Colonialism isn't the best answer to tax dodging

Party like it's 1799.

An interesting point from Ed Conway's write-up of the G8's tax debates. It seems Germany and co aren't particularly happy with British Overseas Territories:

Moreover, it transpires that neither Germany or Russia wanted to sign up to some of the G8 pledges on tax evasion. Other countries remain less enthusiastic about the avoidance/evasion clampdown. Others remain sceptical about the UK’s motives – earlier this year Austria’s finance minister Maria Fekter said she laughed when she first heard George Osborne was focusing on tax.

“Great Britain has many money laundering centres and tax havens in its immediate legal remit – the Channel Islands, Gibraltar, the Cayman Islands, Virgin Islands.

“These are all hot spots for tax evasion and money laundering.”

It's similar to a line pushed domestically: the British overseas territories are British, so we should do something about them. It sounds less appealing when you phrase it as what it actually is: colonialism for the left.

The various islands left in the British Empire are, largely, independent. Britain takes responsibility for defence and foreign affairs, and the Home Office recommends the Queen on who to appoint as governor, but beyond that, they are self-determining. They have elected legislatures and heads of government, as well as their own courts systems (although appeals go to the Privy Council) Most of them would probably be fully independent by now – once decolonialisation began, it went along at a fair clip – except they're too small to realistically survive on their own.

You can be fairly sure, however, that if they did survive, and were made fully independent, their first act would probably not be to shrink their financial sectors. That's one of the few areas in which a small economy actually has a competitive advantage over bigger ones.

So what Austria wants is for the Britain to over-rule independent, elected governments and force them to follow policies which aren't in their best interest. I know the sun never set on the British Empire, but that's ridiculous.

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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The 5 things the Tories aren't telling you about their manifesto

Turns out the NHS is something you really have to pay for after all. 

When Theresa May launched the Conservative 2017 manifesto, she borrowed the most popular policies from across the political spectrum. Some anti-immigrant rhetoric? Some strong action on rip-off energy firms? The message is clear - you can have it all if you vote Tory.

But can you? The respected thinktank the Institute for Fiscal Studies has now been through the manifesto with a fine tooth comb, and it turns out there are some things the Tory manifesto just doesn't mention...

1. How budgeting works

They say: "a balanced budget by the middle of the next decade"

What they don't say: The Conservatives don't talk very much about new taxes or spending commitments in the manifesto. But the IFS argues that balancing the budget "would likely require more spending cuts or tax rises even beyond the end of the next parliament."

2. How this isn't the end of austerity

They say: "We will always be guided by what matters to the ordinary, working families of this nation."

What they don't say: The manifesto does not backtrack on existing planned cuts to working-age welfare benefits. According to the IFS, these cuts will "reduce the incomes of the lowest income working age households significantly – and by more than the cuts seen since 2010".

3. Why some policies don't make a difference

They say: "The Triple Lock has worked: it is now time to set pensions on an even course."

What they don't say: The argument behind scrapping the "triple lock" on pensions is that it provides an unneccessarily generous subsidy to pensioners (including superbly wealthy ones) at the expense of the taxpayer.

However, the IFS found that the Conservatives' proposed solution - a "double lock" which rises with earnings or inflation - will cost the taxpayer just as much over the coming Parliament. After all, Brexit has caused a drop in the value of sterling, which is now causing price inflation...

4. That healthcare can't be done cheap

They say: "The next Conservative government will give the NHS the resources it needs."

What they don't say: The £8bn more promised for the NHS over the next five years is a continuation of underinvestment in the NHS. The IFS says: "Conservative plans for NHS spending look very tight indeed and may well be undeliverable."

5. Cutting immigration costs us

They say: "We will therefore establish an immigration policy that allows us to reduce and control the number of people who come to Britain from the European Union, while still allowing us to attract the skilled workers our economy needs." 

What they don't say: The Office for Budget Responsibility has already calculated that lower immigration as a result of the Brexit vote could reduce tax revenues by £6bn a year in four years' time. The IFS calculates that getting net immigration down to the tens of thousands, as the Tories pledge, could double that loss.

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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