It is in the UK's power to end tax havens

Cameron needs to lead on tax dodging, because he has the power to stop it.

Tomorrow, David Cameron will be welcoming senior ministers from some of the UK’s tropical isles to London for a high level summit. Despite these jurisdictions’ sandy beaches and sunny weather the talk will be of tax, not tourism, as the likes of Bermuda, the Cayman Islands and the British Virgin Islands rank as some of the most significant tax havens in the world.

Cameron’s grand plan is to invite these jurisdictions to sign up to an international treaty on cooperation and information sharing with other countries tax authorities. Cameron is keen to show that the UK is committed to getting its house in order ahead of the G8 summit in Northern Ireland next week. With a huge domestic backlash at home over tax dodging by companies like Google, Amazon and Starbucks, Cameron is hoping the appearance of leadership on the global stage can win some positive headlines at home.

But show and appearance is all we will see over the next few days. The treaty Cameron is asking British tax havens to sign only tinkers around the edges of their secrecy. It will still leave the UK running many of the world’s most significant tax havens. That the government continues to allow multinational companies and rich individuals to use the UK’s tax havens to dodge taxes around the world, robbing the world’s poorest countries of vital revenue, is a scandal of truly epic proportions.

Experts from the Tax Justice Network have criticised this treaty for falling short of what would be needed to break open their secrecy. For a start it only requires jurisdictions to share information when they receive requests from other countries’ tax authorities, rather than automatically and routinely sharing information. Neither does it require tax havens to actually collect information on rich individuals and companies that shelter their money offshore. 

It is not entirely surprising the treaty is not exactly watertight. It is drafted by the OECD, a Paris-based think tank, comprising 34 of the world’s richest countries, tasked with setting the standards for international tax rules: a body that has steadfastly resisted any major change to those rules for over a decade.

At the 2009 G20 summit, when Gordon Brown famously hailed the “beginning of the end for tax havens”, the OECD was tasked with producing a ‘blacklist’ of uncooperative tax havens. So rigorous were the rules for this list that within one week there was not one country on the list.

However, the failure to reign in Britain’s tax havens is not one of diplomacy. It reflects a total lack of political ambition. The simple fact is that these islands are not separate sovereign countries and Cameron does not need to negotiate with them. They are in fact British territories, and the UK government has the power to legislate for them.

Cameron could simply abolish the UK’s tax havens by passing a law requiring them to end their secrecy, establish rigorous financial regulation and making profits and wealth their subject to effective taxes. 

The government has acted in the past to enforce laws on these island jurisdictions before, abolishing the death penalty for Britain’s Caribbean Islands in 1991 and as recently as the year 2000, acting to decriminalise homosexual acts in the Cayman Islands. 

The British government has even acknowledged its full ability to enforce financial regulation on the UK’s tax havens. The OECD noted in a 2012 report (pdf) “the UK acknowledged that – from a constitutional perspective the UK has unlimited power to legislate for the OTs [Overseas Territories]”. 

Cameron has tried to make huge political capital of talking tough on tax. Last year Cameron announced his intention to tackle tax havens during his G8 presidency with huge fanfare, saying: “There are too many tax havens, too many places where people and businesses manage to avoid paying taxes.” Again in Davos at the World Economic Forum the bold rhetoric was out in force, stealing lines from UK Uncut, when he told businesses that “carry on dodging their fair share” to “wake up and smell the coffee”.

To have any hope of living up to his tough tax talk, Cameron must legislate to abolish Britain’s tax havens. He is fully capable of closing down these tax havens, but is just choosing not to.

Grand Cayman. Photograph: Getty Images

Murray Worthy is an economic justice campaigner for War on Want.

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Anti-semitism and the left: something is rotten in the state of Labour

Labour held three separate inquiries into anti-Semitism within its ranks during the first part of 2016. A new book by Dave Rich investigates how we got to this point.

The relationship between the left and the Jews has always been a complex one – ostensibly harmonious but with an underlying unease. For decades, the left’s ideological stance against racism and intolerance made it – in Britain, at least – a natural home for Jews. Its largest party, Labour, could rely on a majority share of Britain’s Jewish vote. Yet the 19th-century German socialist August Bebel, who described anti-Semitism as “the socialism of fools”, understood that, like a tumour, it has always existed in the left-wing body politic.

