Tax havens and transparency
Jim O’Neill takes a little trip round some beautiful islands and ends up on a Chinese railway pondering the meaning of transparency.
Little did I think, when I raised the partnership between the SNP government and a company based in the British Virgin Islands, the tax haven, that I would be returning (figuratively) to those beautiful islands so quickly. However, last week’s big story about the Panama Papers leaked from Panama legal firm, Mossack Fonseca, highlights the British Virgin Islands as one of the main centres of the firms that they set up to hide the money of the rich and powerful and help them to pay no tax in their country of origin.
There have been lots of questions asked of “call me Dave” about whether he has benefitted from funds invested by his father. Clearly he has. How else can one account for his education at Eton and his membership of the Bullingdon Club at Oxford? But that is not what I want to focus on here. Lots of other and better people are doing that.
I want to focus on the spin-off for the Chinese connection to the SNP Government. Every time she has been asked about the secret £10bn deal with Sinofortone and Chinese Railway No 3 Engineering Group, Nicola has said that this was only an agreement in principle and “due diligence” would be done if any actual infrastructure deals were being considered. If the “due diligence” on MacBraynes partner in the port management scheme is an example, then I fear for our taxpayers’ money.
Surely, if that due diligence had flagged up that the partner was owned by a company based in the British Virgin Islands, the SNP Government would have run a mile from such a partnership. Or would they?
For it turns out that Chinese Railway No 3 Engineering Group is owned by the Chinese Railway Group, wholly owned by the Chinese Government, and embroiled for a number of years in bribery and corruption allegations in their own country.
Indeed as far back at 2104, the Ethics Committee of the Norwegian Oil Fund warned the Pensions Committee of Fund against any investment in this company because of the bribery and corruption allegations. Is this why the deal was shrouded in secrecy in Scotland, only to come out when Sinofortone lauded it on its website? Ah the wonders of the World Wide Web!
Or was it because Sir Brian Souter, well-known Stagecoach owner, fundamentalist Christian and SNP donor had a hand in it. There are allegations that he may have been present at the signing and he was the only Scottish businessperson who seemed to know about it and support it. If so, why was he there? Was he the conduit through which the deal was done? It’s about time the SNP Government came clean and gave us the answers. For a Government committed to transparency, they seem awfully opaque.
There is, of course, another angle. The only comment about the Panama Papers from the SNP has been the crass comment from SNP Minister Marco Biagi that this was another good reason not to increase the tax rate to 50p for the best paid. Mr Biagi, these guys have been paying no tax at all. They are based on islands that have no income tax, no capital gains tax and no inheritance tax. Marginal rates of tax are irrelevant to them if they pay no tax at all!
And where are the condemnations of Mossack Fonseca from the SNP Government? Are their hands tied by their links to the islands? The only major condemnation has come from our own Jeremy Corbyn who has called on colonies and Crown Dependencies to implement British tax avoidance laws or face having them imposed by the British Government. It is about time that the flag of convenience was ripped away from these tax avoiders and their shenanigans were publicised for all to see.
It has often been said that the thing that brings you down in politics is not the action but the cover-up. The SNP government are not learning the lessons of history.