The City of London, the world's biggest tax
evasion facilitator and money laundry has just been given some more good news,
courtesy of George Osborne and the Coalition Government. The Chancellor of the
Exchequer has just sent them a lightly coded message that their offshore
revenue stream is guaranteed for the foreseeable future! George Osborne has just chaired a G7 ministers' meeting at which the question of tax evasion and aggressive tax avoidance was on the agenda!
The Huffington Post reports that "...Osborne G7 Talks Sees Chancellor Criticised After Dodging Details On Tax Avoidance..."
Regular readers of this blog will recall my observations last week ("Lies, Damned Lies, and Civil Service Misinformation") about the likelihood of the UK Government doing anything too aggressively to challenge the offshore-sector and its control of the tax evasion/aggroidance (my shorthand for aggressive tax avoidance schemes) industry !
And so it has proved
George Osborne has now been criticised for failing
to set out any concrete steps to promote economic growth or tackle tax
avoidance during G7 talks, despite his insistence that the meeting with finance
ministers and central bank chiefs was "successful and constructive."
Using such weasel words, and playing up the
meeting for all it's worth, Osborne sought to make a great deal of how the
meeting had made real steps in the debate on fiscal evasion issues.
However,
when pressed on the substance of these discussions, the Chancellor declined to
give any details of the talks, which were held on an informal basis in a
country hotel in Buckinghamshire, but suggested there was more agreement
between the rich nations making up the group on how to nurture the recovery.
With bromides like that, we are all the more informed!
He had the sense to say that he recognised that
the larger G20 group - which includes emerging economic powers such as China,
India and Brazil (3 of the world's leading tax evasion and funny money
practitioners) - was now the "primary economic forum for setting the
global rules of the game", which was another way of saying that the G7
nations, which generally represent the old, and moribund economies, were
irrelevant, despite his insistence that they - the United States, Germany,
Japan, the UK, Italy, France and Canada - still wielded "major economic
firepower" as they represented around half the global economy between
them.
Admitting that while there were "...still
many challenges...", he said, "...this meeting confirmed that there
are more areas of agreement between us on fiscal policy than is commonly
assumed..."
Quite what that means in real terms is anyone's
guess, but what it does not mean is that the British Government is going to be
cracking down on the offshore sector any time soon.
How can I say that with such confidence? Well
listen to Osborne's deliberately feeble use of language.
Mr Osborne said British overseas territories
"need to do more" to end tax evasion.
Well, that's like saying the Taliban needs to
do more to encourage greater female emancipation in Afghanistan! Ambitious, possibly; desirable, certainly;
but ultimately futile and illusory!
Asked about the future of tax havens such as
Jersey or the Cayman Islands, he said he had already been "very
tough" in his message to them but wanted to see more action.
"...Of course we would like these
jurisdictions to do more..," he said.
"...We want them to commit to some of the
existing agreements that are in place on tax information and transparency and
we have these initiatives which we are pursuing in the G8, for example around
beneficial ownership, which we would also expect all jurisdictions to be able
to sign up to..."
None of these comments amount to a row of beans
in reality. He can send all the tough messages he likes, he can want them to do
more, and sign up to vague initiatives about beneficial ownership, but this
isn't going to change the reality of the situation that the offshore sector
survives and thrives because wealthy people put their money there secure in the
knowledge that it will be secure and kept in complete confidence
I have already discussed the futility of these
plans at some length in a previous blog and nothing I read here from Osborne is
going to change my views one iota. Because then comes the reality interlude,
when the real world politique creeps in! He says;
"...Of course you have to respect that
many of these territories have important industries and we don't want to
unnecessarily damage them..."
Well, I should think not, and that is the
underlying hidden message he has to send them, because these offshore areas
generate a huge amount of money which the City of London, the enemy within, is
waiting to receive. But at the same time, Osborne has to play the Perfidious
Albion games! So he reverts to the default mode and trots out the shibboleths
again.
"...But it is necessary to collect tax
that is owed and it is necessary to reduce tax avoidance and the crown
dependencies and the overseas territories need to play their part in that drive
and they need to do more..."
"... We all agreed on the importance of
collective action to tackle tax avoidance and evasion..," he said.
Well, no doubt they did, as they peeled their
Plovers' eggs, and shovelled down the Boeuf a la Bordelaise! It's not difficult
to agree to an assertion as bland as that, after all, ask yourself, what was
being agreed to?
"It is incredibly important that companies
and individuals pay the tax that is due and this is important not just for
Britain and for British taxpayers but also for many developing nations as
well."
