Redefining corruption

David Ellis and David Whyte
Tuesday, 3 May 2016

The recent leak of the Mossack Fonseca ‘Panama papers’ has focused attention on how wealthy individuals have established companies in off-shore tax havens as a method of tax avoidance.

Panama is an ocean away and seems to confirm the perception that in order to avoid tax, the wealthy must salt their money away in less regulated foreign climes. Yet, about half of the companies represented by Mossack Fonseca are registered in British tax havens, reflecting the fact that a significant share of this global practice is in territories that are responsible to the British Crown. Indeed, some of these havens are very close to home, such as Jersey and Guernsey.

Whilst much of this is probably legal, the public reaction to the ‘Panama papers’ and the opaque nature of these arrangements, demonstrates widespread concern about the collusion between the wealthy and their tax advisers, and, crucially the UK’s global leadership role in facilitating such arrangements that deny revenue to the public purse.

In this Briefing, David Ellis and David Whyte consider whether such collusive relationships are also a feature of domestic governance, and bring to the fore the question of how corrupt British government practices are, and challenge the belief that such activities are rare in the ‘mother of all democracies’.

Over the last generation, the revolving door between the private sector and government departments, and the ever closer relationship between them, has made many question in whose interests government ministers and civil servants are working: public service or private benefit?

The results of the YouGov survey, commissioned and analysed by the authors in this Briefing, will leave the reader in little doubt that the public believe a number of established practices, including the Private Finance Initiative, introduced by the Conservative Government in the 1990s, should be prohibited because they represent a collusion between government and the private sector at the public’s expense.

The authors call for a national conversation about what they describe as the ‘collusive relationship’ between government and private business.

This Briefing reflects the Centre for Crime and Justice Studies’ commitment to fostering a greater knowledge of the potential harms faced by citizens, and of how they might best be regulated and reduced.