A piece in Foreign Policy notes the UK’s “empire of tax evasion” after the release of the Panama Papers, “There is a temptation, when looking at the astonishing “Panama Papers,” to start by searching for politicians from your own country who are implicated. If you are British and approach the documents in this way, you’ll find slim pickings in the information released so far. Among the many thousands of names listed in the leak as possibly implicated in dodgy tax deals, there can’t be any appearance less surprising than that of Baroness Pamela Sharples, the widow of the former governor of Bermuda. That is, until you get to Lord Ashcroft — billionaire, Belizean national, and former deputy chairman of the Conservative Party — who would have been more remarkable if he had been absent. Then there’s Michael Mates, a former Tory MP, who stood down in 2010 amid another business scandal. And David Cameron’s late father, but again — hardly a surprise. To engage in this exercise, however, is to largely miss the point: not just the point of this astonishing leak, but the point of the whole United Kingdom. Because it’s hard not to look at the whole affair and see Britain right at the core of it. Or, at least, the British state, which one might argue is a very different entity”.
Crucially he writes that “There are, you see, a few important facts we are rarely told about the British state. Like, for instance, the fact that it governs more land in the Southern Hemisphere than the Northern; more penguins than any other; that there are 18 legislatures under Westminster’s auspices; and that these include the governments that oversee by far the most important network of tax havens in the world. With the City of London at its center, Britain’s network of refuges from taxes, regulations, and other pesky laws stretches first to the crown dependencies — the Isle of Man, Guernsey, and Jersey — and then into the 14 British overseas territories: places like the British Virgin Islands, Bermuda, and the Cayman Islands. From there, this web extends to places like Hong Kong, not under British rule since 1997 but, according to author Nicholas Shaxson, still feeding “billions in business to the City.””
The piece goes on to mention “The overseas territories — the last vestiges of the old empire — each have slightly different political structures, but all of them have a governor figure, appointed by the British government. All of them hand control of their foreign policy over to Westminster, and all of them depend on the motherland for military protection: The Falklands War is an obvious example, but let’s not forget that when Tony Blair famously claimed Saddam Hussein had weapons of mass destruction capable of reaching British military targets within 45 minutes, he was referring not to London, but to Akrotiri and Dhekelia, Britain’s military bases and overseas territory on Cyprus. Akrotiri and Dhekelia still serve a strategic purpose, which make them the exception; most of the overseas territories have evolved into, essentially, parking lots for the wealth of the .01 percent. It’s worth pointing out that more than half of the companies listed in the leaked Mossack Fonseca documents are registered in the U.K. or its overseas territories — and they’re not based in Birmingham”.
He does argue that these territories are now part of a “financial empire”, he then correctly writes that “Want to understand how things on the edges got so bad? Look to the center: The City of London itself is even older than the empire. The 1.12 square miles that make up London’s financial center have had their own constitutional arrangements for a millennium. (As Shaxson notes, it’s said that William the Conqueror allowed the City to keep its “ancient rights” in 1067, as he trashed the rest of the country.) Today, those square miles are governed by the City of London Corporation, whose representatives are elected by the businesses that operate there, and they have an unelected representative who sits in Parliament, as well as their own police force, which has been remarkably unsuccessful in policing British banks. Because having its own built-in constitutional protections wasn’t sufficient, in 2010, the City paid for more than half of the Conservative Party’s election campaign, ensuring Cameron’s narrow victory (along with the aforementioned Lord Ashcroft) and that any significant new regulations on finance after the 2008 crisis would be politically impossible. To be sure, however, the Labour Party didn’t do anything to regulate the city in the previous 13 years when it was in power — winning it over with a famous “prawn cocktail offensive” that was a key part of its strategy to get into No. 10 Downing St. in the first place. All of this goes a little way to explaining why Britain has, for some time now, been considered the global capital for criminal money laundering among those in the know. Perhaps, with the release of the Panama Papers, the last sheen of respectability will finally be stripped away”.
He rightly notes the obsession with money and money laundering has led to pushing up the price of the pound making exports more unaffordable and driving up the cost of housing in the South East.
He ends “It was not so long ago — within my grandparents’ lifetime — that Britain was at the center of the biggest empire in human history. Many observers have considered the present day, understandably, as the post-imperial era, placing the end date of empire somewhere around the time Britain withdrew from South Asia. But perhaps we got ahead of ourselves — perhaps we’re only just now seeing the final stages, the physical empire replaced with a hidden financial one. And perhaps the Panama Papers will be seen as the moment when this empire, too, finally began to come unstuck”.