Larry Elliott noted in the Guardian yesterday when writing about the Kilkenomics festival that:
Richard Murphy, who has been the source of many of Jeremy Corbyn's economic policies, including “people's QE”— the creation of money to pay for infrastructure projects — is a big draw.
Actually, somehow Larry and I managed to miss each other the whole weekend: we must have been in different pubs.
Someone I did bump into was Louise Cooper who, amongst other things, writes for The Times and she has a shortish article on my interview on Saturday in that paper today (paywall). This is riddled with errors.
First, Larry got it right when saying that I am a source of Jeremy Corbyn's economic policies but Louise wrote that I was his 'top economic adviser' despite the fact that I made clear all weekend that this is just not true: I have no role at all that I am aware of, a point I also had to make time and again to Liam Halligan of the Telegraph, who insisted to audiences I was now on the Westminster payroll when nothing is further from the truth.
Then Louise said I found the Tax Justice Network when I made very clear I was a co-founder.
But what she also reported was that:
Mr Murphy did not restrict his fire to national governments. He also joked that the biggest threat to democracy in the world came from the four big accounting and tax advisory firms – PwC, Deloitte, EY and KPMG.
Two things about this. The first was I wasn't joking. The second, context is everything. This comment was, of course, made in the context of tax havens and, within that context is, I think, entirely appropriate.
Tax havens have been used to undertake what is best described as a tax war on the right of democratic countries to collect the revenues that are owed to them as a consequence of the laws that they pass. This is not by accident; this is a policy pursued by design, with that design being undertaken by a combination of the lawyers, accountants and bankers who populate such places in combination with the legislatures of those jurisdictions.
As we now well known, very little, if anything, really happens in many tax havens: the purpose of these places is to record transactions that really take place elsewhere. But this legal fiction could not occur without the willing cooperation and enablement of the financial services sector, and most especially the participation of the big four firms of accountants (PWC, KPMG, EY and Deloitte). As I have shown, they are the most persistent, recurrent presence in tax havens worldwide. Bankers and lawyers may always be present, but which of these occurs where does tend to vary: the Big Four accountants are notable by their consistent tax haven activity.
This is not chance: without the presence of these firms it would be impossible for the world's largest corporations to make use of such jurisdictions because the activities that they supposedly undertake in these places must be audited, which is what the Big Four do, giving them a clean bill of health in the process, and therefore the Big Four firms can be quite rightly considered to be critical enablers of offshore tax abuse.
This was precisely the point I was making on Saturday: if these firms have consistently acted to undermine the tax revenues of elected governments, which action has posed a threat to the ability of those governments to fulfil their democratic mandate, and they have done so knowingly, being aware that some say that such undermining action is a necessary condition of constraining the role of government, then I believe it is quite fair to say that they represent the most significant, coordinated threat to the right of democratic governments to act as electors would wish them to do around the world. That the same firms do also, it seems from what I see, take part in the design and implementation of new tax and corporate legislative reforms in tax havens simply adds to the charge sheet.
The fact is that in my opinion if the Big Four were to withdraw from tax haven activity the vast majority of the abuse of these places by the world's multinational corporations would cease. The Times failed to mention that I did make this point clear on Saturday. But as a result they do not make clear why the comment was appropriate. After all, it's hardly radical to say that stopping tax haven abuse is necessary. Why then is it news to name the enablers?
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My 4 biggest threats to democracy are:The Sun, The Daily Mail, The Daily Express and er, the Government
As you know, I am in no way an expert in economics, being a retired agricultural engineer, which is probably why it is a fault of mine to see things in very simple terms.
In arguments about tax cheating it is often thrown back at me that if the government allows it, it must be legal, so what’s wrong with that. Of course we all know the argument that because it’s legal does not make it moral, and that at one time it was perfectly legal to own slaves, but hardly moral.
And now to the point. I’m sorry if you have already covered this in past blogs.
We know that most of worlds tax havens(secrecy jurisdictions) are under UK control.
