The Rev Will Morris is a vicar at St Martin's in the Fields, London. He's also a tax lawyer with GE Capital - who notoriously are now in receipt of regular tax refunds in the US despite being highly profitable. And in the UK he's chair of the CBI's tax committee - in which role I have criticised much of what he does.
Depsite that I admit that Will remains a man I like: it's important to differentiate the person and what they say and are. I also have a sneaking suspicion that despite it all, Will reciprocates that sentiment, which is, maybe, why he's sent me a note about a new paper he's written on business ethics. This was published a few days ago by the right wing Reform think tank, and got trailed on Conservative Home, where to be candid I don't think it got a single positive review.
So what did Will suggest? The synopsis of what he proposes come from this one paragraph:
I suggest a simple new law requiring every business to have a code of ethics, to report annually upon it, and train all key leaders in it regularly. This would encourage businesses to think what their code should be rather than respond to yet another detailed set of rules and regulations. Businesses that ask “why” as well as “how” will be stronger businesses and deliver stronger capitalism too.
Will's undoubtedly right: we need a decidely different capitalism from that we've got.
But he's wrong too: enforcing "tick the box" codes of conduct that will be written, filed in a drawer and be ritually reviewed and re-filed annually will change nothing. If Will is serious about ensuring we have responsible capitalism then he needs to say what should be in such a Code. And since Will won't suggets hat content let me do so instead. I'd suggest that the code must say:
1) We won't use tax havens unless we really trade there - in which case we'll publish an account of what we do, and why;
2) We'll publish full country-by-country accounts to explain what we do to people with concern about our activities in a way that is relevant to them, where they are;
3) We'll fully reconcile our taxable profits with the tax we pay, everywhere;
4) We'll also publish a full analysis of all other payments due to each governemnt we transact with;
5) If the tax we pay doesn't seem to make sense to a reasonable lay person, we'll say why.
That way business would win the confidence of the communities it serves - which Will and all serious commentators (from which I exlcude those who comment on Conservative Home) know is so low right know that any move to increase its role in any community is seriously resisted.
So what about it Will?
If yu're serious - what's wrong with just being accountable? My proposal is much more likely to be effective than publishing warm words that no one will believe - and with good reason.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Now since you have brought up the question of the viability of a business, here is a question. Someone who is unemployed has a go at running a business. He just about breaks even and can indeed pay his taxes on his income which he dutifully declares to the Inland Revenue.
After a while he thinks about taking on someone to help him, full time. That person is unemployed and on JSA plus HB. He would happily work for the same amount. But in order to take home as much as he is receiving in benefit, the employer would effectively have to pay JSA + HB + PAYE income tax + Employer’s NI + Employees’ NI. You know what I am driving at – the difference between the incidence and the burden of taxes.
Anyhow, he concludes that although he could afford to employ the helper for JSA + HB, the other things on top are a deal breaker.
That is what happens at the margin, is it not?
Nothing you can do with LVT can change that
We’ll still be paying taxes
That business and that employee will still need the resources to pay
All you’ll do will change the description of the payment
Spot on Richard. I’ve seen way too many organizations who create these vision statements, a set of values and code of conduct; but at the end of the day, it’s just window dressing. A code of business ethics would be treated similarly I suspect. If there is nothing to enforce the code, the chances are it won’t be upheld. We need actions rather than words.
Perhaps, what we need to do is put up model companies (who pay their taxes, treat their workers right, etc). Is there a role for TJN in this? Such companies would get a lot of favourable publicity and hence more business.