Andrew Gilligan asks the questions.
And gets no answers.
Hat tip: TJN
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An interesting article…
the link is to a mindless bit of speculation. How did they make their money? we don’t know. Is there a point to your question?
I’m no lover of royalty, but what is the point of this article? Why is it anyones business how a normal hard working couple have bettered themselves? Also why is a partnership objectionable all of a sudden. I thought that you, Richard, wanted to see the end of limited liability and all businesses structured as partnerships?
I think this article is interesting as a glimpse into a possible future. The problem with the clamour for financial transparency is that it does not accept that people have a right to privacy. There is an assumption that if anyone has done well, they will either be happy to have all the details of what they have earned in the public domain, or alternatively, have something to hide.
The next step will then be to consider whether someone “deserves” to be as wealthy as they are. Or an article like this that insinuates because it isn’t clear why they have so much money, perhaps – nudge nudge wink wink – oh but of course, nobody is suggesting anyone did anything wrong.
Transparency is actually the enemy of cohesive society, because it gives us grounds to suspect other and to judge others. The Middletons haven’t harmed anyone: it isn’t that clear why the public interest isn’t best served by allowing them to live in peace?
The insinuation seems to be that, since the business is structured as a partnership, it is more likely that the Middleton’s have arranged their tax affairs in such a way as to be strictly legal but perhaps not entirely moral or ethical in some way. Perhaps by involving family members in the partnership is the suggestion.
If memory serves, Richard also operates as a partnership and involves his family in it, and he is categorical that there is NOTHING untoward in such an arrangement.
If such a position is clean as a whistle and whiter than white for the Murphies, why would it be deeply suspect for the Middletons?
IMHO I understand that the arrangement is perfectly legal for both families, and I therefore believe they are fully entitled to pursue it if they so wish. To envoke some semi-articulated nonsense about ethics, morality, common sense, etc is to undermine the rule of law, thereby offering an open door to the next passing tyrant.
@Gary
The point of this article is that reasonable questions are being asked about how selling party fripperies pays for such a lifestyle
It has nothing to do with partnerships being right or wrong at all. Not one thing
It has got to do with the question – how was all that paid for?
And that’s fair
And transparency resolves such situations. That’s all it says, and I think it was fair to draw attention to it
@mad foetus
“Transparency is actually the enemy of cohesive society, because it gives us grounds to suspect other and to judge others”
Is it? I dunno. In my experience, some people are perfectly willing and able to suspect and judge others with absolutely no need for evidence at all! Gilligan and his type will carry on with their ‘nudge-nudge’ morality regardless of the levels of transparency.
Transparency meanwhile has quite a lot going for it, being as it is a necessary but insufficient antidote to corruption.
@Richard Murphy
Gilligan tells us he asks 2 just questions (and I quote) “The Daily Telegraph asked the Middletons, through their lawyer and Party Pieces, whether Kate or the other children were partners in the business. We also asked whether the decision to hold Party Pieces as a partnership was done for tax reasons. A spokesman said: “Party Pieces is a private business and you will therefore understand that we will not be responding to the various questions you have asked.” ”
So only two questions were asked, both of which relate to partnerships and taxation. Partnerships and tax is just about the ONLY thing he is talking about in this piece. He NEVER asks them a question around how they manage to fund such a lifestyle.
Gilligan then clearly insinuates the use of partnerships to restructure tax is suspect when he says “Most interesting of all, you can structure the partnership so it minimises your tax, and you don’t have to say who the partners are.”
Gilligan is being pretty clear in his piece – he doesn’t think the expenses match the income, and he suspects the reconcilling item is the idea that the Middleton’s have used a partnership to reduce their tax bill. He is aware that’s perfectly legal, but he doesn’t think its right from a moral/ethical/spirit of the tax law perspective.
I think Gilligan is wrong to think he has a legitimate question that deserves answer – the Middleton’s appear to have obeyed the law of the land. That’s good enough for me. Better still – the arrangements seem to broadly follow your own, and you previously have given assurances in the strongest possible terms that such an arrangement *is* perfectly acceptable from a moral/ethical/spirit of the tax law perspective.
So no legal need for more transparency (everyone seems to agree) and no moral case to answer either (according to you). So there is no ‘situation’ that requires resolution. they have no case to answer. So they haven’t.
My default position is normally to support transparency, but I accept it does have limits. This is an example of that. If transparency helps clarify a problem, then lets fix that, but so far I’m not seeing the problem he is trying to solve.
@Richard Murphy
I wonder what business that is of anyone other than the Middletons? None I am sure.
I must be reading the article differently to everyone else….I thought it was questioning whether they actually made enough money (taxable or not) from their current business to match their spending.
@Greg
You read it exactly right
The rest are fantasists
@ Richard
It wouldn’t be often that I’d agree with some of those commenting on this thread, but I have to say I mostly agree on this one (particularly with Gary #8).
