The Foot Report: a setback
"The final report of Michael Foot’s Review of the opportunities and challenges facing the British Crown Dependencies (Guernsey, Isle of Man, Jersey) and six Overseas Territories (Anguilla, Bermuda, British Virgin Islands, Cayman Islands, Gibraltar, Turks and Caicos Islands) was published on 29 October. The recommendations made to these jurisdictions cover: the quality and extent of economic planning; meeting international standards on tax transparency, financial sector regulation, and tackling financial crime; ensuring that deposit protection schemes can be understood by depositors; considering whether an Ombudsman scheme is justified; and crisis prevention and resolution measures."
Now the report notes how important these places are:
"Within the offshore market (as defined in chapter 2), the nine jurisdictions account for over 60 per cent of total financial flows through the banking system."
And it provides some more specific indications of the "hoover" effect they have, sucking up money from around the world and channeling it to the City of London. The three Crown Dependencies alone, the report notes,
"provided net financing to UK banks of $332.5 billion in the second quarter of calendar year 2009, largely accounted for by the ’up-streaming’ to the UK head office of deposits collected by UK banks in the Crown Dependencies."
And that is just three of the many, many secrecy jurisdictions linked as satellites to the City of London.
We already provided some background, here. Richard Murphy has provided some preliminary analysis here, concluding that
"we have a weak apology for a report that is going to do little, but allow it to be claimed the issue has been tackled. . . .
I never had high hopes for this report. And even then I have been underwhelmed. A weak man, born to be an apologist, has delivered a weak report. It was what I expected but after a period of real progress this is, without doubt, a set back."
Overall, we should agree that this is an apology of a report. Perhaps its main message is: what are the risks to these places of their own activities, and what are the risks to the UK? It simply ignores the elephant in the room: what about the damage these places cause to the rest of the world? To get a sense of that, it is useful to look at this damning report by the Norwegian government in June.
We will analyse the full report in due course.
Update 1 - Foot Report: some positives.
Update 2: Richard Murphy on Deloitte's role.
Update 3: Would any of this have happened without the Tax Justice Network?