Tuesday, March 3, 2009

Grandstanding, Rhetoric or Real action

One of the mainstream papers sought my view on the press story about Gordon Brown's recent US trip and the announcement he made about tax havens. Here's what I wrote, in case it doesn't get printed.
If past experience is any guide to the future then Gordon Brown's aspiration to 'press for moves to isolate and close regulatory havens' will be nothing more than empty rhetoric or Grandstanding (as your leader put it).

The OECD officially branded a number of British territories as harmful tax havens in June 2000. But Gordon did nothing about it then. The subsequent European Savings Tax Directive came into force in 2005. Some blame Gordon for amendments which reulted in the Directive only having a limited impact. It will only have real teeth when the amended Directive (agreed in principle last December) becomes operational and effective at some stage in the future.

I note that Gordon did not refer to 'tax havens' as such. This may represent a desire for precision over pantomime. Instead of playing games he seems to have chosen his words carefully and confined them to something that may be achievable rather than aspirational. Historically one would have expected him to promise another 'crackdown' on tax havens and of swift changes in the law which then get held up, watered down or abandoned long after public interest has moved on. Again there are plenty of precedents for this approach.

One wonders whether Gordon has been forced to adopt a more realistic stance to distance himself further from Harriet Harman's recent promise to change the law to suit public opinion.

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