A Cold Hard Promise

Even sympathetic papers did not quite know what to make of Gordon Brown’s speech yesterday.

A brave speechmaker challenges his audience and a cautious one flatters them. Gordon Brown spoke to Congress yesterday with all the daring of a lover clutching a bunch of slightly wilted flowers. He said very little that was new, and nothing that was shocking, but he at least looked at home in a way he rarely does in Britain. Unfortunately the grandeur of his aspiration and the fluency of his delivery was not matched by anything he had to say. Vapid passages can be forgiven if they are followed by substance. This script traded comfortably on the occasion, but did not go further

said the Guardian

This is true in as far as it goes, but Mr Brown made one cold hard promise.

And you are also restructuring your banks. So are we. But how much safer would everybody’s savings be if the whole world finally came together to outlaw shadow banking systems and offshore tax havens?

As William Buiter says here

There is the need and opportunity to close down all tax havens and regulatory havens. Tax havens are defined as countries that have bank secrecy, which includes Switzerland, Austria and Luxembourg as well as the usual micro-state suspects (bank secrecy or bank privacy is the legal principle according to which banks can protect personal information about their customers, even from the tax authorities and police authorities of these customers). The anonymity provided by bank secrecy promotes tax evasion, tax avoidance (or fraud), money laundering and hiding the proceeds of criminal activity. Regulatory havens are nations that offer companies the opportunity to avoid global standards for reporting, governance, auditing, transparency, openness etc. Tax havens and regulatory havens are key elements in the global regulatory and tax arbitrage games that have undermined government revenue bases and weakened global regulatory standards. The means to put tax havens out of business are simple: forbid banks, other financial institutions and private persons from doing business with and engaging in transactions with banks and other financial institutions located in countries that have bank secrecy. To take care of regulatory havens, don’t recognise and enforce contracts drawn up under their laws and do not recognise court judgements originating from tax havens.

And I say here

Justifiably or not, colonial guilt still haunts the British. But we are nowhere near guilty enough about the immoral policy of successive governments of encouraging existing British territories and former colonies to become centres of money laundering.
In a bill he presented to the US Congress last year, Barack Obama identified 34 tax havens for the wealthy. As I have mentioned before, if you follow Obama’s classification, you find by my reckoning that Britain controls nine of them – Anguilla, Bermuda, the British Virgin Islands, the Cayman Islands, Gibraltar, Guernsey/Sark/Alderney, the Isle of Man, Jersey and the Turks and Caicos Islands.
If you take the next step and go through the rest you find that another 15 are former British colonies – Antigua, the Bahamas, Barbados, Belize, the Cook Islands, Cyprus, Dominica, Grenada, Hong Kong, Malta, Nauru, St Kitts and Nevis, St Lucia, St Vincent and Singapore. Cyprus, Malta and Singapore became tax havens of their own accord and the Cook Islands are more New Zealand’s responsibility than Britain’s. But especially in the Caribbean, Britain consciously transformed colonial and post-colonial territories into receivers of stolen goods. Because of what we have done, the profits from the drugs trade are recycled – as was to be expected, the US press reported last week that blood-soaked Mexican cartels were laundering their profits in Antigua – and, of course, working- and middle-class citizens are forced to make up the taxes the rich divert to the havens.

So President Obama should thank Mr Brown for his change of heart and ask him to get to work on the Channel Islands and move on across the remnants of empire.

2 thoughts on “A Cold Hard Promise

  1. This may seem nonsense, or simply childish – but I saw that when talking to President Obama, relaxing in the chairs, Gordon Brown’s fly was down. I mention it only because after a flick through Private Eye ( would you have thought it natural for such a named mag to be checking?) and a listen to the Now show, I find it hasn’t been picked up. If Tony Blair had his fly down when chatting to George Bush, I dare say we’d all be sick of hearing about it. What just comes to mind now is that even Jon Stewart ran said footage but didn’t say: ‘hang on there a minute, hmm…why can we see white shirt peeping below his belt line’? Yes there is more important concerns going on, but don’t cartoonists and other satirists job’s depend on such things?

  2. Oops – I’ve made a big mistake; Gordon’s fly wasn’t down, it was the label on the back of his tie that was showing. I guess I should remember to do what SAS soldiers do whenever on operations, and that is check, check, check.

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