Pandora Newspapers Exposed “For Sale” Sign Hanging Over Britain | Marguerite Hodge
There is a “for sale” sign hanging over Great Britain. Pandora Diaries exposed how secrecy, influence, ownership, and other assets are freely available to the highest bidder. Huge data dumps like this offer invaluable insight into the secret world of offshore finance and how it is exploited by the richest people in the world. Once again, the UK and its tax havens are at the heart of the global tax evasion and dirty money crisis. Britain asks few questions, doesn’t care who you are, and doesn’t care where your money comes from.
We now know that 35 current and former heads of state exploited the secrecy to avoid paying fair taxes, to hide their wealth from the people or to launder the money they stole from their own people in Britain. and elsewhere. We have also learned that the Conservative Party has received millions of pounds in donations from oligarchs in foreign jurisdictions, who have used their wealth to access and influence our heads of government here in Britain.
Pandora papers have identified secret real estate deals worth Â£ 4 billion. That’s a huge amount, but it barely touches the Â£ 170 billion of UK properties that are estimated to be overseas. It is scandalous that property in the UK is so liberally used as a vehicle to launder money and hide personal wealth.
Abuse of the real estate market often works this way. You have created a public limited company in a secret offshore jurisdiction such as the British Virgin Islands. You transfer your money (which may have been stolen from your compatriots) to this shell company. The company then buys a property in the UK. You then have a UK luxury home. Or you sell the business to a UK citizen who pays you with legitimate money. You were then successful in laundering your money in a trusted jurisdiction. And as an added bonus, since the transaction involves a business and not an individual, you avoid paying UK stamp duty on the property.
More than one in four people named in the Pandora leaks are UK citizens. This includes some who were granted ‘golden visas’ to the UK because of their individual wealth, which they then effortlessly converted to UK citizenship. Others, like Tina Green, the wife of British businessman and former owner of BHS Philip Green, are British citizens who have settled in tax havens. Green grew his multi-million pound real estate empire in Monaco as BHS collapsed, leaving many jobless.
There are other landmark stories. The Crown Estate bought a London property for Â£ 67million from the notoriously kleptocratic ruling family of Azerbaijan. Pandora papers show that this family alone makes Â£ 400million in real estate transactions. Russian oligarch Mikhail Gutseriev is sanctioned by the UK for his close ties to the corrupt Belarusian regime, but he has Â£ 50million of property in London. The family behind the “world’s biggest bribery scandal” – Unaoil – are believed to have laundered money in commercial property in the UK.
Central London is the heart of most of this wrongdoing. Meanwhile, further out in the capital, in my constituency of Barking, workers face a tough winter due to declining universal credit, soaring energy bills, the end of holidays, rising prices and long lines at gas pumps. It’s a rule for the super-rich, and another for the rest of us.
The use of secret tax havens and shell companies is not necessarily illegal. But it is often aggressive tax avoidance and it is certainly immoral. Too often, such structures are put in place to facilitate money laundering. These complex financial arrangements are mostly created by those who provide services to the super-rich – lawyers, accountants, bankers and real estate agents. They cover up anonymous transactions, but they, the facilitators, are not held accountable for their role in this scandal.
There are ways to fix this mess. We need a public register of overseas or overseas ownership of UK property. With transparency and precision, we can then track the money, limit tax evasion and prevent shady individuals from abusing the UK property market. Despite all their flaws, David Cameron and George Osborne got it. In 2016, they promised us this public cadastre. The Tories consulted in 2017; drafted a bill in 2018; included it in the 2019 Queen’s Speech; and committed to it again during the recent G7. However, we are still awaiting its entry into force. I’m sick of empty promises.
At the same time, the Tories promised – but failed – to reform Companies House so that scoundrels stop using our institutions to set up businesses in the UK which are then used for illicit purposes. The government systematically refuses to hold professional facilitators to account. It does not provide the necessary resources for regulatory bodies that properly monitor financial crime – from the HMRC to the National Crime Agency to the Serious Fraud Office and the police. He is always reluctant to enforce even our weak laws by taking legal action against the super-rich.
Even more worrying, the corruption that infects our economy and our real estate market now infects our politics and the public sphere, from questionable donations to government contracts handed out to cronies. If we are serious about tackling tax evasion, illicit financing and ending corruption, we need to put our own backyard in order. Unfortunately, we are run by a Prime Minister who just doesn’t seem to care.
Margaret Hodge has been the Labor MP for Barking since 1994
Join the Guardian’s head of investigations, Paul Lewis and guests to this special event broadcast live on Pandora Newspaper Revelations on Monday, October 18 at 8 p.m. BST | 9 p.m. CEST | 00:00 PDT | 3 p.m. EDT. Book your tickets here