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(GUARDIAN UK) Holy cow, taxman! Featherweight activist battles the dodgers

Holy cow, taxman! Featherweight activist battles the dodgers
Tax Justice Network chief has seen issue of tax avoidance and havens take off as activists begin to win over public opinion
o Bibi van der Zee
o guardian.co.uk, Thursday 7 July 2011 19.55 BST

John Christensen, director of the Tax Justice Network, said: 'Western leaders look at Africa and blame their leaders for corruption but they don’t recognise that the systems we’ve put in place – above all the tax havens jurisdiction economy – are an open invitation to criminal behaviour, fraud, tax evasion, embezzlement, and non-disclosure.' Photograph: Marcel Mochet/AFP/Getty Images

Perhaps the easiest way to get a picture of John Christensen's daily life is to imagine him in a (very large) boxing ring. In one corner are ranged the UK government, the global financial services industry, a scattering of other governments, and the richest, most powerful people and corporations in the world. In the other, backed up by a handful of non-governmental organisations and activists, plus a small but growing group of members of the public, is Christensen, head of the Tax Justice Network (TJN). He is tall, slightly stooped, with a sweet smile and a habit of saying things such as "crikey" and "holy cow". The competition, it is obvious, is not quite equal.

But to Christensen, who has become the unlikely figurehead of a worldwide campaign against tax avoidance, the growing awareness of the issue has been tremendous, helped by the UK Uncut campaigns against retailers and other businesses .

"If we go back just 10 years I could probably count the number of people who had a genuine sustained interest in this subject on the fingers of my hands. We were a sad and lonely group, who, whilst we understood the issues reasonably well, had no political momentum behind us, and no clear vision of how to gather that political momentum."

Christensen himself realised in the 1970s that "holy cow, these tax havens are very important and no one's studying them". To him, it seemed that tax avoidance and tax havens were a real impediment to allowing developing countries to function properly, and also a moral issue for companies in the developed world; for the Jersey-born Christensen, paying a fair amount of tax was the duty of any good citizen.

On the inside

In the late 1980s he decided that in order to really understand the issue he would need to go inside the financial services industry, so he headed back to booming Jersey, climbing within a couple of years to the position of economic adviser to the government there.

Given his views, was it not astonishing that he should have been given the job by a government described in Nicholas Shaxson's bombshell book Treasure Islands as now being "utterly captured by the financial services industry"? He concedes that life became more and more difficult and that "within a couple of years I was clearly at loggerheads with the main government". In 1998 he gave up trying to hold the line, and headed back to the mainland.

But in 2002, after an encounter with some Jersey residents desperate to fight the takeover of their island by "haughty, unpleasant strangers", the Tax Justice Network was formed with Christensen as one of its directors, and in the years since then tax avoidance and tax havens have moved into public awareness.

Martin Hearson, of Action Aid, says the charity's annual meetings on the subject have gone from half-empty to standing room only, while Christensen says UK Uncut's high-profile campaigns against Vodafone, Boots and Fortnum & Mason among others have been "like a turbo-charge for us". Even the government has made loud noises about curbing tax avoidance, giving £900m to Revenue & Customs to fight it.

But Christensen does not believe the government is willing to tackle the issue and says: "That £900m needs to be set in the context of the £3bn of cuts that are being made to HMRC [HM Revenue & Customs]."

He believes that Revenue & Customs is just not equipped to deal with the growing problem of tax avoidance, estimated to cost the UK between £7bn and £25bn a year. "Many senior officers at HMRC have been telling me for a long time that they don't get the political support they need, that deals are being struck at the highest level, circumventing them, so they'll be in negotiations and they'll get a message from on high saying the deal's been struck. This is what happened with Vodafone," he says, referring to last year's alleged £6bn reduction in the telecoms multinational's tax bill.

Revenue & Customs has had 10 years of cuts, says Christensen, adding: "Many of the people who've gone were their most senior people. So there's a huge loss of expertise.

"The real truth of the matter is that the ones who have got expertise can double, triple, quadruple their salaries by switching to the private sector and joining the poachers," he says.

The focus of Revenue & Customs' tax avoidance campaign will be, as it has acknowledged, small businesses, with the exchequer secretary to the Treasury, David Gauke, telling a Commons select committee in May that "large corporates don't tend to be careless or dishonest".

The government's pursuit of tax competitiveness, where countries vie with each other to offer lower corporate tax rates, puts Christensen's hackles right up. "It's just a race to the bottom, a beggar-your-neighbour return to the protectionist policies of the 1930s, but these days it's not around trade tariffs, but around subsidising multinational corporations through the tax systems.

"It's no coincidence that when this government came into power almost the first thing it did was raise VAT rates so that ordinary people would pay more tax and then cut corporate tax rates.

"What's happening here is that the tax burden is being shifted from capital on to ordinary people."

And for Christensen and TJN, tax avoidance is a problem that is not only taking money out of the pockets of UK taxpayers but directly impacting the economies of developing countries.

"Western leaders look at Africa and blame their leaders for corruption but they don't recognise that the systems we've put in place – above all the tax havens jurisdiction economy – are an open invitation to criminal behaviour, fraud, tax evasion, embezzlement, and non-disclosure."

TJN has set out a list of priorities for reform, which include requiring multinationals to say how much tax they pay in each country they operate in, treating them as one entity for tax purposes (so-called unitary taxation), increased transparency, progressive and equitable taxation, a level playing field in competitive markets, and increased corporate responsibility.
Change of culture

It also wants a change of culture regarding, and over the next year it is launching a number of initiatives: a new social media platform ("the internet has been fantastic for us," says Richard Murphy, another TJN founder whose prolific blogging on tax affairs is followed by thousands), a film and a big conference early next year. "By the end of this year we'll be represented on six continents," says Christensen, possibly more surprised than anyone to find himself at the head of a rapidly growing global campaign.

But can tax campaigners really make an impact against such huge vested interests? Christensen puts his faith in public support.

"I've always felt we're going to make no progress here at all until we have the tanks on the lawns, with public opinion forcing political change and counterbalancing the extraordinary lobbying efforts in Washington, Brussels, London and so on. We do have a hill to climb. But I don't have the luxury any more of being able to say 'bloody hell, this is too big an issue'."

CV

Born 13 May 1956

Education Victoria College, Jersey; Reading University; postgraduate study at Templeton College, Oxford, and the London School of Economics

Career Trained at Unigate; worked in private financial sector in Jersey; economic adviser to Jersey government; work at Menas Associates political risk consultancy; director of Tax Justice Network

Family Married with two sons

Interests Competitive sailing, film, long-distance walking, keeping chickens

Labels: TAX EVASION, TAXATION

posted by MrK @ 3:56 PM