Shame on you if you avoid tax, says Chief Rabbi

Posted by: Giles Barrie

29 October 2010

The rights and wrongs of tax avoidance, the morals behind executive pay and the sins of agents were all tackled by a high-powered panel assembled by the Jewish Association of Business Ethics.

Joining the Chief Rabbi on stage at London’s Park Lane Hotel were WPP chief executive officer Sir Martin Sorrell, chairman of the Delancey advisory board Sir John Ritblat and in the chair, Sky TV’s Jeff Randall.

A 300-strong audience heard Sorrell and Ritblat defend legitimate tax planning on the basis that companies should always do their best for shareholders.

But when just one member of the audience said he disagreed with their stance the Chief Rabbi caused an uncomfortable stir when he said he too could not condone avoidance of tax.

The reason? The world is in the midst of a bad financial crisis and in Britain in particular, with our yawning national deficit, everyone needs to do their bit to pull their weight.

Ritblat was the most impressive participant over executive pay.

`What is inappropriate is when failed chief executives get a big pay-off. Shareholders and stakeholders perhaps don’t exercise their power enough. Likewise, if companies were to collectively lower their fees to investment banks bonuses would be lower, too’.

The final dilemma raised by Randall was over the nuts and bolts of deals.

Many in property have been following the court case in New York between Terra Firma boss Guy Hands and his former adviser, Citi banker David Wormsley.

Wormsley is under attack for allegedly not telling Hands that an under-bidder for music group EMI had pulled out before Terra Firma lodged a sky-high bid.

Asked if he would expect an agent selling a property to tell him about possible problems with it, Ritblat took a highly pragmatic view.

`Caveat emptor’, he declared. `Never a truer word was spoken. That is why we have solicitors who make great enquiries on our behalf’.

The last word, after this, went to the Chief Rabbi himself:

`That is why the Jewish system puts an enormous emphasis on trust, and the English system has an enormous emphasis on lawyers!’.

Many thanks to JABE for hosting this excellent annual event, and to James Andrew International for inviting me along.