More on The Guardian and Tesco

In response to my comment on Alex Hawkes Tax Hack blog, John Adamson wrote:

"I'm not sure John Kavanagh is right on his first two points. The reality is that the whole issue of tax avoidance is now becoming one not just of public interest, but one of political interest too. I'm not sure people ARE tired of hearing about it, I actually think it's a more relevant issue than ever. So isn't it perfectly legitimate for a journalist to ask questions? And as one of Britain's largest private companies doesn't Tesco have a moral and social responsibility, let alone a legal responsibility, to be transparent about its activities? The disturbing issue here is what appears to be an over-reaction by a company under pressure, and implicit threats to any journalist that looks at the company, Surely in a democracy that is a very worrying development?"

I responded:

Despite their name, public limited companies do not owe a duty to the public in general. Their main duty is to two groups of people; shareholders and customers.

Tesco's duty to its shareholders is to maximise its profits by any legal and ethical means, including the legitimate avoidance of tax. I've no doubt that vast numbers of Tesco shares are owned by pension funds and charities. Is it ethical or moral to deny these groups the higher dividends and capital growth that result from proper management of the company's affairs?

As far as their duty to their customers is concerned, who is the Guardian to say that they would not prefer a penny off a tin of baked beans rather than to give it to Gordon Brown? I can imagine what pensioners, those on benefits and the low paid would say and I think it differs from the Guardian's view.

We need to remember that the tax companies pay is just an element in their profits; in one way or another it is always borne by the shareholder or the consumer, in reduced dividends or increased prices.

I therefore think it is for Tesco to decide, as a purely commercial matter, whether the advantages of a sensible tax minimisation policy are outweighed by the opprobrium heaped upon them by a politically-motivated corner of the press. If the press over-step the mark, as I think they have here, it is their right to seek redress in the Courts.

The major disadvantage of the form of democracy we have is that the opinion that gains most credence is often the one which is shouted longest and loudest, not necessarily the one which has been most carefully and impartially considered. I am tired of hearing just one side of a debate, especially when it is supported by claims of ethical or moral superiority which are subjective and unproven.