07 June 2018
A British triumph.
By John Watson
Visas refused; funds frozen. The attack by the UK authorities on Russian oligarchs seems to be well under way. Much of it is a reaction to the nerve gas attack in Salisbury and to Russian aggression in the Middle East. We cannot strike at Putin’s divisions so we will target his friends instead. Let’s keep them out and their money as well. After all, much of it was made in deals struck in those turbulent days after the fall of the USSR. That wouldn’t pass modern money laundering tests. No, it’s all too dodgy; we need to keep them out, regardless of the contribution which they may have made to British institutions over recent years. We only want investment from nice people in friendly countries. Doubtful money would jeopardise our leadership of the drive against global corruption.
Yes, we all stand taller when we stand on our principles and there are many who would have been welcomed here in the past who would now be turned away as not quite respectable enough. But the circle of perspectives continues to turn and it is worth asking how we will feel if one of our European partners decides to be a little less choosy than we are and to invite those to whom we have refused visas to go and spend their cash in their country. After all, it must be quite tempting. It is an inexorable law of finance that the presence of large sums of money brings wealth into the local economy so the game is well worth the candle. Plenty of our EU friends recognise this and, to be honest, they are not a particularly scrupulous bunch. After all Luxembourg has historically made its money out of tax avoidance on a truly industrial scale and some of the tax deals struck by Ireland were a little surprising too. Would other EU countries be attractive destinations for the super-rich? Not all of them, of course, but if Paris scrubbed itself up a bit it could really be quite charming. I suspect that Mr Macron is eyeing up the oligarch business every bit as carefully as he is eyeing up London’s euro trading platforms.
Well, let them have it. We have lots of friends who will do business with us, friends in the United States for example. Later this year, Mr Trump, the leader of our most powerful ally, is to visit London. The red carpet will be rolled out and he and the Queen will hobnob over tea and buns. Yet, despite the efforts of officialdom, he will know that his presence here is resented. After all, Sadiq Khan, the Mayor of London, made it clear in January that he was not welcome, and although Khan is willing to meet him, that is so that he can demonstrate how diverse we are. It will be a patronising lecture from the Mayor rather than a welcome from a friend. Mr Trump would scarcely be human if he did not compare the resentment here with the fulsome treatment he received in Paris. To pretend that that will not affect policy is naïve but at least Mr Khan’s innate superiority will not have been compromised. A victory for British superiority in other words.
Then, of course, there are the British Dependent Territories, home to large amounts of illicitly gained cash and subject to a resolution by Parliament, now adopted by the government, under which they will have to introduce registers of ownership. Quite right too when you think about it. The ungodly must be chastised and you can’t sensibly do that without information telling you who they are. Let us at least see that there is no dark money hiding behind the British flag so that we can keep our leadership in matters of rectitude.
Oh yes, one minor issue. We do not, by convention, interfere in the internal affairs of these territories and it is part of their relationship with Britain that we should not do so. Well, so what? How much would we care if the dark money moved to other places? Not much, I think. Suppose even that some of the territories decided to become independent and to give up our protection. Would that matter? No, not really. What then if they decide to find other protectors to take our place, Russia or China perhaps? Hmmm, that is more difficult.
The purpose of this article is not to go into the whys and wherefores of these individual issues. In each case the UK (or Mr Khan) has the moral high ground. It is just that taken together they give a picture of rather a priggish UK which is rather quick to tear up existing arrangements or friendships in the name of morality. That may be pleasing to the angels but it is probably less pleasing to investors and trading partners, who prize certainty and predictability above everything. One day when we have left the EU and become the most successful trading nation on earth we will be able to follow our inclinations without wondering about how our stance will affect those who do business with us. Still, we’re not quite there yet, so for the moment it might be wise to keep our morality and superiority in line with that of our competitors rather than striking out to become the world leader.