Is the EU crackdown on tax havens another reason for Brexit? We also discuss the Tories’ love of statistics and economic theories, which can sometimes obscure the faces of real people and how they’re affected (Windrush). What about Guy Verhofstadt’s claim that some Brexiters want to turn the UK into a “Singapore at the North Sea”?
In a previous post, I suggested that we might expand on Zanny Minton Beddoes’ analysis of Brexit as a coalition between “red trousers” and “blue collars.” I posited the existence of a third and distinguishable group who funded Brexit, which I dubbed the “rich uncles.” Under that rubric, I listed financial speculators, anti-regulation corporate actors, and Russians or third parties representing Russian interests.
A correspondent has identified another group of “rich uncles” who might fund Leave: those whose wealth is greatly enhanced through the use of tax havens, and who are keenly aware that the EU is trying to crack down on tax avoidance schemes. See these links (as supplied to me):
“European commission to crack down on offshore tax avoidance”
“The more we learn about Brexit, the more crooked it looks”
“EU blacklist names 17 tax havens and puts Caymans and Jersey on notice”
“The Brexiters who put their money offshore”
“Revealed: Isle of Man firm at centre of claims against Arron Banks”
“Arron Banks and Brexit’s offshore secrets”
“UK and territories are ‘greatest enabler’ of tax avoidance, study says”
Of course, the nature of international finance means that much is purposely kept opaque. It’s hard for even seasoned investigators from a single nation to penetrate the complex web of offshore entities woven by those whose speciality is minimising tax bills for their clients. If you’re staring at a financial black box which stretches (hypothetically and figuratively) from the Isle of Man to U.S. Guam, how do you know whether what’s inside is legal or illegal? Where did the money trail begin or end?
This makes it hard to draw direct arrows, and leads to stories which show connections between parties without being able to state categorically that any of them broke the law. Such international finagling to hide assets and minimise taxes certainly looks fishy, is not easily policed, and seems to rarely result in jail time for those caught crossing the (barely visible) line between what you can get away with, and what’s illegal. Those doing the finagling often seem to be one step ahead of the regulators.
Where the world of international finance intersects with the world of Brexit, there are huge clouds of smoke, but so far no one has been able to locate an actionable fire. All those black box entities and subsidiaries of subsidiaries tend to mask the flames.
Brexit is obviously a project of English Conservatives, who have historically been the party of big money; so showing the connection between big money and Brexit is helpful but not earth-shattering — unless investigators can nail down specific violations, and those violations are not swept under the rug.
It can be difficult to prove who owns exactly what, or to be certain which Leavers are motivated by what factors, given that Leave has become a mass movement or mania. Perhaps no one theory explains Brexit — or at least no one theory explains all the different subgroups who’ve piled on.
There seems little doubt that the uber-wealthy with tons of offshore money can be passionately pro Brexit, and not averse to playing the role of “rich uncle.” This includes the owners of some tabloids. In a sense, this fills in a missing puzzle piece: Most EU regulations don’t impact negatively on the daily lives of most UK citizens. In fact, quite the opposite: EU regulations tend to guarantee workers’ rights, safe food and medicine, etc. Why then have numerous fake news stories been circulated about the EU, with themes typically suggesting that the EU is going to ban something Britons like, e.g. pounds and ounces?
There’s a whole website devoted to debunking such Euromyths, which often appear in tabloids like the Sun. (And yes, the EU did alphabetize them. The C’s alone contain Euromyths about everything from condoms to cucumbers. Fishing boats must carry cucumbers, and condoms must be straight. Or maybe I have that wrong, and it’s the fishermen who must be straight…)
Perhaps one explanation for recent Euromyths touted to the public is that the EU is actually poised to crack down on offshore tax avoidance schemes, an issue which only affects the uber-rich. So the public must be given fake reasons to hate the EU.
Who are the con men, and who are the conned? If Brexit in some respects resembles a huge Ponzi scheme or multi-level marketing scam, there may be some people situated at the mid-level who are true believers, and whose sales pitch is sincere (if misguided). There are also those “good government” types for whom process is more important than outcome. They argue that regardless of how the Leave vote was won, a majority did vote for Leave, so government is duty-bound to implement it. (Flawed logic, in my opinion.)
Brexit is sometimes described as an outward manifestation of a decades-long Tory psychodrama. Some Tories exhibit an inbred sense that they are born to rule and born to empire. There’s an element of paternalism in that, an often unspoken assumption that what the English decide will (of course!) be best for Scotland and the other nations; and if the system is gamed to favour the English aristocracy, the poor will benefit from the runnel. (A variation on trickle-down economics.)
