Murdoch's tax: Labour has, er, nothing to say

Why has the Opposition come over all coy? asks Nick Cohen

THERE comes a point in every aspiring monopolist's career when his business reaches a critical mass and he becomes so powerful that no politician dare take him on.

Rupert Murdoch, owner of the Sun, the Times, the News of the World and the Sunday Times, the publishers HarperCollins and a large chunk of BSkyB television, arrived at this comfortable state last week.

The Independent demonstrated on Monday how Mr Murdoch's News International had paid virtually no tax for 10 years. The Labour Party, which has been labelled "loony" by Mr Murdoch's papers for years, and threatened to place restrictions on the growth of his business in the Eighties, reacted by saying ... nothing.

The accounts of News International's subsidiaries showed how money from Britain had moved to tax havens in the Cayman Islands and Netherlands Antilles. Quite legally, Mr Murdoch's empire had claimed "group tax relief" by offsetting profits made in one part against losses made in another.

The result is that News International has accumulated pounds 979.4m of net profit since 1986 and paid just pounds 11.74m of net tax (1.2 per cent of the take).

Gordon Brown, the Shadow Chancellor, daily denounces business "fat cats". At the Labour conference this year he promised that the party would produce an "irreversible shift in wealth and power away from privilege and excess to the real wealth-creators - those who work and study hard, who pay their fair share of taxes."

Surely he would tear into a tycoon who, if he had paid taxes at 25 per cent on his profits last year, would have given the Treasury pounds 200m - enough for about 50,000 hip-replacement operations? "No," explained one of Mr Brown's aides. "We tend not to make specific criticisms of specific companies."

But what about the privatised water company bosses? You are pretty specific about them. "Ah. Yeah. They're different, they're privatised. If you want a comment on Murdoch, try Nigel Griffiths." Mr Griffiths is Labour's consumer- affairs spokesman. All that he had to say was: "It's nothing to do with me. Try the Treasury people [who work for Gordon Brown]." Well, we had. So we turned to Margaret Beckett, described by the Sun last month as a politician "as left as they come". Would she condemn Mr Murdoch? The omens seemed good. Mrs Beckett,Labour's Trade and Industry spokeswoman, would assume final responsibility for the Monopolies and Mergers Commission if Labour won power.

The allegation against the commission from Mr Murdoch's competitors, including the owners of this paper, is that it allowed him to threaten his rivals' future by "dumping" the Times on the quality-newspaper market at 20p. The huge losses the Times sustained - estimated at pounds 40m a year - were then passed around his group.

The commission did not blink an eyelid. This was not a surprise: it hardly ever intervenes. After a year in which it allowed the City to make pounds 500m from fees for giving advice on takeovers, cynics suggest it would have approved Hitler's invasion of Poland as a legitimate expression of the free market in military force.

But Mrs Beckett's office gave no hint that a reformed MMC would trouble Mr Murdoch. "I'm not being evasive, but newspapers are the responsibility of Jack Cunningham at National Heritage," said a spokesman for her office. "Obviously we've got an interest, but we've really got nothing to say."

Neither had Mr Cunningham. "We're waiting to see what the Government does in its Broadcasting Bill," explained a researcher. "Jack hasn't really formulated his ideas yet. I'll get him to give you a call." Mr Cunningham did not call.

The only Labour frontbencher prepared to take a firm line was Tom Pendry, the shadow Sports Minister. He had "a number of reservations" about the way that BSkyB was buying up the great national sporting events and forcing viewers to pay for the privilege of watching them. He promised that a Labour government would set up a task force to investigate the problem.

Mr Pendry should be careful. Earlier this month, Richard Caborn, Labour's spokesman on competitiveness, called on the Government to investigate the "serious threat to the development of the UK broadcast industry" posed by Mr Murdoch's pay-TV monopoly. He was instantly slapped down by John Prescott, Labour's deputy leader, who said Mr Caborn was not reflecting party policy.

