The Panama Papers and our rigged economy
06 April 2016
In every clichéd popcorn movie, there’s a moment when the baddies are unmasked and reveal their true villainy. For us, the Panama Papers leak might just be that moment. The leak shows how Mossack Fonseca, a law firm catering to the super rich, helps clients launder money, dodge sanctions and evade tax. It’s a small glimpse into the democratic crisis of our time. Unaccountable big money is corrupting parliaments and destroying public services.
Big wealth buys big political influence. The super-rich have money that no human, regardless of the lavishness of their greedy imaginations, could ever spend. So they buy politicians to protect their assets. Twenty-seven of the wealthiest hedge fund managers in Britain have donated millions to the Tories. In an annual fundraising dinner for the Conservative Party, 449 attendees had a combined wealth in excess of £11bn.
The collective wealth of Britain’s 1,000 richest people was £98 billion in 1997 when Tony Blair came to power. That’s obscene. After 13 years of New Labour, it was £336 billion. That’s more than triply obscene. Today, the Sunday Times rich list has £519 billion. I don’t even know the word for that. I only know one thing: we live in a rigged economy.
Supporters of big money used to claim that lavish wealth for the rich would “trickle down” to the rest of us. The Panama Leaks shows precisely why this didn’t happen, and why it never will. Through offshore tax havens, shell companies and an added dash of creative ledger work, the wealthiest 0.1 percent consolidate their wealth in water-tight accounts out of which not a drop will trickle.
Nobody gains that sort of wealth and power through hard work. I hope the Panama Papers have unveiled that. As the leaks reveal, only large-scale fraud can protect these interests. The whole thing reminds me of that scene in the Wizard of Oz, where the almighty powerful magician is revealed as another old charlatan. And like the Wizard himself, those charlatans caught up in the Panama Papers leak will likely face no consequences.
Why? Because our very own UK government is at the very centre of the offshore fraud bonanza. It’s a government which has created laws which give their rich pals a legal excuse for tax avoidance. Over half of the companies exposed by the leaks are in British administered tax-havens. HSBC and Royal Bank of Scotland have already been revealed to be complicit. David Cameron’s late father was up to his neck in it.
The prime minister was asked whether his family have money saved in tax havens: “It’s a private matter,” a government spokesperson sheepishly replied.
And this is where I start to feel angry. I have spoken to countless victims who have been punished by DWP sanctions. I think of the women who were derided during the London riots for stealing baby food and nappies. I think of UK cities where homelessness is fast becoming a crime.
It makes you wonder: who are the real criminals in our society? The poor, the starving, those without shelter? Or the super-rich who want to hoard their riches in offshore accounts because they don't want to live by the same laws as the rest of us? This isn’t about the politics of envy. This is about the politics of justice.
Lets be clear: no one person can get their money into a tax haven on a tiny island in the Caribbean without the support of a small army of accountants, lawyers, bankers, political figures and tax collectors willing to look the other way.
This is not the case of ‘a few bad apples’ - the whole system is set-up to protect the money laundering of the rich and powerful. Lets call it what it is - gangster capitalism. When our grandchildren remember our era, I think they will remember two types of politician and two types of citizen: those who fought the super-rich, and those who appeased them. Personally, I've had enough of the 'one rule for them and another for us' type politics.
I believe the super-rich really are the biggest threat to our freedom and our society today. They threaten our ability to run our own affairs. It’s time to stand up to the gangsters in our economy. It’s time to fight for justice.
This article was first published on the 5th of April in the Daily Record.