Tax havens and the Church Commissioners

by
31 May 2013

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From the Revd David Haslam
Sir, - It was good to note that the Church Commissioners are engaging at board level with Barclays in relation to a change in culture ( News, 17 May). You make particular reference to the scandal of the manipulation of the Libor rate, but that is (I hope) water under the bridge. A far more important area to address is that of tax havens, or, to be more accurate, secrecy jurisdictions.

This is especially true in the light of the recent Christian Aid report (also News, 17 May), which showed that companies with subsidiaries in tax havens pay around 30 per cent less in tax. This is especially important, of course, for developing countries.

Recent research by Action Aid showed that Barclays has one of the highest numbers of subsidiaries in these jurisdictions, 471, of which 197 are in British overseas territories or Crown dependencies. In the Cayman Islands alone, it has 120. I recall at the AGM a few years ago an elderly shareholder's asking the then chairman why on earth they needed so many - to which he got the usual anodyne reply.

It is blatantly obvious that the majority of these subsidiaries were set up to assist Barclays' customers to avoid paying tax. Her Majesty's Revenue and Customs are currently working through the 400 gigabytes of data leaked to the authorities by a whistleblower in 2009. These list people from 170 countries - politicians, celebrities, business persons, the élite in various forms.

More than 200 lawyers and accountants are also under investigation for the part they play. In the UK, many of these people will be among the 1000 richest people, whose wealth, according to the Sunday Times 2013 "Rich List", grew by more than £35 billion in the past year; it now totals £450 billion.

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This is happening in a "recession", while the poorest are having their benefits cut and the NHS is being squeezed to pay for the excesses of the bankers who got us into this mess - and some of whom may well now be among those richest 1000. This degree of inequality is totally unacceptable in any civilised society, never mind one that purports to be Christian. Not only the Church Commissioners, but all the Churches, should be up in arms at this shocking situation.

The US economist Jeffrey Sachs has a very useful suggestion to eradicate the deficit. He says that if you allow the richest one per cent of US citizens to keep the first $5 million of their assets, and then tax the rest at one per cent a year, you will bring in one per cent of GDP per year - and they will hardly notice. Raise it to two or three per cent, and you soon have the deficit paid off, and we can return to a decent level of benefit for the unemployed, disabled, and elderly, who will then spend that money and get the economy going again.

Barclays are the tip of the iceberg of what has now become an evil system. Among other things, it managed to pay 428 employees more than £1 million last year. It is up to the Commissioners and the rest of us to continue to expose this appalling situation, to resist by all means possible the cuts that are taking place, and to place maximum pressure on our Government to halt this continual sponge effect, in which the rich suck money upwards from the poor, and then hide it in tax havens.

What needs to be done is outlined in recent reports by Christian Aid, Action Aid and the Tax Justice Network. If the Spirit is saying anything to the Churches at this time, I believe that it is this.

DAVID HASLAM
Convener of the Methodist Tax Justice Network
59 Burford Road
Evesham WR11 3AG

 

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