Is the City of London Good for England?


Sean Gabb

http://www.seangabb.co.uk/flcomm/flc168.htm
Free Life Commentary
,
A Personal View from
The Director of the
Libertarian Alliance
Issue Number 168
19th February 2008
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Are the non-Domiciled Rich and the City
Good for England?
by Sean Gabb

On my way out of the house this morning, I was called by a BBC researcher to discuss my opinion of non-domiciled tax status. As my opinions were not the ones expected, our conversation did not lead to any broadcast. But I was rather pleased with what I said, and I might as well spend the rest of my railway journey writing it down.

For my readers who live abroad, I should explain that resident foreigners in this country enjoy significant tax privileges. I, as a British citizen resident in the United Kingdom, pay tax on my income earned here and elsewhere in the world. A foreigner living here, who can persuade the authorities that his permanent residence is outside the United Kingdom, pays tax only on what income he earns in this country and on what income he brings in from abroad. Whatever he earns abroad and leaves abroad attracts no tax. That is why so many rich people have moved to London.

This privilege is now under attack. During the past eleven years, the British State has almost doubled in size. The Ministers have justified this by an endless chant of “investment in essential public services”. In truth—whether to a few white proles, or to Shopping Coordinators for Bearded Men with HIV, or to the various Tarquins and Jaspers who get the contracts to redesign logos and headed paper every time a Ministry name is changed—our tax money has gone on raising up an army of Labour voters. So far, most of us have not paid attention to the systematic looting required for this. Some of it was cleverly disguised. Much of it was enabled by an expansion of the world economy that brought in more revenue without increases in the rates of tax.

This may now change. If we go into recession, the amount of tax paid will fall at current rates. At the same time, there is no room left for imposing taxes that will not be noticed and felt. Therefore, if the payroll vote is to be kept on, let alone expanded, the Government must now openly increase taxes or inflate or both.

That is why the non-domiciled are to be hit with a poll tax of £30,000 per year. This will not put off the fiscal crisis. At £800 million, the sum projected is barely a fifth of one per cent of total government spending. Nor will it last very long. The non-domiciled are already threatening to leave. That means a farewell to Madonna and to Roman Abramovich. More importantly, it means a farewell to some of the most dynamic people in the City of London. To raise barely enough cash to run the National Health Service for a week, the Government is prepared to lose people who contribute billions in employment and indirect tax, and to damage a vast financial machine that generates more than a third of the national income.

But when a state is hungry, every little extra can look tasty. That it may not last beyond the next election is not something at all likely to worry our present set of politicians.

I think the lady from the BBC expected me to run out of breath as I denounced the scheme. She had me listed on her database as Director of the Libertarian Alliance, and took it for granted that I opposed taxes and supported the rich in general and the City of London in particular.

Well, I did denounce the taxes. They were bad, I said, because they stole the produce of a man’s labour: taxing is enslaving. They were bad, I added, because they enabled government spending that, even when not obviously wasteful or oppressive, tended to corrupt both direct and indirect recipients.

Her problem started when I moved to the rich and all those City people. Good riddance to the lot of them, I said. If it needed a tax to get them out of England, I might almost find something nice to say about taxes.

That was the end of our conversation. The BBC lady made her excuses and rang off. I imagine she then did a search in her database for Tory Boy Intellectual, and was soon hearing a lecture about London as “the Jewel in the Crown of the British Economy”.

I suppose I should explain myself. There are those who think libertarianism involves a defence of riches and of the rich. Some libertarians seem to agree. I do not. A libertarian is someone who wants to be left alone, and who wants to leave others alone, and who wants others to be left alone. People must be taken as the owners of their bodies and of what they create in or appropriate from the external world.

Given that all exchange and other association needs therefore to be voluntary, we move to an endorsement of what is called the free market. If some people do better in life in others, so much the better for them. If they contrive to pass on some part of their success to their children, so much the better again.

This is not, however, an endorsement of actually existing capitalism. A free society is not Tesco minus the State. It is a place of small craftsmen and farmers and traders, of artists and of unlicensed doctors and lawyers, and of others needed if individuals and free associations of individuals are to live well. We cannot say much more than this about the arrangements of a free society. But we can be sure it would have no place for big business as it now is found.

