THE Foot Review of offshore financial centres will do little to tackle tax haven activity, according to campaigner Richard Murphy.
The Tax Justice Network founder said the review was disappointing and that the wrong man had been appointed to do the job.
‘Michael Foot was always the wrong man to do this job – how could a man who makes his living from offshore have ever done this job?’
Mr Murphy said that because Mr Foot (pictured) was part of the UK Financial Services Authority, he was one of those most responsible for setting up the system of bank regulation that spectacularly failed.
‘And just as the rules he delivered at the FSA were useless, so are the offshore rules he is now promoting.
‘They were never designed to really regulate financial abuse and were never intended to stop tax abuse, so encouraging compliance with them now is absurd,’ he said.
Mr Murphy said change would be seen only if Mr Foot had demanded automatic information exchange, the introduction of country-by-country reporting and large increases in the transparency of offshore structures so that the accounts, beneficial ownership and the identity of management of all offshore entities should be available on public record. He added that there should be massive penalties for incorrect recording.
However, he said the report did seek to deliver some small punches in demanding that places such as Guernsey raise more tax, which was right, but the focus of the report was wrong.
‘Raising VAT or its equivalent in Guernsey and other such places is the same as what a small rights issue did for RBS in 2008 – it utterly failed to correct the inherent flaw within its balance sheet.
‘The only way to manage financial risk in these places is to dramatically curtail the risk they deliberately and provocatively underwrite without capacity – and that would require their financial services sectors to be radically curtailed.’
But he said Mr Foot was not saying jurisdictions should do that.
‘It has missed the real issue. Foot thinks the risk is in the weakness in government revenues in these places and there’s no doubt that’s true. But nothing they could raise could in any way help manage the risks they face.’
He said the proposals would marginally reduce the UK Government’s risk.
‘But after a period of real progress this is, without doubt, a setback.’
Article posted on 3rd November, 2009 - 1.00pm
One Article Comment
Well right or wrong: in my own opinion it’s a fact that there are far too many of these outsiders putting their fingers in a pie that in reality has nothing to do with them; we learnt that in 1940, they said so; now only Guernsey people who should talk out-
Hopefully in the next round of votes we get rid of the lot.
When the UK can manage their own lot (seemingly never) then maybe they can speak not; but not decree.
That’s our business not theirs.
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