Have we got tax for you.
The other reason for the Guardian to be extra careful when reporting on tax affairs is that it has also publicly admitted to be involved in avoiding tax itself, or rather that its parent company, the Guardian Media Group, has admitted such. This came about through GMG's alliance with Apax Partners, a private equity group, when it purchased the magazine publisher Emap. Quite rightly, some are therefore suggesting hypocrisy on the Guardian's part to be so apparently outraged about tax avoidance when the newspaper itself also does it. In the paper's defence, it's one of the few companies that has openly admitted some of its tax arrangements, although how much of this was in relation to the Tesco affair is unclear, while Richard Murphy, of Tax Research UK, examined all the other large media groups and found that the Guardian paid the largest percentage of corporation tax of the lot. As Richard Brooks also points out, it would be far worse if the paper's own tax arrangements stopped it from investigating "the tax gap", or even worse, if it affected its stance on it. Hypocrisy can be alleged, but it seems doubtful that the News International papers will be investigating tax avoidance any time soon, just as the Sunday Times every year mysteriously excludes Rupert Murdoch from its rich list.
Richard Brooks' involvement is one of the signs of how seriously the paper is taking its investigation, presuming of course that Brooks is the same Brooks that also works for Private Eye and who has been one of the heirs to Paul Foot's throne. That Private Eye subsequently discovered that Tesco was indeed avoiding corporation tax, as the paper had alleged, doubtless helped.
Undoubtedly, as we plunge head first into a recession, the tax receipts, taken for granted during the boom, become ever more important and should become ever more scrutinised. Peter Mandelson's famous quote, that New Labour was relaxed about people becoming filthy rich, often leaves out its second half, that this was fine as long as they paid their taxes. Half the reason why it was left off is not just so it can be used to beat Mandelson and Labour with, but also because the government itself became fabulously relaxed about companies and the individuals behind them not paying their fair share of tax. The Treasury might each year during the budget plug a few of the loopholes which are discovered by the bean-counting firms and mercilessly exploited, but the real tale, as always, was shown in the honours list, which year after year was resplendent with the burghers of industry who saw it as their duty, both to shareholders and themselves, to reduce their tax burden. Probably the most egregious example was the knighthood awarded to Philip Green, the man behind the Arcadia group - this was despite him taking £1bn out of the company to pay himself, which he funnelled to his wife in Monaco, therefore avoiding having to pay any tax whatsoever. The other gob-smacking incident was the selling off of tax offices to the company Mapeley, which is based in the tax haven of Bermuda. According to the National Audit Office's report on the deal (PDF), this saved Mapeley in the region of £55 million that the taxpayer would otherwise have had paid back to into the public purse.
The completely secretive nature of the deals, as well as the highly complex nature of the avoidance schemes exists not only between the companies and those that draw them up, but also between HMRC and the companies. HMRC, possibly out of embarrassment, possibly out of the desire to keep the missing taxes due a secret, refuses to give a figure for how much they're being left out of pocket each year, although estimates range wildly from between £3.7bn to over £20bn. Part of this secrecy is because HMRC deals directly with many of the companies over exactly how much tax they intend to pay - individuals such as Mohamed al-Fayed have long had agreements with HMRC over the exact figures. This is of course in stark contrast to how other taxpayers who get into arrears are treated, and to how the aforementioned benefit fraudsters are subject to the equivalent of a 10 minutes hate every so often. Both rip off the public purse, but only one enters the public eye, while further establishing the idea that most of those claiming to be sick are in fact not.
Some will console themselves with the idea that although undoubtedly avoiding pay your dues is a bad thing, that the money would just be squandered anyway. The argument would be a lot less alluring if this government wasn't so determined to do the equivalent of pouring money straight down the drain, as it continues to do on the various disastrous IT projects, on ID cards and on the Olympics, to name but a few such schemes. At the same time, there are always other things which many of us would like to see extra money going towards, not least at the moment a more generous benefits scheme for those temporarily out of work, or additional funding for retraining. It could be used to pay off the extra debt we're taking on more quickly, so as not to mortgage another generation of ordinary workers. As could be expected, it has been those ordinary workers, such as those protesting outside Lindsey and walking out in solidarity across the country, regardless of the involvement of the far-right and the nature of some of the slogans used, that are now being hit hardest when it was unrestrained global market fundamentalism which created the mess and which has been bailed out. The least those responsible can do is pay their fair share - and closing down the tax havens and the avoidance schemes has to be one of the conditions of the recovery and subsequent re-regulation.