Big business corporatism, I would never seek to deny, is the best economic model humanity has known in over a century. It does generate vast amounts of wealth, and does ensure that much of this is distributed with some approximation of justice. Give me a choice between what we have and any of the state socialisms tried or recommended since Plato, and there is no doubt what I should choose. Nor is there any doubt, though, that the civilised nations made a big collective mistake around the middle of the 19th century. A system of scientific and industrial progress that might have grown into an unmixed blessing was partly hobbled and made into a new instrument of class domination by laws that allowed firms to incorporate and that gave shareholders limited liability for the debts of firms.

The result was a channelling of investment into firms that would never have been trusted had investors continued to face the risk of joint and several liability for debt. As these firms grew to enormous size, they monopolised or cartellised whole markets. They accepted and often quietly called for schemes of tax and regulation that harmed them, but harmed them less than their smaller competitors. In Britain and America, they demanded the underwriting by the State of their foreign expansions.

To ask whether big business bought or were colonised by the political class is irrelevant. All that matters is that we live in a world where political power and corporate wealth are possessed by different wings of the same ruling class. It is a ruling class that presides over whole nations of people transformed by brainwashing and mild but continuous discipline from human beings to human resources.

More than any other financial centre, the City of London stands as the heart and mind of the global corporate system. Every statistic the BBC lady was hoping I might drool on air—that there are more American banks in London than in New York, that German banks employ more people in London than in Frankfurt, that over a third of all currency conversions take place in London, and so on and so forth—is further condemnation for me.

Anyone who regards the City as identical with free market liberalism is deceived or trying to deceive. It is a place where markets clear, and where profit comes from working out returns in fractions of one per cent. It is one of the few places where reality and the textbook world of perfect competition nearly merge. It is, however, a place maintained in being by the scheme of state-granted privilege that is limited liability. At the very best, its activities are useful to protect us from high taxes. But in a world of free societies, there would be no City of London or anything like it.

A further evil of the City brings me back to the non-domiciled rich. Whatever their immunity from income tax, these are people who pay large amounts of indirect tax. They hand this over without much resistance or complaint, and they hand over large amounts. Political quietism plus great wealth is always dangerous to freedom. When the quiet rich are also foreigners, or at least highly mobile, is still worse. They will not protest at any use of their tax money to oppress other people than themselves. The moment their own freedom is infringed, they will retreat to somewhere more congenial.

For all the airs and graces they try to assume, this is what makes the non-domiciled rich different from the old landed aristocracy. Though tiresome in their defence of legal privilege and unearned wealth, these latter were incidentally useful in slowing the rise of big business corporatism. Like the rest of us, they had nowhere to run to, and were by training and inclination the natural leaders of resistance. Roman Abramovich and Madonna are none of these things. They live among us, but are in no sense with us. The same is true for the more anonymous bankers and fund managers who have for the past generation found this country useful as a trading platform. The same is true of the rich in general. Unlike the workers, who may have little else, the rich have no country.

Just about the only very rich foreigner possessed of any public spirit is Mohammed al-Fayed. He expresses that spirit in what may seem an eccentric cause. But he certainly cares something about this country. He is also domiciled here and is subject to the same taxes as the rest of us. Not surprisingly, he is hated and reviled by the establishment media, and has failed to obtain a British passport in an age when these are handed out to any parasite who can hold his place on the underside of a lorry.

In closing, Gordon Brown and his Ministers do not intend to do well by us. They are traitors to us in their external policies, and rapacious tyrants in all their internal dealings. But their desire for short term gain may set us on the path to a better world. And if they are not to be thanked for this, I am not inclined to join in the chorus of disapproval.

 NB—Sean Gabb’s book, Cultural Revolution, Culture War: How Conservatives Lost England, and How to Get It Back, can be downloaded free from http://tinyurl.com/34e2o3. You can help by contributing to publishing and distribution costs

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12 responses to “Is the City of London Good for England?

  1. Interesting and controversial posting be Sean! This ought to be also published separately and made available onliine nicely; what about it Nigel?

  2. Whether the non-domiciled rich have no country, I don’t know; They certainly do not belong to our country, the United Kingdom.

    Granting foreigners a massively more favourable tax position in Britain, tells us how our rulers view us as British citizens. Clearly, they see us as second class. If we one day obtain rulers who hold the status of British citizen as an honour and us as first class, then a great deal of improvement in our lot will flow from that state of mind.

    The entire progressive mindset is built on a small number of pillars. One of these is a hatred of everything that is established, traditional, natural and / or autonomous. Another, is a desire to treat us as children and prevent us from thinking for ourselves. Progressives loathing of Britain and everything British knows no bounds.

