tax havens

Error message

Deprecated function: The each() function is deprecated. This message will be suppressed on further calls in _menu_load_objects() (line 579 of /var/www/drupal-7.x/includes/menu.inc).

Starmer’s Flag-Waving and Fixation on Celebrities Shows Hollowness of New Labour

I know this is another piece of old news, which Mike has commented on already but there are a few more things to say about it. A few days ago Mike posted up a piece about an idea from the Labour party about winning more members and votes. This new, exciting strategy for gaining the support of the British public was for Starmer to be seen more with the Union Jack. Yep, Starmer’s leadership, which is already determined to copy Tory economic policies, also wants to follow them and be seen as the party of flag-waving – some critics called it’ flag-shagging’ patriotism.

The Tories have been draping themselves in the flag and waving it at every opportunity just about since they emerged in the late 17th and 18th centuries. Their aggressive projection of themselves as the party of British patriotism became particularly acute under Maggie in the 1980s. Thatcher was deeply inspired by Winston Churchill’s heroic vision of the British people and their history, and so was constantly invoking his memory and legacy. Thus we had Torygraph headlines quoting the Leaderene, screaming ‘Don’t Call Them Booj-wah, Call Them British’, while the spirit of the Battle of Britain was invoked in the Tory 1987 election broadcast. This featured Spitfires zooming about the sky, while an excited voice intoned ‘We were born free. It’s our fundamental right’. It’s a misquotation of the great Swiss philosopher Jean-Jacques Rousseau. His book, The Social Contract, one of the first works advocating democracy and a major influence on the French Revolution, begins: ‘Man was born free, but everywhere he is in chains’. You can see why Thatcher didn’t want to include the second part of that sentence. Commenting on it on Radio 4’s News Quiz, the late Alan Coren drily called it ‘the Royal Conservative Airforce’ and made the point that all the servicemen, whose memory and sacrifice Thatcher was exploiting all came back and voted Labour. Now Starmer apparently wants to wave the flag as well in order to win over Tory voters.

The new strategy was proposed by a focus group, which were used by Blair’s New Labour to devise party policy, or put the rubber stamp on those the Dear Leader had already decided upon, when the grinning butcher of Iraq was in office. It was part of the Blairite’s centralisation of decision-making, their managerialism and their pointed determination to ignore the demands and recommendations of grassroots members. Now it seems we’re back to the same tired old attitudes and strategies.

Mike and the peeps on Twitter saw past this threadbare strategy immediately. They quoted Dr. Johnson, who said that ‘patriotism is the last refuge of the scoundrel’. But I remember Jon Downes, the frontman for the Devon band Jon Downes and the Amphibians from Outer Space making another observation: ‘a patriot is a man with nothing left to say’. This was in a song entitled ‘Land of Dopes and Tories’. It was a commented on Major’s Conservative party, which carried on the flag-waving while handing over vast tracts of Britain’s historic landscape to English Heritage, which promptly erected fences around them to keep the British public out, as at Stonehenge. Major’s Tories were ideologically bankrupt. It was Thatcherism with the nasty bits cut off and a marked paucity of ideas. His big notion for galvanising the British public behind his party was a ‘Cones Hotline’. This was a number you could call if you thought their were too many cones clogging up the roads. It’s hardly a grand vision, and was rightly ridiculed by Spitting Image and the rest of the media.

And Starmer’s leadership really doesn’t have any ideas. His policy so far has been to agree with the Tories, then criticise them in retrospect. He seems determined to copy their disastrous economic and social policies of privatisation, including that of the NHS, the destruction of the welfare state, and low wages, just like Blair. The only difference is that Blair and Starmer claimed that they would be able to carry out these Tory policies better than the Tories themselves.

Starmer really, really doesn’t have anything left to say. A fact also confirmed by another recommendation. This was that he should be seen with celebrities. Well, that was another feature of Blairite New Labour, which was also very relaxed, as Peter Mandelson put it, about people getting rich. Hence Blair’s desire to be seen with such celebrity businessmen as Beardie Branson and Alan Sugar. But Mike and the other Twitter peeps pointed out that, thanks to his attack on Corbyn, Starmer might find recruiting other celebs to endorse him difficult. Robert Webb apparently has torn up his Labour membership card.

