In an extraordinary interview, Lord Fink, the Tory party’s treasurer, has admitted that he lobbied the government to compete with the Cayman Islands and other offshore havens, where tax rates are far lower than in Britain, by cutting taxes sharply on the mega-rich who invest in hedge funds.
His motive, he likes to tell us, is to increase UK employment: “I have long felt that the British government loses jobs to tax havens by allowing the Revenue to have these rather archaic rules” (i.e. that people should pay their due taxes). Accordingly he lobbied Osborne to change UK tax rules, which charge gains made on hedge funds to income rather than capital, so that the UK could compete with offshore jurisdictions. That’s the Tory aim: make Britain a country fit for millionaires.
As you would expect, Fink has a small personal interest in this. Apart from being seen as the godfather of the hedge fund industry and having contributed £2.6m to the Tories, he holds directorships in 3 companies which have links with tax havens. His disregard for Britain, apart from the inconvenience of being expected to pay taxes there, is shown by where his loyalties lie: “If you want to be a successful business and attract invisible earnings to the UK, you have to be based offshore.”
This culture of non-payment of tax is becoming entrenched among the top 1%, the wealthiest 270,000 persons in the country. The Centre for Economics and Business Research recently published their finding that: “Essentially for many of today’s generation of wealth creators, income tax has largely become a voluntary tax for high earners”. The euphemism of ‘wealth creators’ is used to describe high-level tax dodgers (their money is overwhelmingly made through financial wheeler-dealing and property with little or no throughput to jobs or real UK wealth for the country as a whole), but real point is that tax cheating is not seen as tainted at all. As the US heiress notoriously observed: “Only the little people pay taxes”.
A reaction to this embezzlement of what are rightly public funds is gradually gathering force. A fortnight ago the City of Helsinki voted to avoid collaborating with companies that use tax havens. It is now being investigated, including in the UK, whether it is legal to require companies bidding for public procurement to report any financial links they might have, directly or indirectly, with tax havens. Another helpful measure would be to require all MPs and peers to register any links they have with tax havens or other offshore activities. Following the anti-tax avoidance (GANTIP) bill I set before parliament earlier this month, I will pursue this.
