Yesterday's Anti-Corruption Summit did not excite the world. It did not even excite readers of this blog: traffic yesterday was at about normal levels and right now those are at below Panama Papers levels. I made it onto the ITN News at Ten, but media coverage on the day was limited, and less than in the build up. The term damp squib feels appropriate: candidly, the event simply did not deliver, as predicted.
As predicted, the event looked at the wrong type of corruption, focussing solely on crime and not the systemic issues that firstly let it happen and secondly undermine global trade and trust.
We got transparency in secret, as I suggested likely. When the Chief Minister of Jersey was asked why he would not commit to on public record transparency his response was telling. That was because, he said, public record transparency was not yet the global standard. He failed to add that his not agreeing to do it implied he was doing all he could to make sure it never is the global standard.
Tax havens have not ended. The Summit agreed business needs data on who owns companies. The tax havens are not supplying it. Nor will we know if they are supplying meaningful data to anyone else because of the secrecy involved. I do not deny there has been a small step in the right direction. To say these places have ceased to be secrecy jurisdictions is just wrong: nothing is as yet on public record.
The professions have said they oppose illegality.
The BVI took no part in proceedings. If the UK takes no action then nothing Downing Street said has any real meaning.
So little happened then. But let me not be completely negative. As the Summit papers show, the previously announced intention to share beneficial ownership data was re-announced, excluding Guernsey and the BVI. And no announcement was made on how to tackle this issue in the USA. And come to that, nothing was said about how the UK is going to verify its data, which is a massive issue of concern.
The UK re-announced it will require declaration of the beneficial ownership of companies owning property in the UK, which had already been the subject of a consultation in March. It did not say how this will be enforced. Forfeiture is not on the cards.
That the rules on disclosure will be extended to public sector contractors is good, but the price limit of £10 million is way too high.
There will be token gesture discussions on public country-by-country reporting, but only about how this might be progressed.
And there will be some increased co-ordination on some issues, maybe.
And that is it. You could call it an opportunity lost.
But not quite. The role of the US as a secrecy jurisdiction came firmly into the spotlight. This has been an issue I have talked about since the US topped the first ever Tax Justice Network Financial Secrecy index, which I directed.
The need for trust registers is now obvious and has got attention. This is an issue TJN has again been highlighting since 2005, and I co-wrote the work in question.
The case for giving Companies House new resources will, surely, be made now?
And that the UK is the epicentre of the biggest tax haven network has featured on every news channel.
Plus some progress on limited information exchange has occurred.
If there is progress then it is not because of what was announced, but the opportunities that the Summit provided to highlight issues. What you can be sure of is that this issue is not going away.
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I noted that you put your availability for interview on Twitter, disgusting that the media only responded with the News at Ten.
How can blog traffic have been so low? Your usual posters would have been all over this? Was there not much outside interest generated somehow? Clearly the government wanted the “summit” tagline but no real detail shown.
Let’s hope you are right.
While there must be an increasing awareness among the general public that an awful lot of undemocratic, anti-social and quasi-legal ‘stuff’ goes on in the upper échelons of our nation, I sense there is a corresponding feeling of helplessness. It’s probably even more pronounced in the US but also applies to other Western so-called domocracies. Thanks to forensic activists like RM we ordinary citizens now have a clearer insight into big issues such as tax which hitherto had been completely opaque or not even on our radar. But what to do about it? Of course we can join pressure groups, sign petitions, support relevant NGOs, participate in local protest movements, etc. But at the back of our minds there is a nagging and depressing feeling that nothing much changes at the key power centres; maybe, if we’re lucky, on the fringes but not where it really matters. I suspect it’s a form of ‘Weltschmerz’. Or, as Mark Twain commented: “If voting made any difference they wouldn’t let us do it.”
When asked the question ‘what can we do?’ Noam Chomsky always replies ‘get active at grass-roots level’. And it’s good advice. But issues such as global tax corruption seem beyond the influence of small-scale protest. Many of us who regularly read blogs such as this are now better informed than we’ve ever been. But the problems seem to be growing exponentially (on a global scale) while the solutions are non-exponential and, anyhow, are dependant on progressive governments which are in depressingly short supply.