You will note that the emphasis here is on the
"...tax that is owed..." but expecting the crown dependencies and the
overseas territories to do anything about it, has the same element of successful
expectation as being the voting returning officer at the turkey farm when the
Christmas vote is announced!
It is this kind of state-sponsored double-speak
that makes the UK look positively mendacious. It is the kind of statement that
is drafted by some clever young Treasury policy wonk who knows full well there
isn't the slightest intention by anyone in Government to do the least thing about
it
And why?
Because the UK Government is a hostage to the
City of London and the City now ultimately determines all financial policies,
and that is why I term them 'the enemy within'. The Government has quietly
surrendered the lead role in defining the UK's future to the City of London, a
non-elected, non-transparent, undemocratic group of elites, and the Government
will dance to their tune.
This is why the Government's threats to break
up the 'too big to fail, too big to jail' banks into small regional hubs is met
by two fingers from Threadneedle Street! This is why the proposal to ring-fence
the retail banks is met be a resounding raspberry from Throgmorton Avenue!
You see, the City of London no longer needs the
UK, the boot is on the other foot, the UK needs the City! I used to believe
that the Government was Sovereign, that Parliament was the final arbiter, and
that confronted with a vague threat to 'take our business elsewhere' if too
much pressure was applied to the City institutions to reform their game, was an
empty threat, and I have previously urged the Government to call their bluff!
But I was wrong! The Government dare not call
their bluff because the City of London isn't just a bunch of buildings inside
four postal codes; it is a concept of enormous power, an exclusive entity, a very
private members-only club into which outsiders are not invited to enter; it is
a powerful clique which exerts huge influence and pressure; it is a Mafia! Even
Her Majesty the Queen requests formal permission to enter the City of London on
a special formal occasion (permission is always granted)!
The City doesn't exist to support this country,
it exists for its own financial interests and the rest of us can go take a
hike! It could, within a relatively short space of time, go offshore itself,
indeed, it has already been described as the most powerful off-shore
jurisdiction on earth! You don't need to be a palm-fringed island in the
Caribbean to be an off-shore centre. The City has its own laws, and it only
obeys those ones which Parliament enacts, when it pleases the suits so to do!
The amount of money that the City turns over
each year is counted in Trillions of Pounds. As a fee, tribute, (bribe) to the
UK Government to allow them to continue, the City contributes about 12% of the
nation's GDP, in terms of the tax it agrees to pay on such profits as it sees
fit to declare. The rest of its proceeds are very carefully squirreled away and
are held in secure and confidential circumstances, and no-one is going to
examine them!
The great financial crisis has brought the role
of the City and its functions into greater notice and under more scrutiny, but
we should not hold our breath hoping that Cameron or Osborne are going to do
anything to bring this criminogenic enterprise to heel! They simply do not have
the power to do it, and that is the problem.
When the Prime Minister or the Chancellor go
down to the City to speak at their tables, you will note the degree of respect
which is afforded to the men and women in fancy dress! They have to be
respectful, because the City might take their ball away and go and play
elsewhere, and they know that would be disastrous for them.
So they pay lip-service to the conventions, and
they make sure they protect the City from any attempts that somewhere called
'Brussels' might make to impose their will on the City of London. Transaction
taxes! Not on your Nellie, monsieur. Capital adequacy rules! Only if everyone
else is signed up to the same calculations, mein herr! Anti-money laundering regulations! Now you are
being fanciful, old boy!
In a time of the worst financial crisis any of
us have ever experienced; at a time when we can see no light at the end of the
austerity tunnel, the City of London continues to pursue its own path and
writes its own pay cheque! Don't expect it to change its ways, because this is
how it has always been done, the City of London is another country, and it is
immune from the ordinary rules of engagement that attach to those outside the
Square Mile.
No Government of the UK will ever dream of
challenging its autonomy, they daren't! The men and women of the City will be
allowed to carry on as they have done for centuries, and no-one there is going
to be subject to the ordinary laws of the land, as long as they are working for
the City and its collective owners! It is a sanctuary, a safe-haven from hue
and cry, and as long as you play by its rules, you will be protected.
You don't have to take my word for it, just
review the last 5 years worth of criminal financial scandals that have come out
of the financial sector, and add up the number of players who have spent time
at her Majesty's pleasure?
Not an awful lot!
So, when you read George Osborne's claims that
he and his mates in the G7 are taking tax evasion seriously and calling upon
the overseas territories to do more to tackle aggressive tax avoidance, you
know that these are just empty words designed to give the impression of
concern, but in reality, just going through the motions!
Nothing, but nothing is going to be allowed to
undermine the hegemony of the offshore sector, it would be naive to think
otherwise!
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