I had a great interview yesterday on the Max Keiser programme, during which we discussed the dichotomy that is George Osborne! Max teased me for my recent blog in which I accused George of unwittingly facilitating financial crime in the City! Of this, more later!
George Osborne has now been defeated in the House of Lords over his deceitful attempts to deny working tax credits to ordinary men and women who are working for a living, but at a low standard of income.
I say his plans are deceitful because a) they were not part of the Tory Election Manifesto in the first place, Osborne refused to say where he would make cuts in public expenditure, and Cameron had said publicly that he would not cut tax credits (although it is now not clear whether he meant child tax credits or working tax credits)! Secondly, the Tories tried to cheat by putting the deal through in the form of a Statutory Instrument (which the second chamber can vote against) as opposed to a finance bill, which by tradition, the second chamber would not vote down.
Perhaps what is more important is the fact that this blatant attempt to hoodwink the House of Lords, backfired on the Tory toffs, and they have been made to pay for it. It is all typical of the way in which they think to run politics in the UK, it’s all part of a silly public schoolboys’ game, in which the clever side which can dissemble better, wins the prizes. It is all predicated along the lines of the debates in the Oxford Union, during which witty and clever tricks are pulled on the opposition. Under other circumstances, it would all be so terribly funny, except that it has terrible implications for the lives of hundreds of thousands of working people who rely on working tax credits to keep their heads above water.
Of course, the Tories are whingeing and bleating, accusing the House of Lords of unconstitutional actions and threatening all kinds of dire retribution, including the possibility of flooding the second chamber with up to 150 new peers to give the Tories a majority there.
It isn’t going to happen of course. Just the thought of the toffs party creating 150 new peers to railroad through unpopular Tory policies designed to grind the faces of the poor, is so risible, that even this present bunch of spivs, second-rate accountants and Little Englanders will think twice before doing such a stupid action.
But the point to remember is that this piece of political chicanery was designed to take away £4.4 billion in working tax credits from people who need it most, people who are working and who may have young children and who, without the benefit of this payment, will find it incredibly hard to manage.
Working tax credits are in fact a subsidy on employers who have been encouraged to pay very low wages. The money which the tax payer is paying out is subsidising the employers who are paying wages, some of which are below the statutory minimum.
I don’t have anything against a man or woman who starts up a business, with the aim of creating a product, or providing a service, and who, in so doing, provides work for ordinary people. As long as the employer pays a fair wage on which his workers can live with dignity, and pays the correct level of taxes he is required so to do, then I don’t care if the employer becomes very rich indeed.
But if he is paying wages which are so low that the employee needs to seek a state handout in order to survive, then I want to know why I am subsidising that employer’s profits. I don’t want to live in a welfare-benefit society, I want to live in a society where men and women are paid fairly and sufficiently so they don’t need recourse to welfare, but it is not realistic to take tax credits from people now in return for the promise to the future of better pay in 5 years time! That doesn’t cut any mustard at all!
These points were all raised and aired yesterday in my talk with Max Keiser.
The biggest point I wanted to make was that in their attempts to curb the benefit culture, the Tories are attacking the one group of society, who can afford it least, while at the same time, they are rewarding a small group in society, the bankers and the financiers with a very great deal of money, men and women who are busily getting very rich indeed on the proceeds of the foreign criminal money which is flooding into London.
So, on the one hand, Osborne is seeking to take away money from people who have been depending on its legitimate receipt in order to make ends meet, while at the same time, turning a blind eye to the wholesale breaking of the criminal law, in the way in which the crooked bankers handle and facilitate vast amounts of foreign money which is finding its way into London.
So there is one rule for the absurdly rich, dishonest and powerful in society, and another for the poor and marginalised.
Now, at this point, I expect to start receiving messages from the unreconstructed spivs who sometimes read my blogs to see how much they can disagree with me.
‘If we don’t accept this money, it will merely go elsewhere’ is quite a common observation.
‘It has always been like this, why are you making such a fuss’ is another.
My point is that we have laws in this country which have been introduced to prevent the proceeds of crime from being easily assimilated into the financial system.
Those laws and regulations require banks to undertake significant checks and due diligence procedures to ensure that they know the provenance of the funds, and so they can demonstrate a good knowledge of their customer, his or her business practices, and sources of finance and wealth, in order to be able to satisfy themselves and the regulators, that the funds they are handling do not come from illicit or illegal; sources.
Put it like this, if a man were to walk into a bank with a bag marked ‘swag’, we might think it odd if the bank teller did not make some enquiries as to the provenance of the money being offered to his institution, before accepting it!
The fact that the money is paid into the bank from an account held in some offshore jurisdiction, or from a solicitor’s client trust account, does not release the banker from his obligations to make the necessary enquiries to establish the lawful provenance of the money.
That illicit money may only be passing through the financial system via the bank account in London, but you may rest assured that the bank will be taking a fee for such a facilitation, and the larger or smellier the sum of money being transmitted, the bigger will be the fee.
But George is making it easier and easier for his friends in the banking sector to accept this money, and that is why I accuse him of unwitting complicity in the facilitation of international organised crime.
You do not help to prevent crime by de-regulating the financial sector within which much of the criminal facilitation is taking place. If you are serious about trying to prevent crime, you first make sure that the regulations are being applied and properly performed, and we know from repeated reports from the FCA and the NCA that this is not happening, yet George just goes blithely on ignoring them!
You should make sure that the banks are taking the necessary steps to identify potential Politically Exposed Persons, before their money is paid into your bank. In a story in The Times, yesterday, it was reported.
“...General Franco amassed a fortune by siphoning hundreds of millions from the Spanish state, according to a new book.
The dictator, who died in 1975 after ruling Spain for 36 years, took money given to the state, and from state enterprises, at a time when millions were starving in the aftermath of the civil war from 1936 to 1939...”
None of this money has been recovered and Franco’s descendants are still living off the benefits of its criminal origins.
When I was a serving detective, we used to say that if there were no people willing to handle the dishonest proceeds of thieves and robbers, it would make life significantly harder for the thief to benefit from his crimes. That is why the Courts have traditionally punished handlers more severely.
The same goes for the banks in their handling of stolen money, if they were less willing to accept the money offered to them in dubious circumstances, criminals would find it much harder to profit from their crimes. Yet strangely, nothing is happening to bring the bankers to book.
Iceland has so far sentenced 26 bankers and financiers to prison terms for crimes related to the global financial crisis. Their combined jail time is 74 years. A great many more prosecutions are expected. In Britain, no banker has yet been tried or jailed for such crimes. It makes you wonder whether bankers might be some sort of "protected species"
We should not be expected to continue to put up with this egregious level of criminality and wrong-doing from within our banking system, and bankers should not be able to get away with the winks and the nods they are being given from the Treasury as to which money they can accept.
Again, a staggering level of British hypocrisy is involved.
If the Government wants the banks to be able to accept this loose money with impunity, then the least they should do is to repeal the laws which aim to deal with the criminal laundering of dirty money.
Take these laws off the statute books and advise the banks that it is now open season for them to accept any money they want to. Of course, this would not go down well in our relations with Europe or the USA for that matter, and so rather than face the degree of political opprobrium which would necessarily follow such a decision, the Government turns a convenient blind eye and lets the banks carry on with’ business as usual.’