In March 2009, after the release (with many redactions) into the public domain of (some of) the previously confidential Inland Revenue papers concerning the exemption in the 1970s of the Oxbridge University Presses from Corporation Tax, I raised the question of why IR Charities section official Betty McRobert should have changed her tune so diametrically between 1976 and 1978 (aka The Ultra Vires Poise Volte-Face Puzzle). In 2010 a book was published which suggests a scandalous answer to this question.
As Akme scholars will know, CUP's chief executive Geoffery Cass concluded his 100+ page application of 11th November 1975 for tax-exemption with an extraordinarily long caveat that CUP's exemption, were it to be granted, would not set a precedent for OUP. Realising that OUP's obvious commercialism was CUP's chief stumbling-block (and remember: this was in the mid 1970s), he wrote:
"It is not an exaggeration to say that the case of Cambridge University Press is quite unique, and that there is a substantial body of evidence to support that contention. There is only one other large university press in Great Britain - namely, Oxford University Press. The Oxford University Press is two or three times bigger than Cambridge University Press, and its character and the nature of its operations are radically different."
Cass went on to quote liberally from Oxford University's own Waldock Report investigation into the workings of its press, which had been published in May 1970:
"Other University Presses differ from that of Oxford in having a more restricted philosophy of University publishing... Other University Presses limit themselves to what they commonly refer to as 'scholarly publishing'... Even the Cambridge Press, it must be underlined, differs substantially from the Oxford Press in the range and size of its business. Oxford has large and important publishing departments in London and New York, as well as at Oxford, and also engages in local publishing on a small scale in a number of other territories. Cambridge publishing (editorial and production), on the other hand, is confined to [i.e. generated from] Cambridge itself."
Cass amplified this, in a tone verging on the snide:
"Whereas CUP publishes only academic and educational books, learned journals, and Bibles and prayer books, all of which are approved, in advance, title by title, by the Syndics of the Press; OUP has moved far away from the concept of the 'pure' university press. Not only does it publish fairy tales, poetry, maps and atlases, adult fiction, children's fiction, biography and autobiography, detective stories, music, sheet music, dictionaries, children's picture story books, sport, reminiscences, and other general trade books; but the majority of the works published are not approved at all in advance by the Delegates of the Press (the Oxford equivalent of the Cambridge Syndics)."
Again he relayed Waldock:
"The role played by the Delegates as a body is less active than might have been expected. We were told that it is not the practice for a Delegates' meeting, whether circulated beforehand or laid on the table, to include full reports on the books for consideration at that meeting... An individual Delegate therefore will know about a proposal only what is said at the meeting at which a decision is taken about it... We understand that it is the practice of the Cambridge University Press for reports to go out in full to all members of the Syndicate, and we found the same practice usual at the University Presses we visited in the USA."
On the last point, Cass added:
"On the question of University's editorial control over the books published, the Delegates of OUP approve a relatively small percentage of the output. Few of the publications of the OUP London Publishing house are considered in detail, and according to the Waldock Report, of the 1,124 titles published by OUP London in the year 1968/9, only 134 were considered at all by the Delegates in advance of publication. OUP New York published 206 titles in 1968/9, of which at least 137 originated in the USA without any specific approval from the Delegates. The other overseas branches of OUP published 192 books quite independently, without individual approval.At CUP, every single book,
[his underlining] journal, or Bible, is individually approved and authorized for publication, by the full Press Syndicate, in accordance with the 1534 Royal Charter: and full papers about each book, journal or Bible - including several readers' reports and an analysis paper - are circulated to each member of the Syndicate in the week before the Syndicate meeting. No publishing decisions are delegated to anyone else, anywhere in the world. No contract can be given to any author without the specific advance approval of the full Syndicate."
