Tax returns in Glasgow, 2009. Photo: Jeff J Mitchell/Getty Images
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Leader: The stench of corruption at HSBC is a reminder tax havens must be closed

Now we've caught wind of the money hidden in Swiss accounts, it's time to turn to other veiled tax affairs.

The tax scandal uncovered at HSBC is one that even the most imaginative conspiracy theorist would struggle to concoct. The Swiss arm of Europe’s largest bank is accused of having colluded with wealthy clients for years to allow them to shield undeclared accounts from their domestic authorities. Detailed information was passed to HMRC in 2010; 1,100 British citizens are thought to have been involved.

Five years later, just one prosecution has resulted. Contrast that with the 1,046,398 sanctions, or financial penalties, imposed on Jobseeker’s Allowance claimants in 2013, or the nearly 200,000 prosecutions of people who failed to buy a television licence. As the tax campaigner Richard Murphy put it: “To the wealthiest criminals and their assistants within the financial system go the rewards and the plaudits. To everyone else goes intimidation and persecution.”

Far from being called to account, Stephen Green, who served as chief executive and then chair of HSBC from 2006 to 2010, was ennobled by David Cameron and appointed as a trade minister in January 2011. He held the position until December 2013. An ordained priest and the author of Serving God? Serving Mammon?, Mr Green is now advising the Church of England on “talent management”.

Both the government and Mr Green must explain how all of the above occurred. But, like many of those on the HSBC list, their response has been one of evasion. “As a matter of principle, I will not comment on the business of HSBC, past or present,” the latter said. This stance is at odds with what he advocated in his book. “For companies, where does this responsibility begin?” he wrote. “With their boards, of course. There is no other task they have which is more important. It is their job ... to promote and nurture a culture of ethical and purposeful business throughout the organisation.” If the HSBC head did know about his bank’s behaviour, he was guilty of collusion. If he didn’t know, he was guilty of incompetence.

Ministers must explain why Mr Green was invited to join their ranks. That he may have been “an excellent trade minister”, as Mr Cameron put it, is irrelevant. The question, as in the case of his former director of communications Andy Coulson, is whether the Prime Minister was “wilfully blind” when he appointed Mr Green.

The laxity of HMRC’s approach to prosecutions suggests a refusal to reckon with the scale of the scandal. Margaret Hodge, the Labour chair of the Commons public accounts committee, observed: “If this had been benefits scroungers, they would have been queuing around the courtrooms.”

Unlike in the US, France, Belgium, Spain and Argentina, where legal proceedings have been launched against HSBC, no action has been taken against the bank by the UK. HMRC asserts: “In most cases, disclosure and civil fines are the most appropriate and effective intervention.” Yet to date just £135m has been recovered, less than France, though British citizens hold twice as much money. When governments fail to pursue those who evade tax, they squander their legitimacy with the great majority who pay it. As long as the penalties for this crime remain negligible, the incentives for others to behave in this way will endure. The feeling will grow, too, that the system is rigged against the honest citizen.

Ed Miliband, to his credit, understands this. Two days before the HSBC exposé, he announced that he had written to the offshore financial centres linked to Britain as Crown dependencies or overseas territories to say that under a Labour government they would have six months to open their books or be placed on a blacklist. The angry responses emanating from Bermuda, Jersey and elsewhere were as predictable as those of the business leaders who have recently warned of doom should Labour win power. They were equally wrong-headed. Tax havens denying that their affairs remain “shrouded in darkness”, as Mr Miliband described it, makes little sense when they still have no publicly accessible registers of beneficial ownership – documents that show who owns an offshore company.

As a result, HMRC cannot check if a UK resident has set up a company in these havens, let alone whether money is being diverted there. Such secrecy encourages tax avoidance and evasion and costs the Treasury billions of pounds in lost revenue. It needs to change – and soon.

 

This article first appeared in the 13 February 2015 issue of the New Statesman, Assad vs Isis

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The deafening killer - why noise will be the next great pollution scandal

A growing body of evidence shows that noise can have serious health impacts too. 

Our cities are being poisoned by a toxin that surrounds us day and night. It eats away at our brains, hurts our hearts, clutches at our sleep, and gnaws at the quality of our daily lives.

Hardly a silent killer, it gets short shrift compared to the well-publicised terrors of air pollution and sugars food. It is the dull, thumping, stultifying drum-beat of perpetual noise.

The score that accompanies city life is brutal and constant. It disrupts the everyday: The coffee break ruined by the screech of a line of double decker buses braking at the lights. The lawyer’s conference call broken by drilling as she makes her way to the office. The writer’s struggle to find a quiet corner to pen his latest article.

For city-dwellers, it’s all-consuming and impossible to avoid. Construction, traffic, the whirring of machinery, the neighbour’s stereo. Even at home, the beeps and buzzes made by washing machines, fridges, and phones all serve to distract and unsettle.

But the never-ending noisiness of city life is far more than a problem of aesthetics. A growing body of evidence shows that noise can have serious health impacts too. Recent studies have linked noise pollution to hearing loss, sleep deprivation, hypertension, heart disease, brain development, and even increased risk of dementia.

One research team compared families living on different stories of the same building in Manhattan to isolate the impact of noise on health and education. They found children in lower, noisier floors were worse at reading than their higher-up peers, an effect that was most pronounced for children who had lived in the building for longest.

Those studies have been replicated for the impact of aircraft noise with similar results. Not only does noise cause higher blood pressure and worsens quality of sleep, it also stymies pupils trying to concentrate in class.

As with many forms of pollution, the poorest are typically the hardest hit. The worst-off in any city often live by busy roads in poorly-insulated houses or flats, cheek by jowl with packed-in neighbours.

The US Department of Transport recently mapped road and aircraft noise across the United States. Predictably, the loudest areas overlapped with some of the country’s most deprived. Those included the south side of Atlanta and the lowest-income areas of LA and Seattle.

Yet as noise pollution grows in line with road and air traffic and rising urban density, public policy has turned a blind eye.

Council noise response services, formally a 24-hour defence against neighbourly disputes, have fallen victim to local government cuts. Decisions on airport expansion and road development pay scant regard to their audible impact. Political platforms remain silent on the loudest poison.

This is odd at a time when we have never had more tools at our disposal to deal with the issue. Electric Vehicles are practically noise-less, yet noise rarely features in the arguments for their adoption. Just replacing today’s bus fleet would transform city centres; doing the same for taxis and trucks would amount to a revolution.

Vehicles are just the start. Millions were spent on a programme of “Warm Homes”; what about “Quiet Homes”? How did we value the noise impact in the decision to build a third runway at Heathrow, and how do we compensate people now that it’s going ahead?

Construction is a major driver of decibels. Should builders compensate “noise victims” for over-drilling? Or could regulation push equipment manufacturers to find new ways to dampen the sound of their kit?

Of course, none of this addresses the noise pollution we impose on ourselves. The bars and clubs we choose to visit or the music we stick in our ears. Whether pumping dance tracks in spin classes or indie rock in trendy coffee shops, people’s desire to compensate for bad noise out there by playing louder noise in here is hard to control for.

The Clean Air Act of 1956 heralded a new era of city life, one where smog and grime gave way to clear skies and clearer lungs. That fight still goes on today.

But some day, we will turn our attention to our clogged-up airwaves. The decibels will fall. #Twitter will give way to twitter. And every now and again, as we step from our homes into city life, we may just hear the sweetest sound of all. Silence.

Adam Swersky is a councillor in Harrow and is cabinet member for finance. He writes in a personal capacity.