The UK chancellor, Philip Hammond, recently suggested that if the EU fails to budge over granting the UK market access after Brexit, Britain could transform its economic model into that of a corporate tax haven. In other words, …the British government would extend the City of London’s business model to the rest of the UK.
The comments above and below are excerpts from an article by Don Quijones (WolfStreet.com) which has been edited ([ ]) and abridged (…) to provide a fast & easy read.
Unbeknownst to even many Brits, the “City of London Corporation” has functioned for centuries as an offshore island inside Britain, even inside London, a tax haven in its own right, as Nicholas Shaxson, author of Treasure Islands, writes in the New Statesman:
“The term “tax haven” is a bit of a misnomer, because such places aren’t just about tax. What they sell is escape: from the laws, rules and taxes of jurisdictions elsewhere, usually with secrecy as their prime offering.”
Provided you have fat bundles of cash, you get to enjoy rights and privileges offered by no other jurisdiction on Planet Earth. The City of London’s legal system takes US-style corporate personhood to a whole other level.
“Unlike any other UK local authority, individual people are not the only voters: businesses can vote, too. Political parties are not involved – candidates stand alone as independents – and this makes an organized challenge to City consensus all but impossible. More than 70 percent of the votes cast during council elections are cast not by residents, but by corporations – mostly banks and financial firms and, the bigger the corporation, the more votes they get, with the largest firms getting 79 votes each.
Not only is the City of London paradise on earth for rights-seeking corporations; it is also the rotten, beating heart of a vast, secretive financial web cast across the globe. As Shaxson points out, each of the Web’s sections – the individual havens in the Caribbean and elsewhere (all of them Crown dependencies) – trap passing money and business from nearby jurisdictions and feed them up to the City, just as a spider catches a fly.
That Theresa May’s conservative government is considering extending this model across the whole of the United Kingdom should come as no surprise, despite the gaping hole it’s likely to leave in the government’s own coffers. After all, it is a whole lot easier for a government to build a national economic model based on undercutting the corporate tax regimes of neighboring states in a frantic race to the bottom than one based on supporting the emergence — or in the case of the UK, reemergence — of a globally competitive business sector.
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