Monthly Archives: May 2016

Tax havens and the wealthy

tax-haven-protestDid you see the desert island appear in Trafalgar Square last Thursday? Christian Aid, Oxfam and Action Aid all came together to create a sandy tax haven to highlight the issue of tax dodging while David Cameron was hosting world leaders at his anti-corruption summit.

By hiding profits, obscuring who owns what and disguising where business is actually carried out, big business and rich individuals can avoid paying the tax that is due, and cream off billions of pounds of what is rightfully public money. And if you think the British economy could do with a bit more money to spend on elderly care, schools and hospitals, just think what that money could do in Zambia or Haiti.

What campaigners would really like to see is a public register of the real people behind company names. Company names are often just shell names for the real interests behind them, and there can be many layers, but finding out who really benefits from the money a company makes (the ‘beneficial ownership’) would shine a light into the dark places where money is hiding. A few countries (including the UK) have agreed to publish a public register of beneficial ownership. But others have only agreed to make this information available to those with a ‘legitimate need’ ie tax enforcers. Good, but not as good as full accountability to civil society. Crucially, those digging their heels in are the British Overseas Territories. Cameron could insist on a public register, but he has not. We must mark this down as ‘Could do better’.

Cameron did manage something though. Foreign companies of property in the UK will have to declare these assets and make transparent who is the ultimate owner, or beneficiary. This is particularly relevant for many hugely expensive properties in London, and has caused quite a stir. Apparently these wealthy owners would prefer to be anonymous and this rule change would make them sell-up. This is being presented as a ‘bad thing’. But as far as I can tell, super-rich foreign investors have caused London property prices to be so hugely inflated that getting rid of them would be a good thing. For more on this, try this article by Giles Fraser, a bit old now but the issues haven’t changed much.

Critics of the public register say it will drive ‘wealth creators’ away, and it was this phrase that finally drove me to my keyboard. It’s one of those phrases that appears everywhere in defence of tax cuts for the rich and austerity for the rest of us. But it’s a phrase that is carefully designed to pull the wool over our eyes. For who in this country truly creates wealth? Those who make things or build things, those who create, those who make something of value from raw materials or their own creative talents. In other words, working people. The rich do not create wealth, they mainly inherit it, and then hide it in an off-shore bank account. Or they become rich on the back of the workers who have created and enabled them to build their fortune.

Rich people don’t boost the economy. Their money is largely static, invested in buildings, or in a complicated tax-free arrangement. But put money in the hands of ordinary people, and they will spend it, on goods and services, on holidays, on food, on the essentials as well as on leisure.

I’ll be glad if so-called wealth creators are driven away. Then we might be able to restore some sanity to the housing market and leave space for the rest of us to truly create a society where the wealth can be spent and shared more fairly.

Advertisements

Who is my neighbour?

pastyI had the following conversation with two friends, well, Mums of my son’s friends, so I’m only just getting to know them. A colleague of one of the Mums was doing the “Greggs run” on the way to work, and saw a homeless man outside the shop. She was moved to want to help him, so she gave him a pasty on her way out and got on the bus. But then, the man ran up to the bus, banged on the window where she was sitting and shouted “This is what I think of your pasty!” And he dropped it onto the ground and stamped on it.

The colleague was shocked and upset, and my friends were outraged at the man’s response. But I found myself unsure how to respond. Why was this reaction so outrageous? Because we think the man should have been grateful? Grateful for something that may not have been what he wanted or needed at that time? Grateful for whatever he can get, beggars can’t be choosers, and all that?

At what point does a person lose the right to decide what kind of help he or she can ask for, accept, or refuse? Surely the answer to that is at no point. Unsolicited help is good to offer, but equally may be refused. We would all prefer to be asked what it is that we want or need, and being homeless doesn’t change that.

Perhaps we are outraged not by the refusal to accept the pasty per se, but the way it was refused? Do we judge the man for being rude? How many other unsolicited pasties has he been offered? Perhaps he is vegetarian, but perhaps we judge that is not acceptable to insist on being vegetarian and homeless? Perhaps he felt judged as the offer of food suggests that he couldn’t be trusted to spend money appropriately? Who is it who decides what is appropriate for an adult to spend money on?

I realise that I have only come up with a load of questions, and no answers. The only realistic answer I have is that we should ask people what they want before we offer, or at the very least, make sure our help is actually an offer that can be refused and not insisted upon. But I didn’t feel able to say this to my friends. I only managed something vague about not knowing what had gone on before and sympathising with hurt feelings.

Meanwhile, my own response to homelessness remains inadequate. I’ve been shocked at how many people I’ve seen on the streets in Sheffield – many more than I ever saw in Liverpool. I buy the Big Issue occasionally (but not always) and I’ve even set up a regular payment to a project that supports homeless people in Sheffield. But I still cycle passed people sitting on cardboard boxes in the pouring rain outside the station and the guy who is always in the subway (under the ring road by Waitrose, if you know it) and use the fact that I’m on my bike as a way to avoid eye contact.

Meanwhile, it’s Christian Aid Week, the annual big fundraising initiative for Christian Aid. This year our theme is ‘loving our neighbours’, from the story of the Good Samaritan, told in Luke 10. The first day of the 7 day reflection asks the question ‘Do you need to expand your understanding of who your neighbour is?’ Yes indeed, not just the families in Bangladesh whose homes are regularly entirely washed away by flooding, but also the man I cycle passed nearly every day in the subway.