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BBC BREAKFAST WITH FROST INTERVIEW
LORD LEVY JULY 9TH, 2000

Please note "BBC Breakfast with Frost" must be credited if any part of this transcript is used

DAVID FROST
Most of the papers agree that Tony Blair must be glad to see the back of this week but the latest claims in the Sunday Times this morning give him little cause for comfort because Lord Levy, his friend and confidante is under the spotlight again over his tax affairs, the paper points to his involvement in a tax company that they say specialises in tax avoidance. Well Lord Levy, Michael Levy is here now, good morning Michael.

MICHAEL LEVY
Good morning David.

DAVID FROST
Let me just begin with that, that they say on the front, you must be relieved it's going down the front page after three weeks, but the political row intensified, it was revealed that he was a part-owner of a firm of tax avoidance advisors until March this year, that, that the firm, J W International, advises clients on strategic tax planning which often involves off-shore trusts according to John Webber, Managing Director? What about that, what they're saying here is obviously, they keep saying there's no suggestion that you've done anything illegal, this is to do with tax avoidance and so on, legal tax avoidance and so on, but what about that, Levy has stake in tax avoidance, had stake?

MICHAEL LEVY
Let me, let me answer the question David, John Webber is someone I've known for many years, he headed IMG, Mark McCormack's set up in the UK, was very highly respected, he decided he wanted to do his own thing and he went to some people he knew, four people took a 15 per cent stake, he controlled the company with 40 per cent, the word tax was never even mentioned in a very short association when I was on the board and after that it was a passive investment which I have now sold. I mean the most important thing he wanted to do was to try and get into the entertainment industry and asked for my advice in international licensing and international copyrights. The word tax was never even mentioned.

DAVID FROST
Right, it is now mentioned in their, in the company's report, this is since you resigned of course, but it does say principle business activities accounting, auditing, tax consultant, the ing is missing for reasons not known there, but I mean inevitably what they're saying is any company that's advising people on keeping as much of the money as they can would, that tax avoidance would be involved?

MICHAEL LEVY
I have never met one of the clients of the company, I was never involved with one of the clients of the company, as far as I was concerned he was in the management of successful people in the sports arena and in the entertainment arena. He was carrying on the work he'd done at IMG. Tax avoidance, tax planning was never mentioned to me, never discussed with me and as I say the word tax was never mentioned in any meeting I've ever had with John Webber.

DAVID FROST
And in terms of this there was also the thing, whether you've ever been involved in tax avoidance, they also point out that there were loans to Wireart, your company, including 386,825 from the Michael Levy Acquisitions Trust which the Labour Peer had set up in 1988 in the tax haven of Guernsey, so on the basis of that they say you have been involved in tax avoidance at some stage?

MICHAEL LEVY
Well let's try and answer that David, in 1988 I sold a business that I had built up over many years, Magnet Records a very successful business and I sold out to Warner Brothers, at that time various advisors gave me different routes to avoid tax, very simple routes. One very simply taking 12 months out of the UK, coming back and would totally have been able to avoid tax. I chose not to do that and I paid 2.5 million in '88 which was a lot of money then and is now many, many millions more. I chose to stay, pay the tax because I did not want to be involved in any form of tax avoidance. Thereafter both my children now live outside of the UK and we set up one trust overseas because it was thought that at some stage we may join them.

DAVID FROST
What join them in Israel?

MICHAEL LEVY
John them in Israel, that was set up in '88 and involved Wireart. Subsequently that trust was brought back to the UK and assessed for UK tax when it was brought back. Now I don't regard that as tax avoidance, there was a wonderful opportunity in '88 to avoid 2.5 million, I chose not to do that, I didn't want to do that. They then take a year of 1988/89 but how did they get that tax information, it now, the Inland Revenue have now got on to the DPP because basically they think that the methods that they had in obtaining that information were illegal. They didn't say 'wow, what a good guy Lord Levy is, he's paid 3.5 million over 12 years, an average of 300,000 a year', I lived off capital in a period because frankly I lost money in a business, another business I'd set up, one of those things, you win some, you lose some. This is political, no one would ever have put me under a microscope if it wasn't political, I made a decision, I believed in Tony Blair, I believe in the Labour Party, I've always been Labour and I support him, I will continue to support him in every possible way. And David this is why this is going on and I think what really should be under investigation is the methods used by the media in order to attain information.

DAVID FROST
And you have got names to suggest to the police of who may have been responsible for this?

MICHAEL LEVY
I, I

DAVID FROST
Impersonation?

MICHAEL LEVY
Well I understand that names have now been passed to the police, I have no knowledge of that myself but I understand that names have now been passed to the police but it does seem very strange that someone phoned the Inland Revenue, impersonated me and obtained verification of information. If someone in public life, David, used those methods, impersonated people to get information, went out of their way to get information obtained illegally, how would those figures in public life be treated.

DAVID FROST
I think we should

MICHAEL LEVY
Why should there be two different sets of standards.

DAVID FROST
I think we should make clear that the impersonator was not under any circumstances Mr Rory Bremner.

MICHAEL LEVY
I'm sure not.

DAVID FROST
Tell me the, in terms of the public life thing, Justice Toulson said that, that you could not altogether complain if you're caught up in the heat of it if you decided to go into public life and so on, has that, has all that's gone on made you think maybe I will not continue in public life or will you be raising funds for the party again at the next election?

MICHAEL LEVY
I have to confess that over the last few weeks there've been moments when I've thought what is this all about, it's been a total invasion of my privacy, my family's privacy but at the end of the day I do what I believe in, I support what I totally believe in, I believe in Tony Blair, I support Labour, I believe in this government and I would also add that anyone else with anything to contribute, whatever little I can or cannot contribute, that wants to go into public life, if you believe in something, whether it's Labour, whether it's Tory, whether it's Lib-Dem, do it, go ahead, don't allow this sort of media behaviour to put you off because at the end of the day you support and do what you believe in David.

DAVID FROST
Thank you very much indeed, we'll just leap for an update on the news headlines from Moira Stewart.

[BREAK FOR NEWS]

DAVID FROST
And that's all we've got time for and we'll be seeing you again at the same time next week, top of the morning, good morning.

END

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