2010 August » Tax Research UK

Why financial integrity?

Task Force on Financial Integrity Comments Off

Aug 262010

The following is by Alex Cobham of Christian Aid and is reposted from the blog of the Task Force on Financial Integrity and Economic Development. Tax Research UK is a member of the Task force:

The Task Force on Financial Integrity and Economic Development has a problem. There are two common reactions when people hear about it. The first is ‚ÄòSnappy title.’ The second is ‚ÄòFinancial integrity? What’s that?’

Now, it’s true that the title is on the long side, but this shouldn’t in itself be a problem – if the name gives people an immediate understanding of what we do, and why it matters. And to be fair, the focus of the Task Force is – well, exactly what it says on the label. Each of the five recommendations we pursue aims to contribute to a globalisation with greater financial integrity, to support a more just and inclusive pattern of economic development.

No, it’s the second reaction people have which is the problem. ‚ÄòFinancial integrity? What’s that?’ It’s a problem for the Task Force if people aren’t clear what we do; but it’s a much bigger problem if we’re not able to communicate clearly the nature and importance of the goal of financial integrity. And if people don’t immediately understand what is meant by ‚Äòfinancial integrity’, it’s probably unlikely that they’re going all out to support it‚Ä¶

More than that, a lack of clarity will undermine progress even where there is support. The coordinating committee of the Task Force, for example, includes Transparency International (TI) and the Tax Justice Network (TJN). TI blazed a trail in focusing international attention on weaknesses of financial integrity among public officeholders in developing countries, through their high-profile Corruption Perceptions Index. More recently, TJN (in partnership with Christian Aid) have published their Financial Secrecy Index which highlights a lack of integrity in the ‚Äòtax haven’ behaviour of jurisdictions large and small, rich and poor.

The work of others on the coordinating committee – Christian Aid, Eurodad, Global Financial Integrity, Global Witness, the Leading Group on Innovative Financing for Development, Tax Justice Network, Tax Research UK, and Transparency International – focuses on these and other aspects of financial integrity, from the transparency of multinational group accounts to the return of assets stolen from developing countries.

How then can the Task Force communicate more clearly the shared vision of financial integrity, in a way that accelerates real progress? One possibility which we are now exploring is that of an index. Task Force members have had significant success with their various indices in raising the profile and greater understanding of their aims, and ultimately in driving policy change.

Is it possible to rank countries, according to consistent data on a range of issues that reflect the perspectives of civil society, of the private sector, of other governments and of international organisations? How would you go about capturing and then combining, and balancing the different aspects of financial integrity, or a lack thereof, from opaque accounting to different tax haven practices, from grand political corruption to low-level graft, and so on?

The Task Force will therefore be exploring these issues in the coming months, and is keen to invite a range of views. If you or your organisation would like to take part in the initial consultation or subsequent discussions, please email info@financialtaskforce.org, or leave a comment below. Initial discussions will take place at the Task Force’s Annual Conference in Bergen next month.

Government is the only game left in town

ConDems, Economics Comments Off

Aug 262010

I mentioned a recent economic forecast from Tory think tank Policy Exchange yesterday. It was gloomy and rightly so, if for all the wrong reasons. One of the reasons is that Tory economists continue to insist there is risk of a UK government default on its bonds and that the bond market is going to stop buying our gilts. As Policy Exchange said:

If/when there is a double dip, many commentators will presumably urge that the Coalition’s fierce fiscal consolidation plans should be abandoned. That would be a bad mistake. With a double dip recession, tax
revenues are liable to fall below forecast and expected future debt levels relative to GDP will rise. In other words, the risk that financial markets will lose appetite for UK government bonds, triggering an upwards
spike in interest rates and the serious further slump that would entail, will rise materially. With a double dip recession, markets will be more demanding of urgent action, not less, and any sniff that the Coalition is
losing the political will to carry its programme through could be disastrous.

This is utterly ludicrous. As Reuters have reported this morning, the UK gilt yield hit new record lows yesterday as global bond markets continued to power ahead on growing pessimism about the economic outlook. The 10-year yield hit a new all-time low of 2.790 percent, having gone below the previous record set in March 2009 on Tuesday.

Record low yields on gilts means record high prices for gilts. And record high prices mean that people are desperate to buy our government bonds – because they’re the best thing to own right now. Why is that? Well, I’ve argued markets are irrational and get things wrong before now, and will do again, but the message they’re putting out right or wrong is that they think there is a double dip recession coming and that they see there being no prospect of growth in the private sector as a result and as such the safest place to put money is with the government who are the only people secure enough to be trusted with it and that they are the only people sensible enough to use it wisely and effectively.

Put it another way – the markets think that the austerity measures the government is creating will so stifle private sector activity that government is the only game left in town.

All of which says yes there will be a double dip – but not for the reasons Policy Exchange suggests. The double dip will be because of the cuts. And markets are likely to want to continue to lend to the UK government securities as a result precisely because – well, they are secure. In which case there is no risk of an interest rate rise. Deflation remains more likely.

Of course, such low rates also make the best option – borrowing to spend now on the part of government – so much cheaper too.

