As the Guardian reported yesterday:
The UK's offshore financial centres must fall in behind plans to stop “dirty money” by publishing registers of corporate ownership, leading political campaigners have said, as Labour pledged not to cave in to lobbying designed to weaken the proposals.
Labour's Dame Margaret Hodge and the Conservative MP Andrew Mitchell hit out at “dither and delay”, ahead of this week's summit between UK government officials and overseas territories, such as the British Virgin Islands (BVIs) and Cayman Islands, in London.
For many years, my campaigning around tax haven issues, including those of the type that the Guardian has noted, was the bread-and-butter topic that drove the content of this blog. As is obvious, that is no longer the case. I moved on from the issues in question, not least because those who campaign on them never seemed to quite grasp exactly what it is that they should be asking for, which fact is inherent in the current campaign.
Tax justice campaigns have reduced their demands to what they call the ABC of tax transparency. The A stands for automatic information exchange of data from tax havens to the places where the people who use those places really reside, which is something on which I did a great deal of work and which, by and large, has been delivered as a result of work done by the Organisation for Economic Cooperation and Development in which I was engaged up to 2015. There is no doubt that the systems could be improved, but the vital breakthroughs have been made.
The same was true of the C in this list, which was country-by-country reporting, which I created in 2003 and which is now a legal requirement for corporation tax reporting by multinational companies in more than 70 jurisdictions around the world, meaning that the tax authorities of those companies do now know in which jurisdictions they record both their income and profits, making it much easier to identify those that try to undertake tax abuse through tax havens.
The B is still the problem, and I remain frustrated that tax justice campaigners still appear to have no idea what they are asking for. It would, of course, be good to know who owns limited companies, including in the UK, which is becoming ever harder to do. However, knowing who owns a company tells you very little about it if you have no idea what it actually does, and this campaign never made any sense unless it was conducted in parallel with one that demanded that the accounts of all private limited companies be placed on public registers wherever they might trade around the world. For reasons that completely baffle me, tax justice campaigners appear to have seen no connection between these two issues, largely because it seems that they know very little about financial data, or how to use it.
When the whole tax justice movement began to be taken over by people who had little understanding of what the issues of concern were, but a lot about pursuing slogans, I realised it was time to move on. The fact that the Guardian is still reporting this matter in a way that shows that these campaigners still have little comprehension of the fact that what they're asking for will not deliver the information that they need is sufficient to suggest that I was wise to do so.
I wish them well, but I wish they would create demands that make sense.
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Can we see the full detailed accounts for your limited company, not the high level minimal information that you choose to publish?
It’s voluntarily on public record
What is the B?
Beneficial ownership
Agree. [You have a typo at start of para 4 ‘Text’ instead of ‘Tax’.
Corrected, thanks
“I remain frustrated that tax justice campaigners still appear to have no idea what they are asking for”
If I was being cynical, I would suggest that the campaigners know exactly what information is required, but choose to feign ignorance in order to bury it.
I note that “Labour’s Margaret Hodge accused of hypocrisy over tax affairs”
https://www.ft.com/content/4d9e16b4-ee3d-11e4-98f9-00144feab7de
Thank you, Ian, for linking that FT article.
There’s a lot more that can be said about Hodge, but I will spare Richard the libel risks.
I had forgotten that it’s the time of year for Hodge to pipe up. Every mid-autumn and coinciding with financial crime related events that she’s invited to address, goodness knows why, Hodge makes a public song and dance. Some of us who have to attend, if only to get out of the office and / or boost CPD points, just chuckle as we know the score. Whatever next.
I worked with Hodge in 2012
But not by 2016
Sorry to go off thread, but there is a very silly argument leading to division in the SNP about Stephen Flynn’s desire to stand for election in both Westminster and Holyrood. Stephen Flynn is quite right, if the constituencies actually want him to stand. The problem is there as a supposed political issue largely because of Douglas Ross’s acrimonious and self-destructive “leadership” of the Scottish Conservatives. Selfish Scottish Conservative puts himself first. That wasn’t an error, it was a definition of Scottish conservatism.
Some SNP members (on BBC Radio Scotland GMS this morning for example) are trying to turn this into a Women’s Rights issue. Flynn is right because he understands the critics do not understand the politics. His critics are playing the ‘devolution is all there can ever be’ game. Unionism alone defines Devolution. Unionist politicians divide the politics in two. Divide and rule. Make it as difficult for the politics of independence to function. Oblige it to spread its resources between two black boxes, and create an illusory unbridgeable political gap between. This is Unionist politics, devised by Unionists solely to protect the status quo.
From an independence perspective, there are two Parliaments, deliberately making the politics of independence more cumbersome and difficult to achieve, that the SNP require to use in ways that best serve the politics of independence, while running a Government in Scotland, and an opposition in Westminster (but never, ever a Government in Westminster – which is itself highly problematic for a political Party, but not for Unionism or Unionist Parties, which gives them a very different perspective, and a huge insurmountable advantage). Once the problem is properly understood, the critics of Flynn (save any internal rules in the SNP in which I have no interest, and are mere bureaucracy that the Party needs to sort out) really need to figure out that the SNP have to manage the political disadvantage differently from Unionist Parties; and decide whether they are content simply to serve Unionism, and continue, frankly to be politically mugged by Unionists. You are making it too easy for them.
Much to agree with
What the company does and who REALLY owns it are the key questions.
Companies House would be the place to start. First, it is in the sole control of our government; second, it is hard to lecture Cayman/BVI etc. when our own house is such a mess.
When I was campaigning on digital privacy 2008 onwards, mainly against BT & their partners-in-*****, “Phorm Inc.”, an AIM listed company latterly based in Singapore but with a Delaware registered US parent as they were “born in the USA”, with various international subsidiaries and chaired by one Kent Ertugrul (also the CEO), our problem was not so much not knowing who the beneficial owners were, but nor knowing what they were UP TO, in their various unlawful globe-trotting internet interception activities, and why/how, without ever declaring a profit, they were able to continually attract millions of pounds of speculative investment, continually diluting their share price (but never their director emoluments), getting kicked out of UK, Romania, Turkiye, Brazil, & S Korea, each time because their activities were deemed unlawful, and eventually disappearing mysteriously into China, and, in their UK incarnation, finally but very slowly, going bankrupt with minimal transparency
Their nefarious doings around the globe, were supported on blogs, & forums by an army of astroturfers, but our campaigns were successful in eventually forcing their closure. We had our suspicions that their declared purpose of facilitating targeted advertising, was a cover for a trial run of deep packet inspection tech of more interest to state actors than advertisers.
Needless to say, Companies House (and City of London police) were hopeless. Filing irregularities and late accounts went unpunished. Alleged criminal offences (including surveillance of campaigners by criminal means) were not investigated properly. Reporting inaccurate company information to Companies House was a waste of time. Interestingly, one of the non-exec directors was former Chancellor, Norman Lamont.
Transparency about company activity? Yes please.
Good summary on Wikipedia.
While we are on the issue of corporate governance, readers might like to check the oral & written evidence of the final 2 witnesses to the Horizon Inquiry who wrote 2 papers then answered questions for 2 days, on Corporate Governance, with reference to the Post Office.
https://www.postofficehorizoninquiry.org.uk/hearings/listing
Thanks