Unwelcome transparency: From the Shard's Shangri-La to Swiss bank accounts

If Switzerland were to make good on their word, it would strike a massive blow at the pernicious, democracy-undermining trait of capital flight

Share

It was a few weeks ago that guests at the Shangri-La – the ‘opulent’ hotel that spreads across the upper floors of the Shard – first caught sight of something rather nasty. Money is supposed to buy you privacy. The ability to look down on the world unobserved. As part of a luxury package, binoculars lie close to hand in every one of the Shangri-La’s rooms. But it wasn’t just London that opened up to view. When hotel lights flickered on, some of the skyscraper windows turned into mirrors – and in them could be seen hazy reflections of other hotel guests, as they moved about in their bedrooms. Looking out, visitors realised others could be looking in.

This dose of unwelcome transparency came at a curious moment. Because while the rich have every right to get undressed in a swanky hotel without fear of exposing their backsides, an unsought-for light is also currently being shone on less legitimate forms of privacy. For decades, at least for those who occupy the ‘top floors’ of the global wealth skyscraper, money has been able to hide itself from sight. The British Virgin Islands, the Caymans, Switzerland. Cash pours in to bank accounts in these countries, and out of the reach of Government tax collectors. But after the 2008 crash, nations could no longer afford to let the rich employ accountants who, like the magicians of old, know how to make elephantine sums of personal wealth disappear.

Estimates of the total hidden offshore vary, but the Tax Justice group suggests a figure of $32 trillion is conservative. The rest of society fills in this gaping hole in global finance: by paying more tax. Thomas Piketty, accused of errors in his bestseller, Capital in the Twenty-First Century, went on the offensive: “My estimates...do not fully take into account offshore wealth, and are likely to err on the low side.”

Until earlier this year, it looked like the status quo would, with a few nips and tucks, stay in place. Then Switzerland, the world’s largest offshore financial centre, announced it would sign up to an international programme of automatic information exchange, set up by the OECD. Where most efforts to combat tax evasion have been bungalow affairs, this could – like the Shard itself – form a towering political achievement. It would require governments to let each other know who holds money in their banks – and how much they’ve deposited. If Switzerland were to make good on their word, and the other 40 or so countries signed up, it would strike a serious blow at the pernicious, democracy-undermining trait of capital flight.

But recent signs suggest the Swiss are looking for wriggle room. They may not be so keen after all to let the light in. The importance of this reform cannot be overstated. In person, the rich can live wherever they please, behind high walls, tinted-windows and obstreperous lawyers. But their money must sit with the rest of ours – where the government knows about it.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Experienced Creche Assistant - Lambeth - September 2014

£64 - £69 per day + Competitive London rates of pay : Randstad Education Group...

All Primary NQT's

£100 - £120 per day + per day: Randstad Education Leeds: Description Calling a...

DT Teacher - Food Technology

£100 - £145 per day + Pension and travel: Randstad Education Maidstone: SUPPLY...

Supply Teachers Needed in Thetford

£21000 - £35000 per annum: Randstad Education Cambridge: Supply teachers neede...

Day In a Page

Read Next
 

Why black cats make amazing pets, and take good selfies too

Felicity Morse
Children of a bygone era  

Kids these days aren't what they used to be — they're a lot better. So why the fuss?

Archie Bland
Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices
Could our smartphones soon be diagnosing diseases via Health Kit and Google Fit?

Could smartphones soon be diagnosing diseases?

Health Kit and Google Fit have been described as "the beginning of a health revolution"
Ryanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?

Can we learn to love Ryanair again?

Four recent travellers give their verdicts on the carrier's improved customer service
Billionaire founder of Spanx launches range of jeans that offers

Spanx launches range of jeans

The jeans come in two styles, multiple cuts and three washes and will go on sale in the UK in October
10 best over-ear headphones

Aural pleasure: 10 best over-ear headphones

Listen to your favourite tracks with this selection, offering everything from lambskin earmuffs to stainless steel
Commonwealth Games 2014: David Millar ready to serve up gold for his beloved Scotland in the end

Commonwealth Games

David Millar ready to serve up gold for his beloved Scotland in the end
UCI Mountain Bike World Cup 2014: Downhill all the way to the top for the Atherton siblings

UCI Mountain Bike World Cup

Downhill all the way to the top for the Atherton siblings
Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain
Ebola epidemic: Plagued by fear

Ebola epidemic: Plagued by fear

How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

From 'Parks and Recreation' to 'Guardians of the Galaxy'

He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star