London is the world's tax haven centre


City of LondonPA

When mention is made of tax havens, thoughts turn to exotic locations such as the Cayman Islands, or to countries such as Switzerland or Luxembourg . But one location stands head and shoulders above all of them as the centre of the global network of secrecy jurisdictions, where the wealthy can stash their cash away from the inconveniences of tax and transparent dealing. That location is London.

The latest, and very comprehensive, Financial Secrecy Index published by the Tax Justice Network puts Switzerland at the top of the list, with the UK in 13th place. But when the Crown Dependencies are factored in, London is way out in front.

Those dependencies are the Cayman Islands, Jersey, the British Virgin Islands, Bermuda, Guernsey, the Isle of Man, the Turks and Caicos Islands, Gibralter and Anguila. UK ministers regularly talk of their value as conduits to the City.

UK Treasury
But the UK government also says it does not recognise the picture painted in the report. The Treasury says is has "demonstrated a clear commitment to tackling all forms of tax avoidance and evasion".

That statement is at odds with the reality in which London stands at the centre of what was described by Nicholas Shaxson in his expose of the global offshore business 'Treasure Islands' as "a global spider's web... a new overseas empire".

He describes he purpose of this web as being to "catch financial business... by offering lightly taxed, lightly regulated and secretive bolt holes for money" in a system in which "criminal and other money could be handled by the City of London, yet far enough from London to minimise any stink."

City of London
Shaxson goes on to describe the City of London Corporation as "this offshore island floating partly free from Britain's people and its democratic system." Former Treasury Select Committee member Jim Cousins says the City has been pushing a "secnd empire project for 30 years.

The UK Government will not confront this, or even admit there is anything to confront. It says it is "keeping up the momentum" in a world in which we are told that "the era of financial secrecy is over".

The Treasury points to the publication of its 'Tackling Tax Avoidance' document and the signing of "over 600 bilateral tax information exchange agreements". But these measures have been widely condemned as weak.

Tax Justice Network
As the Tax Justice Network points out, these agreements "have taken the weakest form possible, in effect requiring tax authorities to know what they are looking for before they ask for information, rather than requiring full disclosure."

This Government makes much of condemning those who abuse the system and don't pay their way. But it cannot be taken seriously on this or its claim to be committed to tackling tax evasion until it confronts the issue on its doorstep.