Panama Papers and media

This video says about itself:

22 April 2016

Richard Seymour reviews media coverage of the “Panama Papers’, the documents leaked from offshore law firm Mossack Fonseca detailing the finances, tax avoidance and legal loopholes used by politicians, celebrities and millionaires.

Belgian Fortis bank helped tax dodgers: here.

Britain: HEALTH chiefs have paved the way for healthcare tax-dodgers to be given contracts worth billions of pounds in taxpayers’ cash. Bristol’s clinical commissioning group (CCG) voted yesterday to drop a clause from its constitution that rules out awarding contracts to tax-dodging profiteering companies: here.

4 thoughts on “Panama Papers and media

  1. Monday 25th April 2016

    posted by Morning Star in Features

    by Neil Clark

    IT ALL began in 1979. That was the year when privatisation was launched in Britain (back then it was called “denationalisation”) and exchange controls were lifted.

    On October 23, Thatcher’s chancellor of the Exchequer Sir Geoffrey Howe stood up in Parliament and announced the abolition of all existing exchange controls — except those applying to Zimbabwe.

    The controls which Howe was abolishing had existed for 40 years — and, like public ownership, were an integral part of the social democratic economic system which existed after WWII. But for the Thatcherites they were an unwelcome restriction which prevented the rich from becoming even richer.

    “I took a great personal pleasure in the removal of exchange controls,” Thatcher admitted in her book The Downing Street Years. She dismissed the idea that exchange controls helped to increase industrial investment in Britain and protected sterling. She also claimed that even “City experts” were concerned with her radical plans, as they believed a total abolition of exchange controls would be too risky. “Not every capitalist had my confidence in capitalism,” the Iron Lady declared.

    It’s interesting, in the light of the Panama Papers, to look back at the parliamentary debate of October 23 1979.

    “What does the Chancellor think will be the consequences of his decision?” asked then shadow chancellor Denis Healey. “We were told by the Bank of England last month that the £500 million outflow the previous month was largely caused by the relaxation of exchange controls following the Budget. Can the chancellor say what proportion of that sum was due to rich men buying property abroad and moving their wealth abroad?”

    Labour’s Robert Sheldon was even more critical. “This decision will mark a turning point in the fortunes of this country, which I believe that [the chancellor] and many others will bitterly regret,” he predicted. Norman Atkinson asked: “Does not the Chancellor’s statement represent a total and final abdication to the multinational companies?

    Is this not now the prelude to the sale of public-sector assets to overseas interests?”

    Of course, the legitimate concerns of opposition MPs were dismissed by the deregulating Thatcherites. This was a much-needed reform that was going to help the economy. But 37 years on, who was right and who was wrong?
    The abolition of exchange controls led to a huge outflow of money from Britain. In 1982, private investment overseas was 116 per cent higher than in 1978, totalling £10 billion. In 1979 British pension funds invested only 8 per cent of their new funds overseas; by 1982 this had risen to 26 per cent.

    Industry was, as many feared, hit particularly hard: between 1979-82 investment in it fell by a third.

    Unemployment rocketed, reaching 3.2 million by 1982. That year, for the first time ever, Britain — a country once known as “the workshop of the world” — imported more manufacturing goods than it exported. And, as Atkinson predicted, the abolition of exchange controls was indeed the prelude to the sale of public-sector assets to overseas interests. It also of course led to a large amount of money being transferred to offshore tax havens.

    One man who no doubt was rubbing his hands with glee was a wealthy stockbroker named Ian Cameron. In April 1982, just 10 days after the military dictatorship in Argentina had invaded the Falkland Islands, the patriotic Cameron was in Panama — an ally of Argentina — to set up his offshore investment fund Blairmore Holdings Inc. In 30 years Blairmore never paid a penny in tax on its profits in Britain, and it was all made possible by Thatcher’s reforms. No wonder Ian’s son David became such an ardent admirer of the Iron Lady.

    Privatisation and the abolition of exchange controls were two integral and interlinked parts of the new Thatcherite neoliberal economic order. By 1982 there had already been some rich pickings from state sell-offs. The public stake in BP had been reduced from 51 to 39 per cent. 49 per cent of Associated British Ports had gone. The majority of shares in British Aerospace had been sold.

    Merchant banks and stockbrokers benefited greatly from these sales. Just four sell-offs from 1979-82 were calculated to be worth £12m in fees alone. While manufacturing contracted, the 1980s saw a burgeoning of the financial services sector, with “financialisation” given a massive boost by “Big Bang” — Thatcher’s deregulation of the City in 1986.

    Over the years the profits made from privatisation grew and grew, with some vast fortunes made. “It’s been calculated that … the deliberately low price at which long-standing public assets were marketed to the private sector resulted in a net transfer of £14bn from the taxpaying public to stockholders and other investors. To this loss should be added a further £3bn in fees to the bankers who transacted the privatisation,” wrote the late Tony Judt in his 2010 book Ill Fares the Land.

    We must also add into the equation the higher bills and fares that the public have had to pay to private providers for services that were cheaper before privatisation.

    Other countries in Western Europe followed Britain’s lead and started selling off publicly owned property. The end of communism in eastern Europe in 1989-90 provided another bonanza for western banks, financial institutions and “global investors” — and mass privatisation also led to the emergence of a new oligarch class in the countries themselves.

    For multinationals and the super-rich, paying tax in this new era of turbo-globalisation became optional. If we made too many demands on them they would threaten to leave the country for good.

    In fact, the more taxes were cut on corporations and the super-rich, the more they moved their money offshore.

    Privatising the world, to use the title of the book by influential Tory and merchant banker Oliver Letwin, has brought us back to global levels of inequality unseen since the early days of the 20th century.

    Earlier this year, an Oxfam report revealed that 62 billionaires own as much as half the world’s population. While the global super-rich continue to forge ahead, the wealth of the poorest half dropped by 38 per cent since 2010.

    It was all a far cry from the much more equitable system which existed before 1979, one in which high levels of public ownership, exchange controls and a steeply progressive taxation system worked for the common good.

    Since the Panama Papers revelations we’ve seen a lot of justified outrage about the use of tax havens and the way the global elite operate. But the scale of the problem and the vast amounts of money involved are directly attributable to the radical changes which began in Britain back in 1979.

    If solutions are to be found it’s essential for us to understand the link between privatisation and tax havens. The Panama Papers reveal to us exactly what those “liberating” Thatcher reforms led to.

    Neil Clark is director of the Campaign for Public Ownership @PublicOwnership. Follow him on Twitter @NeilClark66.


  2. Pingback: Dutch Panama Papers perjury scandal | Dear Kitty. Some blog

  3. Pingback: Paradise Papers, rich people’s scandals worldwide | Dear Kitty. Some blog

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