I've already written about Tax Havens: Creating Turmoil and the recommendations for change we make in it. There is a reason for all the effort expended in its creation: the recommendation made would have real, positive impact on the world. For example, if they had been adopted they would have reduced the impact of the current world financial crisis by substantially increasing the transparency of the world's financial systems. By itself this benefit would have substantially exceeded any cost to the UK and its citizens of implementing these regulatory changes.
In addition, the UK, its international status, its tax revenues and its democracy would all be substantially enhanced. Tax havens are a pernicious cancer undermining all of these from deep within the heart of our society, the epicentre being in the City of London. Regulatory reform is essential if that cancer is to be prevented from both destroying our social order and replacing it with an undemocratic infrastructure intended solely to service the whims of an international elite drawn from the financial services sector.
Developing countries would benefit as much as developing countries. Tax havens and OFCs harm the development process by distorting capital accumulation and investment patterns, and facilitating grand corruption and embezzlement. Unless this cancer is tackled, there is no prospect for an end to aid dependency or for the creation of economically stable, democratic states able to feed, educate and provide health care for their populations.
And what we show is that tax havens undermine effective democratic government and deny the supply of information that markets need if they are to operate properly. So significant is the challenge they pose to global economic and social stability that the risk cannot be assessed within the financial domain alone; it permeates the infrastructure of our society and Creating Turmoil reflects that perspective. From far back the offshore economy has attracted financial wizards whose activities should have been controlled, and who urgently need to be controlled now. Since the 1960s the problem has become manifestly more urgent and the risks to public interest have become that much greater as a result of half a century of inaction. The UK government can no longer turn a blind eye to problems that it has played a major role in creating.
That is why we have submitted our report.
In the face of the complacency of the financial services sector, evidenced in the first hearing of the Treasury select Committee on OFCs we expect what we say to be noticed. I am optimistic that will happen.