Trillions of Pounds/ Dollars?

  • Comment number 38.

    Ummm. The public sector is designed for inefficiency because its objective is to employ enough people in a post-industrial society, doing (hopefully) vaguely useful things. So increasing its efficiency is not hard, but irrelevant.

    If you need to reduce costs, it's a doddle - just unwind all the projects & jobs created by Labour in their 2-year splurge up to 2007. Oh, and freeze public sector pay, as should have been done in 2007 had politics not intervened.

  • Comment number 39.

    Management mantra.
    Obviously successful Philip does not get his hands dirty at the coal face.
    No. He gets them dirty in the boardroom. He will have the knack of knowing who will get the best (for him) out of others.
    He will know who to surround himself with.
    Might even work for a while.
    Then he will become surrounded by yes men with no independent thought.

  • Comment number 40.

    36. At 6:24pm on 10 Oct 2010, Dr_Doom wrote:
    For the last 13 years, money has been squandered on various schemes, pet projects and quangos.


    Always.

    Big Society?

  • Comment number 41.

    Everyone wants to pay as little tax as possible. What a bunch of hypocritical posts today.

    A good idea is a good idea whoever proposes it. Mr Green did not make his money by spending one penny more that he had to. It seems that a different principle applies when it is somebody else's money? There must be many special interests within the public sector who are extremely concerned that a torch is going to be shone on how they squander hard earned taxpayer cash.

    Some examples outlined in today's Times are obvious savings to anyone who has any real experience of running a private company rather than a parasite who has spent his whole career living off others i.e. different departments purchasing the same goods from the same suppliers for different prices.

    No wonder the zombies are moaning. Their concern is for themselves and their cosy relationships.

    More power to your elbow Mr Green. Let them have it.

  • Comment number 42.

    Robert I read your book and you explain very clearly how Philip Green built his empire and contrary to what someone above said, (yes he has an aptitude in clothing sales) but if you are in the club with the banks falling over themselves to lend you money as they were making great fees for themselves, then yes any person with a modicum of common sense could have done what he did.

    First he sold some of the building and rented them back,cut wages and conditions, not forgetting the pension funds, much like the owners on Man U Liverpool et al did , extract a lot of the value load it with debt, stop buying from local suppliers buy cheap from abroad.

    So who does that benefit, shareholders ? bankers, Phil Green, yes
    does it help the economy ? no does it help with tax receipts ? no does it help with balance of payments? no .

    Some mention above the benefit of staying in this country so suck it up and pay up

    well i pay up I pay national insurance,I pay income tax on my self employment I pay tax on my fuel, food, energy, in fact everything I buy I pay tax, I am paying my daughter through university not much left at the end of the month,

    But this is the difference, the club which includes the politicians the greens, the oligarchs, the city boys god bless them, will be all right the game is fixed for them, let the plebs pay for everything, after all those in the club deserve it they create so much (yeah right)

    This isnt about the tories or labour, they are both the same really the game hasnt changed much over the past few decades apart from the rich have got richer and the poorer folk pay more

  • Comment number 43.

    41. At 6:40pm on 10 Oct 2010, truths33k3r wrote:
    Everyone wants to pay as little tax as possible...


    Try moving to Greece, they seem to be more amenable to your views.

  • Comment number 44.

    34. At 6:03pm on 10 Oct 2010, PacketRat wrote:

    Agreed.

  • Comment number 45.

    Evening Robert,
    well I think it's jolly decent of Mr Green to spare his time to help the Government out, after all he is a busy man!
    I'm sure he will tell the Government how it is and what they need to do BUT most outside reports are shelved as they are not politically acceptable.
    And therein lies the rub. There are no quick fixes here. Whatever the Government does will cost the taxpayer BILLIONS, not just in made-up pension contributions but also in Redundancy payments (six years salary).
    Contrary to popular belief that we must reduce our spending on Public services, I would suggest that sacking public employees, however politically expedient will not save £1 in ongoing costs for the next five years ergo don't do it.
    http://www.bbc.co.uk/news/uk-politics-11496520

  • Comment number 46.

    I'm all for cuts and efficiency savings. You get people to work harder and pay them as little as you can. Of course you make people unemployed too, that is the way to make money. Might work in business when the tax payer has to pick up the benefits bill for Mr Green's efficiency.

    Is his business model based on selling British made goods or cheap foreign imports. It might work for his 'success'.

    I am sure that he will spot a whole load of inefficiencies, I'm sure that lots of people could do exactly the same and they don't avoid tax.

  • Comment number 47.

    " Let's get real here. Tax evasion makes benefit fraud seem like a drop in the ocean. So why are government so much more interested in benefit fraud? "

    The poor can't defend themselves. (Not to mention feathering their own beds for when they retire)

    Asking people who lied and cheated the system to do something for the good of the country and not themselves is an idle task. They'll be seen to solve issues people voted them in for, but in reality, they just want to prolong their time in power to increase power/wealth.

    Meaning making real decisions and not blaming someone else for the problems are unlikely to happen. I hardly think Labour were the sole cause of the crisis (like others make out), but certainly have a hand in the dire recovery.

    Waiting for the next election now, maybe we'll get a party worth a vote.

  • Comment number 48.

