Huzzah for Cameron and his offshore-trust beneficiary Chancellor.
And if you swallow this, then you're a fool.
The agreement allows individuals with Swiss bank accounts to either declare their holdings to the Inland Revenue, or make a one-off payment to the Swiss government, followed by a withholding tax each year. The cash will be transferred to the UK Treasury. What we don't know, of course, is whether the level will be high enough to deter - or encourage - this behaviour. The account holders will still remain anonymous, and so out of reach, despite the fact that what they're doing is a criminal offence
But never mind this: individual rich tax cheats will always be with us and the new rules explicitly prevent the British from going on fishing expeditions for these criminals: imagine if we decided that only a small number of rioters could be pursued each year, and that the penalties would be administrative rather than judicial. Each year, millions of British people fill in tax returns. If they're late, you get fined. If they're wrong, you can go to prison. But now, you can hold your cash in Switzerland. If you get caught, you'll pay a bit of cash, but there's no prospect of gaol for ripping of those of us who work hard and pay our taxes.
One gaping hole is the complete absence of corporate, shell and trust holdings (of the kind George Osborne will benefit from): companies are going to see this as explicit approval from our government, and will hide as much of their profits from us as possible, despite the fact that it's the British legal, institutional, educational and physical infrastructure that makes them so profitable. This is theft, and the UK government has legalised it.
They aren't the major problem. The real problem is that this minor deal is a plot between the Swiss and the British to wreck plans for a Europe-wide tax agreement.Now why would the UK want to ruin a plan to stop companies and individuals hiding their ill-gotten gains in offshore tax havens? Because, as Shaxson's horrifying book Treasure Islands reveals, the UK (and Ireland) are essentially revolving doors between honest countries and the various tax havens scattered around the globe. Tax havens that are, for the most part, former British colonies. The City of London is a big bucket into which pours offshore money for laundering into legitimate investment, and money heading for tax havens away from the prying eyes of the tax authorities.
If the EU had signed a transparency deal, the Caymans, Turks and Caicos, the Channel Islands and the Isle of Man would all have been covered, as well as Switzerland: the hundreds of billions hidden away would have been recovered, and some of these parasites would have gone to prison. This deal isn't about Switzerland. It's about the Tories helping their friends in all the other tax havens to carry on stealing. This is what Richard Murphy, accountant and founder of the Tax Justice Network, has to say:
In that case let’s not put too fine a point on this: this is the Treasury and our political leaders going out of their way to support criminality by making sure that a measure – the European Union Savings Tax Directive - that would blow tax evasion in British dependencies apart cannot now be implemented. And all, no doubt, at the behest of the City of London.
Which is odd, because I thought governments were meant to collect taxes, then spend them on behalf of its citizens.