I realise Angela Rayner also returned to make a speech claiming that Labour was still behind the policies laid out in last year’s election manifesto – nationalised public services and welfare state, strong unions, workers’ rights and so on, but Mike asked the pertinent question of whether you could trust her or him on this issue. And you can’t. They’ve shown repeatedly that they’re not prepared to honour the manifesto.

The flag-waving and celebrity-seeking isn’t going to win over traditional Labour voters, who will see past it. Some may even be repelled by it because of the way the Tories appropriated British patriotism and mixed it with aggressive imperialist nostalgia and xenophobia. And it isn’t going to win over Tories. There is a hard rump of extreme right-wing Tory types, who regard the Labour party as the enemies of Britain. The anti-immigrant YouTube channel, We Got A Problem, refers to asylum seekers and illegal immigrants as ‘imported Labour voters’. There are people who honestly believe the allegation that Blair deliberately encouraged mass non-White immigration to this country to destroy the largely White society at the heart of Tory visions of Britain. The same type of people, who believe that the Jews are also encouraging non-White immigration to destroy the White race, the Kalergi plan and the Great Replacement. These people aren’t going to be won over by Starmer waving the flag. They are, of course, probably not going to vote Labour anyway because of Labour’s avowed commitment of multiculturalism. Blair also waved the flag during ‘Cool Britannia’, but it also included Blacks and Asians along with more traditionally British images to project the view of a new, multicultural Britain. That was two decades ago, and while it impressed many, the super-patriotic right still regard it as some kind of betrayal of British identity through its inclusion of non-White culture. Starmer waving the flag won’t get them to change their political allegiances.

In fact, there is a sense that traditional Labour was and has always been the true party of patriotism. George Bernard Shaw pointed it out years ago in his book The Intelligent Woman’s Guide to Capitalism, Socialism, Fascism and Sovietism. He stated that socialists wanted money to be spent here, in Britain, developing its industries and aiding its working people. The Tories, on the other hand, allowed the idle rich to spend their wealth abroad, while undercutting domestic industry with products from the colonies, whose people could be exploited more cheaply. Just like under slavery.

Mike made the point that you could connect British patriotism to a desire for a fairer society where people were supported by a proper welfare state. You could also begin by presenting the Labour party as the party of true British patriotism by saying that it was opposed to the rich hiding their immense wealth away in offshore tax havens, as well as benefiting from tax cuts while the rest of the population have to shoulder the tax burden. Oh yes, and industries that, instead of being owned by the British people, were owned by multinational corporations which simply took their profits without reinvesting in them.

But that would be seen as horribly xenophobic and attacking the free trade and foreign investment the Neoliberals are trying to promote, and so would probably be denounced as horribly racist. Even as the Tories continue to demonise immigrants and asylum seekers.

OpenLux proves that non-compliance remains the game in tax havens

Published by Anonymous (not verified) on Tue, 09/02/2021 - 6:51pm in

A new series of tax haven disclosures by media organisations began yesterday, the Tax Justice Network summarises it like this:

OpenLux is a join investigation into Luxembourg’s beneficial ownership register conducted by the French daily Le Monde, Süddeutsche Zeitung, the journalist network Organized Crime and Corruption Reporting Project (OCCRP), the Belgian newspaper Le Soir, the Luxembourg weekly Woxx and the American media group McClatchy, which publishes the Miami Herald, and others that also took part.

As they add:

What makes OpenLux so striking is that it‘s not a leak from a shady service provider, but a deep dive into public government data that had been made unwieldy to connect dots with. Luxembourg should perhaps be commended for providing better public access to its beneficial ownership register than most other countries, but the fact remains that today’s revelations only came to light once journalists laboriously analysed the data and linked it up with other public records. This speaks volumes about the severe shortcomings of not just Luxembourg but the many governments, including across the EU, that have been reluctant both to publish and to employ beneficial ownership data despite its evident power in the fight against tax abuse, money laundering and financial crime.

They also note:

OpenLux makes two things clear. First, for beneficial ownership transparency to be useful at all, it must be made publicly available so that society can hold wrongdoers and government to account. Second, financial secrecy remains a central pillar of Luxembourg’s economy. Financial secrecy keeps tax abuse feasible, drug cartels bankable and human trafficking profitable. Luxembourg must put an end to its financial secrecy and it can start by closing loopholes in beneficial ownership registration, financial disclosure and tax ruling disclosures, and by closing down companies of investors that fail to comply with transparency requirements.

