Ed Miliband has accused the boss of Boots, the chemist chain, of avoiding his taxes and being in an unholy alliance with the Conservatives after the businessman claimed that a Labour government would be a catastrophe.
In an escalation of the row, the Labour leader took Stefano Pessina, the acting chief executive of the pharmacy chain, to task after he gave an interview to the Sunday Telegraph expressing his fears about the prospect of Miliband as prime minister.
Speaking in a debate for young people on Sky News, Miliband said: “Yesterday the [boss] of Boots started telling people how to vote in the UK general election. Well, it turns out he lives in Monaco and is actually avoiding his taxes. I’ve got to tell you, I don’t think people in Britain are going to take kindly to being lectured by someone who’s avoiding his taxes on how they should be voting in the UK general election.
“You have now got this unholy alliance between the Conservative party and people like him who are actually saying that a country can’t change … Part of my job is to stand up to these powerful forces who aren’t paying taxes, who are avoiding their taxes.
They have a responsibility … that goes from top to bottom in our country. How can we say to people on benefits they should be responsible when some of the top, powerful people in this country are avoiding their taxes and not doing the right thing?
“Mr Pessina, who has been lecturing us about what we should be doing, frankly, I think he should be paying his taxes.”
In a forthright response, Miliband went even further and said he could categorically state that he would make sure companies like Amazon and Google pay a fair share of tax in the UK.
“This is something the world has got to get to grips with,” he said.
“This is about decent businesses in this country, the vast majority [of businesses] are doing the right thing, and frankly they are as narked as we are about the fact there are some people and businesses who are not doing the right thing. We’ve got to clamp down on it.”
Earlier, Ed Balls, the shadow chancellor, suggested that the Conservatives would try to influence voters by persuading more high-profile people to speak out against Labour in the coming campaign.
Speaking on BBC Radio 4’s Today programme, he said: “I would think in the next three months we are going to have a number of people brought forward by the Conservatives, whether it’s Gary Barlow or Mr Pessina, saying: ‘Don’t vote Labour.’ The idea that somebody who doesn’t pay tax in Britain telling people how to vote will stick in the craw.”
Balls also pointed out that Pessina had criticised only one policy, and that was the threat of leaving the EU – something only likely under the Conservatives or Ukip.
The Tories insist that 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 businesspeople to speak out on sensitive political issues such as the Scottish independence referendum.
Douglas Alexander, the head of Labour’s election campaign, had already described Pessina’s comments 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. When Pessina merged Boots with US group Walgreens in 2014, there were plans to move its headquarters from the US to Switzerland for tax reasons, although the idea was abandoned after a US political row and a potential customer backlash.
The weekend row started with Pessina, the 74-year-old acting chief executive of Walgreens Boots Alliance, 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.
A spokesman for Walgreens Boots Alliance had no immediate response to Miliband’s comments. A previous statement from the company attempted to clarify Pessina’s comments on Sunday night.
It said: “The comments made by Stefano Pessina were a small part of a much larger conversation and have been taken out of context. Stefano Pessina was expressing his personal views only and is not campaigning against Ed Miliband or the Labour party.
“Indeed, he previously held good relationships with the Labour governments under Tony Blair and Gordon Brown, as well as the current coalition government led by David Cameron and Nick Clegg.”
