April 2011 - Centre for Civil Society - University of KwaZulu-Natal

threaten to degrade the tax base everywhere, as companies with
headquarters in other countries will demand similar measures from their
own governments.
So how did this happen? You don’t have to look far to find out. Almost all
the members of the seven committees the government set up “to provide
strategic oversight of the development of corporate tax policy” are
corporate executives. Among them are representatives of Vodafone,
Tesco, BP, British American Tobacco and several of the major banks:
HSBC, Santander, Standard Chartered, Citigroup, Schroders, RBS and
Barclays(8,9).
I used to think of such processes as regulatory capture: government
agencies being taken over by the companies they were supposed to
restrain. But I’ve just read Nicholas Shaxson’s Treasure Islands – perhaps
the most important book published in the UK so far this year – and now I’m
not so sure(10). Shaxson shows how the world’s tax havens have not, as
the OECD claims, been eliminated, but legitimised; how the City of London
is itself a giant tax haven, which passes much of its business through its
subsidiary havens in British dependencies, overseas territories and former
colonies; how its operations mesh with and are often indistinguishable
from the laundering of the proceeds of crime; and how the Corporation of
the City of London effectively dictates to the government, while remaining
exempt from democratic control. If Hosni Mubarak has passed his alleged
$70bn through British banks, the Egyptians won’t see a piastre of it.
Reading Treasure Islands, I’ve realised that injustice of the kind described
in this column is not a perversion of the system; it is the system. Tony Blair
came to power after assuring the City of his benign intentions. He then
deregulated it and cut its taxes. Cameron didn’t have to assure it of
anything: his party exists to turn its demands into public policy. Our
ministers are not public servants. They work for the people who fund their
parties, run the banks and own the newspapers, insulating them from
democratic challenge.
Our political system protects and enriches a fantastically-wealthy elite,
much of whose money is, as a result of their interesting tax and transfer
arrangements, effectively stolen from poorer countries and poorer citizens
of their own countries. Ours is a semi-criminal money-laundering economy,
legitimised by the pomp of the Lord Mayor’s show and multiple layers of
defence in government. Politically irrelevant, economically invisible, the
rest of us inhabit the margins of the system. Governments ensure that we
are thrown enough scraps to keep us quiet, while the ultra-rich get on with
the serious business of looting the global economy and crushing attempts
to hold them to account.
And this government? It has learnt the lesson that Thatcher never grasped.
If you want to turn this country into another Mexico, where the ruling elite
wallows in unimaginable, state-facilitated wealth while the rest can go to
hell, you don’t declare war on society, you don’t lambast single mothers or
refuse to apologise for Bloody Sunday. You assuage, reassure, conciliate,
emote. Then you shaft us.
www.zcommunications.org
www.monbiot.com
References:
1. www.telegraph.co.uk
2. See: HM Treasury, 2011. Overview of draft legislation for Finance Bill
2011.