As we were passed from office to office, one name kept coming up. Speak to Alistair Darling, said the aides to Mr Brown, Mr Cunningham and Mrs Beckett. He is the party's authoritative voice on Mr Murdoch and tax.

We finally tracked the well-regarded spokesman on City affairs to his Edinburgh office. Was he prepared to say if a Labour government would force Mr Murdoch to pay more tax?

"Up to a point,'' came the shy reply. "You see, we haven't seen Murdoch's accounts. We don't have anything to go on. In a global economy, all companies can secure tax advantages by moving funds around."

Sceptics suggest that Labour's coyness is motivated by a desire not to offend the world's most powerful media magnate. They cite as evidence Tony Blair's visit to Australia to address News International executives and the party's refusal to condemn Mr Murdoch's closure of the Labour- supporting Today newspaper, even though there was a willing buyer.

But Mr Darling said that the party was concerned with loftier ideals. "You can't be subjective. You must never design a tax system to get at one person. It is a matter of fundamental principle."

Murdoch's power, page 21

Arts and Entertainment
The first film introduced Daniel Radcliffe to our screens, pictured here as he prepares to board the train to Hogwarts for the first time.
booksHow reading Harry Potter helps children grow up to be gay-friendly
Sport
Frank Lampard will pass Billy Wright and equal Bobby Charton’s caps tally of 106 caps against
sportFormer Chelsea midfielder in Etihad stopgap before New York contract
Arts and Entertainment
A scene from Aladdin is performed at the Tony Awards in New York in June
theatreBrit producer Lythgoe makes kids' musical comedy a Los Angeles hit
Sport
Usain Bolt of Jamaica smiles and shakes hands with a competitor after Jamaica won their first heat in the men's 4x100m relay
sport
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
Chancellor George Osborne, along with the Prime Minister, have been 'complacently claiming the economy is now fixed', according to shadow Chancellor Ed Balls
i100... which is awkward, because he is their boss, after all
News
i100
Arts and Entertainment
Adèle Exarchopoulos and Léa Seydoux play teeneage lovers in the French erotic drama 'Blue Is The Warmest Colour' - The survey found four times as many women admitting to same-sex experiences than 20 years ago
filmBlue Is The Warmest Colour, Bojack Horseman and Hobbit on the way
News
Kenny Ireland, pictured in 2010.
peopleBenidorm actor was just 68
Arts and Entertainment
Preparations begin for Edinburgh Festival 2014
Edinburgh festivalAll the best shows to see at Edinburgh this year
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

(Senior) IT Support Engineer - 1st-3rd Line Support

£40000 per annum: Ashdown Group: A successful IT service provider that has bee...

Wind Farm Civil Design Engineer

£55000 - £65000 Per Annum: The Green Recruitment Company: The Green Recruitmen...

Principal Marine Mechanical Engineer

£60000 - £70000 Per Annum: The Green Recruitment Company: The Green Recruitmen...

Principle Geotechnical Engineer

£55000 - £65000 Per Annum: The Green Recruitment Company: The Green Recruitmen...

Day In a Page

Dress the Gaza situation up all you like, but the truth hurts

Robert Fisk on Gaza conflict

Dress the situation up all you like, but the truth hurts
Save the tiger: Tiger, tiger burning less brightly as numbers plummet

Tiger, tiger burning less brightly

When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

In grandfather's footsteps

5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

Martha Stewart has flying robot

The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

Do women cyclists need 'pootling lanes'?

Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

A tale of two presidents

George W Bush downs his paintbrush to pen father’s life story
Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover

The dining car makes a comeback

Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover
Gallery rage: How are institutions tackling the discomfort of overcrowding this summer?

Gallery rage

How are institutions tackling the discomfort of overcrowding this summer?
Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players

Eye on the prize

Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players
Women's rugby: Tamara Taylor adds fuel to the ire in quest to land World Cup

Women's rugby

Tamara Taylor adds fuel to the ire in quest to land World Cup
Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices