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You can find the current article at its original source at http://www.guardian.co.uk/commentisfree/2013/jun/25/tax-havens-here-to-stay-city-uk
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| Tax havens are here to stay, thanks to 'City UK' | Tax havens are here to stay, thanks to 'City UK' |
| (4 months later) | |
| The British media is now in moving-on mode on the issue of tax havens. It would do well to pause, be less excitable about the pantomime of brand shaming and actually examine the depth to which tax havenry is hardwired into our economic model and columns of state. | The British media is now in moving-on mode on the issue of tax havens. It would do well to pause, be less excitable about the pantomime of brand shaming and actually examine the depth to which tax havenry is hardwired into our economic model and columns of state. |
| Among the millions of column inches generated in the past two years on this issue, three words you will not find in sequential order are "City of London". Extraordinary, when one considers the critical advantage our tax haven network offers the preponderance of offshore lawyers and accountants that cluster the Square Mile, siphoning off the rewards of capital flight. And that network that is growing, not receding. | Among the millions of column inches generated in the past two years on this issue, three words you will not find in sequential order are "City of London". Extraordinary, when one considers the critical advantage our tax haven network offers the preponderance of offshore lawyers and accountants that cluster the Square Mile, siphoning off the rewards of capital flight. And that network that is growing, not receding. |
| Back in 2008, in the epicentre of the financial crisis, the City of London – mindful of impending scrutiny and possible regulation on an unprecedented scale – set up a new identity, "City UK", to promote its affairs and sanctioned an immediate £500,000 per annum grant. This body is "independent" and private and so it's exempt from freedom of information legislation, but City of London Corporation heads sit at the top of its governing bodies, beside the major players in global tax avoidance such as Ernst and Young, Deloitte and KPMG. | Back in 2008, in the epicentre of the financial crisis, the City of London – mindful of impending scrutiny and possible regulation on an unprecedented scale – set up a new identity, "City UK", to promote its affairs and sanctioned an immediate £500,000 per annum grant. This body is "independent" and private and so it's exempt from freedom of information legislation, but City of London Corporation heads sit at the top of its governing bodies, beside the major players in global tax avoidance such as Ernst and Young, Deloitte and KPMG. |
| As established UK tax havens are politely asked to show the world some leg on transparency, "City UK", with its unparalleled expertise in the ways of the offshore world, is busily setting up a new "global financial centre" in Nairobi, Kenya. It has appealed to City financial identities to assist in "derivative securities, securities market and the regulatory and administrative environment". Author and tax haven authority Nicholas Shaxson has appraised the development very clearly. This development has not been reported by our news media. | As established UK tax havens are politely asked to show the world some leg on transparency, "City UK", with its unparalleled expertise in the ways of the offshore world, is busily setting up a new "global financial centre" in Nairobi, Kenya. It has appealed to City financial identities to assist in "derivative securities, securities market and the regulatory and administrative environment". Author and tax haven authority Nicholas Shaxson has appraised the development very clearly. This development has not been reported by our news media. |
| Hence David Cameron is enjoying something of a press glow; his management of the rolling tax avoidance scandal has been first-class, for two reasons. First, he is always quickest out of the traps to condemn those exposed as "tax dodgers", often deploying language such as "repellent" or "repugnant". | Hence David Cameron is enjoying something of a press glow; his management of the rolling tax avoidance scandal has been first-class, for two reasons. First, he is always quickest out of the traps to condemn those exposed as "tax dodgers", often deploying language such as "repellent" or "repugnant". |
| The fact, his government legislated to make tax avoidance far easier for large transnationals – even exclusively consulting those holding hundreds of tax haven subsidiaries on how laws should look within that process – is again overlooked by most media. Cameron simply takes credit for deploying strong adjectives. | The fact, his government legislated to make tax avoidance far easier for large transnationals – even exclusively consulting those holding hundreds of tax haven subsidiaries on how laws should look within that process – is again overlooked by most media. Cameron simply takes credit for deploying strong adjectives. |
| Second, most likely due to his twin vulnerabilities of a personal offshore inheritance and poor legislative record, he is careful to always be seen to "own" the issue; never on the back foot reacting, always proactive in hunting down the bad guys; even confronting our own union flag-flying network of tax havens with his recent "clampdown" agreement. | Second, most likely due to his twin vulnerabilities of a personal offshore inheritance and poor legislative record, he is careful to always be seen to "own" the issue; never on the back foot reacting, always proactive in hunting down the bad guys; even confronting our own union flag-flying network of tax havens with his recent "clampdown" agreement. |
| The premier of the Cayman Islands – the UK territory recently described by the UN adviser on economics, Professor Jeffrey Sachs, as "a mortal threat to the world economy" – made clear after the meeting just how much of a clampdown had been secured: "All of us have the ability to insert reservations in whatever agreements we reach and we get to negotiate each of the individual agreements with each country." | The premier of the Cayman Islands – the UK territory recently described by the UN adviser on economics, Professor Jeffrey Sachs, as "a mortal threat to the world economy" – made clear after the meeting just how much of a clampdown had been secured: "All of us have the ability to insert reservations in whatever agreements we reach and we get to negotiate each of the individual agreements with each country." |
| This view was further verified by a rare insight from a UK journalist, Channel 4 News correspondent Gary Gibbon, who managed to accost the deputy premier of the Turks and Caicos Islands, who explained that in terms of the deal: "We cannot say today we will get that because there will be a lot of push-back from companies that have beneficial ownership." | This view was further verified by a rare insight from a UK journalist, Channel 4 News correspondent Gary Gibbon, who managed to accost the deputy premier of the Turks and Caicos Islands, who explained that in terms of the deal: "We cannot say today we will get that because there will be a lot of push-back from companies that have beneficial ownership." |
| These comments, completely at odds with how the "deal" was broadly reported, are compounded by the premise – upheld by almost all British news media – that the territories are independent in the first place. Sticking with Cayman, during 2012 while I was making my documentary, its sovereign budget, drafted by a directly elected ministerial cabinet was twice rejected by the Foreign Office in London. | These comments, completely at odds with how the "deal" was broadly reported, are compounded by the premise – upheld by almost all British news media – that the territories are independent in the first place. Sticking with Cayman, during 2012 while I was making my documentary, its sovereign budget, drafted by a directly elected ministerial cabinet was twice rejected by the Foreign Office in London. |
| Furthermore, when McKeeva Bush, the incumbent premier of the island, was arrested for alleged corruption days after a meeting with Cameron in London, the Foreign Office-appointed "governor" imposed a replacement without any electoral process or consultation with the Cayman people. The move was warmly welcomed by the Cayman financial services industry and the replacement remained in post for six months. | Furthermore, when McKeeva Bush, the incumbent premier of the island, was arrested for alleged corruption days after a meeting with Cameron in London, the Foreign Office-appointed "governor" imposed a replacement without any electoral process or consultation with the Cayman people. The move was warmly welcomed by the Cayman financial services industry and the replacement remained in post for six months. |
| So Whitehall can reject a sovereign budget and impose a head of state, but when it comes to global tax negotiations it is on its knees, tinkering and appealing for co-operation. This is further fudge. If the political will existed, all of the UK territories could be forced to comply with any regulations in a heartbeat. They will not be, because despite nearly half of the 73 jurisdictions listed in the global Financial Secrecy Index being directly connected to the UK, these places are too important to the City and the economic model successive UK governments have been devoted to. | So Whitehall can reject a sovereign budget and impose a head of state, but when it comes to global tax negotiations it is on its knees, tinkering and appealing for co-operation. This is further fudge. If the political will existed, all of the UK territories could be forced to comply with any regulations in a heartbeat. They will not be, because despite nearly half of the 73 jurisdictions listed in the global Financial Secrecy Index being directly connected to the UK, these places are too important to the City and the economic model successive UK governments have been devoted to. |
| That is the elephant in the room of the UK tax debate. And all the while the City enjoys an estimated £93m lobbying war chest, it is safe to assume that Cameron will remain reluctant to budge it. | That is the elephant in the room of the UK tax debate. And all the while the City enjoys an estimated £93m lobbying war chest, it is safe to assume that Cameron will remain reluctant to budge it. |
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