Tax Justice Focus – The Corruption Issue

HSBC explains its relationship with the UK legal system (Image: Nicolas Christensen)

As Britain prepares to host a global Corruption Summit in London next week, the Panama Papers have raised awkward questions about the country’s role as an enabler of transnational organised crime.  Meanwhile evidence is emerging that ordinary people in Britain no longer accept the elites’ version of what constitutes corruption.

The latest edition of Tax Justice Focus – available here – points the spotlight on the British brand of corruption.  While elites still talk about corruption as something that happens in another country (typically in the Global South), survey results from YouGov tell an entirely different story about how public sentiment in Britain is strongly in favour of prohibiting practices that have become normal in the past two decades.  For example:

• 72 percent of respondents to the YouGov survey said that the practice of government ministers accepting corporate boardroom appointments on leaving office should be banned;
• 75 percent said the practice of senior civil servants accepting corporate consultancies should be banned;
• 62 percent said that inviting private corporations into government to help shape the regulation of business should be banned;
• 68 percent said that Britain’s Public Finance Initiative arrangements for public projects should be banned.

In other words a huge majority of the British public want to ban many of the practices now established as the routine way in which Britain does business and politics.  Public opinion on tax avoidance is even stronger, with 85 percent of British adults calling it morally wrong even when ‘legal’ (which is not necessarily the case).

As Guest Editor David Whyte (How Corrupt is Britain?) comments in his editorial:

“We are overwhelmed by the scale, frequency and variety of corruption cases in Britain, from police manipulation of evidence, to over-charging in out-sourced public contracts, by way of cash-for-access scandals involving prominent politicians and price fixing, market manipulation and fraud in key sectors of the economy.”

TJN has long held the view that Britain is at the forefront of the global supply side of corruption.  Ten years ago TJN’s director John Christensen slammed the Transparency International Corruption Perceptions Index for corrupting perceptions of corruption, arguing that:

“The elephant in the living room of the corruption debate is the role played by the global infrastructure of banks, legal and accounting businesses, tax havens and related financial intermediaries in providing an offshore interface between the illicit and licit economies.”

Britain and its offshore satellites – including Bermuda, the British Virgin Islands, the Cayman Islands, the Channel Islands, Gibraltar, the Turks & Caicos Islands, and others – is the world’s largest tax haven empire.  As journalist and author Nicholas Shaxson (Treasure Islands: Tax Havens and the Men Who Stole the World) argues in his contribution to this edition of Tax Justice Focus:

“Prime Minister David Cameron . . . has the authority to require Britain’s Overseas Territories and Crown Dependencies to create public registries of beneficial ownership, for starters. and he should not hesitate to exert that power if they resist.  Anything less would be hypocrisy.”

Also in this edition:

Allyson Pollock examines how the Private Finance Initiative has been embraced by successive governments and enthusiastically promoted abroad, generating windfall profits for banks and others and driving the marketisation of health and education;

Vickie Cooper looks at how the London and the UK property market has become a laundry for tyrants, mobsters and tax cheats.

Steve Tombs considers how endemic corruption in the UK’s financial sector, which relies on the active connivance of the state and leading political parties, has repeatedly defrauded countless millions of people in Britain and the rest of the world.

And in his review of Linda Ambrosie’s book ‘Sun & Sea Tourism: Fantasy and Finance of the All-Inclusive Industry’ Mark Hampton concludes that:

“The book . .  makes a real contribution to our understanding of modern tourism multinationals, and how tax and tourism are, in fact, increasingly intertwined in the global economy with growing negative impacts for host destinations and local communities.”

You can download the full edition as a PDF document here.