Monday, September 04, 2006


Do Off Shore Tax Havens Make us Corrupt?

According to John Christensen, director of the Tax Justice Network, speaking yesterday at an academic conference, Switzerland, the USA and the UK are among the world's most corrupt countries. Actually he goes futher than that: he declares these countries 'as corrupt as the worst African states'. The reason for this surprising accusation is the protection such countries provide for off shore tax havens which enable the richest corporations and individuals in the world to avoid paying tax on their profits and income. The accuser should know of what he speaks as he was once the adviser to the government of one of the UK's premier tax havens: Jersey.

It may seem odd to bracket this practice along with money laundering and taking bribes but the argument is that such devices enable the rich illegitimately to keep money which they should be delivering up to help pay for schools, hospitals and the like from which everyone benefits, including the rich themselves plus their families. Mr Christensen claims that by stealth the global economy had been moulded to suit the interests of the super-rich who now salt away their billions off shore in Jersey, the Isle of Man, Switzerland, Monaco and the Cayman Islands.

'They live more or less where they choose and their main preoccupation lies in staying rich. Detached from the concept and practice of citizenship, they have managed to relieve themselves, to a remarkable extent of the obligation to contribute to the national treasury.'

Moreover these powerful countries do their best to prevent any collective action being taken against such flagrant evasion, either by the EU or national governments. Labour criticised the Conservatives for facilitating conditions so favourable to the rich but once in power have done nothing to close them down. Indeed, Gordon Brown has maintained such a lax regime that mega-rich foreigners like Hans Rausing, the Tetra-Pak billionaire enjoys his fabulous lifestyle in Wadhurst, East Sussex, rather than his native Sweden where the tax regime is so very severe - but public services are probably the best in the world, paid for not by Rausing but his fellow Swedes.

Some economists claim the UK reaps advantage from the presence of the uber-rich on our shores but I've yet to be convinced of benefit to anyone but the plutocrats themselves. Finally, there was quite a furore recently about Cabinet member, Tessa Jowell's husband, David Mills regarding his involvement with Silvio Berlusconi. His job, it transpired, lies in arranging such tax havens the super-rich, enabling them to evade the obligations everyone else has to honour. Is it fair to call this 'corruption'? You decide.

Doe the Isle of Man, the Channel Islands and so on, count as part of the U.K for these purposes?
My understanding is that indeed they do.
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