Labour has launched a stinging attack on the billionaire boss of high street chemist Boots after he accused the opposition party of promoting policies that would lead the country to catastrophe.
In a sign of rising tensions ahead of the general election on 7 May, Douglas Alexander, the head of Labour’s election campaign, described the comments by Stefano Pessina as “rubbish”, while Chuka Umunna, the shadow business secretary, said the electorate was unlikely to listen to someone who does not live or pay tax in the UK.
Pessina lives in Monte Carlo, with a fortune estimated at £7.5bn. Boots was targeted by tax campaigners when it moved its formal tax residence from Britain to Switzerland following Pessina’s private equity-backed buyout in 2007. Last year when Pessina merged Boots with US group Walgreens, there were plans to move the headquarters from the US to Switzerland for tax reasons, although the idea had to be abandoned in the face of a US political row and a potential customer backlash.
The weekend row started with Pessina, the 74-year-old acting chief executive of the newly-merged Walgreens Alliance Boots, saying that if Labour politicians acted in the way that they spoke “it would be a catastrophe”.
In an interview with the Sunday Telegraph, Pessina said: “The problem is would they [Labour] act that way or not? One thing is to threaten and to shout but it is completely different to be in charge and to manage the country day-to-day ... [and if they did it would be] not helpful for business, not helpful for the country and in the end it probably won’t be helpful for them.”
Pessina, whose company has 2,500 shops and employs 70,000 staff in Britain, declined to say which policies he particularly objected to but there has been previous criticism by business executives of Labour promises to reintroduce a 50p top rate of income tax, freeze prices in the energy sector and impose restrictions on the size of high street banks.
Alexander led the fight back, telling the BBC’s Andrew Marr show: “Honestly, it is rubbish. It tells you much more about the agenda of the newspapers than it tells you about the agenda of Ed Miliband and the Labour party. I’ll tell you what’s going on. We’re doing well, we’re going on to victory.”
Umunna later went further, saying it was important that the voice of business was heard during the general election campaign, not least on Europe. But he said: “The British people and British businesses will draw their own conclusions when those who don’t live here, don’t pay tax in this country and lead firms that reportedly avoid making a fair contribution in what they pay, purport to know what is in Britain’s best interests.”
The Conservatives insist they had nothing to do with Pessina’s comments but George Osborne took the unusual step of providing a direct quote highlighting the businessman’s stance. The party has previously been known to approach business people to speak out on sensitive political issues such as the Scottish independence referendum.
“We are not going to stand a Tory analysis of our economic policy from someone who is worth £7.5bn and does not pay tax in this country,” a senior Labour source said, suggesting that Miliband would also address the criticism head-on.
The pre-election temperature will be raised further by a speech to be delivered by Marcus Bowman, president of the UK Chamber of Shipping, at the organisation’s annual dinner on Monday night in London, which will accuse political parties of engaging in anti-business rhetoric.
He will say: “The Labour party – seemingly more pro-Europe – is laying down a policy agenda that amounts to more tax, more spending and more regulation. To business, this is not an economic strategy but a political one. Again, they should think long and hard about the messages they are sending out, and the impact their policies will have.”
Bowman, a shipping lawyer, will not confine his criticism to Labour but also attack the Conservative party for engaging in anti-European rhetoric in a bid to head off its own criticism from Ukip.
“The institutions of the EU are flawed, the commission is often aloof, and less engaged with industry than it should be. The whole thing is in need of reform – but we should think long and hard about what reforms we need, and what leaving the single market would mean for our business, our workforce and our country.”
Bowman will say: “Some of the rhetoric from all parties is decidedly anti-business, and is causing deep uncertainty among those who would want to invest, create jobs and contribute more to the economy.”
As he fought back against the “agenda of the newspapers”, Alexander claimed Miliband was suffering negative coverage in the right-wing press because the party is on course for victory in May’s election. He declined to rule out doing a deal with the Scottish National party if Labour fails to win a majority but made it clear that his party would not contemplate abandoning Trident as the price for an alliance. This is one of the three conditions demanded by SNP leader Nicola Sturgeon in relation the possibility of a tie-up with Miliband.
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