We Are All In This Together...

This week, I find myself back in the UK and enjoying a generous, if not particularly tasty, cup of 'Pike Place' from Starbucks in Epping. Starbucks are the sort of company that, in general, I tend to avoid as representing some of the more irresponsible strategies and tactics that such concern employ in order to avoid paying taxes in the countries where their outlets are actually located. I think my favourite from Starbucks was the importation of coffee beans from that well known coffee 'producer.'..Switzerland (the word 'riiiight' springs to mind). Given the subject matter of today's blog however, I thought that it might be appropriate to put my head in the mouth of the beast.
During the last few days a scandal of global proportions has broken over the tax dealings of many of the rich, powerful and famous. I use the word 'global' advisedly, as those implicated range from the father of the British Prime Minster David Cameron to the brother in law of Chinese Premier Xi Jingping, from the Royal family of Saudi Arabia to the business 'associates' of Vladimir Putin, from the talentless Simon Cowell to the talented Lionel Messi. All it would seem, if the evidence of the released documents is to be believed (it does indeed appear to be a very well substantiated leak), have been happily avoiding large amounts of taxation in the very countries that they are plying their trades or form part of the political or business establishment.
As I read the allegations that related to the apparently nefarious doings of David Cameron's father, Ian Cameron, and his investment company, Blairmore Holdings, I could not help but recall the UK prime minister's words when he took up the reins in 2010: “We are all in this together.” At the time, I was under the impression that what was being referred to was the austerity being imposed as a result of the financial crisis and bank collapses of 2008 instigated by the banking services industry. Now, in retrospect, it appears that 'we' may have been referring to the wealthy and powerful, and 'this' the massive tax avoidance that so many of them seem to have indulged in. 

 
In Iceland as I write, Prime Minister Sigmundur David Gunnlaugsson is facing calls to resign following revelations that his wife was involved in just such practices. Odd how often that seems to happen. Perfectly respectable pillars of the community like the Maxwell brothers or Philip Green seem to be fortunate enough to have very pro-active wives suitably concerned with preserving the family wealth by becoming adept at the nefarious skills of tax 'efficient' conduct. Lucky them…

In Russia, the trail has led to a very close friend of the premier, Vladimir Putin. A cellist by profession, with apparently no business acumen, yet the documents released show him to be again and again being involved in multi million dollar deals that he seems to have little or no knowledge of. I suppose that in such circumstances it must be comforting for the Russian President to have a friend so adept at fiddling...

Vladimir Putin's favourite fiddler...

 In China, it seems that the documents implicate the husband of the premier's older sister, Deng Jiagui. Xi Jinping himself has been running a well publicised campaign to stamp down on the widespread corruption within official and business circles in China. Interestingly though, his own families wealth now runs in the hundreds of millions. I for one am very impressed with the investment skills which obviously he and his family must possess. His salary is in the region of $22,256 a year, and that only after his rise to the top of the political tree. It would seem quite an achievement to turn such limited resources into the huge financial empire he now finds himself the head of.

Chinese leaders with their financial adept relatives...

Reading the Chinese Communist Party's media outlet, The Global Times, one has to be impressed at the prowess of the investigative journalism on display. The only article published to date talks of 'Western smear campaigns' (conveniently ignoring the fact that many Western leaders themselves have been implicated) and fails to even mention the connections leading to the premier, or even to his family. Journalistic truth is a very flexible concept at times, but perhaps never so much as is the case in China.
The usual blowhards represent such a scandal in terms of East versus West, or maybe capitalism versus communism, or some other such anachronistic nonsense. The reality, unfortunately, is far more sinister. Worldwide the gap between the wealthy and the poor has been growing at a huge rate for the past few decades, getting increasingly worrisome with the passing of time. Unfortunately, with globalisation and with the influence of financial services, banking and moneyed concerns on governance, there now seems to be little or no defence to the hegemony of the plutocrats.
All very sad. The likely result of all this will be a few scandals here and there, a few speeches by government ministers about the evils of tax avoidance, but very little action indeed. Those that are making the laws are themselves the beneficiaries of such practices. Given that, it would appear highly unlikely that they will pay anything other than lip service to reform.
The UK government itself perhaps represent a particularly adept use of rhetoric followed by a complete and utter lack of action. Three examples among many spring to mind. The extremes of the Murdoch press were supposed to be regulated after a range of illegal activities were perpetrated by them, the Prime Minister himself making several stirring speeches on the subject. The result six years later? Nothing. Even a refusal to sign through the very limited proposals of the Levonson enquiry. Rupert must be pleased, at least. Secondly, the regulation and prosecution of the bankers who caused such damage to the World's and the UK's economy back in 2008. Eight years later we have had precisely one prosecution, a low level banker of little importance, and no enforced regulation whatsoever. Thirdly, the current topic – clamping down on tax avoidance schemes. Again many a stirring word has been uttered by Messrs Cameron and Osborne on the subject. The result of all these fine words? Nothing, nada, zilch, not a thing. Osbrone carries on enjoying the hospitality of Russian oligarchs whilst Cameron works out ways to word statements to avoid his own all too apparent apparent culpability.

Osborne and his yachting companions, Oleg Deripaska and the Prince of Darkness himself...

Sad times indeed.
Back in Starbucks I finish the admittedly generous cup of Pike Place. It is a comfort to know, as I imbibe the very last drops, that scarcely any of the £1.95 I paid for said beverage will find its way into the hands of the exchequer but will instead be lining the pockets of the already fabulously wealthy but obviously still very needy owners of this enterprise...