Vince Cable has become the most senior member of the government to criticise the billionaire boss of Boots for not paying UK taxes.
The business secretary said Stefano Pessina, the acting chief executive of Boots, had “lost moral authority”, in a sharply worded intervention that contrasted with the position taken by his Tory cabinet colleagues.
Pessina’s personal tax status, and that of Alliance Boots, has been a focus of attention since the weekend, when Pessina accused the Labour party of promoting policies that would lead the country into catastrophe.
Speaking on Wednesday, the Lib Dem secretary of state for business said: “I am afraid that the head of Boots lost quite a lot of moral authority once it was discovered he was lecturing political parties from the standpoint of paying his tax in Monaco.
“We do want people to be paying their taxes if they are here and running businesses here. Certainly my party has always taken a strong view on non-dom taxation, that the regime for non-doms is too generous.”
Pessina lives in Monte Carlo, with an estimated fortune of £7.5bn. Boots was criticised by tax campaigners when it moved its formal tax residence from Britain to Switzerland following Messina’s private equity-backed buyout in 2007.
Last year, after US pharmacy chain Walgreens took over Alliance Boots, an attempt to move the headquarters from Chicago to Switzerland for tax reasons was abandoned in the face of intense criticism from US lawmakers.
In an interview at the weekend, Pessina said Labour policies would not be helpful for business or the country. His comments drew fierce retaliation from Ed Miliband, who said people wouldn’t take kindly “to being told how to vote by someone who doesn’t pay his taxes”.
Boris Johnson, the Conservative mayor of London, said it was refreshing to hear business figures speak out. He said: “I have to say I find it a little bit disappointing that he doesn’t cough up for Britain ... I think it is a good thing if companies that earn great sums in Britain should pay their taxes in Britain.”
However, the chancellor George Osborne took the unusual step of providing a direct quote highlighting Pessina’s comments, although the Tories insisted they had nothing to do with the businessman’s comments.
Differences around the cabinet table have also been highlighted by the varying tones from Cable and Osborne on Greece’s debt crisis. Osborne has said the standoff between Greece and its eurozone creditors was “fast becoming the biggest risk to the global economy”. But Cable said the Greek situation – and knock-on risks for the UK economy – were less serious now.
Cable said: “I think it is less serious than it was a couple of years ago and the evidence for that is that the bond-yields for the countries in southern Europe – Italy, Spain – are at UK levels, which suggests that investors don’t see the risk of serious contagion. But it would be stupid to ignore the risks ... If Greece is forced to leave [the eurozone] there would be very serious consequences.”
Cable also said any solution to Greece’s economic problems would require further debt relief, as well as economic reforms and action to tackle corruption.
The business secretary was speaking on the sidelines of an event aimed at encouraging the UK’s biggest companies to appoint more women to their boardrooms. He said companies had to go further to meet a target that 25% of FTSE 100 directors should be female by the end of the year; the most recent statistics showing the score at 22.8%.
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