Political, Legal and Social Factors

Topics: United Kingdom, Consumer protection, Recession Pages: 8 (2859 words) Published: June 21, 2012
Jacqueline Korley Unit 1-Harleen Grover Task 8- p6
Deadline is on the 20th of November
In this task, I am going to describe how political, legal and social factors are impacting upon activities in Barclays PLC, Diabetes UK and their stakeholders. POLITICAL, LEGAL AND SOCIAL FACTORS

PLS analysis is very useful for studying the environment in which a company operates and accessing external factors influencing the company in the markets it operates. PLS is the acronym for the following categories of investigation: political, legal and sociological factors. BARCLAYS PLC

Barclays is a global profit making service provider that offers retail and commercial banking, corporate and investment banking, credit cards, wealth and investment management to over 50 countries worldwide. POLITICAL FACTORS Political stability is the most important attribute of a modern state and mainly depends on the rule of law, a high degree of autocracy or democracy and the amount of trade that the country engages in. The rule of law has an influence on the political stability because it is an indicator for how well the executive does its job. One political factor that affects Barclays is tax and because it is a public limited company, its annual profits is subject to corporation tax but does not pay tax at the expected rate of 28%. It pays tax at 23% by its own admission. All its tax planning activity delivers some benefit. Tax regulation the company submits to is one more important political aspect. Barclays obeys regional tax framework in all the countries of its operation. But just 10% of Barclays worldwide corporate tax is paid in the UK. Besides, the company has to submit to double taxation in the cases where there are appropriate agreements between countries. It may be stated that tax risk is observed because of regular changes in tax legislation and analysis of taxation framework (Barclays 2008 Annual Report). A lower corporation tax rate would, on its own, be likely to have a positive effect on local private sector investment and foreign direct investment (FDI) by increasing the return on capital to investors. In addition, a lower corporation tax rate means that businesses may have more post-tax profits available for internal investment. Increased investment typically leads to increased growth and employment. Barclays is politically neutral and have a long-lasting policy of not making contributions to political parties or campaigns. An exception to this is Absa Group Limited which have a majority stake and has a policy of making political donations to the major South African parties to support the development of democracy in South Africa. Employees participating as individuals in political activity or campaigning do so in their personal capacity and not as a Barclays representative. Awareness raising activity conducted by Barclays is in accordance with accepted good practice and undertaken only by those employees authorised to do so as well as comply with relevant UK, EU and US financial sanctions against individual bodies and countries. Barclays does not receive any direct support from the taxpayer or the government and in fact, rejected Government plans to impose targets for lending to small businesses. The Bank Rate, formerly known as the Base Rate, is the interest rate at which the Bank of England lends to banks and other financial institutions. For this reason, the Bank Rate has an effect on the level of interest rate paid or charged by banks and other financial institutions on their savings or lending products so for instance if the Bank of England increases its Bank Rate by 0.25%, then Barclays will also increase its interest rates by 0.25%. Lowering the interest rate encourages customers or people to...
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