Suppose you were asked to choose a target for an international campaign on tax avoidance. Who would you pick? That was a question I was asked yesterday.
I had little hesitation in giving an answer. I would pick the Big 4 accountants — PWC, KPMG, EY and Deloitte.
Why? Let me give four answers.
First, I think the comments by these firms in Hong Kong on pro-democracy campaigners were not examples of ‘bad apples' in their global networks. I suspect that the views expressed there might be commonly held around the world.
Second, I think the fact that these firms are a threat to democracy is evidenced in their behaviour. It is a whole ago now that I surveyed where they were to be found in a report called Where 4 Art Thou? That survey provided compelling evidence that these firms between them are the real backbone of the offshore world without which it could not operate. They are the universal, and only consistent, presence in all major tax havens because without their being in those places the global flows of cash (but not real trade) that supposedly (but not actually) passes through tax havens could not happen because these firms would not be there to put their, quite literal, stamp of approval on the accounts of the companies that facilitate this abuse. And since those flows are designed to undermine the revenue streams of the duly elected governments of what are usually the larger and more populous democratic states of the world I do view these firms activities as coordinated assault on the right of those governments to collect the taxes that are actually due to them and that, in my view is an attack on democracy itself.
Thirdly, at precisely the same time as they are doing their very best to undermine the tax revenues due to states like the UK the Big 4 are also simultaneously seeking to secure maximum advantage from those states for themselves by securing lucrative contracts both supplying services to the state and by winning contracts when state services are privatised. The hypocrisy in all this is breathtaking.
And lastly? That one is easy: whenever reform of accounting, tax or company law is proposed to advance social interests (let's call it country-by-country reporting, for example) it is these firms that line up to oppose it.
So the Big 4 have my nomination. I have no idea if they will get the award.
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And fifthly, Richard, and somewhat related to your third point, we have the role these organisations play in providing (so called) expertise and advise to political parties, whether in government or opposition, often through the secondment of staff. This is a very convenient mechanism for shaping and constraining thinking on what may be future public policy and/or the manifestos of political parties.
To which we could also add (as you’ve blogged on this already today), sixthly, the active role they’ve played in establishing, expanding and now maintaining the revolving door between government and public bodies and commercial practice and interests. As I’ve noted on this blog before, the interchange of personnel between government and the private sector was an idea that had great merit but it has been corrupted to a purpose that was never intended and as such is yet another contributory factor in the bastardisation of democracy in the UK (and globally) from government by and for the people, to government by and for corporate interests.
“Suppose you were asked to choose a target for an international campaign on tax avoidance. Who would you pick? That was a question I was asked yesterday.
I had little hesitation in giving an answer. I would pick the Big 4 accountants — PWC, KPMG, EY and Deloitte.”
You didn’t consider “changing current legislation” then?
You’d rather wage a campaign against organisations following laws you don’t like than campaign to change the laws?
As others have said, that’s like waging a campaign targeting drivers obeying a speed limit you think is too high rather than campaigning to change the speed limit.
As for hinting that the Big 4 accountancy firms have world-wide anti-democracy ambitions. You’re sounding paranoid.
Paranoid?
I think they said that of those urging re-armament in the 30s
Godwin’s Law. Two points into a debate and you invoke the Nazis. Sure sign of a weak case.
So you’re now saying that the Big 4 represent a similar threat to democracy today that the rise of the Nazi party did in 1930’s Europe? Now that IS paranoid.
And no comment on my other point?
Why isn’t a campaign to change the law your priority?
I did not make that point at all
It is you who has made the commenting involving something called, erroneously, a law
I always campaign to change the law
That is why I write laws, got the GAAR, etc etc etc
Do you people ever research or read anything?
Please do or don’t comment again
Following laws ?? don’t you mean circumventing law.
If the Big 4 were to disappear tomorrow do you really think tax avoidance would disappear with it?
Icebreaker? – Big 4 Scheme?
Major MNC’s – don’t have tax departments?
Bank structures? – Who do you think dreamt up Barclays more aggressive tax structures? Not the Big 4.
Boutique and law firms. Corporate financiers and investment bankers. Are they all diligently staying well clear of any tax avoidance.
This is what your campaign has become, just an ongoing attack on the Big 4. Tax avoidance is just a convenient stick to beat them with. Any meanwhile the foxes are running rampant in the hen house.
They are the continuing presence in tax havens that make mist abuse possible
No of course they are not responsible for all abuse but through their actions – including effective capture of many tax haven legislatures – they create the environment where this abuse happens
And this is increasingly true in the UK
Of course they are not the sole focus of concern – and I have never, ever argued that there are single issues of concern in tax – but they have a massive role and need to answer many questions