    47. At 8:04pm on 10 Oct 2010, Rorb wrote:
    Waiting for the next election now, maybe we'll get a party worth a vote.
    ------------------------------------------------------
    Errr, No.

  • Comment number 49.

    millions, billions, trillions....its difficult to conceptualise the problems the UK faces:

    * what would you say to a person earning £25,000, with credit card debts of £17,835, and who is adding £2,850 to the card each year?

    * Oh, and by the way, if he doesn’t reduce the rate at which he is adding to the credit card, the interest rate on the card will go up!

    well, i think you'll say: the games's up! you need to stop adding to the credit card. there is no debate.

  • Comment number 50.

    As well as evading hundreds of millions of pounds in tax, mr green
    berates the literacy level of his recent school leaving, minimum wage employeees ; and compains about the standards of education in this country. Unfortunately his own educational standards and lack of basic decency and intelligence prevents him from joining up the dots in this area and smelling the coffee. This inability to see the big picture , and to simply care about his own ( bulging ) bank account renders him the perfect candidate for the tories to consult about how to cut other peoples support networks ( waste to the tories ).

  • Comment number 51.

    RP: 'There is however one cost of doing business, tax, that Green and most private-sector enterprises strive to cut - and where their effectiveness in doing so can be seen as running counter to the interests of the public sector.'
    ----------------------------------------------------------------------
    There is a big difference, Robert, between personal income tax and the taxes that handicap or kill businesses.

    Income and capital gains tax, whether individual or corporate, are taxes on generated wealth.

    Unfortunately, in the UK we have heaped up taxes on the front end of wealth creation. In the case of business there are Business Rates, National Insurance and transport taxes together with additional taxes on utilities.

    I believe business would be generating more jobs and creating more wealth and helping to avoid boom & bust, if these handicaps were removed and the revenues normally raised by these taxes switched to Corporation and Capital Gains Tax.

  • Comment number 52.

    41. At 6:40pm on 10 Oct 2010, truths33k3r wrote:
    Everyone wants to pay as little tax as possible. What a bunch of hypocritical posts today.

    -----------------------------------------------------------------
    Actually, the Inland Revenue want you to pay as little tax as possible. Only that which the rules require. No more. No less.

    How much that tax is and where it is levied is down to the Chancellor of the Exchequer. Not the taxpayer. Not the Inland Revenue.

    We, indirectly (very indirectly) choose who will be Chancellor of the Exchequer.

    Hey! Let's be careful out there today.

    And at the next General Election.

  • Comment number 53.

    >Perhaps the enlistment of the likes of Sir Philip Green to advise on
    >remaking the public sector will persuade business leaders that paying
    >taxes represents reasonable value for money....

    Absolutely, dear boy, Absolutely. After I've had my 15th G&T at the club, I could just about envisage that.

    Funny, these know-everything advisors from industry and the private sector. For example Lord Brown, ex of BP. Brown spent most of his time at the head of BP contracting out, de-layering, flattening management, cost cutting and slashing in what is essentially a cash cow industry. The most obvious result of all this is the recent disaster off the coast of the US. Where the first thing that BP did was point the finger at its subcontractors. The path to come for this new government, and no real acceptance of responsibility when its cost-cutting chickens come home to roost? Or when the electorate extract their vengeance first?

  • Comment number 54.

    Mr Peston wrote:
    'There is logic, however, to seeking his counsel.'

    No there isn't.

    If having been elected, then your counsel should be those that have elected you.

    For if counsel is not sought there, then there is no point in your election.

    Who represents who.

  • Comment number 55.

    " Perhaps the enlistment of the likes of Sir Philip Green to advise on remaking the public sector will persuade business leaders that paying taxes represents reasonable value for money. We'll see."




    -------------------------------------------------------------------------------


    Jokes like that should have a public health warning!


    Then I could have wrapped myself with multiple layers of cling film and saved my sides from splitting .

    I shall sue the BBC next time.

  • Comment number 56.

    Personally i think that the cuts to public services have been along time coming working for a private contractor directly providing a service to a local authority i have first hand experience of the sheer incompetence of public sector workers.I find it frightening at times what these people actually get away with in terms of wasting taxpayers money which at times is bordering on criminal.Particularly when they are moaning about their pay freezes of which i am now into my third year of sorry but no sympathy here welcome to the real world.

    The biggest problem is that these employees are almost bomb proof when it comes to disciplinaries or removal from their posts due to human rights,litigation and good old fashioned accountabilty you only have to look at a certain Ms Sharon Shoesmith to emphasise this point. Unfortunately we have tied this country up in so much red tape we are slowly choking to death

    Now i am not saying that all public services are the same but i would hazard a guess that a significant percentage are. The worst thing about this is it's taken a bunch of bankers to drive the country to the brink of meltdown to highlight this.

    Just one more gripe a certain Lloyds bank executive (Truett Tate) has been quoted saying that the bank bailout is a good thing, saying many people made decisions that LOL were well informed doing the best they could (i'm sure it was the best for their own gains)but mistakes were made.

    However he goes on to say whilst sipping champagne that it's only fair they are given a second chance to make things right (wondering if that second chance will be afforded to all the people defaulting on mortgages,loans and credit cards what do you think)and that us the good ol' taxpayer have made an investment that is making money.

