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Former Marks & Spencer boss speaks out against idea of dropping top tax rate for high earners
The former boss of Marks & Spencer Sir Stuart Rose yesterday urged the government not to scrap the 50p income tax on high earners and said he would be willing to pay more tax to help bail out Britain's finances.
"I don't think that they should reduce the income tax rate. How would I explain to my secretary that I am getting less tax on my income, which is palpably bigger than hers, when hers is not going down?" said Rose, who picked up an £8m bonus when he retired last year.
Speaking on BBC's Hard Talk, he added: "If, in the short term, a case was made for me to pay more than 50% tax, which would help UK plc, I personally – Stuart Rose – would be prepared to pay more tax."
Rose spoke days after 20 leading economists warned in an open letter that the 50p rate on earnings over £150,000 was a threat to Britain's economic recovery. Asked if he would join the US billionaire Warren Buffett in calling publicly for higher taxes, he said: "I'm not that kind of public figure, but if you are asking me now – which you are – yes."
George Osborne is coming under intense pressure from Tory backbenchers to scrap the 50p rate – introduced by Labour in 2009 – and both the chancellor and David Cameron have made it clear they see the tax rate as "temporary". Osborne has ordered HM Revenue and Customs to carry out analysis of whether the rate is even bringing in any extra money, amid warnings that it could easily be avoided by the super-rich, some of whom may even move abroad to do so.
Buffett's call for the world's super-rich to pay more tax has already generated an enthusiastic welcome in some parts of Europe. Liliane Bettencourt, the L'Oréal heiress who is France's richest woman, and 15 other French billionaires signed a letter offering a special contribution to the Paris treasury. In Germany a group of 50 wealthy Germans have joined the "tax me harder" movement because they want to "stop the gap between rich and poor getting even bigger".
In Britain, however, Rose so far stands alone. Sir Richard Branson, who has amassed an estimated £3bn fortune, is not keen, arguing that once the deficit is under control "taxes should be reduced for everybody" so as to attract successful people to the UK. The entrepreneur said the rich should devote their resources to tackling global issues like disease, global warming and poverty.
With a near £500m fortune, advertising guru Sir Martin Sorrell suggested a wealth tax was unlikely to gather an army of supporters. "Not with the marginal income tax rate at or over 50%," he said.
Topshop billionaire Sir Philip Green said comparing the tax regime in the UK with that of the US and France was "like comparing cherries with apples and oranges".The fashion mogul, who has been targeted by tax avoidance protesters UK Uncut, declined to comment on whether he should pay more, but said: "I just don't want to get involved in the conversation, because nobody's getting the right information."
Green famously banked the biggest pay cheque in corporate history in 2005 when his Arcadia fashion business, which owns Topshop, paid out a £1.2bn dividend. The record-breaking payment was made to his wife, Tina, who lives in Monaco and is the direct owner of Arcadia. As a result no UK income tax was due, saving him an estimated £285m. Green declined to comment on whether he should pay more but said: "The American tax system is fundamentally different to England. Everything is deductible."
Dan Milmo
Zoe Wood
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