TJN Admin ■ The City of London: Capital of an Invisible Empire
In July 2017 director Michael Oswald’s latest film, The Spider’s Web: Britain’s Second Empire was premiered at the Frontline Club in London. It has since had several screenings in London and public screenings can be organised from November onwards. This fascinating interview just published in Deutsche Wirtschafts Nachrichten explores what inspired co-producers Michael Oswald and John Christensen to make a film documentary about London’s role as the world’s pre-eminent tax haven. Oswald and Christensen also talk about how London might develop once Brexit kicks in, exploring the possibility of deepening the City’s tax haven role through further tax cuts for the rich and more rolling back of financial market regulation and other social protections.
The key inspiration, according to Michael Oswald, was Nicholas Shaxson’s best-selling Treasure Islands, which explained the way in which the formal British Empire morphed into a spider’s web of tax havens gathering financial wealth from across the world and funnelling it through to the City. As Oswald explains, this helped to re-establish London as the financial capital of Capital:
At the time of the British Empire, Britain structured its economy not around manufacturing and productive sectors, but around finance. City of London banks provided the financing for the Empire and the colonies would pay interest to the City.
As Britain’s Empire declined, City of London institutions were increasingly confronted by circumstances that limited their ability to function and make a profit. It was out of this need that various financial interests sought to fashion for themselves spaces in which they could continue to operate and profit. In order to create these spaces they used the expertise developed during empire and the territorial remnants of the Empire, such as Britain’s dependent territories, financial expertise and networks established during Empire and the knowledge of how to establish, run and benefit from an international financial system.”
Much of the expertise built up during the final decades of the formal empire was focused on ways to avoid paying taxes both in the colonies and in Britain itself. In the 1920s and 30s offshore companies and trusts were increasingly used to avoid and evade paying taxes. In the 1950s, with the emergence of the London-based Eurodollar market, international banks found themselves able to operate in a virtually unregulated financial market which the authorities – in this case the Bank of England – treated in a totally laissez-faire fashion.
As Christensen says in the interview, successive British governments have not only turned a blind eye to the British spider’s web of tax havens, they have actively supported its growth by blocking international attempts to tackle it:
Britain has consistently voted against creating a globally representative inter-governmental body to shape a framework of rules to strengthen international cooperation on tax matters. Britain has successfully resisted international pressure to take effective action against its tax havens in the Channel Islands, the Cayman Islands, the British Virgin Islands, and other British dependencies.
I have observed British officials blocking attempts to strengthen international cooperation on tax information exchange by keeping discussion on offshore trusts off the agenda. This happened as recently as 2015 when Prime Minister David Cameron pushed to have trusts excluded from information exchange processes. This is a pivotal issue since offshore trusts are key to the British tax haven secrecy model. Britain has also spent years blocking EU attempts to make progress towards a common approach to taxing multinational companies (the Common Consolidated Corporate Tax Base).”
Fast forward to the present and it seems clear, especially post-financial crisis, that Britain’s reliance on the City as the engine of growth in the UK economy is a risky development strategy. Christensen again:
The British economy is heavily reliant on external trade in services which is dominated by financial services. Any shock to the financial services sector, for example arising from being denied access to the EU Single Market, would be highly damaging to the economy.”
Which raises the inevitable question about where the British spider’s web might go post-Brexit. Many of the services previously provided from London cannot be provided without the Single Market, which will require London-based banks and law firms to establish permanent establishment with the EU-27. The British tax havens see new market possibilities in China, India, the Middle East and Sub-Saharan Africa, but this will probably involve laundering ever larger amounts of dirty money and enabling ever more tax avoidance. The problem, as Christensen sees it, is that Britain has failed to plan for industrial diversification for decades and now faces limited development options:
Prime Minister May and her finance minister have already indicated that deepening Britain’s tax haven role is an option. This is a sign of weakness since a race-to-the-bottom on regulation, secrecy and corporate taxation would probably expose Britain to risks relating to financial stability and fiscal sustainability.”
Is this a viable development strategy? Unquestionably there will be winners: oligarchs, kleptocrats and the multifarious aristocrats, bankers, lawyers, spooks and retired politicians who benefit from Britain’s tax haven empire. For the vast majority of people in Britain, however, hosting the world’s largest tax haven has no benefits whatsoever and offers only the prospect of further relative decline and social division. As Oswald comments in the interview:
This is something we explore in the documentary, in the case of the US and the UK, services do not make up for the reduction in industrial capacity. Michael Hudson explains that it is through attracting international capital whose origins may very well be criminal that this has become a possibility in the US and the UK.”
