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Will there be a tempest on Treasure island?

IMG_0824 Barclays admission that it paid just £113m in UK corporation tax in 2009 – a year when it rang up a record £11.6bn of profits - should give a boost to UK Uncut, the  network of campaigners for tax justice.

As Nicholas Shaxson's remarkable book, Treasure Islands: Tax Havens and the Men who Stole the World, makes clear, the City of London Corporation operates by its own rules. Politically unaccountable, it is in effect the HQ for global offshore tax havens - those places where vast amounts of money is held in an effort to successfully avoid paying tax. As Shaxson says, "Tax havens and offshore finance have been metastatising through the global economy since the 1970s: the unseen component of financial globalisation. They lie at the heart of the global economy. Half of all world trade passes through tax havens....Recently the Mail on Sunday found that Barclays, Lloyds and RBS have over 550 tax haven subsidiaries between them". Img_0069

According to Shaxson, tax havens also played a major role in the economic crisis. The root of the subprime scandal was Wall Street’s ability to skirt regulations, and corporations were able to do this by partly operating overseas in London that allowed them to grow offshore at a rapid pace. Meanwhile, the race to chip away at regulations wasn’t only occurring between havens (US and UK) but also between states. The competition resulted in a complete gutting of the regulatory system, and the collapse soon followed

This iniquitous situation - how many among us can afford to avoid paying tax?  - is, according to George Monbiot, about to get worse. Planned amendments to the tax acts of 1988 and 2009 will mean "companies will pay nothing at all in this country on money made by their foreign branches. Foreign means anywhere. If these proposals go ahead, the UK will be only the second country in the world to allow money that has passed through tax havens to remain untaxed when it gets here. The other is Switzerland. The exemption applies solely to “large and medium companies”; it is not available for smaller firms".

IMG_0844Billions of pounds are going unpaid in taxes by the super-wealthy while ordinary people are asked to shoulder the burden. Will a perfect storm brew and we reclaim our Treasure island (as the Egyptians have reclaimed Tahrir - liberation - square in Cairo)? Only time will tell....