It is this duality that Dave Rich seeks to explore in his impressive and important book. How, he asks, did we get to the situation in which Labour, the party whose founding principles include opposing bigotry, felt the need to hold three separate inquiries into anti-Semitism within its ranks during the first part of 2016?

For so long, the dichotomy was simple, consisting of a clash of two notions of the Jew: an oppressed figure deserving of the left’s solidarity and the perennial embodiment of socialism’s great enemy, capitalism. In the words of (the Jewish) Karl Marx:


What is the worldly religion of the Jew? Huckstering. What is his worldly God? Money . . . Money is the jealous god of Israel, in face of which no other god may exist. Money degrades all the gods of man – and turns them into commodities . . . The bill of exchange is the real god of the Jew.


Whether or not Marx meant the words ironically (as many academics contend), he articulated the most prominent leftist critique of Jews of his time. However, as Britain’s former chief rabbi Jonathan Sacks has argued, anti-Semitism, like any virus, must mutate to survive. Now the most significant word in the quotation above – which Marx uses figuratively – is not “money”, as he would have seen it, but “Israel”.

As Rich notes, the link between British Jews and Israel is almost inviolable. While support for Israeli policies is mixed (there is much opposition to the settlements), he records that 82 per cent of British Jews say that the country plays a central role in their identity, while 90 per cent see it as the ancestral home of the Jewish people. Set against this is his (correct) observation that: “Sympathy for the Palestinian cause and opposition to Israel have become the default position for many on the left – a defining marker of what it means to be progressive.” He argues that once you discover what someone on the left thinks about Israel and Zionism, you can usually guess his or her views on terrorism, Islamist extremism, military intervention and British-American relations.

When Stalin’s show trials and bloodlust finally discredited communism, many on the left, bereft of an ideology, fell into a dull, almost perfunctory anti-Americanism, dressed up as “anti-imperialism”. Intellectually flaccid but emotionally charged, this strand of thought became – to those on the hard left who had for so long been confined to the margins – all-encompassing. The dictum “My enemy’s enemy is my friend”, in effect, was adopted as its slogan. Any Middle Eastern or South American dictatorship that “stands up” to the US ipso facto is an ally, as is any Islamist hate preacher who does so. Israel, viewed as a US-backed colonial outpost, became the physical manifestation of all that was wrong with the world.

With Jeremy Corbyn’s election as Labour leader last year, this particular leftist world-view entered the heart of the party. In 2008, Corbyn wrote of the Balfour Declaration – the UK government’s promise to British Jews of a homeland in Palestine – that it had “led to the establishment of the state of Israel in 1948 and the expulsion of Palestinians . . . Britain’s history of colonial interference . . . leaves it with much to answer for.” The description of Israel as a colonialist enterprise, rather than a movement for sovereignty through national independence, and the culpability of an “imperial” Britain, encapsulate the twin impulses that drive Corbyn’s beliefs about foreign affairs.

The problem, Rich argues, is that it is just a short step from these beliefs to the ideas that Israel should not exist and that its Western supporters, who include most Jews, are racists. Combined with a resurgence of social media-charged conspiracies about Zionist wealth and power, the left has formed an anti-racist politics that is blind to anti-Semitism. Jews are privileged; they are wealthy; they cannot be victims.

Thus, “Zionist” has become not a term to describe a political position but an insult; thus, Jews, unless they denounce Israel (their “original sin”), are excluded from the left that now dominates the Labour Party. When such ideas become normalised, anything is possible. Jackie Walker, the recently suspended vice-chairwoman of the Corbyn-supporting group Momentum, can claim with sincerity that “many Jews” were the “chief financiers” of the slave trade, a modern myth and piece of bigotry popularised by the Nation of Islam’s Louis Farrakhan – a notorious anti-Semite – in a 1991 book.

By the middle of this year, as many as 20 Labour Party members had been suspended or expelled for alleged anti-Semitism. At times, Rich appears bewildered. Though he never articulates it, the question “What has happened to my party?” echoes through these pages. Is it a case of just a few bad ­apples, or is the whole barrelful rotten? The answer, Rich concludes convincingly, in this powerful work that should be read by everyone on the left, is sadly the latter. 

The Left’s Jewish Problem by Dave Rich is published by Biteback, 292pp, £12.99

This article first appeared in the 20 October 2016 issue of the New Statesman, Brothers in blood