If the late Caroline Ahearne’s comic creation, Mrs Merton, were to ask a few questions of some of those folk so anxious that the UK leave the EU quickly, might they approximate to those below?
“So, billionaire newspaper-owning non-UK domiciled Sir Frederick and Sir David Barclay, why do your newspapers want the UK to leave the EU pronto? Does it have anything to do with recent EU legislation which will force jurisdictions like the Channel Islands and other tax havens to come into line with EU rules on tax?”
The Barclays own Brecqhou, a Channel Island which is under the governance of Sark, its neighbour. They made the news when they attempted to challenge the way that Sark was governed in law and eventually went to the European Court of Human Rights. Perforce Sark changed its system, but voters persisted in supporting the ‘old’ candidates and the Barclays removed their investment from the island, causing the redundancy of 170 people. They also live in Monaco and were both appointed ‘Ambassador Extraordinaire at large for Economic Development in Monaco’ in 2010. They and members of their family appear in the Paradise Papers. Forbes estimates their net worth at £5Bn.
The errant tax jurisdictions have until the end of 2018 to show significant improvement, extended into 2019 for some. Transparency, fair tax competition and real economic activity are the three measures of ‘good’ activity. There is a black list and a grey list ( including Channel Islands and other British dependencies ) and, while this isn’t perfect ( Luxembourg is not on either list ) it’s a good start. Sanctions include withholding monies of transgressors. Read the European Commission’s lists and reasoning here.
“So, Foreign Secretary, why did you revoke your US citizenship after the IRS hit you with a tax bill on your world-wide income?”
Johnson had dual citizenship, because he was born in New York. He renounced his U.S. citizenship in 2015 after having received a large bill from the IRS for Capital Gains Tax ( see Atlantic article ). In 2016 he refused to condemn the use of off shore tax havens ( see interview ) though he did publish his own Tax Return when standing as an MP.
“So, Mr Rees-Mogg, you think those people who criticise individuals who do not pay tax at the same rate as everyone else to be ‘hypocritical and not very bright’. But you argue for interests in Parliamentary debates in which you have a substantial financial stake without telling the House of Commons.”
Jacob Rees-Mogg was a co-founder of Somerset Capital Management hedge fund (worth $8.9Bn) with subsidiaries in the Cayman Islands and Singapore. The fund has substantial investments in tobacco, mining and oil and gas and in 2014 he was reported to the Parliamentary standards watchdog for breaching rules on declarations of financial interests when he spoke in support of these industries in Parliamentary debates, against plain packaging for cigarettes and against ‘green’ energy ( see report in The Independent ). An old Etonian (another one) he is, however, reputedly quite clever.
“And would you also like to answer journalist Will Black’s question on whether or not you would lose money if the EU directive on tax avoidance becomes UK law?”
Will Black has been asking pertinent questions of hard Brexiteers since his article in the Huffington Post (read here ) and in particular has been pursuing Rees-Mogg on Twitter. Rees-Mogg and his old school chum and manager of one of Rees Mogg’s companies, James Pockney, appear briefly in the Paradise Papers.
The EU’s fourth anti-money-laundering directive requires companies, and trusts, to disclose their beneficial (or true) owners; the first in a public registry the second to tax authorities. All EU member states are required to pass this into law within eighteen months i.e. May 2019. (The Guardian reported ). A swift Brexit without a transition period would see the UK leave the EU in March 2019, thereby ensuring the legislation doesn’t apply and permitting ongoing secrecy and potential major financial benefits for those very rich people with monies or investments in tax havens.
The Guardian has been doing stirling work too, with its article The Brexiteers who put their money off shore by Juliette Garside, Hilary Osbourne and Ewan MacAskil ( read here ), which also names Aaron Banks (UKIP funder), George Magan (Tory peer and former Party Chairman), Robert Edmiston (Tory peer and major donor), the family of Andrea Leadsom (self-selected Prime Ministerial candidate and mother) and Jim Mellon (fellow UKIP supporter and Manx resident).
HMRC estimates £7Bn+ p.a. is lost to the UK through tax evasion and avoidance. The OECD estimates a conservative £160bn globally a year is lost to corporate tax avoidance. Somehow I think Mrs Merton might have questions about that too?