Whatever the outcome, tomorrow’s General Election will be an historic one in Croydon South, where for the first time in 23 years, its MP will not be Richard Ottaway. And good riddance, we can sense many muttering – including many Tories. But as WALTER CRONXITE reveals, his likely successor is hardly a paragon of business, either
One of the downsides with an election in a profoundly safe seat is that you tend to hear very little from the leading candidate. Chris Philp is hoping to inherit Richard Ottaway’s Croydon South seat – the Tories held a 15,818 majority in 2010 – and clearly he believes that the less we know about him, the less likely he is to lose those traditional Tory voters. Mind you, given the expenses scandal mess that Tricky Dicky got himself into in 2009, many reasonable folk still despair that Ottaway somehow managed to increase his majority at the last General Election.
Philp’s page on Wikipedia – never the most reliable of sources, as Gavin Barwell and Michael Green have demonstrated – and his own website make much of his background as a high-achieving, successful businessman.
But Philp is very guarded about what information he decides to make available to the public. Thus, at the recent Croydon South hustings, he was keen for the audience to know that since he was parachuted in to the safe seat 18 months ago, he has bought a home in Coulsdon, in the constituency.
What he refused to say was how many other homes he currently runs: “Mind your own business,” Philp said to the impertinent questioner who wanted to know more about the person seeking his vote. A Tory with a sense of entitlement? Shurely shome mishtake?
Philp is just as opaque about his failed businesses and his tax affairs, which today see him running an offshore business in… Montenegro. “Traditional Tory voters will be furious if it turns out that they’ve managed to replace an ardent expenses claimaint with a millionaire tax-avoider as their MP,” one of the other Croydon South candidates told Inside Croydon.
When laying out his rags-to-riches (“You wouldn’t call me posh if you knew my dad”) career narrative, Philp, who turns 40 later this year, usually mentions that he formed his first business, Blueheath Holdings, when just 24 years old.
In Philp’s version of the business’s history, “I set up my first business at 24 – a distribution business – and started off driving the delivery van myself. Four years later the company had successfully created over 250 jobs and was subsequently bought by the Booker Cash & Carry Group.”
That’s not altogether true. As this 72-page document from when the company was listed on AIM shows: the chief executive was Douglas Gurr, an old colleague of Philp’s from McKinsey – where he worked after leaving Oxford with a 1st. But Croydon South’s next MP was not on the board of directors. He was, according to the document, a sales manager: “Chris Philp, formerly of McKinsey & Company, in charge of sales”, it says.
The folk story Philp weaves about his time at Blueheath sees him brag about driving the delivery lorry himself. A real “man of the people”, our Philp. He forgets to mention that those delivery lorries were for selling cigarettes to petrol stations and supermarkets. Imperial Tobacco was the company’s biggest supplier and more than half the company’s turnover came from selling cigarettes and tobacco.
Note, that is turnover, rather than profit, because Blueheath didn’t actually make a profit. It made a loss every year and had sustained losses of more than £2 million by the time it was bought out by one of its competitors.
Philp’s next business venture was to set up a HGV training firm. Philp doesn’t mention the name of this firm anywhere on his publicity, so it takes a bit of research to discover that it was called Clearstone. Try Googling it, and it soon becomes quite clear why Philp doesn’t want his name connected to it.
Clearstone went into administration in June 2007 before finally going bust in 2008, leaving debts all over the place, including £500,000 in unpaid tax and £1.4 million to people who had paid upfront for HGV training.
One of the other “businessmen” behind the Clearstone venture was Sam Gyimah, who since May 2010 has taken refuge from the rough and tumble world of private business by … becoming a Tory MP for the safe Conservative seat of Surrey East.
The following is taken from the June 2007 joint administrators’ report on Clearstone: “The company has historically been loss making and has relied on share premiums and investments from a number of high net worth individuals… Given the continued trading losses, the company has been negotiating with shareholders regarding the possible introduction of additional loan/capital finance. A sum of £400,000 had been mentioned although it was considered that this may be insufficient to rectify all the company’s current cash-flow needs… In the absence of funding, the directors had to consider the company’s alternatives other than to cease trading and take steps for immediate liquidation to avoid further losses”.
As Private Eye magazine reported in 2010, “Clearstone Training and Recruitment and two heavily insolvent subsidiaries crashed in 2007…”, owing creditors a total of £3.45 million. When the business was sold for £100,000, it meant the unsecured creditors of Philp and Gyimah’s HGV training business each received just 1.5p for every £1 they were owed. Is that how Tories always run business?
When the Surrey East Conservative Association read about Gyimah’s failed business background, they tried to deselect their candidate “… for not being frank about his involvement in two business failures,” the Eye reported five years ago.
In his CV put before his selection panel, Gyimah’s description of his time at Clearstone (which he failed to mention by name) said: “Voted CBI entrepreneur of the future in 2005 for my first venture, which trained 4,000 low skilled and unemployed people and put them into work. The business had grown to £10m turnover and 70 staff by the time I sold my stake. 2003-2006”.
The Tory members of Surrey East felt that they had been misled over Gyimah’s business “success”. But any attempt to deselect Gyimah was blocked by Tory Central Office.
It seems doubtful whether the Croydon Conservative Association selection panel, when considering Philp’s candidacy, went into any real detail about his business background. After all, the selection committee included that thrusting, forensic intellect, Anne Piles. And besides, Philp the parachutist has been very generous with his donations to Conservative Party funds…
In his published biographies, Philp claims lots of successes for Clearstone, but fails to mention that he was still in charge when the company went into administration. He did manage to quit as a director a few months before the business finally went belly-up.
Philp’s latest business exploit is Pluto Finance. No van driving. No HGV lessons. Just raising money from other people to invest in … property. What could go wrong?
As is common in much of the finance sector, Philp pays himself a very large salary for taking risks with other people’s money. As is also common, there are a number of subsidiaries and offshoots of Pluto which make it very difficult to keep track of where all the money is going – a dream for accountants and often a nightmare for tax authorities.
When you look through all the labyrinth of sub-companies and offshoots, one question that does arise is why would a London-based finance company decide to open an office in Montenegro? Philp says that his company has “helped re-build parts of the former Yugoslavia in the aftermath of the civil war there”.
Or is it just a coincidence that Montenegro is renowned for having one of the lowest corporate tax rates in the whole of Europe? Inside Croydon has sought, unsuccessfully, to find any publicly available accounts for Philp’s Montenegro business. It may just be that Philp is operating entirely legally within the tax laws. Much like Amazon and Starbucks.
Perhaps, to set voters’ minds at rest before they go to the polls tomorrow, Philp will make copies of his business accounts available so that we can all see how much profit is declared for tax purposes by his multi-million pound London finance company, and how much money is transferred to his offshore business in Montenegro.
After all, as seems highly likely, from next Monday Chris Philp will be a Member of Parliament, and no one would want his position of trust and influence to be undermined by questions about his private business interests. As Peter Underwood, the Green Party candidate in Croydon South, commented, “There were a few raised eyebrows when the Labour Party selected a city banker as their candidate but traditional Tory voters will be furious if it turns out that Chris Philp is just another millionaire tax-avoider.”
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