Luxembourg is about to shed its reputation as one of the EU’s largest tax havens

Cracks to international pressure.

Luxembourg Finance Minister, Luc Frieden, announced today that Luxembourg was willing to share account information on global multi-national companies going forward. This extends current information sharing agreements which are limited to US and EU individual tax payers.

"Luxembourg is comfortable to share information about multinationals as well as individuals," Mr Friedan said. This will help shed Luxembourg’s reputation as one of the EU’s largest tax havens.

According to WealthInsight, Luxembourg is the 5th largest private banking centre in the world with assets under management (AuM) of US$350 billion at the end of 2012.

Luxembourg also had mutual fund assets of US$2 trn and additional bank assets of US$550 bn as of year-end of 2012. These figures together amount to US$2.8 trn, which equates to almost 50 times Luxembourg’s GDP of US$57 bn in 2012.

It also equates to over 30 times the total wealth held by locals in the country (US$91 bn). This is an extremely high ratio when considering that Luxembourg is one of wealthiest countries in the world (in per capita terms).

According to the Credit Suisse Wealth Report, Luxembourg has the 8th highest wealth per capita,in the world at US$178,000 per person. This is well above the worldwide (US$28,000) average. Notably, Switzerland is the highest ranked country based on this measure with wealth per capita of US$293,000, followed by Norway in 2nd place (US$243,000) and Australia in 3rd place (US$239,000). The United States had a wealth per capita of US$172,000.

Going forward, WealthInsight expects Luxembourg private banking AuM to stay remain relatively static at US$350 bn, while countries such as Singapore surge ahead.

Singapore is expected to have private banking AuM of over US$2 trillion by 2020, compared to US$550 bin in 2012 and US$50 bn in 2000.

Photograph: Getty Images

Andrew Amoils is a writer for WealthInsight

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Leader: The divisions within Labour

Labour’s divisions have rendered it unfit for government at a moment of profound political change.

Labour is a party torn between its parliamentary and activist wings. Since Jeremy Corbyn, who this week appealed desperately for unity, was re-elected by a landslide last September, Labour has become the first opposition in 35 years to lose a ­by-election to the governing party and has continually trailed the Conservatives by a double-digit margin. Yet polling suggests that, were Mr Corbyn’s leadership challenged again, he would win by a comfortable margin. Meanwhile, many of the party’s most gifted and experienced MPs refuse to serve on the front bench. In 2015 Mr Corbyn made the leadership ballot only with the aid of political opponents such as Margaret Beckett and Frank Field. Of the 36 MPs who nominated him, just 15 went on to vote for him.

Having hugely underestimated the strength of the Labour left once, the Parliamentary Labour Party (PLP) will not do so again. In the contest that will follow Mr Corbyn’s eventual departure, the centrists could lock out potential successors such as the shadow business secretary, Rebecca Long-Bailey. Under Labour’s current rules, candidates require support from at least 15 per cent of the party’s MPs and MEPs.

This conundrum explains the attempt by Mr Corbyn’s supporters to reduce the threshold to 5 per cent. The “McDonnell amendment” (named after the shadow chancellor, who failed to make the ballot in 2007 and 2010) is being championed by the Bennite Campaign for Labour Party Democracy and Jon Lansman of Momentum, who is interviewed by Tanya Gold on page 34. “For 20 years the left was denied a voice,” he tweeted to the party’s deputy leader, Tom Watson, on 19 March. “We will deny a voice to no one. We face big challenges, and we need our mass membership to win again.”

The passage of the amendment at this year’s Labour conference would aid Mr Lansman’s decades-long quest to bring the party under the full control of activists. MPs have already lost the third of the vote they held under the electoral college system. They face losing what little influence they retain.

No Labour leader has received less support from his MPs than Mr Corbyn. However, the amendment would enable the election of an even more unpopular figure. For this reason, it should be resolutely opposed. One should respect the motivation of the members and activists, yet Labour must remain a party capable of appealing to a majority of people, a party that is capable of winning elections.

Since it was founded, Labour has been an explicitly parliamentary party. As Clause One of its constitution states: “[The party’s] purpose is to organise and maintain in Parliament and in the country a political Labour Party.” The absurdity of a leader opposed by as much as 95 per cent of his own MPs is incompatible with this mission. Those who do not enjoy the backing of their parliamentary colleagues will struggle to persuade the voters that they deserve their support.

Labour’s divisions have rendered it unfit for government at a moment of profound political change. Rather than formalising this split, the party needs to overcome it – or prepare for one of the greatest defeats in its history.

This article first appeared in the 23 March 2017 issue of the New Statesman, Trump's permanent revolution