I picked up a copy of the Financial Times (FT) on Monday 21st November 2011 and on the front page was an article about citizens of the Cayman Islands collecting fund directorships. It seems that the scam out there is for multinational companies to appoint Cayman Islanders as directors in order for the companies to claim to be based in The Cayman Islands and thereby gain tax exempt status in the UK and elsewhere.
The FT reported that “leading firms” “staunchly defend their practices” and claim that “their employees are skilled full time professionals backed by large teams of logistical and support staff”. They’d need to be as “at least four individuals hold more than 100 non-executive directorships each, and 14 have more than 70 – each worth as much as $30,000”. The article didn’t state where these support staff were based. Canary Wharf perhaps?
So it seems that bankers and mega-corporations are lecturing the working people on the sacrifices that must be made while corporations are operating fraudulent practices to “avoid” paying tax.
Another article reported that David Cameron is planning a scheme to boost the housing market by providing £400 million to underwrite mortgages for new homes.
The idea of a scheme to encourage house building is tempting but subsidies will lure people into buying who cannot really afford today’s over inflated prices. It will merely delay the inevitable crash and leave new buyers in negative equity.
After the credit crunch the British tax payer was called upon to bale out the banking industry. Now the taxpayer is to be tapped to try to delay a crash of the housing market. The taxpayer’s money will be used to maintain house prices at unrealistic levels while the house builders grow reliant on a subsidy. As with all such schemes there will be pressure for it to be carried on indefinitely.
An article on page 7 of the FT discussed China’s fears of lasting worldwide recession and stated that China’s premier Wen Jiabao, had prompted speculation that China will loosen it’s monetary policy immanently by saying that China intended to “fine tune it’s tight monetary policy”. The article went on to say that “because almost all of China’s banks are owned by the state and top banking executives are all senior Communist Party officials, Beijing can adjust monetary policy without having to adjust interest rates or make any public policy shift at all”.
Well that’s a neat trick! On the face of it, one might think that state capitalism, as practiced by China, is superior to (supposedly) democratic capitalism as practiced in the West. If only the majority of UK banks were state owned. If only the majority of their top executives were members of the Tory Party……..but wait…..Doh!