I was dumb-struck when I heard yesterday how much money super-rich people and corporations are hiding using the offshore banking system. Billions of pounds are being put through bank accounts across the world to avoid paying tax – and by some very recognisable names.
The names in the leaked Panama Papers are making headlines today but back in 2010 Nicholas Shaxson, in his book Treasure Islands, made it very clear this was a growing problem reaching over £20tn at the time. That figure is likely much higher today. This matters because it is money that no longer supports the jobs and lives of ordinary people and the public services they depend on.
There is a lot of outrage at the enormous scale of hidden and stolen wealth – and rightly so. However, it is important to remember this is the tip of an iceberg and we should not be fooled into thinking it is the work mainly of corrupt despots and bad apples in overseas nations.
The City of London is the epicentre for much of the world’s shadowy banking. Most of the hidden wealth is the product of endless hours of hard work by ordinary people, siphoned upwards, sometimes through corrupt governments but it has become normal in some corporate and wealthy circles. Wrestling it back through introducing a fairer system requires a recognition of how widespread it is.
For me the question is not whether a criminal act has been committed, but why we have money and banking system that actively encourages this hoarding of wealth by a tiny minority of people. It does not need to and ultimately serves no-one – I doubt even those with the swollen offshore accounts.
In terms of well-being it has long been understood that increasing wealth above a relatively mundane £20 or £30k does not bring greater happiness, in fact it may well be the reverse.
The rapacious pursuit of wealth and power that some of these people are compelled by seems to me a problem and not something we should structure monetary and banking systems to serve.
In Bristol it is now very possible to avoid much of the system all-together by using Bristol Pounds. Thousands of people have started on this journey of using local money that stems the losses into the shadow banking system. It is a simple but powerful way to prevent money going offshore and sends a clear signal to those that run the current system that we want more positive values-based financial services that serve real people and real jobs.
We need many more people to join us and we are supporting similar schemes across the UK. We want to be a small start in a great and building movement to take back our economy. In two weeks we will meet with dozens of similar schemes at the Guild of Independent Currencies in Liverpool. Our goal is to support each other at a national and international level and together create money that serves society at large right now and helps create a better future too.
Ciaran Mundy is Chief Executive Officer of the Bristol Pound.
Picture credit: ActionAid UK