I have to confess none of this is terribly unexpected. I can offer three reasons.

The first is UK experience. Since equivalent information was required in the UK and the company annual return filed with the Registrar of Companies was replaced by the supine annual confirmation statement the quality of the information provided here has gone down, considerably.

At one time it was at least possible to determine the legal ownership of companies in the UK. Now that is very hard to do, because complete shareholding listings need no longer be filed on public record for UK companies. That is in itself a massively retrograde step. And once it is possible to miss out whole chunks of disclosure, legally, then the possibility of abuse skyrockets simply because the basic control mechanism that requiring 100% disclosure imposes has gone. As a result the beneficial ownership regime in the UK has taken us backwards and significantly increased the probability that UK companies are used for illicit activity.

Second, if that is the case in the UK, which does at least have a central registry of company data, then it was much more likely to be the case in a place like Luxembourg which has always traded off being a secrecy jurisdiction.

Third, I am afraid that this was predictable, and I always felt it likely. I am going to be critical of some tax justice campaigners here (and there are exceptions, the Fair Tax Mark being a notable one). Because many now have little experience of tax, accounting or regulation, however well-meaning many are (and they are, without a doubt) they do not understand either basic control mechanisms or how they can be abused. So, for example, they tolerated thresholds below which disclosure was not required when campaigning for beneficial ownership disclosure when none should have been accepted.

What is more, they argued for beneficial ownership disclosure but have never made having full accounts on public record a demand of at least equal importance. The result is that all too often beneficial ownership of a company, the scale of whose activities are unknown, is the best possible (and even then, quite possibly unlikely) outcome of their demands, which is why I have never shown much support for their campaigns on this issue.

We need five things from company registries:

  1. The names of all registered companies;
  2. Information on where these companies are, and not just a legal address;
  3. The names of all the beneficial owners of these companies and proven identities of the material owners (I suggest anyone owning more than 2%);
  4. The names of directors;
  5. The accounts of the company, in full, as supplied to shareholders or, if there are none, the directors.

This has not been the demand. It would help if it was from now on.

The Queen of tax havens

Published by Anonymous (not verified) on Mon, 08/02/2021 - 6:28pm in

Tags 

tax havens

It is well known the the UK is the hub of the world’s tax haven network. It’s not just the City of London, of course. The branch offices in Jersey, Guernsey, the Isle of Man, Cayman, the BVI, Gibraltar, Bermuda and onwards, all create the web that has fuelled tax haven activity around the world. That web has also been key to the continual fight back of these places against the demand for transparency that might ensure that that the world’s wealthiest people and corporations pay their proper taxes.

The same havens are, of course, also used as a threat to democratically elected governments. “Tax us and we’ll leave” is the perpetual threat of the wealthy, not that many could face the tedium of living in these places. That they are populated by accountants, lawyers and bankers does not suggest that they are the global hubs of excitement.

They also have a feature in common. That, of course, is the Queen’s head on their stamps. These days it is pretty much a signifier of having tax havens status. And now we know that is not by chance.

The Guardian is running stories this week suggesting that in the early 1970s the Queen did her very best to alter UK law to make sure that her financial secrecy was preserved. As they note (and such is the significance of the matter, the length of quote is appropriate):

The Queen lobbied the government to change proposed new legislation so that she could hide the true scale of her private wealth, according to documents unearthed by the Guardian in the National Archive.

The papers, which the Guardian is publishing this week, suggest that the constitutional process of Queen’s consent, under which the monarch and her lawyers are given advance sight of bills coming into parliament, enabled her to keep shareholdings secret.

The agreement made under the Heath government in the early 1970s meant that her financial interests, believed to run into hundreds of millions of pounds, were hidden in a state-backed shell corporation.

I would add that it is not appropriate to dismiss this as an early 1970s story, and say ‘just move on’. The early 1970s were very much the time when many havens were establishing their activities, almost as if they knew that Thatcher would relax exchange controls and let the money flow unchecked toward them from 1980 onwards. I have written two books on this subject; this period was pivotal in the creation of the curse we still have.

And it does rather look like the Queen lent her support for secrecy, which was the real product they sell.