Overall I thought the article came over as based on research that found very little to write about, but Gilligan had a column to write so on he went. And to be honest some of the sop lines, like the one at the end about her mother being from working class stock, were so transparent in their intent that they were cringe-worthy.
@Ivan Horrocks
So it appears it’s agreed this is not one of my finest moments
Of well, we all have to have them! 😀
@ Ivan Horrocks
…Because of course if Gillingham *was* onto something and using partnerships to legally avoid tax *was* contrary to the spirit of tax law, that would leave all sorts of people in an awkward spot….
OK, it was a bit mean and Richard has acknowledged this. However, I do think that questions like this should be asked and brought to public attention for the simple reason that we are always being told that “entrepreneurs” are a hallowed species, entirely self-made. I am sure that if you were able to delve into the financial success of many of these gods you would find mostly luck and some pretty unethical behaviour. Starting a business is a very risky affair and involves real graft but once the enterprise is up and running it is the workers, including managers, who maintain the success but do not necessarily receive the rewards.
@ Greg
Let’s try it this way: I have no solid information about you, but I see you enjoy some of the trappings of wealth ( a computer to type your comments for example). In my investigations I have not uncovered how you can afford that computer. Do I have a legitimate basis to request you explain youself? Of couse I don’t. Is it proportionate for me to publish a piece positing the scenario whereby your gains are ill-gotten? I know nothing about you and there is no basis to believe you broke the law. I should stay well clear from your affairs. And so with the Middletons.
@Gary Taylor
You forget that LLPs are on public record
Of course not. I’m not arguing against that, and I don’t believe our affairs should be made available to all and sundry. I really don’t care if the Middletons appear to be living beyond the income from their business. There could be stacks of different (legal) reasons why.
But I don’t believe the article was trying to talk about tax avoidance and partnerships etc. I think it was just a snide attack on the Middletons, and was basically asking how they got their wealth. I really think a lot of people are barking up the wrong tree here!
@Richard Murphy
You’re right, although I’m not getting the relevance.
Seperately, much respect for admitting an off day.
@Greg
Yes he was asking how they got the wealth, but he went further. Perhaps the easiest way is just to quote:
“If the Middletons are engaged in tax avoidance, which of course is perfectly proper and legal, that may go some way to explain how they can maintain their standard of living. Or it may be even simpler — that they have worked very hard, invested wisely, paid tax in the normal way, and made enough to support a lifestyle which, while comfortable, is obviously not oligarch-standard.” Gilligan then explores and dismisses the other possibility that they could have inherited.
So in his mind we are down to just 2 possibilities explaining their displays of wealth: Hard work or tax avoidance. Now that can only be a newsworthy conclusion if you think that one of those possibilities would be unethical/immoral/illegal in some way.
I don’t think it is unethical/immoral/illegal in some way to minimise your tax affairs consistent with the letter of the law. Neither does Richard. It’s those implications that we have been getting at on this thread, not the first part (that they might be living beyond their means).
Would this be the same Andrew Gilligan who fabricated his report on “sexed up” intelligence?
(The answer is “yes”, by the way.)
@Carol Wilcox
Carol, my own experience entirely accords with your idea that success is half chance. Mine was (such that it is) and so was everyone else that I know well (for better or worse).
I fear however that you are being a touch too generous with Gilligan. He wasn’t saying their wealth was half chance (which I could agree with); neither was he suggesting that, after an initial period of risk taking and graft, the value was really being added by the salaried workers (which I could also potentially agree with); an adult debate about the most common routes to wealth creation would have been a useful contribution.
But it is not possible to give Gilligan credit for a point that he didn’t raise. You raise it, and I have some sympathy for it, but until *he* raises it we can only address what he did raise.
@Gary Taylor
Agreed.
There is an update from today’s Times and covered later by the Torygraph. It seems some answers have been forthcoming, probably when their is a whiff of tax avoidance.
Turns out they have been selling details (including child data) of the 230,000 customers who placed orders with their children’s party equipment firm for £20k a pop. You only need to find 50 buyers to make a million. So not so much hard work as easy pickings. I wonder how many of their customers are pleased to get a deluge of junk mail every time one of their kids has a birthday? I guess they’re also partly responsible for the mountain of spam which clogs up our inboxes too!
Ha! Very funny. You only have to find 50 buyers of anything at £20,000 to become a millionaire, but that is easier said than done. Once it has been sold to one broker he will have sold it on to his clients at a lower price before you can sell it again so it is effectively worthless.
The reality is that the profits come from the 230,000 customers. You only have to make a £5 profit from each of them to make a million, and I guess that with mail order/web ordering this business operates on a very high (50%) profit margin, and since it sells pretty ephemeral products I suspect it gets a lot of annual repeat business. It has 30 employees, so the annual profits are likely to be a high six figure number.
@Alex
The original Gilligan article makes the point that Party Pieces is not a big player and equivalent businesses only make around £100k pa. It also states (quoting the PP website) there are only eight employees (plus pickers) far less than your claim of 30.
These financial anomalies appear to suggest a reason why they felt the need to tell the media about the data selling.