Comparing the two presses' financial structures, Cass pointed out that while at CUP all major business decisions were taken by the full Syndicate, which received detailed minutes from all its sub-committees, the OUP's Delegates were shielded from the financial affairs of the Press by the shadowy 'Finance Committee'. Waldock again:
"In short the Delegates, by custom if not by resolution, have divested themselves of their powers over a very large area in favour of the Finance Committee. The accounts of the OUP group as a whole are seen only by the Finance Committee and not by the full Delegacy, and no minutes of the proceedings of the Finance Committee go in the briefest form to the Delegacy. The Oxford Delegates who are not members of the Finance Committee never even obtain a sight of the Press's annual accounts. [This, of course has since changed, although several Delegates claimed not to have consulted over the 1999 poetry-axing fiasco. However they were kept informed, by me but not by the OUP staff, of the proceedings in my 1986-1990 case, but they nevertheless did nothing. - A. M.] ... Our investigations have given us the impression that in the past the work of the different departments has not always been fully co-ordinated and that the Press has in some degree been operated as a collection of related businesses rather than as a single closely articulated group."On the scope and ambition of the two presses, Cass wrote:
"Perhaps the fundamental difference between the Cambrdge and Oxford Presses is that, as Waldock noted, the Oxford Delegates insist "upon the pre-eminence of the Press's function as international publishers." The Waldock Committee saw OUP's problem as "one of striking the correct balance between the role of the Press, as the Press of the University and its role as a national and international publisher responsible not only to the University but to the world of learning at large." CUP, by contrast, sees itself very much as the Press of Cambridge University, operating within the strict terms of its ancient charters. It does serve the world of learning - much more single-mindedly than Oxford - but it serves it in its capacity as an integral extension of the University - not as an almost semi-independent 'international publisher'."
He also noted Waldock's dark, prophetic criticism-cum-warning:
"The development [of OUP] has not followed a coherent 'master plan'... The [Waldock] Committee does not suggest that OUP should seek to expand indefinitely in every field of publishing."
And he went into the contemporary tax status of OUP USA:
"All these significant differences between Cambridge and Oxford have always caused OUP to have a totally different taxation status in the USA. CUP's American Branch (not incorporated) has always been fully tax-exempt in the US. OUP (significantly, incorporated as a private company) was challenged on its overall tax status, and had, I understand, to concede taxability on its Bible sales, in order to preserve tax-exemption on its other activities. An attempt by the Internal Revenue to tax CUP on its Bible sales failed - even though CUP and OUP jointly published the New English Bible in America. (I believe Oxford has once again changed the nature of its incorporated status in the USA). The much more commercial orientation of Oxford in the United States counted heavily against it. A relatively small percentage of the books published by OUP New York are scholarly or academic."
Cass concluded his long caveat with a strenuous, tiresome repetition of all these points, finally summing up:
"The Presses of these two great Universities have developed along very different lines over the centuries... OUP has over the years moved from being a 'true' university press to become more of a general international publishing house. The control of the University over its operations - particularly over its editorial policy, - is quite loose, and it does not concentrate solely on scholarly, educational, and religious publications as CUP does."
In a second letter he added:
"There is of course a component of Oxford University Press that is almost exactly like Cambridge University Press, but it is only a part. As a total 'animal' it is quite different... Cambridge University Press is, in the literal sense, unique."The Inland Revenue officials will presmably have read all of this carefully at the time, and in her internal letter of 17th May 1976, Betty McRobert of the Charities Section firmly echoed Cass's caveat and wrote:
"A word should be said on the possibility of a favourable decision on the Cambridge University Press establishing a precedent which others would seek to follow... The Oxford University Press, X36506, C/r48909, was considered on Board's papers PS1199/1950 &ff, and both its position vis-à-vis the University and its tax position are the same as those of the CUP. We do not have all the well-documented evidence that Cambridge has produced, but we know the Oxford Press is run on the lines of a commercial firm and no longer restricts its publishing to purely educational literature. Possibly, it is acting ultra vires in its trading... Its case, if it made one, for having its profits exempted would be much weaker than the Cambridge Press... [name redacted - Manchester?] "University Press seems to be run on similar lines to Oxford, but [redacted] " University has a separate commercial company. [Name redacted - SPCK?] " publishes and distributes not only religious literature, but secular books which are sold in its bookshops throughout the country. The main emphasis, however, is on religious literature (about 85%) and the trading profits have been exempted on a de minimus basis... I would not consider that exempting the trading profits of CUP would establish a precedent since the historic position of the Press and its present function is most uncommon."
McRobert's opinion was then passed to an Inland Revenue solicitor J. S. Clarke, who produced a somewhat cursory legal analysis, to which I have added my own comments as an appendix. While I find much of Clarke's advice dubious, he did at least firmly agree with McRobert that the crucial question concerned CUP's 'poise', that is, how commercially-oriented (profit-generating) its output was. On that score, in 1976, without, apparently, much evidence or investigation or debate, they both found in CUP's favour.