Is it within the UK governments power to close them? If so why are they so reluctant to do so? Is it because many in government and their friends have personal vested interests to keep them open, or is that just a wicked innuendo!!
If it is within government power to close tax havens should that not be the focus of our campaigning? If the government is reluctant we should be asking them why.
I think it is in our power to force changed behaviour on them
But we don’t
That’s the power of the City of London
A good new summary of the UK’s powers over its satellite tax havens is here
http://www.financialsecrecyindex.com/index.php/faq/britishconnection
Kudos to Private Eye, who have been banging this particular drum for years. They have been naming and shaming the big four, and giving detailed, comprehensive coverage of some of the corporations, governments and corrupt individuals involved in these schemes.
Sadly they are a voice in the wilderness. One wonders how the mainstream media can constantly overlook this scandalous situation.
If by the mainstream media you mean newspapers Helen, that’s because most of them are owned by, and are mostly mouthpieces for, right wing, tax dodging businessmen like Murdoch adn Rothermere, who constantly promote the kind of attitudes that support the use of tax havens. Meanwhile, of course, the same organs of our ‘free press’ have no trouble attacking recipients of social security.
I mean newspapers and the BBC. Much as I would wish the BBC to live up to its reputation for unbiassed, well researched reporting, anyone who bothers to check the facts knows that it too is beholden to the same political interests as any other organisations.
I used to think Medialens were somewhat paranoid in their critiques of all strands of the media, but especially since Corbyn, I think they speak the truth.
http://medialens.org/index.php/about-us/what-is-media-lens.html
Helen
You may have seen this in the London Review of Books regarding Corbyn and the media. If not, well worth a read.
http://www.lrb.co.uk/v37/n20/paul-myerscough/corbyn-in-the-media?utm_source=newsletter&utm_medium=email&utm_campaign=3720&utm_content=ukrw_nonsubs_a&hq_e=el&hq_m=3977836&hq_l=9&hq_v=a95c65c70f
Very interesting, Ivan. Thanks for the link.
“That’s the power of the City of London”
And that I would suggest is why PQE is so essential – it’s not only good for the country socially and financially but it is also a step on the road to getting our democracy back. It has it all!
Perhaps Louise should buy herself a notebook or digital recorder so she can get her facts straight, then, Richard. Otherwise I can see that writing for a right wing mouthpiece such as The Times could tend to bias a reporter into writing what they know fits the political philosophy of the publication rather than the truth.
Ditto Liam Halligan (whose days as a truth seeker for C4 News are now long gone).
You forgot to give the Big Four credit for the sterling work they do through those well known cornerstones of any democracy: lobbying here, there and pretty much anywhere; providing secondees to opposition parties/politicians to “advise” on policy; ditto to government departments to help devise and then advise on the implementation of policy (eg. PFI, NHS reform, outsourcing, privatisations, etc etc); providing consultancy services to government and public bodies to sort out the negative outcomes of the policies they previously helped to formulate and implement (eg. PFI, NHS reform, outsourcing, privatisation, etc etc); and last but by no means least, providing a welcoming private sector home for ex politicians and senior public servants once their days of public service are done, but not, of course, to use what these people learnt in their previous job or the networks and contacts they made, to in any way advance the interests of their new employer.
So true….
Whenever you go to a city, at home or abroad, you will notice that the biggest, flashiest buildings in town always house the large banks and the big four accountants.
This is no coincidence!
Where centuries ago, it was the cathedrals. Welcome to the new dominant religion.
“if these firms have consistently acted to undermine the tax revenues of elected governments, which action has posed a threat to the ability of those governments to fulfil their democratic mandate”
Don’t many tax havens have democratically elected governments? Presumably those governments have democratic mandates?
Luxembourg, Switzerland, Guernsey, Jersey, IOM. They have every right to arrange their countries tax affairs as their citizens wish, do they not?
It’s very colonial of you to assert that the UK’s government can do what it likes about tax but these smaller countries don’t have that same right.
Many are not countries
Those that are have been captured
And I have no problem with them setting their own tax rates
I have massive problems with them trying to set ours, which is what they are blatantly seeking to do