Trouble in Paradise

The latest revelations about how the richest protect their wealth and minimise their tax burden tell us little but confirm a great deal. The information in the Paradise Papers show us a truly glittering pageant of celebrities using offshore tax havens, including fine upstanding members of the community, such as Queen Elizabeth II herself, Trump’s Commerce Secretary with shady friends in Russia, Wilbur Ross and, regrettably, the mostly admirable Prime Minister of Canada, Justin Trudeau.

Why, it seems that even Bono, fine humanitarian and protector of the poor in the Third World, may have been benefitting from tax regulations that protect the rich of the Old World. Ironically, I read (in a piece from the Sunday Express, not the most reliable of sources, but this story has the ring of truth), that Bono’s own foundation was set to denounce the tax haven system until it realised that he was a beneficiary.

Still, it isn’t these fine luminaries that interest me here, but just two specific individuals, for what they reveal of how our system works more generally.

(Lord) Michael Ashcroft
Worthy citizen, tax avoider and major contributor to the Tory Party

The first of these is Michael Ashcroft, Lord Ashcroft, former Deputy Chairman of the British Conservative Party and one of its main individual contributors. For many years, he held “non-domiciled” status in the UK, meaning he could live in the country without paying its taxes. When he was raised to the House of Lords, he pledged to give up that status and become a full UK resident, but failed to do so for ten years, when a change in the law would have forced him to give up his peerage otherwise.

It now turns out that he’s a major tax haven investor. That saves a power of tax. Who needs non-dom status when you have tax havens you can take advantage of – and without even giving up your peerage? You might feel, and I’d tend to agree, that the law needs changing again, so that a member of the House of Lords can’t benefit from tax havens any more than from being non-domiciled in the UK.But let s see why that s not likely to happen.

The use of a tax haven saves someone like Ashcroft a great deal of tax. That sets up a fine cycle of mutual benefit. With so much more money to play with, it’s easy for him to make contributions to his favoured political cause, in this case the Conservative Party. For the 2017 election campaign, he stumped up £500,000, which by British standards is a massive contribution to a political party.

Now, isn’t that neat? Serious money for a political party. The party that happens to be in government. In government at least in part thanks to that money.

Now, how much priority would you expect that government to set on changing the law to deal with the abuse of tax havens?

The second person is something of a favourite of mine.

Glencore is one of the world’s major commodities companies. The Paradise Papers reveal that Glencore “loaned” £45m to a shady Israeli businessman, on the basis that it would be repaid if they failed to win a lucrative deal in the blood-soaked, deeply corrupt so-called Democratic Republic of the Congo. Nothing illegal seems to have happened, but that only highlights the weakness of the law. It may have been legal, but there was nothing edifying about this transaction.

So how about this favourite character of mine? He wasn’t with Glencore at the time, but he is now. He’s the company’s non-executive chairman.

His name is Anthony (Tony) Hayward. Not a name to conjure with, you may feel, and I’d agree though I have mentioned him before. If you’ve heard of him at all, it’s likely to have been in the context of the Deepwater Horizon disaster in the Gulf of Mexico, when an oil exploration platform caught fire and the ensuing oil spill polluted vast swaths of the Gulf.

Deepwater Horizon: fitting monument to reign of Tony Hayward

The oil rig belonged to BP. And the Chief Executive of the time? Why, Tony Hayward.

He came to fame with a series of brilliant gaffes. The one I like the best was his apology for the damage and, indeed, loss of life caused:

We're sorry for the massive disruption it's caused their lives. There's no one who wants this over more than I do. I would like my life back.

I’m sure he wanted all that unpleasantness over. As I’m sure that the millions whose lives or livelihoods were affected by the oil spill, to different degrees but seldom positively, couldn’t have given a flying curse for how much he wanted his life back.

Now just as the tax haven issue proves how little consideration of integrity or any kind of principle drives our governments, the Tony Hayward story reveals how little high business office owes to competence or even basic humanity. The colossal remuneration these people receive is often justified as being a reflection of the responsibility they accept. But far from being driven into the outer darkness where there is wailing and gnashing of teeth, Hayward simply stepped from BP into a series of lucrative and comfortable directorships, including at Glencore.

He wasn’t with Glencore at the time of the Congo deal. But still, it’s interesting that it was a company with as savoury a reputation as Glencore that offered him its non-executive chairmanship. And that a man with his track record accepted it.

Might that be just a coincidence? Speaking for myself, I doubt it.

Alas, poor Tories, and poor us: the lesson of Hallam

With just a day to go before the British General Election, there are a whole series of seats which are promising us “Portillo moments.” The term refers to former Thatcherite Minister Nigel Portillo. In 1997, he was beaten in an extremely safe seat, Enfield Southgate, to much rejoicing at the downfall of this notorious right-winger.

It’s unfortunate that such upsets are now named after him. Since leaving politics, he’s turned into rather a good broadcaster, taking honest, well-argued and – frankly – frequently liberal stances on a wide range of questions.

Still, there are still such upsets, many of which would be highly welcome if they occurred. 

It would be wonderful to see Nigel Farage of the dangerously far-right United Kingdom Independence Party losing his bid to enter Parliament in Thanet South. Equally, there would be a sense of Karma if the constituency of Sheffield Hallam waved goodbye to Nick Clegg, whose support for the Tories – in breach, many would argue, of fundamental principles of the Liberal Democrat Party he leads – made the government of the last few years possible.

Possible isn’t the same as bearable.

The reality is that Clegg will probably hang on in Hallam. In fact, the latest constituency poll, carried out by ICM for the Guardian suggests that he has a comfortable lead – 42% over 35%. Curiously, the second-placed party, historically in Hallam David Cameron’s Tories, is now Ed Miliband’s Labour Party. The Tories, indeed, are down to 12%.

Nick Clegg: unlikely to lose his seat
But the way he retains it may be highly instructive...

Hold on a minute, though. As well as asking whether voters would choose Clegg or one of the other candidates, ICM asked them to say which party they preferred. Which gave substantially different results.

To that question, Hallam voters split 34% for Labour, 32% for the Liberal Democrats, and 21% for the Conservatives. A 2% lead for Labour. That’s pretty much in line with the previous poll carried out by Lord Ashcroft.

A fascinating picture emerges from all this, doesn’t it?

What it says is that Labour supporters show some real conviction. Between the two questions, the Labour vote stayed practically unchanged. But of those who prefer the Tories, nearly half chose Clegg when they were asked about specific candidates.

That rather suggests a lot of Tories have identified Nick Clegg as a natural friend. A great many of us would say they’re far from wrong. He certainly already seems to be angling for a new invitation into government from his mate big Dave. And now it seems it’s a substantial group of Dave’s supporters in Hallam who might give Clegg his constituency back.

The poll, however, also implies that rather a lot of Hallam Tories need to be reminded that Nick Clegg, Deputy Prime Minister, the man who kept their party in power for the last five years, leader of the Liberal Democrats, is their local MP. And standing for re-election. By them. 

One wonders how many, prompted with his name, responded “who?”

Not exactly on the ball, one would have to say.

It’s not my aim to be unduly mean, but I can’t help feeling that this reflects a level of intellectual horsepower which might make a lot of other complex ideas difficult to grasp. Like compassion. Tolerance of difference. Human rights.

And certainly anything sophisticated like social justice.

In turn, that might go a long way to explain a lot of our problems. With Tories. Far beyond Hallam.