No one knows quite how much money is hidden in tax havens, but there is good reason to think that one third or more of the world’s dirty money is in Switzerland. This includes at least £125 billion of UK money. In the past few years the European Union and the UK have made real progress in getting access to data on funds held there, both officially through the EU savings tax directive and unofficially through stolen data. The US has made so much progress in similar ways that it was widely thought by the beginning of 2010 that Swiss banking secrecy – the deliberate construct designed by the Swiss to help people evade the taxes they owe in their home states – might at last be broken for good.
But then the Swiss fought back. In 2010 the powerful Swiss Bankers’ Association suggested a deal that would undermine the EU and US initiatives. Their gall was extraordinary. The offer was that they would act as tax collectors for other countries in exchange for anonymity on behalf of their customers. In other words, they’d pay some cash now in exchange for keeping banking secrecy.
At first the world looked on, bemused by such an offer from those who had to date put all their effort into aiding tax evasion. But two countries bit the offered cherry. One was Germany – although it looks highly unlikely that its deal with Switzerland will get parliamentary approval. That leaves the UK alone as a likely participant in the arrangement.
The upfront advantage of the deal is easy to see. The Swiss bankers, in effect admitting that they know which of their clients have evaded tax, have agreed to pay over between 19 and 34 per cent of the balances on those accounts to supposedly clear past tax liabilities. From 2013, moreover, they have agreed to deduct tax at rates of up to 48 per cent from interest, dividends and capital gains paid into these accounts where the taxpayer refuses to allow them to disclose details of the income in question to HM Revenue and Customs.
The advantage for George Osborne may be a few billion now, but the implications are disastrous. The clear message that this deal sends out is that criminality pays. Tax evasion is a criminal act. So is facilitating it. And yet this deal guarantees that the UK will not now prosecute those Swiss bankers who facilitated the crime – which must be good news for Tory trade minister Lord Green, who was formerly both chairman of HSBC and its Swiss private bank.
More than that, the deal guarantees the Swiss that the UK will no longer buy data stolen from their banks that provides the names and addresses of those committing this crime, so guaranteeing them anonymity. And the UK has also agreed that it will never investigate more than 500 cases a year of UK citizens evading tax through Switzerland – even though it is known that tens of thousands are likely to have done so – which puts an effective limit on the operation of justice in the UK to appease Swiss bankers who facilitated criminal behaviour.
As for the UK-based people who committed these crimes, the deal guarantees them anonymity for good – and therefore immunity from prosecution even though it is clear from the amount of money that will now be paid that their crimes involved enormous sums. Indeed, I have estimated that the tax that should be paid if all was settled with the normal levels of interest and penalties would be around £25 billion – at least five times what Osborne is likely to get from the deal.
The result is that many tax criminals will pay no more than 20 per cent of the tax and penalties they owe to have their affairs ‘regularised’ – the quaint way this deal terms the arrangement of whitewashing their calculated long-term criminality.
Compare that with the treatment of this summer’s rioters. I don’t excuse criminality, but these acts were by young people, caught in the spur of the moment who in most cases no doubt acted in ways they might subsequently have regretted. Their acts are not being forgiven. Their moments of folly are being exceptionally harshly punished when the hardened tax criminals are being forgiven.
No wonder Osborne and his party have been coy about this news. Because for a party of supposed law and order the Swiss tax deal reveals the truth: the Tories still believe that there should be one law for the rich and another for the poor, and that only the little people need pay tax.
Hilary Wainwright argues against reclaiming populism for the left and for a leadership that supports people’s capacity for self-government
It may seem as though these apps are working for us, but we are also working for the apps, writes Kurt Iveson
It's over 100 years ago that domestic workers began to organise to demand the same rights as other workers. Yet with LSE cleaners on strike this week, historian Laura Schwartz asks: how much has really changed?
Omar Barghouti asks whether Donald Trump, in his recent break with America’s long-standing support for the two-state solution, has unwittingly revived the debate about the plausibility, indeed the necessity, of a single, democratic state in historic Palestine?
Glenn Greenwald was interviewed by Amandla Thomas-Johnson over the phone from Brazil. Here is what he had to say on the War on Terror, Trump, and the 'special relationship'
In 1972 David Widgery wrote about the bitter intensity of love in capitalism
Andrew Dolan on how the left must match the anti-establishment rhetoric of the right, but with a different politics
Emma Snaith speaks with directors Emer Mary Morris and Nina Scott about the power of theatre to encourage community resistance to estate demolitions.