It was not without reason that in 2009 I had to provide a new definition of tax havens, rebranding them as secrecy jurisdictions, which is a term that has stuck in academic and other literature since then.

A secrecy jurisdiction is a place that creates legislation for the benefit of people not resident in that place that then provides a deliberate veil of legally enforced secrecy to disguise the identity of those taking advantage of that legislation.

The purpose of this definition was to target the real problem, name it, and at the same time provide the remedy, and it worked. Campaigns for automatic information exchange, country-by-country reporting and beneficial ownership registration all followed from that redefinition.

And now we know that the Queen was definitely on the side of secrecy.

And you wonder why London is the centre of a hub of tax havens with her head on their stamps? Wonder no more.

Ten reasons why freeports are a bad idea

Published by Anonymous (not verified) on Fri, 05/02/2021 - 6:30pm in

I was asked yesterday if I might be available to discuss freeports on the media and what my ‘top lines’ would be if I did. These were what I suggested was wrong with them:

1) Freeports are bound to reduce the protection for workers. Light touch regulation always does in the end. Employers NIC is already going. Maybe it will be pensions next, and then what as desperate measures are taken to make this policy work.

2) Freeports increase the risk of criminals using the port, whether for drug or human trafficking, counterfeit goods or other illicit activity.

3) Having a border around the port will increase paperwork and costs for those using the port. Just look at Northern Ireland.

4) Regulation in freeports is going to be outsourced to the freeport operator. Really? Is that wise? Surely this creates the most massive conflicts of interest? Won’t they turn a blind eye to deliver their own economic success?

5) Unless anyone knows what jobs are going to be created in a Freeport, why do it? What jobs are going to be created in each freeport rather than be shifted into them?

6) Freeport jobs are usually 'shed jobs' that usually attract fewer  women. Is that the basis in which we wish to build economic development?

7) Freeports in the UK  were abandoned in 2012 by David Cameron because they did not work. Why repeat the mistake now?

8) Jobs could simply be moved into the port with no real gain at all, and real losses in local areas that force employees to travel further to work.

9) It is still not clear how local authorities gain - and they may lose out from business rates cuts in freeports.

10) These are tax havens at the end of the day. The government will get less money - and when this government says that it needs to raise more tax that means someone else will pay. Why should we all subsidise those who want to free ride us  by using a freeport?

Why Freeports are a terrible idea

Published by Anonymous (not verified) on Fri, 05/02/2021 - 6:02pm in

The government is proposing that there should be at least ten new freeports in the UK.

These were so useless the last time that they were tried in the UK that the programme was abandoned, by David Cameron.

But this time Rishi Sunak is pushing them harder. This time they will create ten new internal borders in the UK, which are the last thing that we need, and will undermine the security of employees who work there whilst being notoriously open to criminal abuse because of the light-touch regulation that they involve.

In this short video I explain why they really are not a good idea.

Jersey says it isn’t a tax haven, but there again, every tax haven says that

Published by Anonymous (not verified) on Fri, 29/01/2021 - 12:34am in

Tags 

Europe, tax havens

I noted a few days ago that the European Parliament has voted to include Jersey on the EU's tax haven blacklist. That does not add them; the Commission has to agree, but it has raised a storm in Jersey.

The Jersey Evening Post has noted today that:

JERSEY is not a ‘tax haven’ and there are ‘no grounds’ to include the Island on a tax blacklist, the head of Jersey Finance has said.

Well, of course he has. That's his job. But as they also note:

But tax campaigner Richard Murphy of Tax Research UK, a long-time critic of the Island’s tax regime, said that he felt that Brexit had increased Jersey’s chances of being blacklisted.

‘The UK’s presence at the table meant that blacklisting, the EU code of conduct and other things which could have been used as weapons against Jersey were mitigated,’ he said.

‘Now, with the EU quite worried that the UK is threatening to effectively become a tax haven itself, then I suspect there is little goodwill for Jersey, the Crown Dependencies and Overseas Territories.’

Mr Murphy said that the EU would also be more likely to blacklist British territories, as they were no longer within the bloc.

‘The EU Parliament doesn’t always get its way. It tends to be more belligerent and gung-ho than the commission is and it signals its wishes is by passing motions,’ he said.