    Given that Lloyds half year forecast for 2010 stands at 1.6 billion profit purely because of our bailout throw into that the figures that have come from the bailout to HBOS and RBS stands at 470 billion with the total cost looking to top 1.5trillion between all three, by my reckoning (apologies if i'm wrong i'm not an economist nor an accountant) we should break even in 3010 mind you that's not including interest anyone know the current APR on 1.5 trillion tell you what could the last person to leave the room turn out the lights.

  • Comment number 57.

    What a bunch of moaners on today.

    I challenged anyone to show that Philip Green had evaded taxes and not one of you can do it.

    The best you can complain about is that he transferred ownership of shares to his wife. Leaving aside a lot of businesses operate that way. What you are actually advocating is that if a man transfers money or assets to his wife (and presumeably vice versa) that should be taxable. Now that is a perfectly logical position to have as long as you follow through. So if a man has a non working wife and gives her housekeeping money are you agreeing to that housekeeping money being taxed as her income? Or are you just objecting about the value of shares Philip Green transferred to his wife - so what you are saying is that it is fine for a husband to give his wife assets or income on a tax free basis but as long as it is not too much. Would you like to tell us how much is too much? £50 per week maybe?

    ================================

    #27 "Return his tax status to the uk and repay all past taxes that would become due He could then carry on paying his Tax over here"

    Please try and keep up. Philip Green is tax resident in the UK and does pay all his taxes here. It is his wife who has a permanent place of residence in Monaco.

    #34 "Frogmarch Sir Philip Green and his missus to the airport, slap a 100% wealth tax on them, rip up their passports, strip them of their titles and kick them out."

    AS his Missus lives in Monaco that could be a bit tricky. But at least we know where you stand - tell me when you are in power do you plan to do the same to everyone else who obeys the law but does it in a way you do not like ? Sounds like a tyrannical dictatorship to me

  • Comment number 58.

    Following that rant got a bit side tracked but the point is this it doesn't take some multi-millionaire tax-evading middle man to come up with a more efficient public sector let's face it Mickey Mouse could probably come up with a more sustainable,cost effective business model than the current one.

  • Comment number 59.

    Like most big businessmen Sir Phillip is no doubt an expert at using loopholes for tax avoidance. Closing some of these loopholes would probably help the public finances much more than economising on paper clips or even sacking junior civil servants.

    Why not ask Sir Phillip to look at some of the loopholes used by the "undeserving rich"? Closing these is potentially much more beneficial than taking benefits away from the "undeserving poor", because obviously very much more can be taken from the rich than from the poor. As a poacher turned gamekeeper Sir Phillip might be rather good at this.

  • Comment number 60.

    Whatever Green advises, you can be sure it will involve massively reducing the number of people employed - either directly in the public sector - or in the private sector suppliers - probably both.

    It will also involve driving down the wages of those directly working for or involved in supplying the Government - people who are already quite low paid and about to have their pensions cut drastically too.

    When Tony Blair put the "new" into New Labour, many of us hoped that at the very least we would see the end of class warfare - that a progressive government willing to work with the prvate sector and the City would gradually erode class distinctions and lead to the emergence of a meritocracy at the very least, with ramps to help those less fortunate to gain entry to better paid jobs and a more equal society. I stress the words "VERY LEAST" here...

    With every pronouncement from child benefit through to student fees and now bringing in a notorious "billionaire commuter " as you call him, to advise on how to sweat the public sector harder, I'm afraid all I can see is class war writ large - and not even a traditional British class war between the old working and ruling classes.

    The last Conservative government broke the organised industrial labour movement through the miners' strike and other disputes - the focus is now either side of the old working class - on one hand what Marx called the "lumpen proletariat" - the poor outside the working class - and very surprisingly the middle class, in the shape of those who own property, have pensions and send their kids to university.

    Indeed, the public sector is the last bastion of organised labour, but as it doesn't work to produce profits for private businesses, its ability to take effective industrial action is fundamentally limited as no company is losing money if it goes on strike - indeed government is saving money for every day of dispute - and the public are more alientated by the loss of their services with every strike.

    You only have to look at the public sector and those in the private sector supplying the public sector, who are likely to suffer from the spending cuts. These people are going to include a lot of middle class people, or those who aspire to be so.

    The ConDems need to understand the degree to which they are playing with fire here. Take on the NUM - they went on strike - they picketed, they demonstrated - that's the way that organised labour did business - yes there may have been hotheads who went too far, but the union was very well aware of the court of public opinion and wanted to win their confrontation through a combination of industrial muscle and public support - it was focused and directed - there was some discipline there - that's not true today in un-unionised, anarachic, contract labour Britain.

    Where can we go to find a parallel situation to what the middle class currently face? I'd point to French farmers or lorry drivers as the most applicable groups - people who have become so embittered by their experience of being at the sharp end of government policy that they become detached from politics and coalesce around being a dissenting group - maybe the Japanese "salariamen" protesting at losing their jobs, attempting to appeal to the core values of Japanese corporatist politiics? Who knows - the Stop the War Movement mobilised over 1,000,000 - yes political parties, religious and community groups organised for it, but a hell of a lot of ordinary people turned out of their own volition.

