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02 Nov 2011
A TORY MP has called on the government to halt further regulation on tax havens, claiming that they are an economic benefit.
Mark Field, MP for the Cities of London and Westminster, told a Sovereign Group seminar that the debate around tax havens was "one-sided", The Telegraph reports. The TUC's £25bn estimate for money lost through corporate tax avoidance via international finance centres was too high, he said.
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The UK has a constitutional relationship with 30 offshore financial centres, Field claimed. It was therefore "essential" that the UK ensures any regulation is appropriate.
"Together, the Crown Dependencies make a significant contribution to the liquidity of the UK market. Together, they provided net financing to the UK banks of $332.5bn in the second quarter of calendar year 2009.
"These funds are largely accounted for by the 'up streaming' to the UK head office of deposits collected by UK banks, including Lloyds Banking Group and Royal Bank of Scotland, as well as Barclays, HSBC, Santander and a number of building societies."
Nicholas Shaxson, author of Treasure Islands and the target for many of Field's comments, replied: "There is a permanent regulatory ‘race to the bottom' between jurisdictions as each seeks to attract flighty global capital.
"Tax havens with their ‘fast and flexible' lawmaking lead this race. Financiers wield the threat: don't tax or regulate us too much or we'll run offshore. So the race goes on. You will also find that a lot of the exotic instruments behind the subprime mess were located or listed offshore. Tax havens are never the only cause, but they were a major factor."
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Visitor comments Add your comment
Of course £25bn lost to tax havens was too high
Of course Mark Field is right to say that less than £25bn is lost by corporate abuse of tax havens.
But then as author of the TUC report in question I can confirm that a) it said only £12 bn was lost to corporate tax avoidance and b) no figure was stated for the role tax havens played in that.
So the errors are all Mark Field's. He should stop fighting straw men and face the reality of tax haven abuse - which I estimate actually, in total, costs the UK £18bn a year.
But he'd rather play with myths - which must make him feel very at home in the offshore world
Posted by: Richard Murphy, 02 Nov 2011 | 10:04
Robin Corner
Mark Field is the Tory MP for the City of London (and Westminster)...
As the City has vested interest in the control and continuing existence of the UK's tax havens he can hardly say otherwise - and expect to retain his seat.
We fully support the note posted by Richard Murphy - and we must all face the reality of tax haven abuses which have dire repucussions throughout the world.
Posted by: Premier Shareholders Group, 02 Nov 2011 | 12:39
bring it on
More gobbledygook I guess. When will the government ever own up to its immense culpability for the current situation, irrespective of which party was in power seeing as this was brewing for decades?
As for tax haven "abuse", the more the better.
Posted by: Anthony, 02 Nov 2011 | 17:04
PSG
You can disregard the comments of Murphy's crony PSG. He's just a one man phony.
Posted by: Illuminati, 02 Nov 2011 | 18:45
Facing facts or grinding axes ?
Does Richard Murphy and the rest of his fundamentalist economic acolytes not see the point that Mr Field is making? Mr Murphy may well claim that tax avoidance may be "losing the U.K. economy £12bn" but doesn't appear to dispute that the UK Crown dependancies provide much needed liquidity to the U.K. market (£209bn in the second quarter of 2009 alone). So scrapping these offshore centres will save the U.K. £12 bn but lose it somewhere in the region of £300-400bn per annum in inward investment. Where is the sense in that ? Let's hope that Mr Murphy doesn't advocate spending £100 on scratch cards just to win back a pound ! Utter nonsense from a man with an offshore splinter in his eye. Get over yourself Mr Murphy and if you want to make use of your evagelical opinions regarding taxation, speak to Mr Osborne and persuade him to reduce the corporate taxation in the U.K., thereby making the offshore centres irrelvant, and you may well get your way. Blaming well regualted and co-operative financial centres for the mess that European and U.S. bankers (and governments for that matter) have got the world economy into just won't wash anymore. The cat is out of the bag and all Mr Murphy can do is complain about it's whiskers !
Posted by: MadManx, 17 Nov 2011 | 14:58