Friday, February 29, 2008

A nation of "spivs, swindlers, cheats and cads"

This headline draws its inspiration from a line in a big comment piece in Britain's Guardian newspaper with a strong tax justice theme, and it refers to the contradition between Britain's own self-image: tolerance, fair play, decency, honesty and a polite reticence, and the reality of Britain's own financial sector, whose morals and approach to life are almost the complete opposite. Polly Toynbee writes:

We boast with great arrogance of the pre-eminence of our world-beating City of London, with its probity and professionalism - but others call it a world-beating haven for global world-cheating. Gordon Brown boasted in his Mansion House speech of "our competitive tax environment", while other see it as the playground for global kleptocracy.

Ever since the Big Bang Loadsamoney 1980s, a British culture of excess has welcomed the wealthy with no questions asked. We have embraced a politics of taxation where all tax is a burden and all tax avoidance a duty.

We could quote sentence after sentence of this article. We would urge you, instead, to read it.

The world of tax havens has a long history - a history with the British Empire at its heart: British companies, British-associated tax havens which endure today, from the Cayman Islands, British Virgin Islands and other British Overseas Territories, to Jersey, Guernsey and the other Crown Dependencies - not to mention the City of London.

For decades, Britain's politicians have been talking the talk of liberal ecomomics: free and perfect market competition, while walking a very different walk: distorted markets, underhand direct and indirect subsidies, and beggar-my-neighbour policies to attract money on any terms - mistaking this for entrepreneurship. TJN's John Christensen has been making this point to senior Treaury officials for years: that a policy of seeking to boost economic growth by attracting capital on any terms will undermine the entrepreneurial culture: the result is not genuine innovation but financial engineering to boost share values. And, for an interesting and well-written exploration of what the City of London really means for British people, read this.

The latest editorial responds to some reporting by the Guardian newspaper about the supermarket chain Tesco. TJN's Richard Murphy has a comment piece in the Guardian today, which explores the corporate social responsibility implications of this, and looks at what might be done to improve matters.

Finally, don't forget that all this is not only relevant to Britain and the world's rich countries. As Polly Toynbee's editorial says:

Money lost through corruption far exceeds aid for poor countries: it needs international transparency to deny safe hiding places for cash from bribes, drugs and dictators' stolen fortunes. Protecting offshore trust secrecy to keep Britain's non-doms happy also protects the world's brigands and killers

Read more here.


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