I was contacted last week by the PR person at the Ecology Building Society who told me that the Ecology now had accreditation under the Fair Tax Mark. I emailed back to ask if the Ecology, a small building society with all the financial regulatory regime it is required to abide by, could actually avoid paying its taxes even should it want to, Fair Tax Mark or not. I can’t somehow see the Ecology with its single office in the West Yorkshire town of Silsden opening up, say, a Channel Islands offshoot as once upon a time an ex-building society named Northern Rock chose to do.
My email response was a little unkind. The Ecology, set up by a group of activists at the time when it was just about possible (with a lot of hard work) to start a new building society from scratch, has gone on to do good things. And the Fair Tax Mark (very much a creation from within the cooperative movement) is a useful propaganda vehicle when so many companies appear to feel that UK Corporation Tax is a voluntary commitment that they may or may not decide to meet.
The International Trade Union Confederation, together with several of the sectoral Global Union Federations and a host of national trade union organisations, issued a call yesterday for pension funds to fight against tax avoidance schemes by companies they invest in. “The global scale and influence of pension funds creates an opportunity to further advance responsible tax policy and practices”, the unions say.
There’s a lot of activity in this area going on at the moment. Last month’s newsletter from the UK charity ShareAction (it used to be called Fair Pensions) suggests that institutional investors should ask all the companies they invest in a set of questions about these companies’ tax strategy, including the size of tax savings brought about by intra-group financial arrangements.
These are useful initiatives, but do they fall within my self-imposed restriction in this blog to cooperative matters?
I think they do, for two reasons. Firstly, it’s been encouraging to see some UK cooperatives (most notably Midcounties and the Phone Coop) taking a lead in endorsing the ‘Fair Tax’ mark, itself an initiative of the (cooperative) Ethical Consumer group.
There’s another reason. The world’s cooperative insurers and banks hold phenomenally large amounts of investment funds on behalf of their customers. The members of the international coop and mutual insurers’ federation ICMIF (some of whom have a commendable track record incidentally in promoting socially responsible investment) alone have over one and half trillion US dollars in assets.
The necessary work of campaigning against companies’ manipulation of corporation taxation is an area, in other words, where cooperative businesses can take a lead.
(If cooperatives are to claim the ethical high ground, change the verb in that last sentence of mine from ‘can’ to ‘must’.)