Questions raised on Giordano

Mr Giordano was plunged into a fresh "fat cats" controversy after Labour said he was saving pounds 70,000 a year in tax by having part of his pounds 450,000 salary paid in the US, writes Mary Fagan. The row erupted only weeks after British Gas announced the early retirement of Cedric Brown, chief executive, whose 75 per cent pay rise to pounds 475,000 caused outrage at the end of 1994 and has dogged the company ever since.

Andrew Brown, Shadow Treasury Secretary, called on British Gas to put its house in order. But the part-time chairman said the arrangement had the approval of the Inland Revenue and was a way of avoiding paying tax twice.

Mr Giordano said: "I am entitled to take whatever steps I can to avoid punitive double taxation. I think that is a worthy objective." The statement echoed evidence he gave to the House of Commons Employment Select Committee a year ago when he said he could "easily slip into a situation where Her Majesty's Government and Uncle Sam both taxed the same pound of income." Mr Giordano is a US citizen but has residency on both sides of the Atlantic. Forty per cent of his remuneration comes through a contract with British Gas Holding International and is paid in dollars while the rest is paid by British Gas plc.