Tuesday, 5 April 2016

Rich man, poor man ...

I'm going to have to do a bit of tip-toeing here, because I can't afford expensive lawyers. So I'll leave you to join up the dots.

Fact 1: House prices in London rose by 13.5% over the past year, bringing the average price to £530,368.

Fact 2: Off-shore companies associated with the Panama-based law firm Mossack Fonseca own more than 6,000 properties in London worth at least £7 billion.

(In response to the so-called Panama Papers disclosures, Mossack Fonseca have said in a statement: 'For 40 years Mossack Fonseca has operated beyond reproach in our home country and in other jurisdictions where we have operations. Our firm has never been accused or charged in connection with criminal wrongdoing.' The full statement is here.)

Fact 3: The family of the president of the United Arab Emirates have property interests in London worth an estimated £160 million.

Fact 4: Average London house prices now stand at a record nine times average earnings, nearly twice the level they were at during the housing boom of the 1980s.

So now I'll stop tip-toeing. The people who hide their wealth from the taxman -- sorry, some of the people who hide their wealth from the taxman -- are thieves. They take money to which they are not entitled and squirrel it away so that it can't be used to pay benefits to disabled people, fund local authority services for children at risk of abuse, or provide emergency assistance for people fleeing from war.

It is as if they had read the story of Robin Hood and turned it on its head: they rob from the poor to give to the rich. Cuts to welfare services, made necessary, so we're told, because 'we are all in this together', mean that some of the most vulnerable people in the country die unnecessarily. I draw no conclusions, but you may wish to draw your own. You may even wish to start joining up the dots.

The son of the Pakistani prime minister Nawaz Sharif, who has denied any wrongdoing in connection with London properties owned by off-shore companies associated with Mossack Fonseca, described the family's involvement with such companies as 'a legal way to avoid unnecessary tax'.

Perhaps you'd like to ponder the true meaning of those words: 'unnecessary tax'. (Note: there is nothing illegal about the use of off-shore companies.) You may also like to ponder the difference between 'legal' and 'moral'. If you were to conclude that what is legal may also sometimes be wholly immoral, that would be a matter entirely for you.

The 11.5 million documents that were leaked from the Panamanian law firm prove what many people have long believed: that the American businesswoman Leona Helmsley, who was worth an estimated $8 billion and was jailed for tax evasion in the 1980s, was right when she (reportedly) said that 'only little people pay taxes.'

Some years ago, I was in Nigeria, and I was talking to a local human rights campaigner in the bar of a 5-star hotel in the capital, Abuja. As an evidently wealthy businessman in resplendent robes and expensive jewellery swept past us with his entourage in tow, my companion remarked sadly: 'Every time I see a wealthy Nigerian, I know I am looking at a crook.'

If you were to think the same every time you looked at an obscenely outsized yacht, or a grotesquely expensive, foreign-registered sports car, or the people who buy houses valued at £62 million in Belgravia, I could not possibly comment. They may not be crooks (on the other hand …), but you may wish to form your own conclusions about their sense of morality.

And if you were to say that it made you very, very angry, I might well be tempted to sympathise. If I could afford expensive lawyers, I might even say the same myself.


Anonymous said...

Robin, if I were not so very, very angry I might be tempted to comment, but really - what is there left to say? They know it's wrong; that's why they deny knowledge/wrongdoing/accountability at every opportunity. We know it's wrong. Time alone will tell if there's anything we can do about. Let's hope.

Unknown said...

I wholly agree with what you haven't quite said. If only I had any faith that these leaks, and the journalism that follows, would do anything to change the situation. But no amount of exposure will stop the rich creaming percentages off the poor and hiding their millions. It's expropriation, pure and simple, and it's enough to make you a Marxist. Oh, wait: I am. But without an effective Left, we'll carry on letting them do it.

CLIFF MARSH. said...

I thought the average salary was about £28000 pa. This would make London average house prices about
18 times the average salary!!!
Cliff Marsh, Crawley.

Anonymous said...

Well said Robin. It may be, of course, that some of those who have been revealed to have been involved in this and other such tax havens are entirely innocent and simply inherited or had bequeathed to them funds or assets. I'm not in a position to say.
What utterly stinks, however, is that some of our leading banks and other financial institutions, have been heavily involved in encouraging and facilitating this sort of behaviour for years. They, in my view, are the real culprits and it is they who should really be taken to task.
And I don't mean the local officials at branch level; I mean those right at the very top of these businesses, who surely must have known all about this kind of operation and encouraged it. Probably on the basis they would be receiving some very hefty bonuses. And if they weren't aware, they should not have been in these jobs in the first place.
Several times, recently, we've seen big, respected banks fined quite trivial amounts for 'failure'to properly carry out their responsibilities in money laundering checks; facilitating over years the transport of billions of dollars around the world for those wishing to avoid tax or simply to hide their wealth. Some banks have been heavily involved in sanctions busting operations. But is senior management ever sanctioned? Of course not - they get a gong. But you try to open a bank account for your grand child, or ring up to talk about your gas account. The security and red tape you have to go through is a joke.
So time, I think, for the journalist world to turn its attention to those organisations who have been helping the super rich to avoid their fair share of taxes. And time for our politicians to ensure that those at the very top of our banks who preside over this behaviour are personally liable for the shortcomings; any fines should not be applied to the bank itself. That would mean the little people paying, yet again.