‘However, the parliament is a barometer of EU mood music. And at the moment tax revenues are in short supply and there’s a lack or sympathy for companies that see the opportunity to take advantage of low-tax jurisdictions.

‘They may have difficulty agreeing on whether Malta is a tax haven because Malta is a member state. But Jersey and the UK being outside means that it is much likelier Jersey will be listed.’

He added that he believed that the development could mean the Island’s ‘zero-ten’ corporate tax regime ends up ‘back on the table’ in negotiations with the EU in relation to the level playing field issue, which involves ensuring business have common rules and do not have unfair advantages.

I haven't got much to add to that. Except for those not familiar with my one-time engagement with Jersey and the fact that it was in no small part down to my persistent campaigning that Jersey was forced to change its laws to comply with EU requirements, there are 720 posts to read here. 

It’s time for the EU to get tough on Jersey and Guernsey

Published by Anonymous (not verified) on Sat, 23/01/2021 - 6:59pm in

I was pleased to note this report in the Guardian yesterday:

The European parliament is pushing for UK overseas territories including the British Virgin Islands, Guernsey and Jersey to be added to an EU tax havens blacklist after the conclusion of the Brexit deal.

Sending a signal that tougher action on tax avoidance was required in response to the coronavirus pandemic, MEPs voted overwhelmingly in favour of adding more nations and territories to the list of non-cooperative jurisdictions.

Their logic was absolutely sound:

The resolution, passed earlier this week by a vote of 587 to 50, included measures calling for the automatic inclusion on the blacklist of countries which use a 0% tax regime. Among these are the UK overseas territories, viewed by transparency campaigners as havens for tax avoidance.

I will ignore the BVI for now; when the UK had to announce that law and order had effectively broken down there this week their inclusion on this list was, I think, inevitable.

Instead I want to comment on old foes of mine, which Jersey and Guernsey are. It’s hard to recall now how much they featured on this blog at one time.

When these two (along with the Isle of Man, whose non-listing is hard to explain, barring the fact that they have the reputation of being more cooperative) persist in running a tax regime for companies that was deliberately designed to undermine the EU’s requirements in its Code of Conduct on Business Taxation it is hardly surprising that the EU has now moved against them given that their protector, in the form of the UK, has now exited the EU. I hope that they anticipated this; I certainly did.

The issue now is for the sanction to have real bite. Whilst the abuse persists the EU should require that tax withholding takes place on all payments to these places. Unfortunately, this need not be the case at present. Require that the withholding be at a sensible rate of, say, 20% and suddenly EU listing would impose a real sanction. Then, at long last the abuse of the UK’s Crown Dependencies as corporate boltholes would really begin to come to an end.

Scotland is going to get its own version of Sleazeports

Published by Anonymous (not verified) on Sat, 23/01/2021 - 3:47am in

I have long been an opponent of so-called freeports, which are the onshore version of tax havens that the Westminster government wants to introduce into the UK. To summarise, they undermine fair competition, produce deliberate unfair competition, and are seen as aggressive international tax policy. They may well also undermine EU level playing field rules. Many studies show that freeports are widely associated with crime, tax evasion, money laundering and smuggling. There's very little evidence that they do actually create new jobs, but they do fit into the Singapore-on-Thames agenda.

I was hoping that the devolved administration would hold against what will become epicentres for potential corruption. The attitude of SNP conference, reported last December, was good. They passed a resolution in conference last November saying:

Conference acknowledges that freeports cannot and will not offset the damage caused by Brexit, which is taking Scotland and the UK out of the world’s biggest free trade area and single market, and is concerned that the Tories’ focus on freeports may be positioned to compete on low-cost, low-wage, low-value opportunities with which they are often associated globally.

Conference reaffirms that is entirely at odds with the SNP’s ambition for Scotland’s
economy to continue to build a high-productivity, high-wage, innovative economy built on the strength of our world-leading technology, businesses and academic clusters.

And now they have backtracked, which shows how in much esteem the SNP leadership holds its membership.

As they announced yesterday:

Proposals have been unveiled for a new model of green ports focused on inclusive growth, fair work practices and delivering a net zero economy.

The Scottish Government is developing plans to establish fair, sustainable, green ports. These would adapt the UK government’s freeport proposals, offering streamlined planning processes and a package of tax and customs reliefs.

