U.K. plays host to global corruption summit, but overlooks its complicity

U.K. Prime Minister David Cameron closes the Anti-Corruption Summit, held at Lancaster House, London. (Photo Credit: U.K. Cabinet Office/flickr)

The U.K. played host to a global anti-corruption summit yesterday. The event seemed particularly well-timed, coming on the heels of the Panama Papers controversy and a gaffe by Prime Minister David Cameron who told the Queen of England that Nigeria and Afghanistan are “fantastically corrupt” countries.

Attendees at the summit agreed with the idea that “corruption is at the heart of so many of the world’s problems.” Yet solutions offered were vague. Terms like accountability, technology, partnership and transparency made their way into the final communiqué with little detail on how to root out the problem of corruption in every country.

“No country is immune from corruption and governments need to work together and with partners from business and civil society to tackle it successfully,” reads the document. “We need to face this challenge openly and frankly to fulfill our shared commitments under the 2030 Agenda for Sustainable Development to ‘substantially reduce corruption and bribery in all their forms’ and ‘strengthen the recovery and return of stolen assets.’”

NGO campaigners Oxfam, ActionAid and Christian Aid performed a stunt to draw attention to tax havens. Staff from the groups set up a beach resembling the locale for many of world’s tax havens in London’s Trafalgar Square. Dressed in suits, the participants played in the sun and tossed around the money they were hiding from taxes, highlighting corruption with the U.K.

All the talk about problems in places like Afghanistan and Nigeria, ignores the poor example set by countries like the U.K. British Overseas Territories are some of the most popular destinations for the world’s wealthy to hide their money to avoid paying taxes. More than half of the companies set up by the Panamanian law firm Mossack Fonseca were located in U.K. territories.

RELATED  Polio eradication gets financial boost but suffers setbacks in Syria and Congo

“Failing to ensure that U.K. offshore territories publicly reveal who controls companies would be a betrayal of the world’s poorest people, who are hardest hit by tax dodging – missing out on health care and education that the lost billions of tax revenue could help to fund,” said Mark Goldring, head of Oxfam Great Britain, in a statement. “As long as British-linked tax havens continue to help the rich and powerful get away with dodging tax it will remain deeply damaging to the U.K.’s credibility as a leader in the fight against corruption and global poverty.”

More than 350 economists from 30 countries signed on to a letter supported by Oxfam calling for the end of tax havens, this week. Heavyweights representing a range of political ideologies argue that tax havens fuel corruption. Each year $170 billion is lost tax revenues is lost. While all the economists do not necessarily agree on taxation policies, they are concerned that the practice distorts the global economy. The $14 billion lost in Africa each year could save the lives of 4 million children each year and employ enough teachers for all children to go to school, according to the letter.

While it is not likely the recovered money would be spent on health and education, the statistics show the potential impact of those funds. That money could also go toward improving infrastructure, investing in small businesses and increase access to clean water. By enabling territories to continue to act as tax havens, the U.K. is complicit in the corrupt system.

“Why I think this matters so much is that I believe that corruption is the cancer at the heart of so many problems we need to tackle in our world. If we want to see countries escape poverty and become wealthy, we need to tackle corruption,” said Cameron, at the summit.

U.S. Secretary of State John Kerry, who was in London to attend the summit, agreed with Cameron’s sentiment. His comments echoed Oxfam and the economists – money lost to corruption could be used for development in poor countries. He went further to say that corruption is as destructive for countries as extremists and linked the two problems.

RELATED  Corporations secretly lobbying UN to allow tax avoidance in its anti-poverty agenda

“The extremism we see in the world today comes in no small degree from the utter exasperation that people have with the sense that the system is rigged. And we see this anger manifesting itself in different forms in different elections around the world – including ours,” said Kerry.

Both the U.S. and the U.K. will have to do more than make bold statements denouncing corruption. In recent years, campaigns have focused on the issue of tax havens and tax avoidance to shift the conversation away from pointing fingers at developing countries. Pledges by Cameron in 2013 to end tax havens were seen as a victory by campaigners. The tone of the recent event shows that leaders are changing their views, but the Cameron gaffe may indicate there is a long way to go.

“By continuing to resist that, in order presumably to protect the secrecy business of the U.K. territories, David Cameron has turned his back on the transparency legacy of 2013,” said the Tax Justice Network, in a blog post. “This critical failure of the summit today seems to indicate instead that his government will ultimately support the U.K. secrecy model; for there could have been no possible better opportunity than this summit, in the wake of the Panama Papers, to take the decisive step necessary.”

Share.

About Author

Tom Murphy

Tom Murphy is a New Hampshire-based reporter for Humanosphere. Before joining Humanosphere, Tom founded and edited the aid blog A View From the Cave. His work has appeared in Foreign Policy, the Huffington Post, the Guardian, GlobalPost and Christian Science Monitor. He tweets at @viewfromthecave. Contact him at tmurphy[at]humanosphere.org.