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Corbyn strikes a rich vein with taxes on the very rich

George-Osborne-tax-dodger credit: 38 DegreesJeremy Corbyn’s latest move – to give reassurance that Labour will campaign to remain in Europe and then, if elected in 2020, reverse from the inside any diminution of workers’ rights which Cameron may have secured – is a smart move when it is linked with pushing through the £50bn financial transactions tax on almost all EU bond, share and derivative transactions. But in terms of the wealthy making a fair contribution to paying down the budget deficit, which is Osborne’s excuse for prolonged austerity whose real aim is to shrink the State, there are many other options to serve that goal.

One is the replacement of the regressive council tax by the much more progressive land value tax. But there is another which has earned very little attention. That is the enormous extent of UK land and property which now operates from offshore companies and therefore in most cases pays rent to overseas landlords who pay significantly lower rates of tax.

Private Eye has calculated that it involves as much as £200bn worth of land and property covering nearly half a million acres acquired by offshore companies since 1999. It includes pubs, garages, shopping centres and supermarkets, including Sainsbury and Tesco outlets. But this almost routine practice of tax avoidance has infected some of the most unlikely area of the public sector too. Perhaps most disturbing of all, the leasehold of HMRC’s large central Leeds office was transferred to a Cayman Islands company in 2013. Thus we have the government department charged with cracking down on tax evasion/avoidance engaging in such practices itself. Even more extraordinary, the UK Border Agency occupies offices at Waterside Court in Leeds which are owned by an Isle of Man company.

Cameron has promised that the names of the ultimate owners of these elaborate chains of ownership will be disclosed. This was in response to the question of those buying up Britain while hiding behind offshore companies. But that is very unlikely to happen since it would unlock the names of thousands of owners of prime property in London, a great many of whom have been and remain major donors, both personal and corporate, to the Tory party. Much talk, though little action, surrounds the UK Dependencies and Overseas Territories, the over-used tax havens ultimately controlled by the British authorities, but there is far less understanding that the City of London has now itself become in effect a semi-offshore state in its own right. What is needed now is an insistence by Labour that all beneficial ownership of land must be declared if the privilege of legal registration in Britain is to be given.

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