In recent history, the Greek tragedy served to emphasise the scale of protest that’s needed to get nowhere. In their case not even an elected government had the power to look after its own people. In or out of the EU, would it be any different here? I’m only writing this because of the stated lower-than-usual blog traffic and asked myself why? After all, tax is not such an arcane topic is it? Hence the above observation is a knee-jerk reaction to this and other important issues of the day. I understand it’s a touch cynical but I fear cynicism is spreading and is the enemy of change. When people feel that the problems are too great for their vote to make any significant difference then fascism cannot be far away. Without wanting to appear over-dramatic, I fear we live in dangerous and uncertain times.
If ‘Tax’ is a tip of the iceberg, for heaven’s sake, don’t ease up Richard! We (I) need all the encouragement we (I) can get to maintain a degree of optimism.
Grass roots activism made yesterday possible
And we are making progress
Too slowly
And not enough
But progress
Individually we are powerless, collectively we are an army.
That is why every non-democratic/quasi-democratic government hates real democracy and public referendums.
So use your individual power and add it to the collective voice. It is always better to do something than nothing – if you feel strongly about something it makes you feel much better to have tried.
Even if we don’t always win bringing public pressure to bear heavily onto our so-called representative politicians is essential for any type of democracy to function.
https://home.38degrees.org.uk/
https://www.change.org/
https://petition.parliament.uk/
Now I feel guilty! Richard and Keith – you’re both right. It’s always better to light a candle than to curse the darkness (apparently Eleanor Roosevelt said that). Sometimes it just seems that the darkness is all-pervading, which it isn’t of course. We’re in it for the long game. Thanks for the words of encouragement. Happy weekend.
And to you
What summit?
Did I blink and miss some real leadership from the western world?
Just more tinkering with the private financial capitalist engine to make sure it performs at optimum levels for the benefit of the few with minimal social unrest – yet again!
Tax havens are just another symptom of the underlying disease that Cameron referred to, they are not the cause. Any serious attempt to resolve the issues caused by tax havens would have to look at the private financial and monetary system – which no global leader will countenance and therefore we should expect no real change from above.
Keep up the grassroots movement Richard!
So the secret is still not out. These powerful people have institutions to protect them and ordinary people have no idea how to make them accountable. We rely on good people such as you to help us. You could write a thriller you know Richard and make millions from the film rights. Thank you for your persistence, you are every bit as determined as the shadow people. The force be with you always.
Well Dirty Secrets will have to do
Serious writing under way today
So much bitterness Richard.
Jersey was praised yesterday and even though it will be unpalatable for you and John it’s obvious that your hate of the Island always blanks out the facts.
You also sad we’d be bankrupt by 2015, another silly prediction to add to the others.
http://www.bailiwickexpress.com/jsy/news/jersey-has-taken-lead-global-transparency-osborne/#.VzWiNuTmrIU
The fact is Jersey has an insurmountable black hole
Its business model has failed
And step by step we are forcing it top change against its will
No hatred of Jersey at all – just the corrupt forces that have captured it
“Jersey was praised yesterday…”
By George Osbourne,
I guess that must mean they’re doing a really grand job!
Lack of coverage, lack of web traffic and lack of interest – simple, Panama revealed nothing that people didn’t already believe and expectations for genuine reform hover around rock bottom. The GFC revealed corruption/gaming far beyond what people believed and nothing really happened, so why expect it over Panama? I think peoples ghasts are beyond being flabbered, but I don’t think apathy is winning the day it’s more like sullen discontent and distrust.
America elected Obama, finally we said, 8 years later we say meh. Greece went hard left, yes we said now it begins and again we end up at meh. The Middle East is on fire, pick your reason it almost doesn’t matter now. America is looking at Trump, Brexit is looming(TTIP waiting if it fails), China rumbles, Russia growls and the sullen discontent becomes more like a dry forest, waiting for a spark, every day.
You could argue that Sanders in the US and Corbyn here are genuine reasons for hope. But then you see the MSM attack them at every turn. Even if they made it all the way how much co-operation do you think they’d get to enact any serious reform? Greece shows us how the establishment is able to neuter the popular will.
We achieved, what we like to think of as normal, on the back of WWII and the fear of communism. For at least 40 years those gains/rights have been eroded. Unions, the single greatest tool at the peoples disposal, have been demonised. Oh it’s been well handled via the MSM, we all ‘believe’ socialists spend other peoples money, unions stand in the way of progress, complaints about inequality are just the politics of envy…the list is endless. Tube drivers are greedy but hedge fund managers are wealth/job creators.
