Friday 14 August 2009

The Great Question - Politicians, Financiers, And Tax Havens

One of the Human Rights is privacy, up to a point. Our tax affairs are private. As I am unable to find any rational explanation for the level of tax I pay from the Inland Revenue, this might be taking privacy too far, but this should reassure me that nobody else will know. My bank account is supposed to be private, but a dedicated hacker can find out. Whether this might given them cause for complaint about disturbing images when they see the figures I cannot say.

Tax Havens are keen on privacy as well. Indeed secrecy, discretion, and absolute trust are what it is all about. Ask Mr. Madoff and Mr. Stanford, where would they be now if it wasn’t for these priceless advantages? At one time these facilities were for the few and rich, a limited number in the know. Nowadays they are a major part of our financial sector that compete to gather in as many people with assets or decent income as possible into the networks of accounts and trusts that are such a large part of their trade and profits. One of our local jobbing builders now operates his affairs from a tax haven, even his vehicles are registered in one.

This gives such people a priceless advantage, because they are then much better informed about their tax affairs. In short, not how much they pay, but how little and it seems that a large part of the UK potentially higher tax bracket has gone off-shore. So the government prides itself on the wonders of our finance sector one minute, and then complains bitterly about the increasing fiscal deficit the next.

During this year there has been the hullaballoo over the expenses of Members of the House of Commons, and the House of Lords, which has spilled over into the incomes and expenses of many in the public sector. This is small change in comparison to the real scandal because like the fabled gorilla, elephant, or mad bull in the room The Great Question is not being asked.

Only in one or two parts of the media is there a trace of any suggestion, and then by very guarded inference. Otherwise you get slapped with a libel suit by some of the costliest lawyers in the universe and in the UK in a libel case you are guilty unless you can prove your innocence. The trick here is that the Judge will not allow you to submit the documents or evidence that would do this. Privacy, you understand, is paramount, especially for rampant financial extortionists. These days judges are integral members of The Political Class.

You will not hear anything from the BBC nor Sky, the media in general; nothing from the press, nor from those brave bloggers now in their holiday villas abroad, they will all maintain a discreet silence either because they are all such quiet and deferential people, or their bosses are involved, or other peoples bosses will put the hoods onto them. In Russia people might get shot, in other places they just get turned over a few times.

The Great Question in the UK is this, how many Parliamentarians, their associates, their families and connections, have offshore accounts and trusts, who are they, and what is the extent of their holdings? Subsidiary questions involve what payments are going in and from what sources, and what are going out and where? Further to this is how much tax would they have paid had all these funds been held in the UK and there been fully liable for ordinary levies?

Then there are the really nasty questions, who are all the financial and property side kicks who are amongst their allies and associates, and have enabled them to build up their portfolios? Bear in mind the FTSE these days is just a money temperature measure where the big boys lights matches under the mercury bulb.

It is my belief that the Iceland crash was London made, much as the AIG crash and others were also London made. Those involved will be in sectors of the property and finance markets where tax is an optional side dish. Very recently there have been leaks of certain documents relating to Iceland and amongst the companies listed with huge debt levels there are names that raise the eyebrows. It would take time and trouble work out the who’s and what’s and the joins are hardly seamless, but it is likely that there are a series of networks that are interlinked tightly enough to make a whole.

So that is where the bailout money is really going, channelled through the banks, what ever all the spin and speeches. It is going to the chancers that drove up the figures and caused the crash. Because if they go down, then they will take a lot of people with them. In fact they might bankrupt the bulk of the Political Class that as well as the judges includes the media.

Just like in 1772 when some high rollers in Ayrshire borrowed too much from the local bank and broke it, took down Fordyce’s discount house and then most of the City with them, including Arnold Nesbitt, friend and financial adviser of the famous and the fabled. Nesbitt stayed out of gaol and managed to leave his estates to his family. Well his best friend was secretary to the Prime Minister and came out smiling with an estate in Hampshire. The Austen’s knew him, but not closely.

So this explains why the FSA is delicate in its approach to bonuses, why the UK deal with Lichtenstein has more get out clauses than there are exits from Wembley Stadium, why there are no UK cases of fraud, why the OECD’s initiatives are becoming a bedroom farce, why the proposed UK regulation is as light as ever, why there is no real interest at all in either sorting out mess or sorting out those who created it. It is because just about everyone who might do much has their own offshore arrangements and trusts to worry about, and why those who haven’t but are stuck with the UK government are going to pay.

And it is why The Great Question is not going to be asked, at least in the UK. While our troops are in Afghanistan helping out the Americans, it is hoped this will shut them up, at least for a while, but the price is losing the last vestiges of the Special Relationship. We shall be the embarrassing relative who got nicked for stealing handbags from pensioners outside post offices. In Europe, if we are lucky, they might summon up the courage to close down the various rackets in the UK financial sector. In Araby and the East they might think it safer, cheaper and quicker to cut out London altogether in the future.

In the meantime we must all pretend that things will get better, which they won’t for most of us. But they certainly will for the lucky few who are being bailed out with our money.

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