Book review: ‘Butler to the World’by
Oliver Bullough’s latest book compares the efforts of UK governments, bankers, lawyers and accountants, to the work done by Jeeves on behalf of Bertie Wooster. The resulting read is more horror than comedy.
Oliver Bullough is never going to become a politician. That is because, rather than courting popularity with the great and the good, the financial journalist goes out of his way to expose wrongdoing by the super-rich, taking pleasure in attacking those who facilitate it.
Having set out his stall in his previous book Moneyland, Bullough moves into top gear in Butler to the World (published by Profile) cynically comparing the efforts of succeeding UK governments, enthusiastically supported by greedy bankers, lawyers and accountants, to the work done by Jeeves on behalf of Bertie Wooster.
Where PG Wodehouse’s butler helped one rich man and a few of his friends to enjoy the high life, his successors today are accused of doing the same on an industrial scale or in Bullough-speak: “How Britain became the servant of tycoons, tax dodgers, kleptocrats and criminals.”
The following quotes should be chilling for anyone who believes that our nation still upholds the values of honesty and integrity, while painting a very grim picture of many aspects of British society today including, dare one say it, our own profession. It’s not just that Britain isn’t investigating the crooks, it’s helping them too.
- However bad other countries are, Britain has for decades been worse. It operates as a gigantic loophole, undercutting other countries’ rules, massaging down tax rates, neutering regulations, laundering foreign criminals’ money.
- Hundreds of billions of pounds are laundered through the British banking system every year. That is money stolen from people who desperately need it, which was intended to pay the wages of nurses or teachers, or to build roads or power lines, but instead has ended up in the offshore banks of dishonest politicians or crooked businessmen, thanks to the discretion and skills of Butler Britain.
- Boiled down to its essentials, finance always does the same thing: it takes money from people who have it but don’t need it, and gives it to people who need it and don’t have it, and earns a fee for its trouble. Governments try to regulate this process, to direct the funding towards the causes they care about, and financial institutions try to avoid those rules so they can direct the funding towards the causes that will pay the largest fees.
- Hong Kong’s capitalists had “extremely low tax morale”, and did not want to contribute anything to the Communist Chinese government, which explains the rush to shift their assets behind the protective screens of BVI shell companies before 1997. As for the kind of clients who came via Panama’s dodgier law firms, they were after the same service but for even ignobler reasons: they wanted to make sure their corruption, money laundering, drug smuggling and general criminality was kept secret from law enforcement, above all the agencies of the United States.
- So, when you cut past the legal terminology, what is the BVI selling? It is selling discreet and affordable asset protection services, all guaranteed by the pleasant and reassuringly solid presence of the British flag. Those services have been used by North Korean arms smugglers, crooked Afghan officials, American tax dodgers, South American drug cartels, Kremlin insiders, corrupt football administrators and far too many criminals to name.
- Why is Britain not ostracised from the community of civilised nations as a result? The answer is that there is a large and largely unrecognised gulf between what British politicians say and what British institutions actually do.
- “Why does money laundering matter?” asked Alison Barker of Britain’s Financial Conduct Authority in 2019. “It pays for human trafficking. It facilitates drugs. It cheats societies of a legitimate economy. Money laundering deprives our schools, hospitals and roads. It causes violence and intimidation – it makes our communities unsafe.”
- Britain has essentially outsourced responsibility for stopping money-laundering to the money launderers, and is failing to stop dirty money as a result. Much of the time the same bodies tasked with regulating professionals’ financial transactions are also charged with lobbying government on their behalf, also relying on those professionals’ membership fees to keep solvent.
- According to analysis from the FCA from 2019, almost a quarter of these regulators [which includes numerous accountancy bodies] were doing no supervision at all, almost a fifth had not identified who they needed to supervise and fully 90% had not collected the information they needed in order to identify the riskiest companies on their lists.
- “We were told, particularly in the accountancy sector, that professional bodies believe their members would leave if they took robust enforcement action,” the FCA said.
Bullough’s modus operandi is to zero in on particularly egregious behaviour and use that to demonstrate how rotten the whole system is.
The story starts out with Britain’s ignominious retreat from Suez in 1956 and the nation’s attempts to replace the physical empire with a fiscal equivalent.
It then picks up on such issues as the exporting of tax-free betting to Gibraltar, illegal wealth plus tax evasion to the British Virgin Islands and Panama, the use of Scottish Limited partnerships, shell companies, and the uneven nature of private prosecutions. Topically, it also takes a peek at the activities of Russian oligarchs in London.
Reading this book can be dispiriting at times, for example when you discover that almost all of the reports filed with the relevant authorities in connection with money-laundering will be spiked without even being read.
Bullough also makes it very clear that it isn’t just HMRC, which is underfunded and under-resourced. Basically, every aspect of British government that should be directed towards protecting the nation from fraud and fraudsters has been denuded of power and money.
Sadly, far too often the response is, “As the old song goes, if I don’t do it, somebody else will.”
This might be a horror story, but it is very compelling and should be compulsory reading for every accountant, not to pick up tips about how to make a packet and rip off the country but rather to learn how to do our jobs more effectively.