Link to this page: http://www.socialistparty.org.uk/issue/514/3567
From The Socialist newspaper, 13 December 2007
Charity begins at the bank
BRITAIN'S HIGH street banks have been using charities, particularly children's charities, to benefit from tax breaks and maximise their profits with no obligation to give them a penny.
Twelve well-known British-based banks and finance institutions including Northern Rock, Alliance and Leicester, Standard Life, Lloyds TSB and Halifax raised billions of pounds in funds through complicated financial deals using 'charitable trusts.'
They raised funds on the back of £234 billion worth of home loans over the past seven years, using trusts which have charitable status but rarely do anything charitable.
It all came to light when Northern Rock was found to have raised £71 billion through a trust using the name of a Newcastle-based charity, run on a shoestring budget, for children with Down's syndrome. The Charity Commission is looking at Northern Rock and other banks to see whether they broke charity law.
Halifax set up a similar trust worth £47.9 billion, claiming its profits would go to the NSPCC children's charity, that has yet to see a penny piece.
HBOS, Halifax's owners, say that money would only be paid out when the programme is wound up.
The banks can control trusts without owning them. This isolates any financial risks, and keeps their liabilities off their balance sheets to make them look more profitable.
Trusts with a charitable status can be operated indefinitely with no obligation to make any payments unless they are wound up. Even then the charity would receive a tiny fraction of the sums raised.
The scrooge banks try and excuse the inexcusable by admitting that such cheating actions were an everyday occurrence - which seems another good argument for nationalising the whole banking system!
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In The Socialist 13 December 2007:
Scotland
Defend Tommy Sheridan: End Murdoch's witch-hunt
Tommy Sheridan: End Murdoch's vendetta
Socialist Party NHS campaign
Warning: NHS cuts seriously damage your health
Manchester: Karen Reissmann sacked - and cuts still loom
Post Office dispute
What we think
Interest rate cut will bring no reprieve
Global Warming
Thousands march against climate change
Socialist Party news and analysis
Sefton's first citizen "cheating the system"
Unite Cardiff schools campaigns
Socialist Students
National Union of Students: Right wing force through undemocratic changes
Leicester students debate tuition fees
International socialist news and analysis
Beijing Olympics under a cloud
China: Mass protests erupt in Shenyang
Extraordinary tape destruction at CIA torture camp
Workplace news and analysis
DWP strike: Fighting the pay cuts
Birmingham city council: Workers boo 'lead balloon' councillors
Action can beat Cadbury closure threat
Newham council sack Unison chair
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