By Dave Stockton Villains stashing their ill gotten gains on Caribbean treasure islands is not new
“April is the cruellest month,” goes the poem. Well it certainly started cruelly for David Cameron. The publication of 11.5 million records (the “Panama Papers”) of Mossack Fonseca, an offshore law firm involved in arranging tax havens for wealthy clients, revealed that his father Ian Cameron was a director of Blairmore Holdings, a major client.
On Monday 4 April, Cameron’s spokesperson claimed this was a “private matter” and nobody’s business. On the Tuesday, Cameron claimed, “I have no shares, no offshore trusts, no offshore funds, nothing like that.”
A few hours later Downing Street declared, “The prime minister, his wife and their children do not benefit from any offshore funds”. Note the present tense. The next day, another “clarification”, shifting the tense again: “There are no offshore funds/trusts which the prime minister, Mrs Cameron or their children will benefit from in future.”
Finally on Thursday he admitted that he and his wife Samantha had indeed profited from his late father’s offshore fund: “We owned 5,000 units in Blairmore Investment Trust, which we sold in January 2010”. They were sold for £31,500, and the couple made a profit of £19,000.
Jeremy Corbyn hit the nail on the head: “It took five weasel-worded statements in five days for the Prime Minister to admit that he has personally profited from an undeclared Caribbean tax haven investment deal. [...] Tolerance of tax avoidance and tax havens, and inaction on tax evasion, is denying funds to the public purse and leads directly to cuts in services and benefits that are hurting millions of people in Britain.”
Of course £19,000 is mere pocket money for the Camerons; their combined wealth was estimated in 2009 as over £30 million. They belong to the class of the filthy rich, with mansions in town and country estates. This class dominates the Tory Party.
But the scandal goes far further than Chipping Norton. The documentation released by International Consortium of Investigative Journalists reveals the corruption of the high and mighty on a world scale. Some 72 current and former heads of state have been found to possess offshore accounts in which to deposit the proceeds of looting their own countries’ assets.
The rich and tax
Coming at a time when government leaders are telling people to tighten their belts and making cuts to welfare, healthcare and education, the revelation that the elites are tax cheats will further inflame the hatred millions feel towards them.
After all, the Tories (and Labour under Tony Blair) have been steadily reducing taxes for the super-wealthy for decades. Blair himself has now amassed personal wealth to the tune of £60 million and ten houses.
When Margaret Thatcher came to power in 1979, the top rate of income tax was 83 per cent. When she left it was 40 per cent. John McDonnell has made the point that if the tax rates of the early Thatcher years were restored, the books would be balanced at stroke.
Now we have confirmation that wealthy individuals, big corporations and the banks don’t just press constantly and successfully for tax cuts, they also use top law firms and private banks to salt much of it away from the prying eyes of under-resourced tax collectors.
So what is the answer? Well, certainly it is a good thing that exposures like the Mossack Fonseca treasure trove have come to light. The more of this, the better. And where the law has been broken, culprits should be charged and prosecuted. Whistleblowers in the banking and finance sectors should be protected from reprisals – although it will still take capital controls and other state measures to put legal tax havens out of business.
Indeed, we should expose the whole process of capital flight that not only defrauds ordinary taxpayers but also undermines states like Greece, forcing governments to slash social provision.
The movements to force the resignation of politicians who are caught with their snouts in the trough should be supported 100 per cent. A left Labour government should at least restore the levels of taxation on the wealthy and on corporations that stood for half a century before the giveaway era of Thatcher and Reagan. Plainly there is no need whatsoever to close libraries or privatise schools and hospitals.
But in the end the problem of the wealth and power of the super-rich cannot be solved by taxation alone. Their control over the wealth of society arises from their ownership of the means of production and exchange. The real “wealth creators” are not the parasites who use the “treasure islands” of the Caymans or Jersey. Wealth is created by the labour of working people and their families; it is expropriated and hoarded by the super rich who own all the workplaces. Only by expropriating these expropriators can a society of equality be born.