City of London and the Offshore sector - The Enemy Within

[Tony Gosling]

The City of London and the Offshore sector - The Enemy Within
Rowan Bosworth-Davies - former Scotland Yard Fraud Squad detective
http://rowans-blog.blogspot.co.uk/2013/05/the-city-of-london-and-offshore-sector.html
http://911forum.org.uk/board/viewtopic.php?p=164703#164703

The City of London, the world's biggest tax evasion facilitator and
money laundry has just been given some more good news, courtesy of
George Osborne and the Coalition Government. The Chancellor of the
Exchequer has just sent them a lightly coded message that their
offshore revenue stream is guaranteed for the foreseeable future!

George Osborne has just chaired a G7 ministers' meeting at which the
question of tax evasion and aggressive tax avoidance was on the
agenda!

The Huffington Post reports that "...Osborne G7 Talks Sees Chancellor
Criticised After Dodging Details On Tax Avoidance..."

Regular readers of this blog will recall my observations last week
("Lies, Damned Lies, and Civil Service Misinformation") about the
likelihood of the UK Government doing anything too aggressively to
challenge the offshore-sector and its control of the tax evasion/
aggroidance (my shorthand for aggressive tax avoidance schemes)
industry !

And so it has proved

George Osborne has now been criticised for failing to set out any
concrete steps to promote economic growth or tackle tax avoidance
during G7 talks, despite his insistence that the meeting with finance
ministers and central bank chiefs was "successful and constructive."

Using such weasel words, and playing up the meeting for all it's
worth, Osborne sought to make a great deal of how the meeting had made
real steps in the debate on fiscal evasion issues.

However, when pressed on the substance of these discussions, the
Chancellor declined to give any details of the talks, which were held
on an informal basis in a country hotel in Buckinghamshire, but
suggested there was more agreement between the rich nations making up
the group on how to nurture the recovery.

With bromides like that, we are all the more informed!

He had the sense to say that he recognised that the larger G20 group
- which includes emerging economic powers such as China, India and
Brazil (3 of the world's leading tax evasion and funny money
practitioners) - was now the "primary economic forum for setting the
global rules of the game", which was another way of saying that the G7
nations, which generally represent the old, and moribund economies,
were irrelevant, despite his insistence that they - the United States,
Germany, Japan, the UK, Italy, France and Canada - still wielded
"major economic firepower" as they represented around half the global
economy between them.

Admitting that while there were "...still many challenges...", he
said, "...this meeting confirmed that there are more areas of
agreement between us on fiscal policy than is commonly assumed..."

Quite what that means in real terms is anyone's guess, but what it
does not mean is that the British Government is going to be cracking
down on the offshore sector any time soon.
How can I say that with such confidence? Well listen to Osborne's
deliberately feeble use of language.

Mr Osborne said British overseas territories "need to do more" to end
tax evasion.

Well, that's like saying the Taliban needs to do more to encourage
greater female emancipation in Afghanistan! Ambitious, possibly;
desirable, certainly; but ultimately futile and illusory!

Asked about the future of tax havens such as Jersey or the Cayman
Islands, he said he had already been "very tough" in his message to
them but wanted to see more action.

"...Of course we would like these jurisdictions to do more..," he
said.

"...We want them to commit to some of the existing agreements that
are in place on tax information and transparency and we have these
initiatives which we are pursuing in the G8, for example around
beneficial ownership, which we would also expect all jurisdictions to
be able to sign up to..."

None of these comments amount to a row of beans in reality. He can
send all the tough messages he likes, he can want them to do more, and
sign up to vague initiatives about beneficial ownership, but this
isn't going to change the reality of the situation that the offshore
sector survives and thrives because wealthy people put their money
there secure in the knowledge that it will be secure and kept in
complete confidence

I have already discussed the futility of these plans at some length
in a previous blog and nothing I read here from Osborne is going to
change my views one iota. Because then comes the reality interlude,
when the real world politique creeps in! He says;

"...Of course you have to respect that many of these territories have
important industries and we don't want to unnecessarily damage
them..."

Well, I should think not, and that is the underlying hidden message
he has to send them, because these offshore areas generate a huge
amount of money which the City of London, the enemy within, is waiting
to receive. But at the same time, Osborne has to play the Perfidious
Albion games! So he reverts to the default mode and trots out the
shibboleths again.

"...But it is necessary to collect tax that is owed and it is
necessary to reduce tax avoidance and the crown dependencies and the
overseas territories need to play their part in that drive and they
need to do more..."

"... We all agreed on the importance of collective action to tackle
tax avoidance and evasion..," he said.

Well, no doubt they did, as they peeled their Plovers' eggs, and
shovelled down the Boeuf a la Bordelaise! It's not difficult to agree
to an assertion as bland as that, after all, ask yourself, what was
being agreed to?

