The SNP need to move fast to avoid getting caught up in the Panama Papers scandal. As it stands, they appear to be on the side of the criminals.
Huge amounts of data have leaked from a Panamanian law firm called Mossack Fonseca, which specialises in helping rich people hide their wealth through the creation of offshore accounts.
The data show the filthy rich at their dirtiest.
So far, a Scot has been exposed for setting up a front company to sell North Korean arms, Russia’s Vladimir Putin has been accused of hiding a billion pounds of uncertain origin and Iceland’s prime minister is history for hiding an investment in a company which stood to gain from the rescue of the country’s banks’ post-2008 crash.
After three failed attempts to address concerns, Downing Street has issued a fourth which amounts to a promise the UK Prime Minister will not gain from his father’s offshore trust.
This is all fun and games for the 99.99% of us who should be so lucky to have enough money that we feel the need to take the advice of a Panamanian lawyer. Schadenfreude doesn’t begin to cover it.
The story is a modern one. There are something like 11 million pages of information that have become available such a leak can only happen in a digital world.
Deserved cash
That said, the tale is a very old one. Very rich people acquire a sense of entitlement: it is not luck that has made them rich but hard work and they deserve every penny.
That the rest of the world works harder but is considerably poorer doesn’t seem to upset this rationalisation.
A good example is Lionel Messi, who appears caught up in hiding earnings from the Spanish taxman.
The footballer for Barcelona earns something close to a hundred million Euros a year yet still feels the need to squirrel the money away like a man who fears he won’t meet next month’s rent.
Hiding cash is not inevitably a crime but is usually so. It is a bid to dodge tax demands and police questions about where the money comes from.
Simply disguising the money is never the full story. The rich want to get richer, not just by avoiding the tax but using the money to make more money.
There are a million different sales pitches on how to get money to multiply but they boil down to the same few methods, the oldest and best of which is this buy land.
It’s a horrible twist that the game of Monopoly was invented to show the injustice of land ownership and capitalism, only to become a celebration of property avarice.
We all know how land value has become the great global game of the last few decades. Inflate the price of property and you can get national economies to rise.
Our political leaders have become Monopoly fanatics, no longer clear how else to create growth.
The escalator of prices is not the main thing, though. The reason why land is always a good bet is rent.
This is the fundamental of western capitalism.
It is, therefore, no surprise that the Panama Papers link all manner of political regimes to property speculation not least in London. Dirty money ends up in property deeds.
Interestingly, the Cameron family offshore trust is named after its ancestral land Blairmore though there is no suggestion the funds are criminal in any regard.
This is why the regulation of land ownership matters. If you don’t have rigorous and transparent property records, you are aiding and abetting criminals.
Big reviews
In the last two years the SNP, in government, held two reviews. One was on land reform, the other on local taxation. These were big events, the stuff of multiple cabinet discussions.
Land ownership and tax were inextricably linked in the government’s thinking. For example, the stand-out promise from the SNP before the land review began was that country estates would no longer be exempt from business rates.
The land review concluded: “The Scottish Government should make it incompetent for any legal entity not registered in a member state of the European Union to register title to land in the Land Register of Scotland.
“This is to improve traceability and accountability in the public interest.”
The review was referring to the fact that, unusually among EU states, anyone can buy and own land in Scotland while hiding their identity.
Dropped
Astonishingly, the SNP dropped land ownership transparency from the final legislation. No explanation was given at the time and none since.
It is impossible for the SNP not to have known the effect of this. Their minds were consumed with advice about tax regulations, assets and how to fund the government.
They actively chose to reject a simple measure, as set out by the land review, which would have blocked tax-dodging and criminal offshore funds using Scottish communities to hide money. Scotland deserves an answer to the question why the SNP acted on the side of the super-rich against the interest of the people and an immediate pledge to enact new legislation to correct this error.