    What of the lumpen proletariat? Without any focus to organise, the way that this sector of society react to economic pressure is crime and civil unrest which finds its focus around a community of interest.

    In the past this has often been racial - Toxteth, Brixton, Southall - but it was also been sparked by less defined groups with a sense of complete injustice - think poll tax riots, but the fuel tax protesters are also a good example of a group of people driven beyond what they perceive as their sustainable limits - the Countryside Alliance is another group that springs to mind.

    I'm not advocating unrest - I'm not a supporter of any of these groups and I'm not proposing direct action. What I am saying is that it seems to me that all the conditions are coming right for major dissent: it seems to me that there seem to be a hell of a lot of potential flash points being created that could spark the same level of unrest as were seen in the 1980s inner city riots, or the Poll Tax riots which drove the Tories into ditching Margaret Thatcher.

    The other factor here is the apparent alientation of the security forces - the idea that 40,000 police can be made redundant and that the Armed Forces can be heavily cut - both elements were critical to the Thatcher Government - yet if we are to believe the way the cuts are being trailed, Cameron & Clegg think they can make big cuts in Defence & Home Affairs spending.

    It always pays to put yourself in the position of oyur potential enemy - made redundant, pension slashed, services cut, unable to pay for you kids to go to university, your house plummeting in value whilst your cost of living rises steeply and your community falls apart.

    LibDem MPs already face the wholesale ditching election pledges - will they still stand firm when they come under serious pressure from the grassroots? Unlike the Tories whose supporters egg them on to even greater cuts in spending, the LibDem parliamentary party are creatures of middle class dissent politics and bleeding heart "do-gooding".

    I find it hard to believe once the cuts package is out there and the reality of Tory politics in the shape of Green's report are clear that the pressure on individual LibDem MPs won't rapidly become too much to take. If this happens against a backdrop of the government losing effective control of public order, the damage to its credibility will be total and its ideas and politics will be consigned to another generation in the political wilderness, just as it was after Thatcher & Major.

    If LibDem MPs are seen to stand with the Conservatives in the teeth of this level of dissent, as the Party of the centre ground protest voter, they face being decimated at the next election - I think coats will be turned quite rapidly to oppose the government and be on the dissenting side.

  • Comment number 61.

    #54. Dempster wrote:

    "Mr Peston wrote:
    'There is logic, however, to seeking his counsel.'

    No there isn't."

    I agree, but as government quite often presents itself as asking for advice, it is interesting and curious who it chooses to ask and why.

    But the one certainty is that no Government will take any advice it does not like! Advice to Government is a myth.

    Government is seeking one of two things when it asks for advice first to persuade the people that what it already wants to do is the proper thing to do and second to persuade the giver of the advice that what the government already wants to do is the right thing to do.

    On the basis of the first reason: this government are amateurs and new to the job of conning the public and are not very good at it so they did not really understand the downside of picking Mr Green would be that his agreement to back what they already want to do would not be persuasive of the public.

    On the second reason: There is no way a hard nosed experienced businessman will do anything that hurts his business or his own pocket, so on that basis the government again picked the wrong person.

    Overall the government chose the wrong man to achieve its aims, but that is only to be expected as they are amateurs and new to the job! I n three or four years they may get better at choosing advisers, but they will never ever take advice, particularly wise council from people with practical experience if this goes contrary to they latest hair brained scheme, and all government schemes are hair-brained and amateur as the people we select to run things are professional politicians who have never, in the main, run anything in their lives.

    You or I or any man in the street, would make a better fist of doing things than they will!

    What are our permanent government doing about it? That is the real question. Are the Civil Service really providing the service to the Nation that we have a right to expect? They should have the experience shouldn't they? So why didn't they see the bubble and crash coming? And as we know they didn't - why are the same people still running things?

  • Comment number 62.

    The banks fell over and made life difficult for everyone.
    Obama responded by hiring bankers to his administration, like Geithner and Summers.

    Cameron responds by hiring a rich shopkeeper (and no Mr Green, you can't even stock half-decent knickers)!

    Pattern of behaviour here?




  • Comment number 63.

    The jealousy on here is absolutely astonishing to me.

    Every time I vist my local pub I listen to the self employed builders, plumbers etc explain, sorry boast, about how they make every attempt to pay the minimum amount of tax possible and so far I have yet to see a single fellow drinker challenge one of them - many often even congratulate them for "sticking it to the man".

    So, why is it that people thinks that Mr.Green is somehow different? As far as we're all aware he follows the tax laws set by the country and so any criticism on here is just related to the scale of his attempts to minimise tax in the same was as the bloke down the local.

    My issue with his role is, as Mr.Peston highlights, that his takeover speciality may not be directly transferable to the public sector. But IF he can help, he has my support 100%.

    I wish we would all try to support those trying to help rather than simply criticising out of jealousy or dogmatic adherence to (or more often against) a political party.










  • Comment number 64.

    "imdividuals" is there no spell checker?

  • Comment number 65.

    Why did the government ask Sir Philip Green to look at whether he could find some significant savings in the costs of providing public services?

    Robert The answer is the they didn't. They asked soon to be Lord Stephen Green who will be appointed in January as the Trade & Investment minister at BIS. The appointment is ironic as he is on the board of HSBC which is one of the banks that needed proping up by the taxpayer. surely no banker should go anywhere near government.

