IPPR produced a report on globalisation last week. With a forward by Lord Mandelson the report was written by Will Straw and Alex Glennie.
I admit I don’t agree with either Mandelson or Straw; they have a political perspective I don’t always share but this report has merit to it, as others have also noted since its publication. It represents a clear change of heart on Peter Mandelson’s part, and that I welcome.
I’ve long argued for the contention in the title of this blog. I am convinced legal limited liability is a privilege – after all, if people sign a piece of paper to form a company they no longer have to accept full responsibility for their debts. That’s an extraordinary state of affairs, and a massive privilege. But I have said that, like all responsibilities, this one comes at a price. The price is to say who you are i.e. to disclose who really owns the company and who really runs it, as well as to say what you do i.e. to put true and fair accounts on public record.
The Isle of Man noted that the island may be used for egregious tax avoidance. It’s good to see that KPMG admit that the Isle of Man is used for such schemes.
I was delighted to talk at the launch of Eurodad’s new report – ‘Exposing the lost billions: How financial transparency by multinationals on a country by country basis can aid development‘ – last evening in the European Parliament.
The report is on country-by-country reporting and is another major contribution to the debate now going on in Europe on this issue, and how far such reporting should go.
Gibralter proves that it’s just more of the same.
The reason why places like Jersey became tax havens was to raise tax revenue from third parties. The tax revenues raised were, in effect, export earnings that kept their economies afloat.
A couple of days ago I highlighted a report from Cayman about a meeting of offshore lawyers where it seemed there was widespread agreement that the system of tax information exchange agreements that the OECD, UK government and tax haven authorities say delivers secrecy in the murky world of secrecy jurisdictions really does not such thing.
Cayman News Service has blown the lid on one of the biggest lies of recent years about tax havens / secrecy jurisdiction. It’s been claimed since 2009 that tax information exchange agreements – promoted by the Organisation for Economic Cooperation and Development as the way to tackle tax haven abuse – mean that tax havens are now ‘open and transparent places’.
There have been more responses to Action Aid’s report on the use of tax havens by FTSE 100 companies.
This image comes from the Hindustan Times.
I’m reproducing it. It shows just how important the British Overseas Territories are to the City of London and the tax abuse it promotes. And remember, it misses off the Crown Dependencies of Jersey, Guernsey and the Isle of Man.
As The Guardian reports this morning:
More than a third of the subsidiaries owned by major energy and mining companies including Shell, BP and Glencore are based in “secrecy jurisdictions” where company accounts are not publicly available, according to a report.
The study by Publish What You Pay Norway, which campaigns for transparent accounting among oil, gas and mining giants, claims that populations in resource-rich countries are losing out because they are unable to extract financial information from businesses operating on their soil or off their seaboards.
“Extractive industry giants’ corporate ownership structures, their use of secrecy jurisdictions and the lack of meaningful information they impart is a major reason why stakeholders in resource-rich nations often meet a wall of silence when asking questions,” says the report. “This makes it very difficult to hold their politicians and the companies that extract oil, gas and minerals to account.”
The full report is available here. And yes, in the interests of full disclosure, I should note I advised on its production.
Green MEP Sven Giegold tabled a question to the European Commission in July asking about the EU’s position on the IASB’s revision to its constitution that has downgraded its obligation to anyone but those people who use accounts to make investment decisions. I discussed that issue here.
Now the Commission has replied as follows:
Answer given by Mr Barnier on behalf of the Commission
The Commission shares the view of the Honourable Member regarding the importance of properly taking into account the public interest in the IFRS standards setting.
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