War on Want land a blow on Alliance Boots

Posted on

War on Want started a new campaign against the tax affairs of Alliance Boots yesterday, and have at least three articles on the issue in the FT this morning. One says:

Alliance Boots, which owns one of the UK’s oldest and most trusted high street brands, has come under fresh pressure from campaigners over how much tax it pays.

The claims are the latest allegations aimed at reinforcing public anger that large companies can use complex arrangements to minimise their tax bills within the law.

Two organisations – War on Want and Change to Win – said the way Alliance Boots handled deals between the company and entities controlled by Stefano Pessina, its executive chairman, broke OECD guidelines.

The essence of the claim is that not enough information has been disclosed on a complex debt deal to know who really profited from it, where, why and with what UK tax implication.

The appeal to the OECD is clever, and new: I welcome it. The UK government is forced to act as a result. But the win has already been secured in a very real sense. The Lombard column in the FT has this headline:

Alliance Boots can dispel WoW factor with disclosure

Precisely right: tax haven secrecy is key to the issue here.

The same column adds:

Alliance Boots has all the characteristics a tax campaigner could ask for in a target. It is a trusted healthcare retailer, founded, like Cadbury, by philanthropic Victorians. But in its modern incarnation it is a tax-savvy group, which was purchased for £12bn in 2007 by Kohlberg Kravis Roberts and entrepreneur Stefano Pessina.

War on Want is the latest righter of perceived wrongs attracted by the contrast. The charity alleges that “entities apparently controlled by Mr Pessina have achieved exceptionally profitable results” from offshore transactions.

AB “categorically refutes” the claims, which it says are defamatory. Sadly for the group, Britons are now predisposed to believe the worst of businesses.

Is anyone surprised by that?

Good work by WoW it seems to me, including their admission that this is not an open and shut case but about knowing what happened: accountability is key, as ever.