Gordon Brown has been right to criticise the Swiss. But they are right to point out there is trouble in his own back yard that needs attention. This from the Wealth Bulletin:
Doris Leuthard, head of the Swiss Federal Department of Economic Affairs, has said the UK should clean up its own tax havens before pointing the fingers at others.
In an interview with the Austrian newspaper Kurier, Leuthard said the UK Prime Minister Gordon Brown has never indicated how he plans to abolish British tax havens.
This is true.
She added:
Leuthard, who is also a prominent member of the centrist Christian Democratic People's Party of Switzerland, added that Switzerland isn’t a tax haven.
This is blatantly untrue, as is this:
She said: “We are no tax haven. We have been cooperating with others for years and also work closely with the Organisation of Economic Cooperation and Development.”
This response is fair:
Alistair Darling, the UK Chancellor of the Exchequer, said last February: “I think it’s important there is transparency‚ĶIt’s one of the things Switzerland has got to address. If it wants to be part of the international community, it’s got to be open.”
But if Brown is to win friends he has to make clear British territories including the Crown Dependencies must be on any new list of tax havens to suffer sanctions. Nothing else will do. It cannot be one rule for the Swiss and another for everyone else.
And we have to tackle the domicile rule and the secrecy that British trusts in combination with nominee companies allow. These issues have to be on the agenda as well, if not at the G20 (it will not do this level of detail) then soon after.
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Dear Miss Leuthard,
I think there is sufficient prove that Switzerland is not only a tax haven but also Swiss companies abuse English offshore centres such as Cayman Islands (UBS more than 100 employees), Julius Baer used to have up to 40 employees in the Caymans, Jersey, Guernsey etc. Therefore, it might be thoughtful to think about the Swiss Banks taking advantage of UK offshore centres. German Parliamant got it right because Deutsche Bank, Commerzbank and UBS have to answer questions in the German Parliament why they use offshore centers. Maybe it would be a good idea to have the major Swiss Banks invited to Swiss Parliament to explain why they use the offshore centers. It might be an enlightening experience!
On another note the UK have already achieved that Jersey and Isle of Man listen to what the UK Parliament says and my understanding is that the UK already has taken certain actions. I have not noticed that anything like that happened in Switzerland, however I noticed a lot of resitance and reluctancy in the Swiss politcal arena to protect the tax haven but that is it!
To be clear the driver of the offshore business are obviously the foreign banks and lawyers and not really local governments. Local governments assist but the decision makers are unfortuntaly the big banks and the big law offices in this world and that is why Joe Ackermann, CEO Deutsche Bank, is schedule for an anwering and questioning session in the German Parliament!
This is my view and I am willing to change my opinion if someone can prove I am wrong!
Rudolf Elmer
This will be the defense by all of them. Simply, “clean yourself up before telling us what to do”. America is a world financial hipocrit and so is the UK with its treatment of res non doms.
There has to be balance in the world economy and sanctions and incentives must be given to cater for everyone and given freedom to those that not only believe it but demand it. This gives encouragement for investments were it normally may not be forthcoming.
After all the very rich have and will always rule and the politician only deal with domestic issues and politics. The reality of the situation is that there has to be tax havens and privacy. Common sense itself dictates. This is true and has always been true no matter which side of the fence you sit on.
Trying to close down tax havens and secrecy because the economy is not doing well is missing the point completely. Yes, there is more pressure on the public purse but surely pursing the people that are financially secure will make them feel unsafe and this will affect their confidence which is one of the problems with the world economy as it stands. Surly it is better to allow some to pay little tax who in turn gives invaluable investment which governments will collect a large amount of tax especially if you take into account the multiplier effect. Balance is the key to success.
Scopy, I agree that balance is important. You and I would seem to disagree about where that balance lies. You believe that the correct balance is for the rich to ba able to take whatever they want, do whatever they like and that the rest of us peons should be grateful to be allowed to grovel before our masters and receive whatever crumbs we are blessed with. Either you are one of the very wealthy in which case you are arguing from personal self-interest and can be merely treated as one voice among the many who want a fair share of the world’s wealth. Alternatively, maybe you should find a bit of self-respect and stand up for yourself and the rest of the ordinary folk of this world, rather than rolling over on your back.
Frankly, your argument does not really stand up when the largest financial institutions in the world are going to the people’s representatives and begging for largesse. This problem has been greatly exacerbated by the lack of transparency in the tax havens. Unless you want us to have to pay even more later in a repeat of the same catastrophe, we really need to do something about the tax havens.
Presumably you would apply your argument about how the rich have always taken what they want so it is OK to child labour, slavery, forced marriages etc etc. Thwe world has always been full of people who say “this is how it has always been” The people who are remembered are the ones who said “we can change”.
No, you may have misunderstood. There needs to be balance, reasonableness and common sense. Pensioners who live on their savings and their pensions have been badly hit by the recession. These are ordinary folks, were some have done better than others and expect, as a right, that they have worked all their lives for the future income. As probably you do or would.
Tax havens have nothing to do with the banking crisis. In fact it was the except until all the talks about closing them and trying to force them to breach confidentiality.
The banks have been bailed out by the taxpayers and still this pillar of the economy is not lending. Why is this? As mentioned before they have lost their confidence and until they feel safe the rest of us will suffer. Changing the status quo raises the problem even further.
There will always be people that will abuse the exceptions and incentives and this is the worst time in history for us the people and our representatives to be meddling. There are more important issues than chasing old money, which can be done latter.
Scopy
I’m sorry – I’m now just getting annoyed when I read crap like this
Read the stuff on Barclays
It’s all offshore
wake up and notice reality
Richard
Richard
Yes you are right but isn’t it Barclays who should be carrying the can, rather than the offshore jurisdictions ? By all means throw the book at Barclays if they have done anything wrong but relative to what UBS have done its on a lesser scale if it was legal.
Seems to me that the targets are wrong here.
Barclays looks like one of the strongest banks we have.
If Barclays were “strong” they wouldn’t have had to sell themselves to the Arabs! Anyway, who knows how strong they are? Their accounting is obviously so opaque that it is impossible to tell.
Of course, Scopy, your comment is relative – since the other banks are so parlous, you might be right, but, again, who knows?!