There's a great hoo-ha at the moment in the UK about things offshore. A recent release of hitherto secret information has revealed that several influential individuals have investments held offshore. This means that they have invested funds in organisations registered elsewhere than the UK, to take advantage of more favourable terms. Those favourable terms can include such things as lower tax rates, greater secrecy, and differences in regulations which enable the saving of money.
There is, in many cases, no indication that the individuals concerned have done anything illegal. Offshore investing has a long history. And it got me to thinking: what, exactly, is the problem that the media are feeding on? What, in our, the readers', perceptions, is this news stimulating? Certainly, if you watch the UK news at the moment, there is an impression being spread that something dodgy is being exposed, that wealthy people have been doing what they shouldn't do, and that something should be done about it.
As with many stories with a scandalous feel to them, the public is feeling its way as it goes. Cultural viewpoints have a way of developing themselves as they go, using news events as catalysts for changes in ideology.
Picking out a few of the materialising assumptions, some of which may not be conscious in everyone's minds, what do we get as emergent ideas?
Let's choose an example of such news stories, and then try to take apart what it is inciting.
Lewis Hamilton, the racing driver, is being accused of acquiring a private jet via the Isle of Man, to take advantage of a VAT exemption on planes exclusively for business use. Additionally, it is alleged that he in fact went on to make some private use of the jet.
There are a range of assertions that members of the public might make in their minds in response to the story. Teasing apart a few of the ethical assumptions we might apply, here is a short list of statements you might approve or disapprove of:
1. A citizen should pay home country tax on all their earnings
2. A citizen should not use transactions outside their home country to reduce their tax liability
3. A citizen should not make financial transactions in secret
4. A citizen should not benefit financially from making a false statement
The first three, while possible moral views, are, as a matter of fact, not the legal position in the UK. Legally, the UK allows certain offshore schemes to avoid tax, and does not generally require immediate public disclosure of such schemes. Number four may have the law on its side - Lewis Hamilton may have fallen foul of tax regulations in claiming exclusive business use of his plane.
THE POWER OF LANGUAGE
Regarding the first three: while fiduciary loyalty and openness are what the public may like in a rich citizen, they are not legally required. If UK citizens want them, they may have to press for legislation to require it.
So what is all the fuss about?
I suggest the power of the story is in the language used by the journalists, and it is this language that may ultimately incite change. The key words here (even if they are not always uttered out loud) are:
1. Disloyalty
2. Secrecy
The feeling left by the language of journalists, is that Lewis Hamilton, in seeking to invest money elsewhere, is being (a) disloyal to his home tax regime, and (b) secretive in order to gain an advantage. Compare these two sentences:
1. Lewis Hamilton bought a plane via the Isle of Man
2. Investigations reveal that Lewis Hamilton avoided taxes of £3 million through an Isle of Man scheme
Using the language of revelation and exposure makes the original act sound more sinister and secretive. And in saying 'avoided taxes', there is a double hit. Avoiding can be positive, but has many negative connotations; and 'taxes', in the plural, rather than 'tax' in the singular, sounds less technical, and more as though Lewis Hamilton is avoiding what most people have to pay. In this way, the language used by journalists can emphasise social division, and stimulate a sense of social injustice.
If UK citizens want new legislation that requires UK citizens to maximise the UK tax they pay, and publicise all of their financial information, then that option is open.
I just have a couple of balancing reflections.
RELATIONSHIP MANAGEMENT
Imagine you are in a relationship with someone who requires you to do nothing unless it benefits them. If you do, then they accuse you, directly or indirectly, of disloyalty and secrecy. Under UK legislation, this can be classified as controlling behaviour, and there is a law against it. Carrying the analogy across to the UK's financial affairs: is it a good way of encouraging people to be UK citizens, or residents in the UK, if the government and media insist that to benefit from an offshore transaction is to be disloyal and secretive? Do we want to become a world of selfish countries, with each government only interested in its own benefit? Just asking.
OTHER ACTIVITIES
Have you holidayed abroad? If so, how do you feel about it being characterised as an offshore transaction?
What a disgrace! Instead of supporting your home country and investing your money there, you skulked abroad and gave your money to foreigners! You avoided traditional UK weather in order to benefit from enhanced conditions offshore. Shame on you!
Have you learned another language? If so, how do you feel about that being characterised as an offshore ruse?
What a disgrace! Instead of supporting your home language and enriching it, you slipped away to evening classes and used your hard-earned brain capacity helping to promote a language not your own. You avoided your traditional words in order to benefit from an enhanced relationship with those that use other languages. Shame on you!
SUMMARY
I guess I am suggesting we think carefully about what world we are trying to create. It is all very well to be watchful of hypocrisy, and to ensure that those with wealth and power are aware of the great responsibility they can hold to behave with dignity and respect. Speaking truth to power is a great function of the media.
But readers of the media must be careful that they are not led into hypocrisy themselves. It is easy to view the rich and powerful as a different species, prone to disloyalty and secrecy. It is harder to realise that we can all, even when we think we are being righteous, be prone to controlling, intolerant and invasive behaviour.
Offshore is not necessarily sinful. A sense of balance, perhaps, would help.
