Fair tax reflections from investors (II)

Further to the discussions at the recent ICGN conference, responsible tax also featured at the current PLSA (Pensions and Lifetime Savings Association, the former NAPF) conference in Edinburgh. Delegates were asked their reaction to aggressive tax planning by companies.

Far fewer than 10% of delegates answered that any tax minimisation within the law was in shareholders’ interests. Nearly half were most concerned about the potential reputational risks to the company, and around a third expressed concern that aggressive tax planning actually harmed the company directly by undermining state investment in its local infrastructure and society. Rather fewer worried about future tightening of regulation. These results are still more striking and powerful than those from the ICGN conference because there were many more participants in the PLSA session and they were much less self-selecting.

One other message clearly heard at the conference was the importance of stories about ESG and stewardship as being hugely important for engaging savers in their pensions investments, and in making the mysteries of finance closer to real life. This is a message I have emphasised for some time, not least in my FT article.