The Guardian has written extensively over the years about tax avoidance. Not surprisingly, the newspaper is against it. No doubt a few of its staff have ISAs, which are also a form of tax avoidance, but that's by the by. The newspaper is at it again this morning. "UK's top companies condemned for prolific use of tax havens", reads the headline.
This is all very well, but as I never tire of repeating, the Guardian's owners, Guardian Media Group, themselves used offshore companies to buy Emap. In 2008 GMG made profits of over £300 million but paid no tax whatsoever; actually it received a tax rebate of £800,000. You can read more about its activities here.
How does the Guardian justify this self-contradictory stance? In a blog a couple of years ago Editor Alan Rusbridger argued, essentially, that the newspaper - which generally makes a loss - needed the profits from GMG in order to keep going. He said this arrangement allowed "the Guardian's writers the freedom to write what they want. . . Individual columnists - and even leader writers - may well disagree with some aspects of how the parent company has run itself over the years. Commercial colleagues may likewise fundamentally disagree with the views of the paper and its writers. The point of the trust is to allow each to operate independently. It seems an odd argument that individual Guardian journalists, who have no part in business decisions, should refrain from covering tax avoidance, or should feel inhibited in expressing their views".
This just won't do. Firstly it's not true to say that Guardian journalists "have no part in business decisions". Actually their very jobs depend on the business decisions made by GMG, including its decisions to avoid tax. They may not have any influence on those decisions, but without them the newspaper would go bust.
Secondly its curious that although the Guardian's writers are said by Rusbridger to have "the freedom to write what they want", to "disagree with some aspects of how the parent company has run itself over the years", little of this disagreement actually makes its way into the pages of the paper. Where was the Guardian coverage when GMG bought Emap via offshore companies? Or when it paid zero tax on £308 million profit? Rusbridger and his colleagues seem to have felt strangely "inhibited in expressing their views" on those occasions.
It seems to me that Guardian journalists are happy for their own jobs and pensions to be propped up by tax avoidance; but when - say - Barclays uses similar means to prop up the jobs and pensions of its own staff (not to mention the dividends of its shareholders, many of whom will be pensioners or pension funds), Guardian journalists start jumping up and down.
What hypocrites. The truth about tax avoidance is that you cannot stamp it out altogether. It's in the nature of a system where x attracts tax and y doesn't, people will do their best to try to shunt as much of their income as possible into y. New rules only lead to new methods of avoidance.
If the Guardian really wants a worthwhile target, it might like to consider the - largely third world - countries whose economies depend on low tax rates which attract the avoidance industry. Perhaps Mr Rusbridger could send a gunboat.