But I can’t see this government doing that.

Tax Justice Network USA

86, USA 1 Response »

Aug 252010

Tax Justice Network USA is seeking to appoint a director;

Job Announcement: Executive Director, Tax Justice Network USA

Location: Washington, D.C.

Summary of Role:

This is a leadership position, with the responsibility of building the momentum of the organization. Currently, the Executive Director will be the sole staff member.

Tax Justice Network USA is the national chapter of Tax Justice Network International, presenting solutions for tax policy reform at the national and global levels through research and campaigning‚Äîwhich may include public education, policy discussion, advocacy, media, network building and partnerships.

Founded in 2002, Tax Justice Network International now has full-time experts in more than two dozen countries, plus an internationally recognized network of senior board members and advisors. It is by far the oldest, most experienced, and most highly focused non-profit spearheading the global campaign to clean up tax havens/secrecy jurisdictions.

The Executive Director is hired and supervised by the Tax Justice Network USA Advisory Board, together with the Executive Director of the Fund for Constitutional Government, the fiscal sponsor of Tax Justice Network USA.

Core Responsibilities:

Campaigner/Organizer: Quality policy analysis and advocacy is provided by individual and organizational members of TJN-USA. The Executive Director will take that analysis and advocacy capacity and link it with grassroots organizations to effect successful campaigns to change the actions of the US government, including regulatory agencies, and corporations.

Leadership for the organization: As envisioned by the Advisory Board, the Board of The Fund for Constitutional Government, and Tax Justice Network International, Tax Justice Network USA is a campaigning organization that combines excellent policy analysis with broad and energetic campaigners from the grassroots through to national policy makers.

Strategic direction and implementation: The U.S. national chapter of Tax Justice Network’s success is essential in itself, as well as for the global success of international campaigns on tax justice. TJN-USA is an active and strategic partner within the TJN international network.

Fundraising: It is essential that the Executive Director be a successful fund-raiser, with a strong and positive partnership with the Development Committee of the Board of Advisors. The Executive Director will define the annual operating budget, subject to approval by the Advisory Board, and raise funds to support the budget.

Media and Communications: Translate policy language to campaign language, while developing extensive media (TV, Radio, Print and Web) contacts to disseminate the agenda of TJN-USA.

Staffing: Define staffing needs, subject to approval by the Advisory Board, and hire, train, and supervise personnel.

General operations and administration: Initially, as the sole staff member, handling all day to day administrative tasks and organizing technical support and practical resources.

Qualifications:

Successful experience serving as an Executive Director or senior staff of a non-profit, development, policy, philanthropic, or advocacy-focused organization. The person must have successful fundraising, campaigning, management, and supervisory experience.

The position requires a minimum of five years experience and demonstrated expertise in the following areas:

Experience raising funds for not-for-profit organizations of similar size and scope, from individuals, foundations and members, with annual budgets of at least $250,000.

Experience in designing and leading national campaigns that bring together a wide range of grassroots activists, media, and policy experts to achieve genuine change in the actions and outcomes of government and/or corporations.

Some knowledge of tax issues is essential, but detailed knowledge is not. The candidate must be familiar with and understand the significance of secrecy jurisdictions / tax havens for poverty and policy in the US and internationally.

Strong and dynamic leadership, able to motivate “unlikely partners” to achieve a common goal.

Exceptional verbal and written communications skills.

Experience in fostering a highly dynamic and collaborative work environment, involving staff, volunteers, network members, and campaign activists.

Commitment to the values and vision of the Tax Justice Network.

Compensation: Salary and benefits package are dependent on experience.

Some travel will be required.

This is an “at will” hiring.

Tax Justice Network USA is an Affirmative Action/Equal Opportunity Employer.
Qualified persons are encouraged to apply regardless of their religious affiliation, race, age, sex, sexual orientation or disability.

Application Process: Qualified applicants should send a cover letter and r?©sum?© to: info@fcgonline.org

Closing Date: Applications reviewed on a rolling basis until position filled.

It’s good to see the Tories are optimistic

ConDems, Economics 1 Response »

Aug 252010

Policy Exchange’s chief economist Andrew Lilico is a man I usually have little time for – not least because he seems to have such weird belief in the power of free markets during recessions and so readily abuses statistics. His latest paper – which I’ve just caught up with but which was issued last weekend – is a case in point.

First he argues there have been many (well, five) double dip recessions in the UK since 1958 – the second dip, however, never lasting more than a quarter which means he pushes the description somewhat since none of the second dips therefore conform by themselves to the definition of a recession – to which I think the double dip concept refers.

The he argues that the UK will see higher growth in 2011 than at any time since the 1980s – the implausibility of which is high.

But last he argues that if he is right – and that an extra dose of quantitative easing soon will deliver this outcome – it follows that the boom he predicts will lead to inflation and substantial interest rate increases and that in turn will lead to a recession in 2013/14.

About this he then concludes:

When pondering the political cycle, think of this: the Coalition arrives; there are big tax rises; then there are massive, unprecedented spending cuts, involving more than half a million public sector job losses; then inflation races away; then interest rates spike up; then, after all that, there is another recession in 2013/14.