The Scottish Government’s green ports would make it necessary for operators and businesses benefitting from the package of incentives to:

  • pay the real Living Wage

  • adopt the Scottish Business Pledge

  • commit to supporting sustainable and inclusive growth in local communities

  • contribute to Scotland’s just transition to net zero

So, freeports under a green banner. But with all the tax abuses and distortions to the economy thrown in.

What's the conclusion? It is to be that the race to the bottom in tax, regulation and abuse works. And Scotland has fallen for it. The Sleazeports (for what is what these are likely to be, with even aspects of the administration of the law within them effectively outsourced to commercial operators) will now appear in Scotland too. And that's a capitulation that it should not have offered to Westminster.

Would 35% of people tax evade if there was a wealth tax?

Published by Anonymous (not verified) on Wed, 20/01/2021 - 9:41pm in

I was sent a press release saying this yesterday:

A survey of 885 UK investors has revealed their sentiment towards the UK government’s proposed “wealth tax”. It found: 

  • 52% are against the introduction of a wealth tax in the UK
    • This figure rises to 60% for people with investment portfolios worth over £50,000 
  • 55% feel it would dry up overseas investment into Britain
  • 35% would relocate investments to non-UK assets if the tax was brought in

The majority of UK investors are opposed to the UK government’s proposed introduction of a wealth tax, according to new research by Butterfield Mortgages Limited (BML).

First, I was surprised at how low the rate of opposition was.

Second, I was surprised that those rose only a little amongst people with supposed ‘portfolios’.

Third, I wonder why people think this will impact those investing in the UK from overseas, because it is not clear how it might?

But fourth, I was intrigued by the last comment. Are 35% of respondents willing to tax evade to prevent their having to pay this tax?

And are they really now so naive that they do not appreciate that overseas holdings now have to be reported to the UK government?

It’s very strange if they do think they could get away with doing this.

Very clearly the government has a great deal more to do to educate people on the current dangers of investing outside the UK  without declaring doing so.

But most importantly, the implication that people think evasion is still possible and might therefore be trying it is present in these answers, and that suggests more action on data supplied via automatic information exchange is still required.

Just as the UK announces it plans to be a tax haven it has to announce an investigation into corruption on the British Virgin Islands

Published by Anonymous (not verified) on Tue, 19/01/2021 - 3:28am in

I mentioned this morning the confirmation that the UK government has made that it plans to turn the UK into a tax haven. I made clear that my concern that this is, in effect, the launch of an assault on democracy.

This afternoon Dominic Raab, the Foreign Secretary, has issued a statement to parliament saying (and I have edited the length):

Statement

The UK is extremely concerned about the state of good governance in the British Virgin Islands (BVI).

A consistent and deeply troubling array of concerns have been put to the Governor by local institutions and the community. The Governor has set out these concerns to me, they include, but are not limited to:

- Allegations of political interference and coercion in relation to appointments in the public service and statutory boards, the criminal justice system and individual criminal cases;

- Claims that people in public service, media and community leaders have been intimidated to such a degree that they describe living in a climate of fear;

- Allegations that funds set aside for struggling families during the pandemic may have been re-allocated to political allies;

- Concerns around spending on Government contracts without any proper procurement process;

- Misuse of taxpayers’ money on infrastructure and transport projects.

Successive attempts have been made to address these concerns through local institutions, many of which have done commendable work to bring them to light. However, the scope and seriousness of the concerns are now beyond local capacity to address.

The UK Government is responsible for ensuring the security and good governance of BVI. We have a constitutional and moral duty to protect the interests of the people of BVI. We cannot ignore such serious allegations.

With this in mind, on Monday 18 January, the Governor of BVI, supported by the UK Government, announced an independent Commission of Inquiry

What is my concern? Actually, it's that many of the highlighted issues (excepting, maybe, the third) could all quite reasonably be raised here and that's before we are a tax haven.

For those who are not aware, the BVI is a notorious tax haven, and is permitted to be so by the UK. We have long permitted the criminogenic nature of those tax haven activities. Why is anyone surprised that a break down in good governance follows? That is what tax havens promote?

The government added:

The Commission will inquire into whether there is information to substantiate claims that corruption, abuse of position and serious impropriety has taken place in public office in recent years, and it will make recommendations.

If only we could have such an inquiry here.

Pages