The government frequently says that it cannot change the law in the UK’s Crown Dependencies and Overseas Territories as they are independent jurisdictions. As a result it pretends there is nothing we can do about the fact that they are tax havens.
This is not true. Start with the names. They are ‘dependencies’ and ‘British overseas territories’. Internationally, they are ours. We are responsible for them.
And as a matter of fact note that as a result the world thinks, and the law accepts, that we are responsible for their foreign affairs. And since offshore is, by definition, all about foreign affairs because it records transactions that do not have their economic impact in the place that records the event then the offshore tax laws of all these places are wholly within the UK’s responsibility and legislative remit.
Yes, let’s return to our colonial ways! You, bastard grotty foreigners that you are, will simply have to do what we whities say you must.
Interestingly, great uncle was a colonial governor: over the years of Gilbert and Ellice, Montserrat, Anguilla, Turks and Caicos…..and the balancing act was to make sure that that colonialism diminished rather than increased.
There is, inevitably, an urgent call for actions being made on tax havens. One way to tackle their abuse is to impose capital controls on money flows to and from them. This is something I called for in Chapter 18 of The Courageous State. I wrote there:
The measures suggested in this chapter are forms of capital control: they are intended to make sure that capital is accountable wherever it is. This is essential if the inevitable increase in the rate of return to capital that has been a characteristic of the last thirty years, and which has been so harmful to the world economy, is to be corrected. The proportion of the world’s income paid to labour has to increase if people are to have any prospect at all of realising their potential, meeting their needs and even of paying their debts, which in itself makes this a matter of self-interest for capital itself.
Erm, did the rate of return to capital increase? I’m reasonably sure that it didn’t. Rather, that there was an increase in the amount of capital looking for a return which perhaps increased the portion of the economy which flowed to capital but lowered the rate of return to each part of it.
You know, those oceans of cash that companies are sitting upon and earning 0.1% as companies can’t think of how to invest it profitably that Ritchie so complains about?
Not employing more members of the PCS is now corruption:
Failing to provide the resources HMRC needs to tackle tax abuse is in itself a form of corruption
How long before not providing public funding to tax campaigners is corruption?