And all of this is the optimistic case ‚Äî what happens if the government gets policy right and its policies work. I shan’t sketch you my pessimistic case.

Enjoy selling that one on the doorsteps at the next General Election‚Ä¶

Well I’m glad to see they’re optimistic about the outcome of the carnage they’re prescribing.

I’d just remind them of what Mervyn King said earlier this year – that whoever won this year’s election would be out of office for a generation thereafter. Looks like some in the Conservative Party are already bracing themselves for that prospect.

Double dip on the cards

Conservatives, Economics, Green New Deal 3 Responses »

Aug 252010

The prospect of a double dip recession – not just for the UK but across much of the world economy – seems to increase daily.

US house sales slumped by 27% in July.

Mortgage lending in the UK fell by 18% in the same month.

Confidence has been sucked out of both economies; in the US by fear that the stimulus is ending, in the UK by the ferocity of the ConDem attack on jobs, spending and demand that can only and inevitably mean that they want and are planning to deliver a recession, or a depression.

In both cases – and throughout the Eurozone where austerity has become the norm – even in Germany where more than anywhere the opposite policy is needed – this austerity is absolutely the wrong policy.

It is only government spending that can keep us out of recession now. What is more – as I have shown – cutting jobs now saves the government no money at all, and in all probability imposes considerable costs after multiplier effects are taken into account.

This means this is not the time for cuts. This is the time for government spending – selective spending with a focus on investment admittedly – to create the demand that will get us out of recession and deliver the new economy we need.

This is, of course, the Green New Deal. For more detail, there’s much here.

It’s the alterative to the inevitability of stagnation, recession or depression that neoliberal politics is offering.

It’s hope when all the ConDems are offering is fear.

It’s a no-brainer for the people of Britain. Unless of course you’re seeking to increase the power and wealth of an elite by abusing the population of the UK – as this government’s regressive policies seek to do.

Regressive – inevitably

Conservatives, Economics 1 Response »

Aug 252010

The ConDem government sought to claim its policy of cuts was progressive when it was announced.

First they lied to claim that, by including Labour’s genuinely progressive measures in their calculations.

Then they just blustered about “progressive austerity” – one of Nick Clegg’s most absurd contributions to debate, ever.

And now the Institute for Fiscal Studies – whatever their manifold weaknesses and right wing predilections – says that the ConDem package is unambiguously regressive.

That’s not hard to agree with, because it is glaringly obviously true.

The reality is that the neoliberal right wing is using a crisis it created to reinforce its stranglehold on both wealth and power in the UK. This is not chance. This is deliberate. And this is abuse of most people who live in this country.

No wonder those people are frightened about the future. They should be. They’re not going to suffer through misfortune or accident. They’re going to suffer because some have chosen that they should. That’s a real cause for fear.

Abusing procedure

ConDems 1 Response »

Aug 252010

The FT reports:

John Bercow, the Commons Speaker, is being urged to stop ministers from rushing through legislation that will slash redundancy terms for civil servants and clear the way for a cull of up to 100,000 jobs.

Francis Maude, cabinet office minister, has asked Mr Bercow to approve a fast-track procedure for the bill to come into force by November, allowing ministers to embark on the redundancy plan this autumn.

But civil service unions have written to Mr Bercow insisting that the procedure – in which the legislation is classified as a “money bill” that cannot be amended in the House of Lords – should not be approved.

If the Speaker accepts the union’s case, the bill could be held up in the Lords, seriously disrupting a redundancy drive seen as vital in cutting the deficit. “The Speaker has an enormous amount of power over this,” said one union figure.

What won’t the Tories do to increase unemployment and reek havoc on our economy and the lives of millions?

Long overdue

Pensions 2 Responses »

Aug 252010

The FT reports:

Large activist pension funds are to launch a campaign to shake up underperforming US companies, using new rules due to be agreed on Wednesday that allow shareholders to directly nominate board directors.

The proposal allowing investors to put their own nominees for board seats alongside the company’s nominees is expected to be approved by the Securities and Exchange Commission on a party-line vote, with three Democratic commissioners voting in favour and two Republicans opposing it.

This is long overdue in the States. And pension fund activism is long overdue everywhere.

Next on the agenda though is pension fund opacity – which is almost complete.

It baffles me why pension funds are almost wholly unaccountable for what they do and never send their members accounts. Why is that?

Brilliant!

ConDems 1 Response »

Aug 242010

As the Guardian notes:

The public sector union Unison today said it would go to court to try to block the coalition government’s plans for a radical reorganisation of theNHS.

The union is applying for a judicial review on the grounds that the consultation process conducted by the health secretary, Andrew Lansley, is a sham.

Consultation on plans to give GPs control of £80bn NHS spending runs until October, but the Department of Health has already indicated the plans are non-negotiable. Unison claims this makes the process unlawful.

Thank goodness they’re fighting back!

Brilliant news.

This is privatisation – and it will be a disaster – and cost us all a fortune – as health care in the US does. There’s no better place to fight cuts.