Jon Snow of Channel 4 News is one of the most respected journalists in the UK. He wrote from Davos yesterday, noting stories in the media, on IKEA and hedge funds, all of which pointed to tax haven activity.
As he then noted, tellingly:
We have been repeatedly told by Brussels that Liechtenstein and its tax activities have been dealt with. Allegations of tax laundering by high street traders in Britain, let alone foreign owned companies, have been rife for many years. In recent years, successive UK Governments have claimed that these tax loopholes will be closed.
There is no one who intersects with the UK’s current deficit related woes who does not know that if war were declared on these tax havens our financial position could be fast transformed. So why is nothing done? Why is it still permissible for British Citizens to avoid taxes by living, or locating funds in the Caymans, Liechtenstein, or indeed much closer to home in Channel Islands for ‘tax purposes’?
As the World Economic Forum opens in Davos, might it be a relevant question for the great brains assembled there? Don’t hold your breath!
He is right, of course.
We do know an attack on tax havens would be of immense benefit to those suffering the woes of the current recession.
We know that because a few of us set out to tell that tale.
So why is nothing being done?
Brown started late, that I have accused him of, but then did good work - as did minsters such as Stephen Timms.
But what now? Where is the willingness to tackle this issue?
There is none. Instead we have a government willing to offer 8% corporation tax to any British company that wants to hide its profits - including those abusively transfer misplaced out of developing countries - in a tax haven.
That's what we have now - a government promoting abuse, encouraging the non-payment of tax in developing countries and offering a tax rate of 8% - yes I mean that - a tax rate of 8% to British companies when everyone else is seeing tax increases.
And yet Jon Snow is right:
There is no one who intersects with the UK’s current deficit related woes who does not know that if war were declared on these tax havens our financial position could be fast transformed.
In other words, this is a choice.
A choice to allow the abuse of developing countries.
A choice to allow companies to pay almost no tax.
A choice to shift the burden onto ordinary people.
A choice to turn a blind eye to increasing income disparities.
A choice to allow the rich to get richer relative to everyone else.
A choice to allow the avoiders and evaders to get away with it.
The wrong choice.
And one for which this government must be held to account.
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Tackling tax avoidance aggressively would hurt ministers personally. It would damage their mates – the sort of people ministers’ holiday with, live near and with whose children they educate their own children, and that really would not do! Ministers and tax avoiders implicitly understand the pact. Ministers when in office keep open the tax avoidance gateways useful to the wealthiest who in turn give the same ministers cushy jobs when they leave office.
How we’ve managed to get into this situation is interesting, it’s an exercise in “smoke and mirrors” policy making in Government combined with deception of the public through collaboration between a popular media substantially controlled by tax avoiders and their friends in Government. The policy mismatch between openness about housing and other benefits scroungers and secrecy on tax avoidance, especially personal tax avoidance, is intentional. It helps fuel false public perceptions that welfare recipients, not tax avoiders, are the parasites that are making everyone else feel sick. These false perceptions keep voters minds away from thinking about what is the real problem, the sort of action required to address it. The counterparty to access to government information about welfare benefits is government tax secrecy, so that the dirtiest secrets of the wealthiest are kept secure.
I’m afraid Richard’s tendency to exculpate Brown and Balls is misplaced. Brown and Balls are guilty too — perhaps not quite as guilty as Osborne and Clegg, but certainly guilty enough not to qualify for reduced opprobrium.
@belgraviadave
I am not exonerating them
Brown, Balls and Darling made big mistakes
All I’m saying is I hope Balls has learned the lesson