A TRADE union in the vanguard of the campaign to expose tax avoidance has an investment in a firm based in the Channel Islands tax haven of Jersey.
The Public Commercial Services (PCS) union has an £11,000 stake in 3i Infrastructure PLC, which paid no corporation tax in Jersey in 2015 and has interests in the private finance initiative.
PCS has around 195,000 members in the public and private sectors, many of whom work in government.
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The union has been a major campaigner against tax avoidance and commissioned a comprehensive report into the subject two years ago by expert Richard Murphy.
The report, which mentioned tax havens twelve times, estimated that the total ‘tax gap’ in 2013/14 was £119.4bn, of which around £19bn was in avoidance.
It was published two years after PCS general secretary Mark Serwotka said: "It is sickening to see millionaires in the cabinet wringing their hands about the immorality of tax avoidance when it is their lack of political will to act that means we lose tens of billions of pounds every year.”
However, according to the union’s latest annual return, PCS has a stake in 3i Infrastructure PLC, incorporated in Jersey, worth £11,620.
A financially and politically autonomous territory, Jersey has a zero per cent tax rate for most firms and 10 per cent for regulated financial services companies.
The jurisdiction imposes no tax on capital gains or inheritance and applies a maximum 20 per cent rate to personal income.
3i’s 2015 accounts state: “Profits arising from the operations of the Company are subject to tax at the standard corporate income tax rate in Jersey of 0%.”
The investment vehicle also has extensive interests in PFI/PPP deals, which allow companies to make profits from state-financed infrastructure projects.
Senior trade unionists have been vocal opponents of the policy, but 3i had a £159m portfolio in PPP as of March 2015.
According to information published by the Treasury, it had stakes in a community hospital in Midlothian and in the Findlay House care unit in Edinburgh in 2014.
When Labour was last in power at Westminster, Serwotka blasted PFI: “Take the private finance initiative, introduced by the Tories and expanded by the chancellor. The higher costs of PFI are leading to large deficits, job cuts and hospital closures. In the first 14 PFI hospitals there were bed reductions of 30 per cent and staff cuts of 25 per cent."
There is no suggestion of wrongdoing by 3i Infrastructure PLC, but Tory MSP Fraser criticised PCS over the revelation.
He said: “The tax-avoidance campaigners in PCS have been left more than a little red-faced. Perhaps Mark Serwotka and others need to address their own failings on tax before calling on others to put their house in order.”
A PCS spokesperson said: “We operate an ethical investment policy to avoid companies that conflict with our policies, and constantly monitor investments to ensure they conform to the very high standards we set. Where conflicts arise or we are dissatisfied, we would always consider disinvesting.”
Meanwhile, it was reported last week that Serwotka had had a successful heart transplant operation after health problems going back to 2010.
The union said: “This is fantastic news for his family – his wife, Ruth, and children, Imogen and Rhys – and for the union, and we know everyone sends their best wishes."