Sunday, October 26, 2008

Sunday Herald on tax havens and the economic crisis

More people are waking up to the link between tax havens and the current economic crisis, following our seminal article in The Guardian and statements by leaders and politicians around the world.

Scotland's Sunday Herald has published an excellent in-depth report on this. Part 1 looks at the fact that banks that have come under state (or partial state) ownership now, and should not be working to fleece the taxpayer through offshore tricks. They've been digging around, and found out things like this:

"The Royal Bank of Scotland Group, one of the so-called "jewels" of the Scottish economy, has beneficial shareholdings in at least 128 companies incorporated in tax havens, according to its annual return; included in its portfolio are 62 firms in the Cayman Islands, 29 in Jersey, 11 in Guernsey, seven in the British Virgin Islands (BVI) and four in the Bahamas."

TJN is quoted, of course. It's Part II which looks at the links with the economic crisis. It's right on the nail. Read it; we'll just highlight a couple of sentences:

"Even as the UK government has taken substantial stakes in the major banks, it has not challenged the use of the offshore tax havens which played such a prominent role in turbo-charging the credit bubble. As we reveal today, the network of offshore banking operations which have lost the taxpayer hundreds of millions, if not billions in much-needed tax revenue, are still in existence - now being bankrolled by the British taxpayer. Yes, we are paying banks to avoid paying UK taxes. The government's blind eye to these offshore scams has made a nonsense of attempts to regulate the banks and control irresponsible lending. The only politician who seems to understand what has been going on is the Liberal Democrat finance spokesman, Vince Cable, but his has been a lone voice calling for an end to tax haven status."

Well said. Note the language that runs through this edition: whereas many newspapers have been happy to play along with the offshore weasel words and phrases like "tax efficiency" and "tax innovation," we are heartened to see more thoughtful language being deployed: "derisory" tax rates, banks "connived" with wealthy clients, "offshore casinos" and so on.

The comments underneath this are worth looking at: almost all in favour of more transparency and other good things. We'll highlight a couple of ones we like:

"Well done to the SH for raising this issue. I get so sick of hearing people banging on about single mothers and benefits scroungers. Very rarely do we ever hear about tax evasion."


"An excellent article . . . which deserves a major newspaper campaign."


Anonymous Anonymous said...

I read this article today. IT was excellent and insightful into the seeming inability of the UK government to stand up and realise that tax havens are incredibly detrimental to the UK, and indeed, global economy. Thanks for pointing it out!


4:22 am  

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