John Glen MP gets new post

In the last reshuffle, it was announced that John Glen MP has been promoted to become the City Minister for which he must be congratulated.  This is located in the Treasury and its actual title is Economic Secretary to the Treasury.

In his Salisbury Journal piece (View from the Commons, 11 January 2018) discussing this he says:

There could hardly be a more important or exciting time to engage with the sector, which contributes so much to our economy – not just in terms of wealth and employment – but also vital stability and continuity for all businesses, wage earners and consumers.

It is undoubtedly true that the City contributes a lot to the economy and is a major contributor to our GDP.  This is why the need for the City to get ‘passporting’ rights in Europe when we leave the EU is so important.  If we are unable to do so, the loss to the economy could be considerable and will be felt by all.

Clearly there was insufficient space for Mr Glen in his piece to discuss the other and darker side of the City and this is its role in the massive tax avoidance industry.  Revelations arising from Luxleaks followed by the Panama Papers and most recently the Paradise Papers described in immense detail the sheer scale of this activity and the central role that the City of London plays in it.  Around a quarter of the world’s tax avoidance industry is centred on the City of London.  The sums are vast and involve billions and billions of pounds each year and trillions sit in accounts dotted around the world in a network of islands.   Many of these are Crown dependencies umbilically  linked to the City.  It is impossible to be accurate about the scale of it – the secrecy makes this extremely difficult – but lower estimates are around £35bn per annum and it could be much higher.

Tax avoidance on this scale means this country is deprived of billions of tax with which to pay for public services.  One of the arguments raging as this is being written concerns waiting times and cancelled or delayed operations in the NHS.  Hardly a day goes by without pictures of ambulances queuing up and people waiting for hours to be seen in accident and emergency departments. The word ‘crisis’ is seldom off the front pages. Theresa May wanted to shift the Health secretary out of his department.  While this is happening, billions are being shunted off to Jersey, British Virgin Islands or the Caymans.  There is simply no need for an NHS crisis if this activity was curtailed.

Why does it happen?

Why it happens is an obvious question.  Why does the country permit billions of its income to be spirited off to a network of tax havens and secrecy jurisdictions leaving the Treasury deprived of desperately needed revenue to fund public services?  The history is interesting and dates all the way back to the Romans who actually built what is now the city when they founded Londinium.  It was left alone by William the Conqueror and its rights and privileges were enshrined in Magna Carta the best remaining copy of which resides here in Salisbury.

The key – and for many the truly surprising fact – is that the City of London is not fully in the United Kingdom.  It is independent, has a Lord Mayor and its own police force.  Laws passed down the road in parliament do not apply there.  The Queen has no dominion and has to seek permission to enter it.  This independence is key to its continuation as the hub of the tax avoidance industry.

The second fact – and again almost unknown to many – is that its rights and privileges are jealously guarded by a man called the Remembrancer.  He is the only unelected individual to sit on the floor of the House of Commons.  His duty is to scour every piece of legislation to ensure the City’s interests remain unaffected.  He has a staff of 6 to help him and a budget of half a million.  It is interesting to recall Ted Heath’s famous cry when he called an election based on ‘who runs the country?’ referring to the miners.  Was the real answer to this question the City of London?

The City Minister

This brings us to Mr Glen’s new role.  Public disquiet is slowly growing at the scandal of tax avoidance.

As people’s incomes are squeezed, public services are cut and cut again, waiting lists grow and queues form in hospitals, the notion that sitting in the centre of London is an entity devoted to siphoning off billions of pounds to sit in an island in the Caribbean is becoming less and less acceptable.  Thus far they have got away with it.

Our tabloid media and Channel 5 devote acres of space or time to benefit scroungers seldom paying much attention to a financial scandal which is immeasurably larger and just up the road from their offices.  The Guardian and the BBC’s exposure of tax avoidance was a one week wonder and was quickly forgotten.  This is partly due to the fact that several newspaper proprietors are themselves tax avoiders.

So far City Ministers have come and gone typically lasting in post around a year each.  But Mr Glen can make a truly significant contribution to the prosperity of the nation, and of his constituents, if he were to be a reforming minister and curtailed the power of the City.  He could start by ending the right of the Remembrancer to sit in parliament.  This is truly outrageous, an anachronism and indefensible.  Secondly, he should force some transparency on the Corporation and make them publish accounts and reveal their wealth.  Thirdly, the Corporation should be incorporated into the UK and be subject to its laws the same as everyone else.   Finally, he should put ending the tax avoidance activities on the front burner as the Americans say.

Half the Conservative party’s income comes from the City so it is a big ask.  But nevertheless, to quote Mr Glen again from his View from the Commons piece ‘the constituency remains my top priority …’ and with that in mind if he tackled the City Corporation along the lines suggested he would be doing a great service to the nation and his constituents and his name would go into the history books.

The alternative is to put on a penguin suit, go the lavish banquets and make vacuous speeches.  I wonder which it will be?

Peter Curbishley

 

 

 

 

 

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