I’m sorry Richard, despite the above, I do strongly support the efforts you make here but I’m losing heart. I think we’ve gone beyond the point where meaningful reform can happen/help within the existing structures. I hope I’m wrong and the conflagration isn’t coming.
It’s easy to despair
I’m not sure why I do not
But I have hope, including the hope that there will be no conflagration
This’ll cheer you up – not: http://www.counterpunch.org/2016/05/13/the-great-leap-backward-americas-illegal-wars-on-the-world/
I too am rather despairing.
But yet, I’m afraid I’ve suggested this before: we have to urge every local authority to create a local bank. That would give them far more power than any ‘devolution’. I’ve suggested it to my local authority (still Labour) and there is a stunned silence. (I’ll be working on it!)
This is definitely a basic grass roots concern so coincides with Chomsky’s principles. Also, as many Conservative local authorities are, I think, a bit fed up with being dictated to from on high, yet with no resources, I can only urge others to follow this idea and try to get a local bank!
I’d prefer a local bank with a non profit motive but it really doesn’t matter as it is, as they tend to say about uber, disruptive, and that is what is needed more and more for the banksters.
Despair is the precursor for change
Why change without it?
Richard, I came across this interesting piece that suggests the real motivation behind the Panama Papers was a preemptive marketing strike, to drive American tax-dodging away from Panama and towards “local” jurisdictions such as Delaware and Nevada.
http://www.telesurtv.net/english/opinion/The-Real-Target-of-the-Panama-Papers-20160510-0044.html
If this is true, then despair indeed, and “Lasciate ogni speranza, Voi ch’entrate!” (“Abandon all hope, you who enter”), for this would then be “corruption upon corruption”, which I fear is the real state of things!
I have to say that I think this is a real possibility
We cannot prove it, of course. But it really should not be dismissed. Dirty tricks are part of the tax haven world, as I know all too well.
MayP – you are right about the need for public banking, which could easily be started in all those towns and villages where the commercial banks have closed down their physical branches on the assumption that they will keep the vast majority of their customers online. Well why not have a public alternative in the real world for those that can’t or don’t want to bank exclusively online?
It should be no surprise to anyone that understands money and finance to see that almost every major retail corporation now has a bank – why? Because they make so much more money than their core business and they have a captive customer base to exploit.
So time for the public, charitable and worker co-operative sector to put even more competition into the banking sector – which has been too much of an old, elite (public school) boys club for far too long.
It should be no surprise that one of the reasons in my view for the success of Mondragon Corporation as the largest worker co-op in the world was its founders view (a priest) to set up a bank in the very early days to avoid the fees and control that private banks would have over the co-op. They now have insurance, pensions, medical care, a university, low cost housing and much more all within the group – thereby removing the leech like tentacles of the private financial capitalist rentiers as much as possible from their worker owners lives.
Now that would be a better future to look forward to, in my view! The answers are almost all out there, you’ve just got to go looking for them.
I will never set up a bank
I wish luck to all who wish to do so: we need them, vey badly
Richard you are already the bank of dad!
But do you charge your children interest or fees? Or deliberately put them into indebtedness to you, so as to extract your just returns in future? Or bankrupt them when they fail to settle their debts to you?
When you think about it like this you realise just how immoral our banking systems have become. They should be more like the bank of mum and dad, enablers for a better society and a brighter future!
I can assure you I am the bank of dad
And I extracting reward right now: the grass is being (unwillingly) cut
That’s fair exchange for 200 miles of taxi driving tomorrow because or rail replacement buses making a trip nigh on impossible otherwise….
Still, ample time to work on the book whilst waiting for the return trip. I have to find a bright side
Re banking and localisation I would say that we already had the perfect setup in the form of the Post Office, though I thought it worked better as Royal Mail.
Richard – allow me to use your “bank of dad” grass cutting and taxi driving as an example of the moral debate I feel we need to have as a society over the role of commercial banking (and financial services in general).
Q. Is your “deal” of lawn mowing for taxi services a business transaction agreed between two people of equal knowledge and resources. Do you both have full knowledge of the law and its financial implications in concluding your deal?
Q. Did you both calculate the full value of the lawn mowing service with the value of the taxi driving service, before concluding the deal?
Q. Did you ensure a contract was signed before the transaction took place (worded of course in your favour in case of dispute)?
A. Of course not (I assume!), you most likely concluded the “deal” as any parent would between an adult and a child, for one reason to teach them the value of the things you do for them, as well as to partially compensate you for your efforts and costs.
