Monday, May 11, 2009

Questions for Britain's Conservative Party

Prem Sikka has some interesting questions today in The Guardian newspaper, directed at Britain's Conservative Party, long an enthusiastic cheerleader for secrecy jurisdictions, tax and regulatory "competition" and the offshore world. The Conservatives have not yet been taken to task for their long-held stance, undoubtedly bolstered by significant funding from major offshore operators. Prem has ten questions, but we might like to focus on these two:

"Tax avoidance was rampant under previous Conservative governments. Directors of some companies paid themselves in gold bars, fine wine, and platinum sponge to avoid National Insurance contributions (pdf). The Conservatives did nothing to check organised tax avoidance. They nurtured UK crown dependencies to become tax havens and allowed them to erect walls of business secrecy to degrade the global financial system. Now that the world's attention is focused on these issues what will you do to combat tax avoidance and tax havens?"


"The economic model advanced by previous Conservative governments is broken and can't be repaired. It destroyed skilled and semi-skilled jobs in shipping, mining, steel, cars and manufacturing. Financial services grew from 0.5 % of GDP in 1970 to 8.5% in 2007. "Greed is good" ideology encouraged speculation and credit bubbles. The light-touch regulation championed by the Financial Services Act 1986 and delegating regulatory matters to corporate elites has failed in every sector. The view that inflation should be controlled by having higher exchange rates and therefore cheaper imports destroyed local jobs and did not help exporters either. This model of the economy has failed. What has the party learned from past mistakes and what economic model do you have in mind?"


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