Two years later, on 15th August 1978, when assessing OUP's copycat claim, McRobert began by continuing in Cass's and her previous vein:
"The [Oxford] publishing business covers a much wider spectrum than that of Cambridge and in some areas is more commercial in character with a number of overseas branches... The Press is administered by Delegacy, the delegates of which are appointed by the University (which corresponds to the Cambridge University Syndicate), but the OUP does not exercise such a close control and supervision on the books published... It is in the size and scale of its operations and its more commercial organisation that it differs from CUP and it has clearly become a more general publishing house in direct competition with other commercial publishing firms despite the publication of a large percentage of learned and academic books... It is possible too that the OUP's future developments may be directed to an even wider range of commercial publications whilst retaining its scholarly and educational books... The amount of tax at stake is substantial... Owing to a wider range of literature published by the OUP and the considerable size of its trading operations as a publishing house, I think the claim for tax exemption is a weaker one than that put out by CUP. Although the OUP is a part of the University and subservient to the University's educational aims, the size of the trading carried on and its scope is such that it is almost a case of "the tail wagging the dog."But having said all that, she then, quite contradictorily, concluded:
"At present I think that the poise of the OUP is toward the publication of learned books, academic textbooks and mainly educational books. Provided therefore that the poise did not in the future change to more general commercial publishing, I think the OUP has made a case for exemption of its profits under S360(1)(e) ICTA 1970."Even more contradictorily (Freudianly?) on 12th September 1978 another Inland Revenue official E. A. Rapsey added this very strange anti-caveat:
"I would not think it necessary to carry out reviews at all frequently of the publication lists to test for any movement in the [UPs'] poise."
Stranger still, despite the fact that, even then, OUP was obviously vastly more commercial and profitable than CUP, the matter was not referred on as before to the Inland Revenue solicitor J. S. Clarke. Perhaps he was bypassed precisely because of his earlier insistence upon the importance of CUP's 'poise', but whatever the reason, OUP's claim was allowed through merely on McRobert's and Rapsey's flimsy, contradictory remarks, a carelessness which was in stark contrast to all the rigorous Inland Revenue analysis that had attended CUP's and OUP's rejected applications for tax-exemption during the 1940s and 1950s.
It was this puzzling, secret Inland Revenue volte-face in 1978 that finally swung the day in OUP's favour and thereby subsequently distorted the entire UK publishing industry. In March 2009 when these papers were released under the 30-year rule, I commented: "McRobert's tone and conclusion here are in perfect, startling contradiction of her own report on CUP of just two years earlier, when she went out of her way to assert that a decision in CUP's favour would not set a precedent for OUP, whose publishing 'poise' she then strongly contrasted. What could possibly have happened during those two years?" Now, at last, we may have a clue.
In his recent encyclopædic study Bookmakers - British Publishing in the Twentieth Century published in 2010 by the British Library, Iain Stevenson, Professor of Publishing at University College London, writes at pages 238-240 about this period in the two university presses' history as follows:
"[Geoffrey] Cass then achieved arguably his greatest coup. He successfully put the case that CUP's activities justified charitable status; this was granted in 1976, thereby absolving it from Corporation Tax and giving its balance sheet a powerful fillip. Although problems remained there is little doubt that Cass - against all the odds - saved CUP from collapse at probably the most dangerous period in its history... OUP had grown internationally with 'branches' throughout the English language world, and indeed elsewhere, and had used its long-established London publishing house to develop a reasonably lucrative trade list, even experimenting with paperbacks. While CUP had always kept a more academic profile in its publishing, OUP's list had become much more diversified. [Footnote: It was CUP's 'purity', compared with OUP's 'trade orientation' that Cass had used in his argument with the authorities to obtain charitable status.] It published poetry, music, children's books and a wide range of educational material... Oxford, too, sought and acquired charitable status in 1978." (Click for Stevenson's passage in full, with a photo and link to his UCL home page.)Stevenson, who has obviously done his research carefully and is evidently privy to inside knowledge of what went on, states here, with surprising absence of comment, that CUP was granted charitable status, while OUP acquired it. In expressing himself thus, with this implication of purchase, is he perhaps, ever so diplomatically, suggesting an answer to our puzzle: that Oxford simply bribed Messrs. McRobert, Rapsey et alia to change their tune? If so, the wagged dog here is revealed as being the Revenue, and in the very year that the (anti-)Bribery Act has come into force. Perhaps it is now time for it to bark.