Thursday, September 17, 2009

London is a huge tax haven - The Spectator

We don't generally see eye to eye with the Spectator magazine, which often tends to support a line in favour of the City of London and its satellites in Jersey, Cayman and elsewhere. Nevertheless, there is a kernel of truth in an article they've just published, whose headline contains the line "Britain is the biggest tax haven of them all."

We agree broadly with that sentiment, though note that we will before long be producing a new objective ranking of tax havens around the world, so we will have more to say on this issue. And we'd agree with this analysis:

"For years when they were in opposition, Labour used to bang on about what they would do when they got into power. . . . High on their agenda were tax havens: those funny places with their quaint customs and obsession with secrecy, where big business and the rich choose to stash their cash. They would soon be history. Labour duly entered Number 10 – then what? Nothing."

Too true. Labour has been captured by Britain's financial industry, and the Conservatives, who look likely to be in power in less than a year, would be even worse.

This is where we begin to part company with The Spectator.

"There is a whole industry here built upon offering tax advice. The idea that Liechtenstein and the rest coordinate complex financial and legal affairs locally is nonsense. In the main, they’re brass-plate operations with most of the business run out of advisors based in the City. This was certainly the finding of John Christensen, director of Tax Justice Network, who went undercover for the Jersey government and found that countries across the globe were happily using the Channel Islands and that many of the tax-saving structures and devices were put together in London."

Again, grains of truth in here - yes, often the smaller tax haven operations are just booking centres for business that really happens in London - but - John Christensen working for the Jersey government? We can only chuckle at that. Perhaps The Spectator's journalists might like to indulge in some proper research -- such as picking up the telephone and calling John Christensen -- before putting fingers to the keyboard.


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