And so the bank of dad was very wise, generous and supportive – because you had both the insight, resources and capability to assist your offspring as they develop in life to reach maturity and achieve their own full capability.
My point being (perhaps overly laboured), is that banking (and money creation) should never be considered a privately owned for-profit business opportunity. Primarily because of the perverse incentives to exploit and place in debt those people least able to understand and manage their own financial affairs with the skill of a professional. Which we have seen only to clearly in recent decades.
Consider the “parent creditor” and “child debtor” relationship for example – where there is a much greater responsibility on the parent creditor because they have so much greater knowledge, resources and experience than the child debtor.
And so banking and money creation is of far greater importance to society in my view than just a private for-profit business could ever be. It is the financial and economic equivalent of the social elixir of life, because without it we are all liable to suffer extreme hardship.
Therefore those that have control of banking and money creation have a huge responsibility and power over others. And so it is an extremely important questions as to who we entrust with such power and responsibility.
If we are to become a more humane and sustainable society, I really do feel that banking and money creation must be taken completely out of private hands. At the very least this should be for all personal financial transactions where the balance of power is so immensely weighted towards to the professional creditor at the expense of the individual debtor.
Business to business banking and finance I accept can be considered differently, but again with extreme caution between the advantage that the large financial banking corporation has over the sole trader or small/medium business.
In the meantime, I trust your lawn was well mowed and your taxi service fully appreciated!
I like that
And yes the lawn was quite good
And I suspect I will get thanks fir being a taxi
He’s OK. Although he has his moments
I suspect I had mine
There are many people like myself who refuse to give up hope that one day we will have a UK government that works for the people it represents not for their own gratification. Friends I spoke to yesterday believe in all of Corbyn policies and feel if he was allowed to implicate them our country would be a fairer and better place that worked. They added that “they”(the powers that be) will never allow that to happen because of the underlining greed that consumes our country. I replied that we, the people of the UK are the UK and if we all change the learnt behaviour infiltrated by the likes of the American model, then we can change our country.
Of course we knew that this government which has been sited as the worst ever in all our history, even more evil than Thatcher (she was at least honest about her attitute)
would never do anything to change the staus quo that works for Dave & his mates.
What I hate is that the main media is working for him … rather like the American model.. excpet for Channel 4 News and they are in danger of getting closed down to shut them up.
I will keep campaigning…
Please do Min
I hope you’re well
If you want fairly unbiasedUK reporting you can do a lot worse than Al-Jazeera
Richard, you quote the Jersey representative as saying that the reason secrecy arose “was because… public record transparency was not yet the global standard.”
You rightly imply he was being ingenuous but he raises a truth. Like nuclear disarmament, who disarms first, and by how much?
What the conference appeared to lack was the presence of some existing beacon of transparency who could morally challenge the others to follow suit, especially if it could be seen to be a country that had not suffered, and had perhaps even gained, from transparency.
But are there ANY countries that fit that bill?
This is not a rhetorical question, but a genuine enquiry – are there any shining examples that can be cited?
Chris
As yet I fear not
I have challenged on this issue – see this http://www.taxresearch.org.uk/Blog/2010/07/04/plan-b-for-jersey/
So far no takers
Richard
There won’t be “any takers” for the same reason – first mover DISadvantage. All existing good business would run for the exit doors to other jurisdictions still offering privacy, and the jurisdiction losing all the business would be in dire economic straights. It took Jersey 50 years to build up to where it is today. Losing nearly all existing business overnight and trying to replace it with business under your “Plan B” would take decades (even if you are right).
I’m not saying that your Plan B is wrong, just that it is not economically viable for an existing well-developed jurisdiction to adopt it. A brand new financial services jurisdiction may find it far more viable to adopt it from scratch.
Jersey is going bust anyway
I have always been right on that issue
Jersey has a government spending problem, not a revenue problem. Hard facts are that employment in the finance sector is back to peak levels, and the industry directly and indirectly employs a massive proportion of the population, from which enormous levels of employee income tax revenue is generated. There’s not a cat in hell’s chance of them voluntarily risking the loss of that tax revenue and adding 20,000+ to the unemployment register.
But that industry cannot support the services Jersey needs
A defintion of bankruptcy if ever there was one
And remember, the finance industry in Jersey is heavily supported by the States. Who pays Geoff Cook, after all?
