[size=10pt][size=10pt]Xabi Alonso warns that tax will drive top players away[/size][/size]
Even footballers have turned on the government. Xabi Alonso believes Gordon Brown's economic policies have weakened English football and that the Premier League's star players could be forced to the Continent to escape the weak pound and the incoming 50p tax rate.
Alonso is refusing to commit himself to Liverpool next season, with Real Madrid eager to to take him to the Bernabeu, and with Alonso estimating he is losing a third of his earnings he is edging closer to a return to Spain.
"Of course we footballers think about it; we are not stupid, we keep an eye on it," Alonso said. "When you see your contract down by 30 per cent you cannot be happy. I cannot do anything – it must be Gordon Brown or David Cameron.
" I think the weakness of the sterling is not helping the Premiership because for those competing and fighting against the European teams it is a big weak point. Hopefully over the next few months and years it will get back to what it was not so long ago."
Liverpool are determined to keep Alonso despite Real Madrid's very public interest, but having just published worrying financial results and with Rafael Benitez having to work with a restricted transfer budget, the Anfield club might be forced to sell, especially if the player wants to leave. Alonso, in South Africa with the Spain squad for the Confederations Cup, pointedly refused to answer questions about his future at Liverpool.
His Anfield colleague Fernando Torres admitted he was concerned about losing his Spain team-mates Alonso and Alvaro Arbeloa to La Liga but insisted that playing for a club with the traditions of Liverpool should count for more than a decline in your net income.
"I worry about losing my team-mates, of course," Torres said. "But when you play for a team like Liverpool you don't have to worry about that. You are a top player and you will get a good contract. You don't have to be scared to lose a little bit of money."
That depends on your definition of 'little'. Alonso signed a five-year contract with Liverpool in 2007 worth an estimated £65,000 a week. At the time there were €1.48 to the pound so he was on €96,200 per week but due to the weakness of the pound that has fallen to €76,700 a week. When the 50p tax rate comes in next April that will drop to €69,000 a week, so he could be losing €27,200 every week compared to what he was earning back in 2007. Overall, Alonso fears he could end up losing nearly £1.2 million per year.
Alonso is not the only player unhappy with the British tax system. Andrei Arshavin, of Arsenal, claimed he had an "unpleasant surprise" when he opened his first pay packet and saw how much he was paying in tax. The Russian international is now trying to renegotiate his £80,000 a week contract to ensure he has a higher net earning.
Clubs across the country are concerned that foreign players are using the weak pound as an excuse to get a pay rise.
Arsene Wenger, the Arsenal manager, predicted back in April that "the domination of the Premier League will go" because of the government's tax policy and the fact that the United Kingdom has been hit particularly hard by the financial crisis. His prophecy seems to have been realised.
Accountants working with footballers and clubs are trying to come up with all sorts of ways of avoiding paying the top tax rate. One option being explored is paying players in interest-free loans which would attract a much lower tax rate. But ultimately, it seems the power base has shifted to the Continent.
That is particularly true of Spain, who can set up foreign players as 'company executives' who have a preferential 23 per cent tax rate for the first six years. David Beckham was on this kind of deal and Cristiano Ronaldo and Kaka will be on a similar scheme. Obviously this gives clubs like Real Madrid and Barcelona a real competitive advantage in the market.
Sam Rush, whose WMG agency look after Michael Owen and Steven Gerrard, believes English clubs will have to bear the brunt of the cost as foreign players will increasingly demand to have contracts net of tax.
"If clubs want to keep top players they are going to have to push the boundaries of their financial parameters," he said. "In Europe sums are offered net of tax. That's ultimately what's going to happen here in the UK."