20th February 2015

Tendring Topics…….on line

‘Immoral Earnings’

          Tax evasion (strictly illegal) and tax avoidance (legal but often distinctly dodgy) have been a recurring theme in this blog. I regard income tax as our annual subscription for the privilege of British citizenship. We should be proud to pay it, not reluctant. There is nowadays a thriving business in advising already-wealthy clients how to avoid paying anything like their fair share of income tax – in some instances how to avoid paying any income tax whatsoever.  This new ‘profession’ is surely parasitic and ’living on immoral earnings’, much the same as brothel keepers and the like; and deserving the same punishments as them if or when they are brought to justice.

             I was astonished when I learned that BBC investigative journalists had discovered that Britain’s largest Bank HSBC, was among  the foremost of these ‘financial pimps’ – and that one of their multi-millionaire clients had lived in luxury for years without ever paying a penny in income tax.  HMRC – the government department charged with the collection of taxes and customs duties believed that this particular client was living somewhere in Spain, but – surprise, surprise! – had been unable to contact him.

            There seems to have been a remarkably cosy relationship between HSBC, the HMRC and the government that employs the latter to collect money owed to them (our money in fact).   A former Chief Executive, later chairman of HSBC, on leaving the bank was ennobled (just like our own Lord Hanningfield!) and given a job in the government.  Nothing wrong with that perhaps – I have always thought that the Kray brothers would have made excellent Police and Crime Commissioners!    Rather more worrying is the fact that, on retirement, a former senior official of HMCR was given a senior position with HSBC.  Poacher becoming a Gamekeeper is one thing – but Gamekeeper becoming Poacher is something quite different.

           

            I wouldn’t pretend to understand exactly how multi-millionaires were advised on avoiding the taxation that the rest of us have to pay.  It seems though that at the centre of this operation was a Swiss ancillary of HSBC. We are told that that ancillary has now been thoroughly reorganised.  ‘Lessons have been learned’ from the mistakes.  They were made a few years ago and we must now draw a line under the past and move forward into the future.

            I bet that those ‘celebrity paedophiles’ who are serving prison snentences for incidents that occurred forty or fifty years ago, are wishing that they could have said the same thing – and got away with it!

The Prime Minister’s response

          David Cameron’s response to the revelations about HSBC and HMCR was as we have come to expect.  No government, he claimed, has done more than his has to stem aggressive tax avoidance and tax evasion.  That says no more than that no government has ever done very much in that field.   Understandable enough – start taking money from the super-rich and they’ll be less inclined to offer financial support to the party that they had relied upon to look after their interests.

            Probably though Mr Cameron, like me, doesn’t really understand how tax avoidance works, and how it can be prevented.   He swiftly moved on to a field in which he and his chancellor have become experts; penalising the poor and vulnerable to avoid inconveniencing the really wealthy.  They hadn’t previously noticed that some of those who receive benefit do so because they are suffering from obesity or alcohol or other addiction.  These are curable conditions.  Cut their benefit unless they are positively seeking a cure and you’ll not only improve their medical condition but you’ll encourage them to seek work and save a few quid to reduce that deficit.

            I’m reminded of a somewhat cynical story that was circulating in Germany in the early post-war years when every firm and every organisation was struggling to rid itself of the taint of Nazism.    One keen German gardener meets another:   ‘What have you been doing today Fritz?’ ‘I’ve been denazifying my carrot patch’. ‘Denazifying?’   ‘Yes, denazifying – you know; pulling out the little ones so that the big ones will thrive and get bigger’. 

Ukraine

           Three times I have started to put on paper my thoughts about the situation in Ukraine and three times I have failed.  The situation changes day by day, almost hour by hour.  Hope of a peaceful settlement almost dies – and then flickers into life again. One thing that is certain is that the outlook on both sides has hardened as a result of the conflict. Before the killing started I am quite sure that the rebels would have been satisfied with a limited autonomy within a loose Ukrainian Federation.  Now, I think, they’ll be striving for full independence.   Similarly, many on the government side would, I think, have been willing to grant that limited autonomy.  Now hard-liners will be satisfied with nothing less than the ethnic cleansing from Ukraine of all Russophiles (hundreds have already been killed and thousands driven into exile) and the obliteration of the Russian language and of Russian culture from the country.

In this conflict it is the rebels (always referred to in BBC news bulletins as  ‘Russian-backed rebels!) who are the victims.  They feared that the Kiev Government intended to destroy their language and culture.   At first they tried to prevent them by peaceful means – do you remember the tv pictures of unarmed civilians, men, women and little children trying to stop the progress into their country of Kiev government tanks and armoured cars?  Since the fighting started it is the rebels’ homes that have been flattened by shellfire.   The million people driven from their homes and seeking refuge in Russia are all from rebel held towns and villages.  I have little doubt that they comprise most of the 5,500 dead.

Angela Merkel and the French President are at least trying to keep the flame of peace alight.  Our government?   Well, we’ve supplied the Kiev Government with sixty second-hand armoured cars.  They’re unarmed at the moment but the Kiev government can soon mount some machine guns onto them and send them into the conflict.    Oh yes – and our Defence Secretary has announced that any armed Russian incursion into the Baltic States will be resisted by NATO.  Over a quarter of the population of two of those three Baltic states are ethnic Russians. The Defence Secretary (who clearly isn’t old enough to remember the true horror of a European War) would be better occupied urging the governments of those Baltic States not to treat the ethnic Russians as second-class citizens, and to give the Russian language the same status as the local tongue.  Switzerland, Belgium and Wales all have more than one ‘official language’.   So could Latvia, Lithuania and Estonia.   

If the Baltic ethnic Russians have no grievances they’ll have no inclination to revolt and seek Russian help.

Some later thoughts

This morning (Friday 20^th February) I have just heard that an influential committee of the House of Lords has declared that, due to inept policies pursued by inexperienced foreign office officials, we have ‘sleep walked’ into the situation in Ukraine.  My own fear is that we may be sleep-walking into World War III.

 Nations, as well as individuals, should make a real effort to see the world through the eyes of their opponents.  Russia sees itself surrounded by a hostile NATO alliance extending from the Baltic, round the frontier of the Russian Federation to the Black Sea.

We may well think of that NATO alliance as being purely defensive – but how would we feel if the Irish Republic, the Netherlands, Belgium and France were to become part of a potentially hostile alliance?   How would the USA feel if Mexico and Canada did the same?

In the case of the USA we know what would happen.  In the 1962 the Soviet Union attempted to supply its ally Cuba with missiles to defend itself from the very real threat of invasion from the USA. President Kennedy – by no means the most bellicose of American presidents – was prepared to bring the world to nuclear war to prevent it.   Fortunately Nikita Khruschev, then President of the USSR, had more sense.  He withdrew the missiles – but there was no further attempt to invade Cuba from the USA.