    This is an unwise appointment.

  • Comment number 66.

    @Justin150

    The fact that his wife in not tax residence and does not pay UK tax is not evasion unless you would like to go back to the old rules where all income of a wife is deemed to be her husband

    You obviously haven't heard about the changes to Child Benefit. This is paid to my wife, I cannot interfere with that process but it is my tax code that is changed to reclaim it. You are right to make the point that he isn't a tax evader. That would be unlawful. He is though a successful tax avoider - that is legal and entirely rational. Let's see what he comes up with but let's also remember that the Public Sector is not Arcadia. It is several hundred times larger, several thousand times more complex, you don't get to choose your customers - indeed you are often forced to spend huge sums dealing with some of them - Post Office Card Account anyone?

    If all he has found is a few too many blackberries and some Police Uniforms that are too expensive then don't hold your breath for the billions that will be saved. If he says there is spare office accommodation then great - tell us something we don't know! We know it is there - most organisations are shedding staff - of course there is empty space. That doesn't mean anyone wants to occupy it or that leases allow for that.

  • Comment number 67.

    6# Maimonides ... and add avoidance to tax evasion, and our debts are almost paid - while improve the Inland Revenue (who admit to not collecting £42bn of payable taxes last year) and the debt is almost gone.

    Several comments about cuts and as opposed to taxes seem to ignore the "black whole" that has been allowed to form in the tax system. Why not introduce a banking style "bonus system" whereby the Revenue is payed by results - the resuction in salaries should atleast contribute something to the deficit reduction.

    #8 Justin150 ... avoidance/evasion it all amounts to not paying taxes that are due. While your comments are contradictory. Mr Green can borrow money you say because he has companies that he turns around, but you also point out that Mrs Green owns them. So surely it is Mrs Green who is borrowing the money and, therefore, likely, being based in Monaco, be as much an unproved liability as #2 the_fatcat.

    It is time that the Inland Revenue undertook the task ii is meant to undertake - ensuring that all monies earnt in Britain are duly taxed at appropriate rates. For example Al Fahed owner of Harrods had an agreement with the Revenue to pay £250,000 annually in taxes, because the Revenue found his tax to complex to calculate. Yet any individual paying tax on commencing employment under the PAYE scheme is taxed on emergency codes until they income is proved. Liability should be on the individual with no exception - too many take tax avoidance as a privilege of higher salaries rather than tax payment as a duty. The role of the Inland Revenue has been a hinderance to necessary change in Britain for too long.

  • Comment number 68.

    As everyone including Robert bekieves the owner of BHS and his other retail innterest is going to be the new Trade & Investment minister I suggest you refer to number 10 http://www.number10.gov.uk/news/latest-news/2010/09/trade-and-investment-minister-appointed-54880 when people write bloggs they should get their facts right.

  • Comment number 69.

    #63 Down_with_Dogma ... a very dogmatic view.

    The disparity in society is a reflection of experience (read-up on the theory of hegonomy) those who have believe in their entitlement, while those who are deprived can only see their lack.

    When the "coalition" through their many percewived actions/speeches indicate that they see their role as "financiers" rather than the historical function of acting on behalf of those in society least able to influence. Dogma is always based on a particular perspective - wars throughout history have been mainly concerned with differing perspectives on similar ideologies (Christians of one church or another, belivers of the same God with a different prophet). Why denegrate those who view a topic from a personal experience you could never possibly comprehend - as it is yours and nobody elses.

  • Comment number 70.

    I rarely read the comments sections here any more: it's just too depressing. As Churchill said, "the best argument against democracy is a five-minute conversation with the average voter". Why is it that the those with the most strident opinions seem to have a such a poor grip on the English language? At least half of the comments here are completely incoherent.

    So far as the topic is concerned, I can't remember whether similar questions were asked that other underwear salesman, Sir Derek Rayner of M&S, when he was brought in by Margaret Thatcher. As it turned out he managed quite well, not least because he drew on talent from within the civil service (mostly young Oxbridge fast streamers) and set them loose on the problem rather than pretending to be an expert in all things related to government. If Green has an ounce of sense he'll have done something similar rather than attempted to do it all himself. We'll find out on Tuesday.

  • Comment number 71.

    I've just done re-reading and watching the vids from a year ago.

    Nothing has changed, it's the same old and it looks like things are gonna get a lot worse.

    What we are going to experience is not so much an economic crash as a currency crash; the only question is - which country's currency will disintegrate first?

    The UK pound, the U.S. Dollar and the Euro - none of these are backed by anything substantial.

    These currencies and the associated economies have been artificially kept afloat by devious banking and trading practices, such practices being held has criminal if you or I used them in our businesses.

    The banks have, for years, been lending money they don't have and most of the money which we think is in banks doesn't even exist.

    When, as all ponzi systems do, this criminal system collapses, the banks, considered to be necessary (they ain't) are bailed out with our taxes and carry on business as usual and now what? Another bail-out in the form of increasing taxes and reducing services so that we the people suffer hardship while the banking & corporate fraternities continue to live their extravagant lifestyles?

    This is of course, supported successive governments which care not about we, the people.