    Although “Blue Labour” (the party formerly masquerading as the Conservatives) lacks much of that mindset, they usually manage to achieve the same objectives. Many conservative members of parliament, I suspect view Britain as an adjunct of the City of London. If it is good for the City of London then they are for it. It would never occur to them to ask themselves, whether it is right to treat British citizens as second class.

    Given that the very rich in Britain today have opted out of any political leadership role, who then will represent the people and lead the resistance to the enemy class? Unfortunately, I don’t know the answer to that question.

  3. What would happen though, if limited liability was outlawed? Would there be no more Asda or Tesco? I’m not much of an economist but I love my supermarkets. They do give value for money in some respects. Seems like a case of needing to get rid of the bad aspects whilst keeping the good.

  4. My objections to one of Sean’s theses in the above were not to do with the status of “limited liability” (although I can’t figure how very large and costly projects would ever get under way today seeing the vast sums needed and the consequent risk to still only few individuals.)

    My first concern focussed on the immediate effects of the withdrawal of these people’s discrectionary spends in the UK (which may be quite large.)

    Granted that we live in a very imperfect and quite fascist setup now, in which ordinary British are treated worse by the state and the Enemy Class than these nondoms, I would, as a requirement of simple practical politics, NOT wish to see the bread (all there is in some places!) removed from the mouths of ordinary traders, suppliers of goods and services, and the like, by the free and easy decamping of these rich persons.

    Moreover, given that the taxation yield will be at best marginal; will create insult in the minds of nondoms far out of proportion to the hurt done them (the discussion of it is so public!); and that they are so freely mobile unlike, say, small local building firms who rely on them and their grand works, I can’t see the point of this measure.

    The govmint is about to retax “cheap alcohol” any day now, since Sir Terry Leahy has just requested this very measure!

    This will yield several billion a year right away since the poor and the oppressed are not about to be able to stop drowning their sorrows just like that. Taxing nondoms will pale into nugatory insignificance. See smoking and fags (and how consumption is not falling) and then also read your Daily Quisling-Graph today!

  5. Indeed, I think I would even bribe more nondoms to arrive, and settle here. At least they might be able to just about pour money into the wallets of the oppressed British working classes (which includes the middle classes) at a slightly faster rate than the state tries to funnel it out again.

    This place is like Cuba now, anyway. Why carry on pretending it’s not? Let’s just try to behave like surviving Cubans for now; times may get better after liberation.

  6. If the Brownmaster decides to tax cheap alcohol, then a very important chapter in my life is coming to an end…

    .-)

  7. In short, Sean is intellectually quite right about (a) the status within capitalism of “limited liability”, and its utility or otherwise, and (b) MAY also possibly be right when he questions the opposition to taxing nondoms, and indeed their utility to us also.

    However, I immediately reacted in their support whe I learned it was bust Gordon deciding to hit them, aided and abetted by the Tories. This to me was clear and simple socialist grandstanding, in front of an audience of (supposedly) voting masses who lives would never be badly affected by the disappearance of these people.

    It was “banning foxhuntung” all over again, wxcept this time it was a group of people that was to be hit.

    That’s a public populist-editorial-summary of my position, anyway. I am a populist editor, after all!

  8. Robin Ramsay, who edits “LOBSTER” and has written for the LA, follows this issue closely.

    He calculates that the entire UK would be better off if the City of London were to be given full independence and floated out to sea.

    An inordinate love of the City and its juicy perks has led to successive governments favouring the City’s interests at the expense of everyone else’s.

    Regards,

    Tony

  9. I don’t really recall “The City” enjoying the level of “perks” (and there are indeed lots these days of course), say, 50 years ago, or even 30. Yes, some people who worked in it were quite rich in relative terms, but not the run-of-the-mill dealers/brokers/traders/staff, unlike now.

    All strongly-taxating governments, and especially this one, ought to be careful of doing anything which might even HINT at turning off the tap of foreign-domiciled money and buisiness passing through London – against which it can take some sort of protection-rake-off, even if only in indirect ways.

    Let’s get this Stalinist shower-of-gun/camera-wielding, power-crazed thugs out of westminster first – then we cna worry about our precious principles, in a climate of business which is friendly to all – even the poor native British – on a level basis.

  10. Wow. That’s a memorable post that throws up many issues.

  11. A good discussion. I feel encouraged to write at greater length about the limited liability issue.

  12. Please do Sean, for it rather got lost in the general cloud of dust that you stirred up! A separate post maybe.