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Boris Johnson enters Boots v Labour tax row | |
(about 4 hours later) | |
Boris Johnson has weighed into the row about the amount of tax paid by Boots and its chief executive in the UK. | |
The mayor of London said it was "disappointing" Stefano Pessina did not pay tax in Britain and the firm moved its HQ to Switzerland for tax purposes. | |
Ed Miliband has attacked Mr Pessina as a "tax exile" after he warned a Labour government would be a "catastrophe". | |
Other business leaders have rallied behind Mr Pessina, saying he should not be subjected to personal attacks. | |
Labour has suggested there is an "unholy alliance" between some business people and the Conservative Party to resist change in the run-up to May's election and has vowed to take on "powerful forces" over the amount of tax paid by multinationals, as well as on wider issues of taxation and regulation. | |
'Tax exile' | |
Mr Pessina, who took over the High Street retailer when it merged with Universal Unichem in 2007, has suggested Labour policies in such areas would be "unhelpful for the country". | |
This prompted an angry response from the Labour leader, who said a "tax exile in Monaco" should not "lecture" people on how to vote in May's election and Mr Pessina "ought to pay his taxes" in the UK. | |
Mr Johnson told LBC Radio that Mr Pessina was "perfectly entitled" to express his view on the business landscape in the UK and it was "refreshing" that businessmen did not feel cowed from speaking up so close to an election. | |
Mr Johnson, who is hoping to return to Parliament as a Conservative MP in May, said it was "absolutely true" that Labour had "no interest" in wealth creation. | |
But he said that it was "slightly disappointing" that Boots had moved its headquarters from Nottingham to Switzerland in 2008, a move experts have said is saving the firm millions of pounds every year. | |
"He is doing his best by the lights of his shareholders and the interests of the company," Mr Johnson said. | |
"These guys, I'm afraid, have a fiduciary duty to their shareholders to minimise their obligations. In business terms, it's what you have to do. | |
"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." | |
'Business backbone' | |
Responding to Mr Johnson's comments, Labour challenged David Cameron and George Osborne to "join the criticism of tax avoidance by the Boots chief". | |
A Downing Street spokesman said it was "absolutely right that companies that enjoy the benefits of operating in the UK must pay a full and fair share of tax on profits they make in the UK". | |
But Lord Rose, who headed M&S for a decade and is now a Conservative peer in the House of Lords, defended Mr Pessina's right to intervene in a political debate. | |
"As a man responsible for 70,000 workers - that's 70,000 livelihoods supporting 70,000 families - Mr Pessina was perfectly entitled to speak out," he told the Daily Mail. | "As a man responsible for 70,000 workers - that's 70,000 livelihoods supporting 70,000 families - Mr Pessina was perfectly entitled to speak out," he told the Daily Mail. |
"What happens in Westminster has a direct impact on his employees and his customers." | "What happens in Westminster has a direct impact on his employees and his customers." |
He added: "In a healthy, thriving democracy, people must be free to speak out without fear or favour," he added. | |
"This is the real face of British business. They aren't the enemy. They are the backbone of our economy - and they deserve the support and respect of our politicians." | "This is the real face of British business. They aren't the enemy. They are the backbone of our economy - and they deserve the support and respect of our politicians." |
'Reputational damage' | |
Sir Ian Cheshire, the former boss of B&Q, said politicians should refrain from "unattractive" personal attacks even if they disagreed with others' point of view. | |
"He has the complete right to have his say, as have other people," he told the Daily Telegraph. "Even if you disagree with him, I don't think it is necessary to have personal attacks on Stefano in this way - particularly for a guy who has really ploughed a lot of money into the UK and is doing now to make Boots a world force." | "He has the complete right to have his say, as have other people," he told the Daily Telegraph. "Even if you disagree with him, I don't think it is necessary to have personal attacks on Stefano in this way - particularly for a guy who has really ploughed a lot of money into the UK and is doing now to make Boots a world force." |
Sir Ian, who stepped down as head of Kingfisher last year, was recently named as the government's top non-executive director, advising departments across a range of issues. | Sir Ian, who stepped down as head of Kingfisher last year, was recently named as the government's top non-executive director, advising departments across a range of issues. |
Conservative backbencher John Redwood suggested the row risked damaging Boots' reputation as well as Labour's and business leaders needed to think carefully before wading into political controversies in the name of their companies. | |
"By all means let's hear from Mr Pessina as an individual with his anti-Labour views, but let's hear less from Boots," he wrote on his blog. | |
"Labour now sees it as an opportunity to put the boot into Boots, as they are stung by the criticism. Neither Labour nor Boots will gain from these rows." | |
Some business leaders are uneasy about Labour's plans to freeze energy bills, introduce a tax on properties worth more than £2m and raise the top rate of tax to 50p. | |
Labour has insisted that it has a pro-business agenda, citing its pledge to cut corporation tax for small businesses and its support for the UK to remain in the EU. | Labour has insisted that it has a pro-business agenda, citing its pledge to cut corporation tax for small businesses and its support for the UK to remain in the EU. |