Respectfully – you are stiull flying very, very close to the Sun
Pragmatist,
we’ve been told, many times, that what Jersey offers isn’t secrecy or nil tax but financial expertise. In that case, presumably, once the legislation has had effect &, the doors (& windows) have been wiped clean, all your wealthy clients will continue to shop at Jersey because they value your expertise.
As if !
Richard
Let me make it clear – I have no direct connection with Jersey. I know the island well as I used to live there many years ago.
The finance industry is more or less all that Jersey has, apart from a tourism industry which is half the size it was 15 years ago.
The island has plenty of revenue to support what it NEEDS. However it’s politicians have been spending/wasting far too much on misguided capital projects. It also has a high social welfare bill be a use of a large influx of Eastern Europsans, plus a very bloated public sector, all of which needs to be addressed.
But the island has huge cash reserves which enable it to continue to be reckless in not addressing the above issues for several years yet. It would only go bust once those reserves run out. However the excessive capital spending can come to an end very abruptly. The public sector costs are starting to be addressed. The social welfare bill somehow needs to be cut.
This is why your Plan B will never be taken seriously by Jersey.
Jersey Finance (and thus Geoff Cook’s salary) is paid for partially by the States of Jersey (the taxpayer) and partially by the finance industry.
You clearly do not know Jersey at all based on the comments you have made
You’re just talking the sort of nonsense the TPA deliver by the manure load
Richard
Please elaborate on your comments. What have I said which is incorrect?
Apart from the fact finance is functioning again almost everything else is wrong
Richard
You’ll need to expand please on your comments. What else is “wrong”? I can assure you that is extremely accurate.
I have no need to expand
Your statement that Jersey has a spending problem, for example, is just opinion
Local politicians appear unable to find the savings
And if they did the poorest in Jersey would pay
You are not offering fact but unsupported hype
Now stop wasting my time with anti-state waffle, even if it is anti-States of Jersey waffle
Richard
Of course you have to expand. You made the comments that what I said was incorrect. It isn’t, but you won’t expand or justify your comments. The fact is that you can’t substantiate your comments!
Jersey’s spending is massively out of control. The civil service payroll in particular has mushroomed out of control. Kevin Keen was hired to reduce the public sector but he quickly resigned because of the resistance that he faced from the civil service. Turkeys do not vote for Xmas. It is totally unsustainable.
Jersey is throwing money at large capital projects which it simply cannot afford.
It has a huge spending problem.
You are clearly listening to the wrong people in Jersey.
Those civil servants don’t talk to me
I would agree Jersey wastes money – but the problem is a shortage of revenue
You miss the obvious
We know the present set up of household debt/oversupply/rentier extraction cannot go on for ever (although it feels like that within the time frame of our lives). Things will change.
Do we have the leadership to do that? Not yet.
Do we have a grass roots movement? Sort of.
Is there an awakening of the populace to change. No
Khan in London is indicative of how backward looking politicians still are and can’t grasp it is time to change.
Comments from Khan have been rather depressing since he has been in power
Power is not for its own sake
I admit I am not sure he realises that as yet
And how he will be used if he thinks that is the case
You are right, Richard. I suspect he’s riding high on being ‘The First Muslim….etc’ in a similar vein to Obama as ‘The First Black…’ Although it is not without significance, these notions are still based on ‘fulfilling the dream meritocracy’ which, in my view, is a stale notion. Sander’s movement got this-we need it over here!
Identity politics doesn’t trump underlying economic illiteracy.
Given that he is quoted as saying – preposterously, in my view, given only Ed M’s quashing of Syrian intervention, let alone the following in HuffPost http://www.huffingtonpost.co.uk/matt-monk/jeremy-corbyn-labour_b_9871358.html – that “I’ve achieved more in these seven days than in the last six years in opposition.”, I think a little humility and magnanimity might be called for.
I have to agree
Burnley savings and loans, started by local business man Dave Fishwick 2011. I am surprised this model has not been used by others.
Yes, small and he does not sound like a man who wishes for more and more. It must help in its way to help an area thrive.
I think you are right May, I don’t know what kind of model, but a bank for ordinary people, yacht buying folk need not apply.
Add your voice to this very sad personal story of why tax havens should be closed down.
David Cameron: Fight corruption & insist UK tax havens reveal company owners
https://www.change.org/p/david-cameron-mp-david-cameron-fight-corruption-insist-uk-tax-havens-reveal-company-owners?