Saturday, 3 May 2008

Tesco A-Go-Go

There is an interesting series of articles in the Guardian today about the Tesco supermarket chain and its legal battles with that newspaper. The Guardian simultaneously apologizes for mistakes it made in a February story about Tesco and criticizes the company for being sneaky.

Here's what happened: In February the Guardian's Ian Griffiths wrote that Tesco had avoided paying close to 1 billion pounds of corporation tax. Five weeks later Tesco sued for libel, arguing that the Guardian had shown "an utter disregard for the truth or falsity" of the claims. Griffiths and the Guardian then worked to figure out if they'd gotten anything wrong and decided they had: Tesco had really avoided paying 100 million pounds in something called Stamp Duty Land Tax. So, the paper was wrong about the specific tax and off by a factor of 10. It clarifies and apologizes in the paper today.

The Guardian also explains what went wrong. And, though bloodied, the paper remains unbowed. It offers what might be called the "It's so complicated no one could understand it" defense. This is not necessarily a good defense. If the accounting machinations involved are truly so complex should the Guardian be trying to untangle them? Should it be going to press without a firm grasp of the pesky details?

The paper would probably argue it did think it knew the truth. In any case, Tesco wasn't much help, a story explaining the reporting methodology reports. The company only answered a few of the reporter's questions while he was working on the article. Tesco's position seemed to be: "Nothing to see here, move along." That's the sort of attitude that enrages journalists. And makes them suspicious. Today's Guardian stories claim that Tesco was doing all it could to reduce paying tax that Parliament wanted such companies to pay, tax due to Her Majesty's government. The paper was wrong on some of the details but correct in its bigger point.

The best overview of the issues involved is a well-argued editorial in the Guardian. It admits that what Tesco did was legal but proposes that it probably violates the spirit of the law. In any event, what matters, the leader writer says, is that such issues be transparent.

The Guardian made a mistake. It offers a kind of whingeing explanation/apology. And yet I applaud its refusal to back down. A newspaper's reach sometimes exceeds its grasp, but that shouldn't stop it from stretching.


Anonymous said...

Hmm, trying to defend originally shoddy journalism with more accusations is a tough sell to me. A company has a fiduciary responsibility to identify every legal trick it can to save itself money--blame the law, not Tesco. I think one of the other English papers also noted that the Guardian's parent companies exploit the exact same trick to avoid some stamp duty tax. But Tesco is a much easier, more public target to chase--jt in cambridge

John Kelly said...

JT: I hear you. That was my first reaction, too. The Guardian package struck me as a little whiny, as if they doth protest too much. You got it wrong, live with it. But then I decided that they are on to a good story and that Tesco would like nothing more than for the Guardian to just drop it and retreat with their tale between their legs. I hope it will make the Guardian more careful but I'd hate to see them shy away from complicated, controversial stories. And if the Guardian's parent company (which I think is a trust) does the same thing, that should be mentioned in the stories. But, again, I feel that shouldn't stop them from pursuing the story.

John Kelly said...

Or "tail" between their legs, even. Whoops.

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