    One does not get out of debt by borrowing. That first rule of budgeting is totally ignored.

    To get out of debt, yes, one saves (how many £billions wasted on illegal invasions? Absolute waste of resources)but one also produces something of value which can be sold at a profit.

    Which brings me to the GDP. This GDP figure is a complete lie and always has been. Today it is an even bigger lie.

    If I cut your hair for £10 and you cut my toenails for £10 has anything of value been produced? None at all, yet we have a GDP of £20.

    The reason this is worse today is because the service industry has vastly increased while production has all but vanished.

    Watch gold prices. Look at what they were a year ago compared with what they are today. The value of the gold has not changed. These vastly increased prices demonstrates how the value of the money had reduced and ...

    ... the value of the money has reduced every year and this is reflected in increased prices: we need more of the stuff to buy things which have not changed in value at all.

    This being so, if the money continues to become worth less and less each year, then as no-one is doing anything to halt this phenomenon, the money will, inevitably, become worthless.

    Mr Preston - why have you not pointed out this most obvious state of affairs, please?

  • Comment number 72.

    @71

    Wasn't it MrsT who said we won't get rich by taking in each other's washing? How right she was!

  • Comment number 73.

    They will get on well together. Just like the Guardian and its little tax dodges, MPs have their own little tax haven law.

    Tucked away at the end of a pensions bill(2003) is a clause that exempts MPs from tax on their expenses (we now know why) and they pay offs. Something that others don't get.

    One law for them, one for the rest.

    At least Green doesn't need a law that other's can't use. MPs just vote themselves the perk.

    We on the other hand, pay for MPs mistakes and screw ups.

    5,000 billion of debt. How are you going to pay your share?

  • Comment number 74.

    Sir Phillip Green should be offered a seat in the house of Lords if he can cut public expenditure by 40% and we wont mention Monaco again!
































    1


  • Comment number 75.

    Surprised at Sir Philip Green's conclusions? Not really.

    We have known all about lack of central state purchasing for contracts since the 1980's and nobody seems to have the guts to change it., be it IT in the Civil Service or bedpans in the NHS.

    As the report is a foregone conclusion, isn't this more about paying a fee to Sir Philip Green to "tke the flack" for these "facts" being made more available to a wider audience and to remove the 'political' aspect?

  • Comment number 76.

    Would Philip Green be anywhere near the success he is if his Arcadia Group lost it's DWP contract to supply up to £300 in clothing to the unemployed in an effort to get them back to work?
    100,000 claimants @ £300 = £30 million per annum and that's a conservative estimate.
    Will he be eating his own words when as part of the governments spending rationalisation this contract is the first to go?

  • Comment number 77.


    The principal, and obvious, difference between the public and the private sector is that the latter is profit driven. This is not a bad thing, in that it creates a culture in which reducing costs contributes to the goal of the organisation.

    This cannot be transferred to the public sector, as can be seen in any contracted out service. In these, the cost to the Government is capped and the service provider makes their profits by reducing staffing levels, reducing wages and demanding greater "productivity" - for which read "work harder for less". At the same time they reduce the level and quality of service to the bare acceptable minimum.

    To rectify this, Governments have sought to introduce "competition" into the public sector: and argue that this gives greater consumer choice. If this is sincere, it has failed. Consumers of Government services are not looking for the range of choices (low quality/low price or high quality/higher price)they would find in a competitive market. Would anyone be satisfied with a suggestion that their children should go to a poorer school because it is cheaper?

    The purpose of this so called competition has been to drive price down to that needed to provide the lowest acceptable quality of service.

    It is not "efficiency" to provide a lower quality of service at a lower cost. Greater efficiency requires the same or a better service at the same or lower cost!





  • Comment number 78.

    "But (to state the obvious) if all businesses and wealthy imdividuals could somehow be persuaded to devote less time and effort to minimising their British tax payments, rather smaller cuts in public services would be required to restore the health of the public finances."

    Would they Robert? Take the £300m tax Green "avoided" in 2005. With the size of the UK problems, we'd need 143 such cases just to cover the 42.9 Billion interest payable this year.

  • Comment number 79.

    You dont need a rich businessman to sort out problems created by civil servants but you do need to make the civil servants take responsibility for their actions when spending tax payers cash.The private sector also need to stop using a contract from the government as a licence to print money.Tenders for services and products seem to carry a premium especially if it comes from the government which is nice work if you can get it for the suppliers and contractors but not good value for the tax payer. Paying the most competitive price for quality supplies and services should carry a penalty if the supplier or contractor comes back with a revised price to complete a contract,just look at the MOD and the huge costs and delays when ordering equipment.The completion penalties are severe in the private sector so why not the public sector?

  • Comment number 80.

    I think some of us are making this blog personal rather than factual. From what I've read so far, the potential cost savings identified make good sense & it's a bit worrying that the previous government weren't able to address these issues during their long term in power.

  • Comment number 81.

    Something which I don't think anyone else has mentioned is that dividends are paid out of profits which have already been subject to Corporation Tax.

  • Comment number 82.

    But (to state the obvious) if all businesses and wealthy imdividuals could somehow be persuaded to devote less time and effort to minimising their British tax payments, rather smaller cuts in public services would be required to restore the health of the public finances.

