Recently, the world of the millionaire has become an open secret. The Pandora Papers have emerged as the successor to a series of whistleblowing documents, giving us rare insight into the frivolous lives of the 1%.
Consisting of 11.9 million leaked documents and totalling 2.9 terabytes of data, the Pandora Papers were published on the 3rd of October by the International Consortium of Investigative Journalists. Alongside the Panama and Paradise Papers previously leaked by the organisation, it exposes the offshore accounts of over 400 public officials from nearly 100 different countries. This includes over 100 billionaires and their 29,000 offshore accounts, meaning that an estimated total of $32 trillion is being hidden from tax. This becomes particularly ironic, given recent complaints from government ministers regarding the lack of investment into social care and vital services.
Yet trends of tax avoidance and embezzlement are not alien. Ex-Prime Minister David Cameron allegedly benefited from a Panama-based offshore company, Baltimore Holdings back in 2016. Furthermore, there is an ever growing number of celebrities becoming known for tax avoidance. Alongside this are examples such as the Ireland V. Commission case, in which the EU Commission accused Ireland of granting illegal tax benefits to Apple. The history of tax avoidance is not a recent one, but the Pandora Papers have finally led to a backlash from within, albeit a stiff one.
Despite the European Union passing an Anti-Tax avoidance Directive in January 2016, a move to abolish banking secrecy and money laundering, the crux of the problem still remains. The Directive focusses primarily on corporate tax, with a further move to place a minimum tax on tax havens for corporate income not being introduced until 2023. This ignores the individuals who still avoid tax. With this semi-legal loophole, will tax avoidance truly be crunched down on? Moreover, bloc members including Malta and Cyprus still serve as tax havens, meaning that the legislation rings hollow. Alongside this are the recent removals of certain tax havens from the EU's ‘blacklist’ of non-cooperative jurisdictions. Additionally, the British Virgin Islands still remain off the list despite accounting for 2/3rds of shell companies in the world.
Yet again this seems to be being brushed back under the (£1 trillion) rug. Instead, politicians such as Boris Johnson are reattributing accusations of Tory embarrassment to Tony Blair. Despite Mohamed Amersi - a major Tory backer - advising on a £162m Swedish telecoms deal later found to be corrupt.
What has been revealed is a plot twist akin to any poorly written media. That Smaug-like millionaires hoard the wealth that could instead be used as money for vital services. Given the legacy of austerity within the UK, having the figures finally revealed concerning how little is being invested, is truly the sour cherry on the cake.