When I began this blog, if a Treasury minister had enjoyed the benefit of a flat owned by an offshore trust it is very unlikely that anyone would have known. It was also, quite extraordinary, unlikely that anyone would have paid a lot of attention. As I know from my personal experience of campaigning on tax haven issues from 2003 onwards, getting the media to take any interest in tax, let alone tax haven matters twenty years ago was very hard. Maybe that is why John Christensen and I were probably the first and the only two full-time campaigners on this issue anywhere in the world at that time.
Yesterday, Labour Treasury minister Tulip Siddiq had to resign because she had been provided with the benefit of the use of a flat that was associated with a trust named in the Panama papers, which provided a potential link to members of her family who were in the now fairly recently deposed government in Bangladesh.
She put out a statement saying that after investigation, she had been found not guilty of any wrongdoing but still felt it right to resign as a consequence of her association with the provision of that property and the questions that arose as a consequence. The Commissioner who had reviewed the matter made it clear that questions of poor judgement did arise, even if wrongdoing had not occurred.
From that, I draw the conclusion that twenty years of campaigning on issues relating to tax havens, opacity, tax abuse, financial corruption and more has delivered a return. No longer can people in public life in the UK use such arrangements with impunity, and that is to be welcomed.
Twenty years ago, I took a lot of abuse from a great many people in a great many tax havens about what I had to say about the uses to which these places were put, all of which they denied, but all of which have subsequently been proven to be appropriate. John and I stuck to our guns, and others joined the campaign.
Neither of us might talk very much about tax havens anymore because we have both moved on to address other issues, but I will never regret the time I spent enduring that abuse because the consequence has been a change in public perceptions about financial abuse and that is reward enough. We set out to explain that the use of tax havens was toxic because these places were created by people who had the intention of undermining the choices of democratic governments around the world. People now believe that is the case.
Tulip Siddiq might well be as innocent as she claims. I have no evidence otherwise, but her resignation is entirely appropriate. She took a Treasury post without declaring what had happened in her past, and it will be impossible for her to pretend that the provision of a flat for her use was not a benefit linked to the use of a tax haven by a relative of hers, about which she should have known. She had no choice but to resign, and did the right thing by doing so, although I suspect that she knew that if she did not, then her sacking would have followed.
Progress on issues like this takes place slowly and incrementally. This news is another welcome development in that process. But what is clear is that it is fair to say that as a result of our campaigning work, the rules on tax haven opacity around the world changed, starting with those relating to the UK's Crown Dependencies and Overseas Territories and then moving on from there due to work undertaken at the OECD. I was at the heart of that process for a long time. I offer no apology to Tulip Siddiq for what happened. She should have been very aware of this as an issue. If she was not then she was not fit for office.
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It is worrying that Siddiq either did not see the clash of interests or that her advisors did not either suggesting that it is all too normal.
I dont know how close she is to her Aunt who was President of Bangladesh but it seems to me that being a UK Politician and having a relative who is Lord High Panjandrum of Ruritania carries a significant level of risk unless they are either Properly Elected and follow the norms of a Democratic Society, OR you are not ‘close’
As far as I understand it she didnt do that well on either count
There are also calls for her investigation by a Bangladesh anti-corruption unit, although we may not hear much more about that. It would have made the anti-corruption part of her Treasury role a little tricky..
https://www.bbc.co.uk/news/articles/cp3zqen209go
This is not the first time her family links to the former regime in Bangladesh have been raised in Parliament – there were issues raised in 2016, in relation to a detained British subject, while she was an opposition MP.
https://southasiajournal.net/what-can-tulip-siddiq-do-to-lessen-human-rights-abuse-in-bangladesh/
Of course, the politics of all this often obscures the facts, but there is certainly a lot of smoke, even if we can’t be sure which fire it is coming from.
Hats off also to the Bangladeshi Corruption Commission and their work since the dictator there was deposed. Also to the 5th November blog. The story does seem to confirm that the biggest abusers of offshore secrecy are government officials by far.
That is total nonsense.
Corruption is every where.
And who are the corrupt suppliers is the real question. They are no government officials.
As a Yank, I am totally lost in this latest Tulip Siddiq political scandal.
I have attempted to research and read but still do not understand it.
Would this be like the UK Foreign Minister or US Secretary of State living rent free in a 15-room flat owned by an off-shore holding company which is controlled by a LLC Partnership consisting of Vladmir Putin and Xi Jinping?
Tulip Siddiq seems to have cooked her owned goose. Is she really that stupid or just so egotistical that she thought she could get away with whatever it was she did?
In afew words, yes, sort of
And yes, sort of.
This is one of the perfect examples of the call for greater transparency. For sure, the efforts to increase transparency have been instrumental in the Tulip Siddiq case.
Whether guilty or not, the optics are terrible for any government with any interest in transparency and equitable treatment.
I would challenge the calls for transparency on only one issue – that is that confidentiality and privacy should not be (unduly) compromised and culpability assumed where this is often not the case. This is the frequent refrain from the legal community. I do not share the view that 100% of those using tax havens are necessarily corrupt or dubious. Nor do I believe that the truism: “If you have nothing to hide…” is adequate in many cases where confidentiality and privacy are paramount. To be fair, the calls for greater transparency have never demanded outlandish approaches where ultra-sensitive data or information is concerned…
That said, the call for transparency has had enormous and much-needed “Follow-the-money” benefits and consequences – as the Panama Papers and Paradise Papers investigations have shown. OCCR and ICIJ have been undeniably empowered by this approach – which I regard as utterly commendable.
Richard – your input and efforts are most welcome and your work on transparency much needed. Great that we can see the impact from a Bangladesh former PM and dictator and the link to her relative, an Anti-Corruption Minister serving in His Majesty’s Government…
Why did former DPP Starmer not do background checks on his two departing Ministers…??