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Tax havens are latter-day pirates. They should be treated accordingly

Jersey today threatens to declare independence from the UK to protect its financial interests. These “financial interests” are the historic practice of drawing in the financial activities of multinational businesses and wealthy individuals in exchange for a modest ‘rent’. This action by Jersey and numerous other tax havens provides the basis of aggressive tax avoidance schemes now condemned as “immoral” even by David Cameron and George Osborne, and which the Guardian reports as “leeching tax revenues from the increasingly stretched public wallets“. Jersey may well be entitled to its independence, but we are also entitled to act to protect our own financial interests against those that live off these immoral earnings.

Of course those that do earn their living this way are keen to defend what they do in the name of the “free market“.  Julian Winser, head of Schroders’ Channel Islands private banking arm and president of Guernsey Chamber of Commerce is quoted saying:

Every state in the world has a different tax regime which every individual, wherever they sit, has a right to take advantage of.  The principle of the free market is that it [legal tax avoidance] is available to all – even if some of them can’t reach it.”

Those of us who do not support the right to avoid tax will not be convinced. But the point is that this practice now brings serious hardship to most people in those countries which do seek to use fair taxation to provide a welfare system and decent public services. Jersey may be entitled to its independence, but we are not obliged to trade with them, to facilitate financial transactions with them, or to provide transport connections with them.

We’d rather not have to starve them into submission, but, in the case of all those places that provide sanctuary to those who leech away the resources we need to protect our people, we should be prepared to sever all these links, and to persuade other countries to do likewise.

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