One should therefore not assume that the Tories hate the poor or wish them ill, or that every Tory move is a conscious plot to harm the less fortunate. Many Tories live in their own bubble world (as do members of many political, social, and religious groupings.) The Tories are able — through a combination of willful blindness, paternalism, superciliousness, and over-reliance on questionable statistics — to believe that all their policies are beneficial — even where a more objective analysis would tend to reveal manifold harms.
Perhaps, rather than there being a single conspiracy theory which explains Brexit, there is a confluence of interests at the top of the pyramid, coupled with the power and influence to persuade those lower down that Brexit is something beneficial. It must be remembered that some Labour MPs have their own reasons for supporting Brexit, such as political expediency or ideological disagreement with the EU.
I want to be clear that I consider some Tories to be very decent folk who would personally extend kindness to anyone in need, and who favour policies which they honestly believe to be of benefit — not just to the upper class, but to the nation as a whole. Even some Tories who voted for austerity measures did so because, based on their education and upbringing, they were absolutely convinced that debt reduction was the only viable choice following the Great Recession.
But as for Brexit, that policy remains redolent with the stench of lies. Maybe those who consciously craft the lies are more guilty than those who merely go along with them; but if we all had a more sincere longing for truth, and were more scrupulous in rejecting lies (and in permanently expelling politicians caught lying), then we might be able to fashion a Brexit-free zone.
Each individual has a role to play in creating a society which is fundamentally honest. At the same time, improvements in education might help the general public identify the techniques of populism, and understand how social media can be used to unfairly manipulate opinion. A better-informed and educated public is less likely to be deceived by politicians who use populist techniques to put over elitist policies like Brexit.
Lies, damned lies, and statistics
The Tories are fanatics for statistics. According to them, everything is going swimmingly well, and life is getting better and better each day! On the other hand, one hears that food banks are overflowing with customers, homelessness is epidemic, and some schools close on Fridays because they can’t afford to stay open five days a week. A United Nations report (presumably apolitical) states that poverty in the UK is “systemic” and “tragic.” According to Prof Philip Ashton — the UN’s special rapporteur on extreme poverty — quoted in this BBC article: “The bottom line is that much of the glue that has held British society together since the Second World War has been deliberately removed and replaced with a harsh and uncaring ethos.”
I would argue that said replacement also creates a need to relocate blame for the harsh conditions thus created. Don’t blame vulture capitalists for the financial meltdown of 2008, nor blame the Tories for subsequent austerity measures. If you’re living in poverty, blame immigrants and the EU, and threaten to riot if Parliament thwarts the “will of the people” by failing to pass the government’s Brexit deal. (Obviously, I’m being sarcastic.)
However well-meaning some Tories may be, their love of statistics and economic theories may blind them to the real world consequences of policies which look good on paper — or which at least make them look good to their conservative base. The Windrush scandal was caused in part by excessive zeal to make good on Conservative Party promises to decrease net immigration figures. The people affected by the policies had real faces and real stories, which Amelia Gentleman brings to light in her book The Windrush Betrayal: Exposing the Hostile Environment:
Yet, these people didn’t seem to “register” with government bureaucrats intent on tamping down the figures.
I don’t want to wax alarmist, but still: When we hear government ministers talk about “short-term displacements” caused by Brexit, we need to ask, “How many people will die because of Brexit?” It’s a valid question, even if not a polite or subtle one. It concerns those people just barely getting by today who may go under if conditions worsen even slightly.
Returning to the possible motives of Leavers: It’s widely implied in UK media that changes to the backstop are the only aspect of Boris Johnson’s proposed Brexit deal which fails to meet with EU approval. But if you suss out EU spokespeople, it’s clear they’re also objecting to a “downgrade” of the political declaration which scraps language guaranteeing workers’ rights and environmental protections. See “Beyond the backstop: how Johnson wants to change Brexit deal” in the Guardian.
These changes scrapping certain protections lend credence to the theory that Johnson has thrown in his lot with those who favour a low tax, low regulation Singaporean model for post-Brexit Britain. Witness this exchange in EU Parliament, where Brexit co-ordinator Guy Verhofstadt accuses the (perennially loud-mouthed) Brexit Party of wanting to turn the UK into “a Singapore at the North Sea”:
The video is edited by the Sun to bring out conflictual elements and perhaps glorify the Brexit Party; but it does suggest that some European leaders think they know what the end game for Brexit really is.
As always, you can pick your theory of choice. And by the way, the video does show that factionalism and incivility are not confined to the House of Commons. Madam President, I would accuse Mr Farage, that worthless piece of belly-button lint, of closing the Barnier door after the horse has already gone to the Verhofstadt… 😉
The views expressed are my own, and do not represent any other person or organization.
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