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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

Tommy Sheridan perjury charge


Socialist Party NHS campaign

Warning: NHS cuts seriously damage your health

Manchester: Karen Reissmann sacked - and cuts still loom


Post Office dispute

Fight to save post offices


What we think

Interest rate cut will bring no reprieve

Charity begins at the bank

Every fiddle helps

Government's lying statistics


Global Warming

Thousands march against climate change


Socialist Party news and analysis

Sefton's first citizen "cheating the system"

Unite Cardiff schools campaigns

Your new police terror chief


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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