In the first of a series of interviews with migrants' rights and racial justice activists from the US, Marienna Pope-Weidemann speaks to Peter Pedemonti, co-founder and director of the New Sanctuary Movement in Philadelphia
Photos from The World Transformed festival in Liverpool, by David Walters
Secrets and spies of Scotland Yard
A new Espionage Act threatens whistleblowers and journalists, writes Sarah Kavanagh
#AndABlackWomanAtThat – part II: a discussion of power and privilege
In the second article of a three-part series, Sheri Carr reflects on the silencing of black women and the flaws in safe spaces
How progressive is the ‘progressive alliance’?
We need an anti-austerity alliance, not a vaguely progressive alliance, argues Michael Calderbank
The YPJ: Fighting Isis on the frontline
Rahila Gupta talks to Kimmie Taylor about life on the frontline in Rojava
Joint statement on George Osborne’s appointment to the Evening Standard
'We have come together to denounce this brazen conflict of interest and to champion the growing need for independent, truthful and representative media'
Paul O’Connell and Michael Calderbank consider the conditions that led to the Brexit vote, and how the left in Britain should respond
On the right side of history: an interview with Mijente
Marienna Pope-Weidemann speaks to Reyna Wences, co-founder of Mijente, a radical Latinx and Chincanx organising network
Disrupting the City of London Corporation elections
The City of London Corporation is one of the most secretive and least understood institutions in the world, writes Luke Walter
#AndABlackWomanAtThat: a discussion of power and privilege
In the first article of a three-part series, Sheri Carr reflects on the oppression of her early life and how we must fight it, even in our own movement
Corbyn understands the needs of our communities
Ian Hodson reflects on the Copeland by-election and explains why Corbyn has the full support of The Bakers Food and Allied Workers Union
Red Pepper’s race section: open editorial meeting 15 March
On 15 March, we’ll be holding the first of Red Pepper’s Race Section open editorial meetings.
Social Workers Without Borders
Jenny Nelson speaks to Lauren Wroe about a group combining activism and social work with refugees
Growing up married
Laura Nicholson interviews Dr Eylem Atakav about her new film, Growing Up Married, which tells the stories of Turkey’s child brides
The Migrant Connections Festival: solidarity needs meaningful relationships
On March 4 & 5 Bethnal Green will host a migrant-led festival fostering community and solidarity for people of all backgrounds, writes Sohail Jannesari
Reclaiming Holloway Homes
The government is closing old, inner-city jails. Rebecca Roberts looks at what happens next
Intensification of state violence in the Kurdish provinces of Turkey
Oppression increases in the run up to Turkey’s constitutional referendum, writes Mehmet Ugur from Academics for Peace
Pass the domestic violence bill
Emma Snaith reports on the significance of the new anti-domestic violence bill
Report from the second Citizen’s Assembly of Podemos
Sol Trumbo Vila says the mandate from the Podemos Assembly is to go forwards in unity and with humility
Protect our public lands
Last summer Indigenous people travelled thousands of miles around the USA to tell their stories and build a movement. Julie Maldonado reports
From the frontlines
Red Pepper’s new race editor, Ashish Ghadiali, introduces a new space for black and minority progressive voices
How can we make the left sexy?
Jenny Nelson reports on a session at The World Transformed
In pictures: designing for change
Sana Iqbal, the designer behind the identity of The World Transformed festival and the accompanying cover of Red Pepper, talks about the importance of good design
Angry about the #MuslimBan? Here are 5 things to do
As well as protesting against Trump we have a lot of work to get on with here in the UK. Here's a list started by Platform
Who owns our land?
Guy Shrubsole gives some tips for finding out
Don’t delay – ditch coal
Take action this month with the Coal Action Network. By Anne Harris
Utopia: Work less play more
A shorter working week would benefit everyone, writes Madeleine Ellis-Petersen
Mum’s Colombian mine protest comes to London
Anne Harris reports on one woman’s fight against a multinational coal giant
Bike courier Maggie Dewhurst takes on the gig economy… and wins
We spoke to Mags about why she’s ‘biting the hand that feeds her’
Utopia: Daring to dream
Imagining a better world is the first step towards creating one. Ruth Potts introduces our special utopian issue
A better Brexit
The left should not tail-end the establishment Bremoaners, argues Michael Calderbank