For obvious reasons I rarely mention the many discussions I have with journalists. I leave them to get on with their stories.
But every rule needs to be broken sometimes. I’ve just had a call from a journalist on the FT who told me they are planning to do a big feature on the benefits of using tax havens - next week.
There could be no better indication of where they stand on this issue.
There could be no better indication of the contempt of the financial services community, of which they are a part, for the G20 process - which is meeting to curtail tax haven activity next week.
Unsurprisingly they did not get what they sought from me — which was a list of tax haven tax rates and how a UK based person could take advantage of them.
I reminded them of Denis Healey’s old maxim:
The difference between tax avoidance and tax evasion is the thickness of a prison wall.
In most cases those using a tax haven should be the wrong side of that wall. It’s only secrecy that saves them. Which is why it has to go.
And why the FT really has got to understand that promoting abuse of society is not a long term option for a viable business.
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Its about time and well done to the FT!
You seem to be so angry and full of self-righteous indignation all the time Richard, you should probably try to calm down a bit or you will have stroke. Perhaps you should retire to a nice little island in the Caribbean, somewhere like the Cayman Islands perhaps.
There was an interesting letter published in the FT recently which suggests that “offshore tax havens” may well flourish in future.
“The dawning of a bright new day for tax havens
Published: March 21 2009 02:00 | Last updated: March 21 2009 02:00
From Mr Richard Hay.
Sir, Gordon Brown speculates that increased transparency is the beginning of the end for tax havens (March 14). However, if urban myths concerning supposed secrecy in UK offshore centres are exploded by these developments, this will herald a new beginning, and not the end, for such centres.
Small jurisdictions are unrepresented in the forums where the blame game for the world’s ills is being played out. “Low taxes” have been mischievously conflated with “low regulation” to unfairly malign small offshore centres.
The UK Channel Islands dumped tax evaders 10 years ago with legislation treating foreign tax evasion as a predicate crime for money laundering; other UK offshore centres followed suit shortly thereafter.
Large countries like the US have yet to take similar steps, perhaps because the substantial deposits from foreigners in US banks provide essential funding for their structural budget deficits.
Expert observers, including the International Monetary Fund, have regularly acknowledged UK offshore territory transparency and supervision as amongst the toughest in the global finance industry. The reputation of the UK offshore centres such as the Crown Dependencies, Bermuda and Cayman for probity, professional skills and financial sophistication enables them to attract capital from around the world. Such capital is injected into UK, Europe and the US banking and securities markets, creating crucial synergies with such centres.
Public perceptions of transparency standards in the UK offshore centres are at last catching up with the current reality. Those centres will be helped, not harmed, by a more informed appreciation of their important role in the global economy.
Richard Hay, Tax Principal,
Stikeman Elliott LLP,
EC2 London, UK”
The link to it is here http://www.ft.com/cms/s/0/41f4b2f0-15b8-11de-b9a9-0000779fd2ac.html
What’s your view?
And what exactly is their important role? What do they build, what do they make, what do they grow, what services do they provide to Joe Public? The fact is they have no role in the real world economy. They do have a role for the small number of people who can access their services. Richard Hay should get out more!
Well said John Buckles. I am in complete agreement. The ill-informed ramblings and arguments of the opponents (including Richard Murphy) to such places are about to be firmly rebutted.
The FT is about as good on trade in services trade agreements as well – only informing those who want to screw others, so that they are better informed, however that destroys the lives of those who suffer from it.
Maybe that’s the basic nature of the FT – though it does show some exceptions to this on occasion
Richard Hay has actually summed up the truth pretty conclusively. We know from working within the heart of offshore finance that Richard and Chris’s views and accusations about regulation are inaccurate, or outdated at best.
This pre-conceived idea that offshore finance is less transparent than onshore finance is also an illusion.
They are always asking us to do things that their own banks and finance institutions won’t even do themselves.
It is about time the FT did an article from the other side, offshore finance is not responsible for the USA/UK recession, poor onshore regulation and irresponsible lending together with draconian fiscal policy is solely to blame for the mess they have got themselves in.
If it’s the case that the FT is planning such a series of articles, why be surprised? Since the FT’s constituency is exactly the people in the financial services industry (e.g Barclays) who’ve been enthusiastic users of tax havens for years, as soon as anyone tries to get rid of these places, and points out their role in producing the current economic disaster, it’ll spring to their defence. Since when have the rich and powerful given up their unearned privileges without a fight?
The dishonesty of the arguments of those defending tax havens is neatly expressed by some of the article quoted above; “The reputation of the UK offshore centres such as the Crown Dependencies, Bermuda and Cayman for probity, professional skills and financial sophistication….” Pull the other one, it’s got bells on.
John:
Thanks for providing a more informed picture of the “reality” in certain offshore centers. Those who paint ALL offshore financial centers as one, do so for their own selfish reasons.
SN
Bermuda
[…] pro-tax haven comment on this blog over the last day or two. It was sparked by a letter in the FT, reproduced here, from a solicitor who has made his fortune defending tax havens and all the usual culprits from […]