The anti-corruption lobby want to revive colonialism

I am no tax expert, but when 300 economists, particularly if led by Jeffrey Sachs and Thomas Piketty, all agree about something — as 364 did that Mrs Thatcher, in 1981, was messing things up — one can be confident they are mistaken. The 300 want this week’s global anti-corruption meeting to clamp down on tax havens. This is, among other things, an attack on Britain, because they call on us and the United States to deal with ‘all countries for which they are responsible’. This ignores the fact that some such places — Jersey and Guernsey, for example — are not governed by Britain, though they share the same Queen; and that others, such as Bermuda, the British Virgin Islands or the Caymans, though colonies, have systems of self-government.

In any other context, a British attempt to overthrow these systems would be regarded as gross colonial interference. At any one time in the world, there are lots of places or countries which provide services which citizens from other countries find useful. Britain, for instance, is the main place to settle disputes in maritime law. Tankers are Liberian or Panamanian registered. Macao used to thrive on gambling because mainland China prohibited it. Cannabis may be smoked in Colorado. The state of Delaware gives more freedom to companies than other US states.

An expert in the field tells me that 80 per cent of all the world’s mutual funds are established in Cayman, so it is probably true to say that every single one of the millions of British citizens with private pensions depends to some extent on offshore arrangements, and the British government’s own pension fund has billions in offshore investments. The same expert informs me that while Britain is only now enacting ‘beneficial owner’ identity collection rules, Bermuda has had a government-vetted register system since 1943. ‘Offshore’ is, in principle, a legitimate means of competition by which a small place can gain advantages over a big one. Has much happened in the past ten years to show that big ‘onshore’ countries are better at regulating their financial industries than the hated offshore?

This is an extract from Charles Moore’s Notes. The full article can be found here.