    Perhaps the enlistment of the likes of Sir Philip Green to advise on remaking the public sector will persuade business leaders that paying taxes represents reasonable value for money


    Ah the age old argument of tax avoidance. What people need to remember that to be successful in the private sector you have to look at the profit and loss and see what you can get for less. Unfortunately that includes paying the amount of tax that you owe, no more, no less.
    And nobody can convince me that paying tax in this country at the moment represents 'value for money'. As Mr Green has pointed out, we are funding waste, the black hole that is the NHS and other departments that bring no real benefit and benefit cheats that sit at home all day watching sky TV on 50 inch plasma screens when they could be working and their kids are playing on the latest game consoles.

    As for one of the other posts 'tax avoidance/evasion it amounts to the same thing' No it does not, one is a crime in this country the other is prudence. However, fraudulent claiming of expenses is a crime and is also tax evasion, a crime that has been rife in Government for years.

  • Comment number 83.

    @ 8. At 3:05pm on 10 Oct 2010, Justin150 wrote:

    > There are some very silly comments in today

    That's rich, coming from you.

    > My understanding is that Philip Green is tax residence in UK and pays all the
    > taxes due on his income. The fact that his wife in not tax residence
    > blah blah blah

    Our tax system has more loopholes than a Fairisle jumper - that's precisely _how_ he dodges the tax – he's fixed things like that. Avoidance, evasion, ducking and diving – it's all the same trick – it's not just bankers who are at it. And it has to cease.

  • Comment number 84.

    @ 57. At 10:32pm on 10 Oct 2010, Justin150 wrote:

    > What a bunch of moaners on today moan, moan, moan.

    Just take a look in the mirror, chum! We can spot fiddlers miles off. Like I said, it has to cease - we have no time for billionaire tax dodgers who step off the plane from their tax havens into the country where they make their money and have the effrontery to tell us how to vote and how to run our tax policies!

  • Comment number 85.

    I may be missing the point but don't all governments have a duty to spend our tax revenues as efficiently as possible? In the "easy times" we might have been able to be less efficient but now times are hard everyone has a duty to think about the money they are spending. I'm no big fan of either Cameron or Green but someone has to do this dirty job.

  • Comment number 86.

    # 79. At 09:06am on 11 Oct 2010, stevegrant wrote:
    ......"Tenders for services and products seem to carry a premium especially if it comes from the government which is nice work if you can get it for the suppliers and contractors but not good value for the tax payer"......

    Do you know that from experience or are you jumping on the bandwagon. In my corner of the civil service we drive tender prices so low that many companies drop out because they can't/won't operate at the costs we have budgeted for. Many successful contract winners "try it on" later by coming back and saying costs of materials/labour/fuel etc have increased blah blah blah. Tenders received are scrutinised in detail for any excessive management or administration costs and they are driven down.

    Governemnt procurement is overly complicated for sure but costs are certainly not accepted at face value and they're no meal ticket. The reason companies fall over each to tender for government is they're going to get paid, no other reason, the money is as good as guaranteed.

  • Comment number 87.

    I think Robert is mixing up two completely different issues, for dubious reasons. The Government is very bad at buying things, and there has always been plenty of evidence for this. The public sector generally do not have the skills to specify what they want or to negotiate sensible terms and prices. This is my own experience from working in several govt departments and agencies.

    Why should Green pay taxes he does not need to? The Govt decides the tax regime, and creates the loopholes and allows them to persist. Does Robert pay more tax than he needs to? I don't. Why should anybody else? His wife is not UK resident, why should she pay UK taxes. Many non-UK residents earn dividend income from UK investments but do not pay income tax on it.

  • Comment number 88.

    Why is this man rewarded with a knighthood for dodging £300m in tax? Doesn't he realise this pays for our schools, hospitals, police, roads, transport etc? The right-wing media brutally attack so called "benefit scroungers" yet Philip Green is far worse!

  • Comment number 89.

    Would it not be a sensible idea to have one centralised procurement agency that covered all Govt departments. I'm sure that would save a shed load of money - or am I being incredibly naive. I watched a programme on the tv a couple of weeks ago, think it was Dispatches on C4, about the MOD, they have something like 26,000 people employed on the procurement side. 26,000!!!! Do they need even 5% of that number?

    As the blog is about Govt using its muscle in the procurement field I thought I would comment about it, not the minor point about tax.

  • Comment number 90.

    One wonders whether the author perhaps diverts part of his salary into a pension fund to avoid paying taxes?

  • Comment number 91.

    Comment no. 8 by Justin150:

    Come on, you are being so naive here! Philip Green's wife does not work to earn the money she is given in dividends. The dividends are SPECIFICALLY paid through her so Philip Green's company can avoid paying tax on it.

    Of course the rules need to change but of course we all know the ruling elite rules for the benefit of the ruling elite. Much easier to go after "benefit scroungers" who have no power or influence than Philip Green who can afford to hire the best lawyers to defend him.

  • Comment number 92.

    41. At 6:40pm on 10 Oct 2010, truths33k3r wrote:
    Everyone wants to pay as little tax as possible. What a bunch of hypocritical posts today.

    What and have rubbish public services? Come on "truths33k3r" paying tax is inevitable (unless you're Philip Green) and it is what pays for our schools, hospitals, roads, transport, dinner ladies etc.

