Alan Rusbridger (he’s my editor) writes about the fallout from the Guardian’s incorrect coverage of Tesco’s tax affairs in the New York Review of Books. (I suspect in the NYRB so that it falls under the First Amendment…? Though possibly not: there’s a footnote which says “This article has itself cost several thousand dollars in order to make sure that it stands on solid legal, tax, and accountancy ground.”)
But there’s also the problem of how to do the followups when Private Eye, helped by “a tax specialist who was once employed by HMRC”, wrote about similar Tesco tax avoidance methods:
In order for The Guardian to follow up the Private Eye story, the paper had to spend perhaps $17,000 in seeking expert libel and tax advice on whether the magazine was correct (and maybe double that to secure the opinion of a senior tax lawyer in order safely to plead it in the paper’s defense). Any editor wanting definitively to state that this was, indeed, a strategy to minimize corporation tax would have needed to be able to find a qualified tax specialist prepared to testify under oath to that effect. Such an expert would have needed an extremely sophisticated understanding of current corporate tax law; the latest filed accounts of all the companies involved (including in Luxembourg); details of the partnership’s lending activities; and a knowledge of Luxembourg accounting practice.
Of course, almost no news organization has this sort of expertise to hand. Pro-bono advice, for example, from professors of law or business, might be of help—but few academics would volunteer to give evidence in the High Court. So, after the Tesco legal assault, it is fairly safe to predict that almost no British paper will investigate in any detail how companies today increasingly fund and structure their overseas expansion with an eye to avoiding tax. If Tesco feels unfairly spotlighted in this respect, it is with some justification. The company does pay a great deal of tax, and is by no means the worst culprit in matters of avoidance. The UK government’s own estimates suggest that thousands of major companies behave in a similar way. Their directors can sleep easy, knowing that the likelihood of anyone writing about their tax affairs is slim.
And here’s the key point. Big companies avoiding tax has a direct effect on us all: it means that we don’t get the tax revenues that we are really owed by those companies, who get our work and our revenue here, but don’t want to pay back into the society what they owe – to pay for the hospitals, schools, roads, railways that the people who work for them rely on.
They want to take, but not give. That’s wrong.
Which is why at the very least Andy Burnham should be trying to reform the law of libel, and make it more like the US where there’s an assumption of freedom of speech – but also more like the blogosphere, where you correct things if they’re wrong as soon as you can. Rather as the Guardian does, in fact.
Do read the Rusbridger article though. The numbers involved, especially on the Tesco side, will make your hair stand on end.
Still, it does have happy ending:
Mr. Justice Eady found against Tesco on all counts.
Yes, that’s the same Justice Eady who Paul Dacre hates.