"It is incredibly important that companies and individuals pay the
tax that is due and this is important not just for Britain and for
British taxpayers but also for many developing nations as well."

You will note that the emphasis here is on the "...tax that is
owed..." but expecting the crown dependencies and the overseas
territories to do anything about it, has the same element of
successful expectation as being the voting returning officer at the
turkey farm when the Christmas vote is announced!

It is this kind of state-sponsored double-speak that makes the UK
look positively mendacious. It is the kind of statement that is
drafted by some clever young Treasury policy wonk who knows full well
there isn't the slightest intention by anyone in Government to do the
least thing about it

And why?

Because the UK Government is a hostage to the City of London and the
City now ultimately determines all financial policies, and that is why
I term them 'the enemy within'. The Government has quietly surrendered
the lead role in defining the UK's future to the City of London, a non-
elected, non-transparent, undemocratic group of elites, and the
Government will dance to their tune.

This is why the Government's threats to break up the 'too big to
fail, too big to jail' banks into small regional hubs is met by two
fingers from Threadneedle Street! This is why the proposal to ring-
fence the retail banks is met be a resounding raspberry from
Throgmorton Avenue!

You see, the City of London no longer needs the UK, the boot is on
the other foot, the UK needs the City! I used to believe that the
Government was Sovereign, that Parliament was the final arbiter, and
that confronted with a vague threat to 'take our business elsewhere'
if too much pressure was applied to the City institutions to reform
their game, was an empty threat, and I have previously urged the
Government to call their bluff!

But I was wrong! The Government dare not call their bluff because the
City of London isn't just a bunch of buildings inside four postal
codes; it is a concept of enormous power, an exclusive entity, a very
private members-only club into which outsiders are not invited to
enter; it is a powerful clique which exerts huge influence and
pressure; it is a Mafia! Even Her Majesty the Queen requests formal
permission to enter the City of London on a special formal occasion
(permission is always granted)!

The City doesn't exist to support this country, it exists for its own
financial interests and the rest of us can go take a hike! It could,
within a relatively short space of time, go offshore itself, indeed,
it has already been described as the most powerful off-shore
jurisdiction on earth! You don't need to be a palm-fringed island in
the Caribbean to be an off-shore centre. The City has its own laws,
and it only obeys those ones which Parliament enacts, when it pleases
the suits so to do!

The amount of money that the City turns over each year is counted in
Trillions of Pounds. As a fee, tribute, (bribe) to the UK Government
to allow them to continue, the City contributes about 12% of the
nation's GDP, in terms of the tax it agrees to pay on such profits as
it sees fit to declare. The rest of its proceeds are very carefully
squirreled away and are held in secure and confidential circumstances,
and no-one is going to examine them!

The great financial crisis has brought the role of the City and its
functions into greater notice and under more scrutiny, but we should
not hold our breath hoping that Cameron or Osborne are going to do
anything to bring this criminogenic enterprise to heel! They simply do
not have the power to do it, and that is the problem.

When the Prime Minister or the Chancellor go down to the City to
speak at their tables, you will note the degree of respect which is
afforded to the men and women in fancy dress! They have to be
respectful, because the City might take their ball away and go and
play elsewhere, and they know that would be disastrous for them.

So they pay lip-service to the conventions, and they make sure they
protect the City from any attempts that somewhere called 'Brussels'
might make to impose their will on the City of London. Transaction
taxes! Not on your Nellie, monsieur. Capital adequacy rules! Only if
everyone else is signed up to the same calculations, mein herr! Anti-
money laundering regulations! Now you are being fanciful, old boy!

In a time of the worst financial crisis any of us have ever
experienced; at a time when we can see no light at the end of the
austerity tunnel, the City of London continues to pursue its own path
and writes its own pay cheque! Don't expect it to change its ways,
because this is how it has always been done, the City of London is
another country, and it is immune from the ordinary rules of
engagement that attach to those outside the Square Mile.

No Government of the UK will ever dream of challenging its autonomy,
they daren't! The men and women of the City will be allowed to carry
on as they have done for centuries, and no-one there is going to be
subject to the ordinary laws of the land, as long as they are working
for the City and its collective owners! It is a sanctuary, a safe-
haven from hue and cry, and as long as you play by its rules, you will
be protected.

You don't have to take my word for it, just review the last 5 years
worth of criminal financial scandals that have come out of the
financial sector, and add up the number of players who have spent time
at her Majesty's pleasure?

Not an awful lot!

So, when you read George Osborne's claims that he and his mates in
the G7 are taking tax evasion seriously and calling upon the overseas
territories to do more to tackle aggressive tax avoidance, you know
that these are just empty words designed to give the impression of
concern, but in reality, just going through the motions!

Nothing, but nothing is going to be allowed to undermine the hegemony
of the offshore sector, it would be naive to think otherwise!