  • Comment number 93.

    It seems this comments board is too concerned about trying to attack the author of the report (Green) rather than look at the substance.

    Avoiding the subject by denial diminishes your arguments.

  • Comment number 94.

    During the last and the preceding election campaigns the Tories claimed that they could make efficiency savings. The response to this claim on the part of BBC interviewers was usually a worldly-wise assertion that such claims were always made but were likely to be mythical. And now it turns out that there does indeed appear to be significant scope for efficiency savings but the discussion here is all about the issue of the tax status of Philip Green.

  • Comment number 95.

    Many super rich appear to achieve negligible marginal rates of tax by abusing weak taxation rules for those that live or spend time abroad.
    They appear to get a better deal from the Government than even the benefit cheats (who of course should be stopped from robbing the hapless taxpayer).
    Many even get knighthoods and peerages in the process. Some even go on to advise the Government, but evidently not on how to prevent this abuse by super rich tax cheats.
    You say “He (Sir Philip Green) famously saved £300m in tax in 2005 on a £1.2bn dividend from his company, Arcadia - because Arcadia is registered as owned by his wife Tina, who is resident in the tax haven of Monaco”.
    Isn’t it time that such captains of: industry; commerce; banking, and celebrities and stars of: media; rock; stage; and screen; etc., “lead by example” in the country’s hour of need?
    As an expert in this perhaps Sir Philip Green should be asked by Messrs Cameron and Osborne to advise on how HMRC should tackle the problem of tax avoidance by the super rich.
    I would suggest that one way to prevent this form of cheating would be to tax such dividends at source, before they leave the country. It may be argued by vested interests that this would not yield much tax, or that it would make “entrepreneurs” go elsewhere. But this is just special pleading. It misses the point. Shouldn’t leaders “lead by example”?

  • Comment number 96.

    Can I point out to those who think the answer to our deficit problem is to have other people pay more tax, that the Treasury welcomes voluntary contributions to the nation's coffers. If you think the tax take should be higher, just get your own cheque book out and write a cheque to the Chancellor. Maybe Robert would care to lead the rush

  • Comment number 97.

    Experience will show, yet again, that the Civil Service is much more difficult to run than any business. Some of the obvious reasons are no clear objectives - the whims of ministers, much more complex accountability - to ministers, the public etc. Green will join a long and undistinguished list of failed advisers from business.

    And it's not a new idea. HM Stationery Office has existed for centuries as a centralised purchasing unit for forms of every kind. But the long lead times and high bureaucratic overheads have rendered it wasteful, and increased costs. I know, because I used to purchase stationery for a Government department.

    I do not claim to have any answers but I do know that if value for money is your principal goal you do not want to run a democracy. Quite properly businesses are not democratic.

  • Comment number 98.

    In essence the comments Philip Green Makes are "common sense", but it makes you wonder why, in the NHS sphere of IT spending, it cancelled an agreement with Microsoft that clearly benefited those section of IT in the NHS buying Microsoft products. Is this report going to make the Government perform a U turn and re-negotiate an agreement with Microsoft? I think not.

  • Comment number 99.

    Hopefully he will have a nice surprise in store from leveraging the governments credit rating as an idea.

    Because if it is just the hoary old extend payment terms to suppliers (as all the big box retaillers have done) then that will be very dissapointing. Retaillers are cash only or want to charge huge interest on store cards, since I have noticed that if you pop up to the till and suggest that you will be back in 3 or 6 months with the cash for your purchase they get a little upset - yet think nothing of imposing this on suppliers to their business.
    Curiously the only business which seems to charge cash customers more than ones on credit terms is the Energy business, peculiar that one.

    Why should business who have to borrow from the banks at exhorbitant rates fund government who can borrow at very low rates (or nothing if they just print it)? It rankles to be forced into this for the large multiples and multi-nationals who can borrow far cheaper than any SME business.

    Hopefully he will have something more exciting as a proposal - like using low government borrowing rates to allow SME suppliers to borrow at low rates from HMG to fund the extended credit terms rather than having banks do it at multiples of the cost (which is all added into the price in the first place ).

    Perhaps something exciting like a avoided tax discount on offshored business - we will pay X but autodiscount invoices by y% to reflect tax loss if the business was UK onshore to level the playing field?

    However I expect to be disappointed.

  • Comment number 100.

    "Why did the government ask Sir Philip Green to look at whether he could find some significant savings in the costs of providing public services?"

    Goo question - my only conclusion is because they are idiots.

    I could have told you what 'Sir' Phillip Green concluded for free and much cheaper - I mean have I not been saying how centralised systems are more efficient - I mean any GCSE Economics student will know that already!

    Well one good thing to come out of this is it is yet another stab in the eye for the coalition - self inflicted too - so tell us Dave, how does this conclusion fit into the 'Big society' and decentralised government system you are promoting as the way forward?

    So the idea to cut government spending by putting power back in the people's hands - will in fact increase government spending - unless of course an army of volutneers do all the work for free - the savings that will bring shoudl just cover the increased costs that decentralised purchasing brings.

    ...however as the suppliers are all private sector companies - isn't this a round about way of making people work for free - which corporations will directly profit from?

 

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