TOP STORIES

Sunday 29 May 2011

Sunday, May 29, 2011 Posted by Jake 1 comment Labels: , , ,
Posted by Jake on Sunday, May 29, 2011 with 1 comment | Labels: , , ,

Unremitting doom and gloom in this blog would get anyone down. A little while ago we celebrated a salesman who is on our side – the estate agent. It’s time to cheer ourselves up again, that we Ripped-Off Britons aren’t being vindictively picked on. We should remember that Britain doesn’t only rip-off Britons. Britain has for centuries had an enriching tradition of offshore private, or should that be pirate, enterprise. Britain rips-off our foreign brethren as well as us ordinary Britons.

Like a mother doting on her wicked children, the British Government over the centuries has licensed pirates, sailing under the euphemism of ‘privateer’, to loot Spanish treasure ships, and incorporated private companies to invade foreign countries. The private British East India Company invaded India, and the Virginia Company took the first colonising steps into North America. “What can you do?” says Mother Britain with faux-exasperation, “Pirates will be pirates.”

Anyone who thinks this is all ancient history has missed the still thriving ‘offshore fleet’ of our financial services industry.
  • HMS Antigua
  • HMS Bermuda
  • HMS British Virgin Islands
  • HMS Cayman Islands
  • HMS Gibraltar,
  • HMS Turks and Caicos Islands
  • HMS Guernsey
  • HMS Isle of Man
  • HMS Jersey




“HMS” of course standing for Her Majesty’s Shifty Cayman Islands etc. Sir Francis Drake (picture courtesy of New York Public Library, http://digitalgallery.nypl.org/nypldigital/id?831578) would be spinning in his grave, knowing his heirs purloin vast foreign treasure showing no more derring-do, no more courage, than facing dinner schmoozing a tax dodger of tedious conversational skills. For what else are tax havens for, other than to deprive countries of their tax revenues. Just the same as Sir Francis and his fellow sea-dogs who were licensed by the British Government to deprive the King of Spain of his treasure.

According to the Economist magazine, the modern-day UK is second only to Switzerland as an offshore financial centre. Switzerland secreting approximately $2 trillion, with Britain & the Channel Islands squirreling away around $1.4 trillion of foreigners' money, both well ahead of the rest of the pack. This money only includes the savings of High Net Worth Individuals, not taking into account the activities of the corporations.

Taking into account examples of all tax evasion:


Of course, even Britain loses tax money via these havens. So what makes it all worthwhile? A report on British Offshore Financial Centres done for Her Majesty’s Revenue and Customs (HMRC), shows that it is not just individuals and companies that are dependent on these ‘offshore financial centres’ to dodge tax. Business done by banks with these offshore privateers runs into trillions of US dollars:

“2.4 International financial flows through the banking system are captured on a point in time basis by data collected by the Bank of International Settlements (BIS)…. Most claims are in the form of loans made by banks to these individuals and entities.

2.9 The aggregate claims [loans made by banks to the offshore centres] by BIS reporting banks on the nine jurisdictions covered by this Review amounted to $2.3 trillion at the end of the fourth quarter of 2008, about 63 per cent of the total claims on all offshore centres.

2.20 Claims by the nine jurisdictions [loans made from the offshore centres to the UK banks] on banks resident in the UK (the latter’s ’liabilities’) totalled some $670.9 billion at the end of June 2009 (see table below). The largest creditors were Jersey ($314 billion), Cayman Islands ($172.5 billion), Guernsey ($92.1 billion) and the Isle of Man ($56.6 billion).


2.23 ....At end-June 2009, UK banks had net financing of approximately $218.3 billion from Jersey, $74.1 billion from Guernsey and $40.1  billion from the Isle of Man. 

2.24 ‘Up-streaming’ allows deposits to be gathered by subsidiaries or branches in a number of  different jurisdictions and then concentrated in one centre, in this case the UK, where the bank has the necessary infrastructure to manage and invest these funds.  This model is followed by many large banks around the world and is not confined to ‘British’ jurisdictions.   All the major UK clearing banks have significant deposit-gathering capacity in the Crown Dependencies” 



The report “tentatively concluded that the Crown Dependencies and Overseas Territories [differentiated themselves from other territories] sometimes through tax rates but more often through the absence or near absence of certain forms of taxation…..

With the exception of Gibraltar, the  Overseas Territories have not introduced income taxes, corporation taxes, or value added tax  (VAT) or goods and services tax (GST)…. The tax regimes in the Crown Dependencies [the Channel Islands and the Isle of Mann] and Gibraltar have developed to include  income and corporation taxes, with the latter consistently levied at a lower rate than the main  rate in the UK. 

There is no stronger lobby in Britain than the Financial Services industry. Benefits to the banks are counted as much more important than benefits to the rest of us Britons. So long as offshore tax havens bring net benefit to Financial Services, then that outweighs an overall detriment to the nation. Neither the spoils nor the detriments are shared equally. 

So, as we Britons count our meagre pensions, despair at our excessive energy bills, pick up our jaws having seen the pathetic returns on our investments, grind our teeth as we wait for compensation for missold insurance and mortgages, scowl as we see how the wealthy avoid taxes we have to pay, and generally feel ripped-off - perhaps we can take some small comfort from the knowledge: it's not just us getting ripped-off, it's the whole world!

Actually - it's no comfort at all. It's all still damn annoying!



1 comment:

Note: only a member of this blog may post a comment.

Share This

Follow Us

  • Subscribe via Email

Search Us