Read the full interview here.
Follow this link to organise a screening of The Spider’s Web.
Related articles
Indicator deep dive: Public country by country reporting
Profit shifting by multinational corporations: Evidence from transaction-level data in Nigeria
5 June 2024
Policy research conference: How a UN Tax Convention can address inequality in Europe and beyond
Inequality Inc.: How the war on tax fuels inequality and what we can do about it
New Tax Justice Network podcast website launched!
The Corruption Diaries: our new weekly podcast
Overturning a 100 year legacy: the UN tax vote on the Tax Justice Network podcast, the Taxcast
The People vs Microsoft: the Tax Justice Network podcast, the Taxcast
Bahamas: Submission to the UN Independent Expert on the effects of foreign debt and human rights in support of the country visit to the Bahamas
7 November 2023
Dear Friends,
In view of the nature of your activity, we thought that you would take an interest in our recently released book: “FOR VICTIMS YOURS AND OURS”.
Our book “For Victims Yours and Ours” is a ground-breaking story about the financial elites of the City of London and Washington D.C.; how they influenced world events and how they financed wars and revolutions across the centuries.
In the last 7 years we have been investigating the circumstances surrounding the unlawful destruction of the Anglo-Polish cultural and religious heritage in Fawley Court in England, which had been overtaken by an offshore trust with support of the Vatican and the British authorities, in particular the UK Charity Commission, the UK Ministry of Justice and the UK Supreme Court. All of the decisions made by the British authorities with regards to the Anglo-Polish heritage were made in breach of the English, European and international law and resulted in the destruction of the heritage site that had protection under international law.
Our campaign to save the Anglo-Polish heritage lasted many years and when all our appeals had been rejected by the British authorities we delved deeply into the “rabbit hole” and re-visited the last 2000 years of history in order to fully understand the process by which the elites of the City of London became so powerful. The result of our investigation is our book “FOR VICTIMS YOURS AND OURS”, which contains a unique analysis of the growth of the power and wealth of the City of London elites, their expropriation of land and resources across the globe, as well as destruction of indigeneous communities in the process of colonisation. The book describes how the elites of the City of London spread masonic lodges across the European Continent and supported Prussia and Russia in order to undermine the Catholic states in Europe. The book exposes how the City of London elites, under the leadership of the House of Rothschild, balanced the powers on the European Continent and the world, helping to destroy or subjugate Catholic states such as Ireland, Poland, France and Spain, and building numerous Empires including the British and American Empire, the Russian Empire, the German Reich and the Empire of Japan. In the XX century these elites, acting in co-operation with their affiliated partners in Washington D.C., financed two totalitarian regimes: Nazi-Germany and Soviet Russia. Millions of people suffered in the following decades when the USA and USSR oficially vied for supremacy in the world, albeit they secretly co-operated and exchanged technology and information. Our book unveils how the said elites of the City of London and Washington D.C. created terror in the world by financing wars and revolutions, how they built and proliferated nuclear weapons, how they financed various regimes, terrorist organizations and intelligence operations around the world. We strongly believe that there will be neither peace nor progress in the world until the people comprehend these historical processes and the true role of the elites of the City of London and Washington D.C. in shaping world’s major events across the centuries.
The material gathered in our book is extremely valuable for everyone who is interested in geopolitics, history, economy, social sciences and social activism. Our book provides a new interdisciplinary aproach to history and for the first time reveals the hidden forces that for centuries determined and shaped in shadow destiny of nations and order of the world. Moreover the book gives unique knowledge to understand and predict direction of events and powerful forces at play.
Our book “FOR VICTIMS YOURS AND OURS” has 65 chapters and around 4,500 references to other books, reports, archives and newspaper articles. It covers roughly the period from foundation of Rome right to the present time and is a result of many years of our campaign, research and analysis.
Our book “FOR VICTIMS YOURS AND OURS” is available for download on our website.
https://forvictims.co.uk
We hope that you will take an interest in our book and encourage others to read it in order to raise public consciousness.
Best regards,
Natalie Graszewicz & Dominik Socha
The authors of the book “For Victims Yours and Ours”