John Kampfner: What the Italians can teach us about tax avoidance

The coastguard has mounted helicopter raids on mega-yachts off the Sardinian coast

Share

I wasn't sure if I was suffering from sunstroke. On Saturday, sitting on the beach in Puglia, in the south east of Italy, I was reading that the Prime Minister, Mario Monti, had declared his country was in a "state of war". It certainly didn't look like that to me as thousands of locals were vying theatrically for spots on the crowded public beach.

The ability of Italians to laugh off their problems has been both their salvation and their curse. It is the pact that made Silvio Berlusconi attractive for so many – you leave me alone to make my money and to shag nightclub dancers, and I'll leave you alone to cheat on your taxes.

Whenever anyone sought to intervene they were given short shrift. Romano Prodi, the centre-left Eurocrat, was punished for having the temerity to try to sort out the state's horrific public-sector deficit. With Berlusconi's eventual demise last year (and one suspects there is political life in him yet) came Monti and his technocratic solutions – put up taxes, clamp down on avoidance, tackle the deficit.

Such are the vested interests that pretty much every Italian has had something to complain about. From taxi drivers to owners of chemists' shops, liberalisation has been resisted. As for his real-estate tax – 0.4 per cent of registered value for primary residencies and double the rate for second homes – that has gone down badly even though the register used hugely undervalues their worth and even though the rate is relatively small. The aim is to claw back €10bn, a tiny fraction of Italy's debt.

Monti, who has vowed not to cling on to public office, is unabashed. He says his war is on two fronts – on domestic evasion and on unnecessarily punitive German-driven austerity terms. He insists that the two are linked; Italy's record on tax evasion has turned much of the international community against it.

Unlike pretty much the rest of Italy, he has not shut down for the month of August. While briefly sojourning in the Swiss Alps, Monti met the Swiss finance minister to try to come to a deal on stashed assets. George Osborne did the same with the Swiss a year ago – a limited arrangement involving a one-off levy while maintaining the (absurd and unethical) attraction of banking confidentiality.

The most ostentatious part of the Monti crackdown brings me back to the beach. On the other side of the country, off the island of Sardinia, the coastguard has been mounting helicopter and boat raids on the super-rich as they lounge on their luxurious mega-yachts offshore. The authorities' double whammy has been to steer ships away from protected environmental zones, and to warn the owners about their obligation to pay taxes.

Not surprisingly, this message has hardly gone down well among the oligarchs, sheikhs and footballers. There have been threats to start the throttle and swoop along the Med to Saint-Tropez. Among ordinary Italians, the reaction has been more favourable. For as long as the wealthy are getting away with it, perhaps it is no wonder the working and middle classes see an injustice when the tax man comes to call.

Monti's Costa Smeralda show of strength is unlikely to bring much into state coffers. But the message is what matters. It would be amusing to see that message replicated in a Britain looking almost desperately at how it can consolidate the Olympic mood of solidarity. The Monti recipe could be what's needed to remove the snorts of derision from David Cameron's "we're all in it together" mantra. Given the starring role at the Olympics played by both the volunteers and by the squaddies, why not unleash them on the super-rich?

Imagine the scene: trucks of soldiers descending on the mansions of the plutocracy, a platoon of marines and accountants demanding to see their books. Or imagine the other army of volunteers, in their purple garb, ringing the doorbells of Mayfair hedge-fund offices, with television cameras in tow, politely reminding those assembled of their moral and legal obligations.

Of course, this is the stuff of mid-summer fantasy. But for as long as individual countries descend to the lowest common denominator, then nothing will be done. According to a report last month, more than £14 trillion of untaxed private wealth was invested in global tax havens in 2010. This corresponds to more than a quarter of the world's GDP – or the size of the US and Japanese economies combined.

In 2007, a book took Italy by storm. Called The Caste: How Italian Politicians Have Become Untouchable, it described in acute detail the scams that enabled the politicians, moguls and financiers to fleece the country. This class, the book's co-author Sergio Rizzo told me, is "increasingly indifferent to the common good and the notion of sound administration".

While corruption in Italy has been characteristically flamboyant, its notionally legal twin brother, tax avoidance, has for years run rampant in the UK. I lose track of the number of times I argued with ministers in the Blair and Brown governments about the social dislocation, not to mention the financial damage, caused by there being one rule for the very rich and one for the rest. They would shrug their shoulders, with their "he'll grow up one day" look about them, arguing that any money that was accrued from these borderless global folk was helping to build schools and hospitals and children's clubs.

The mood has shifted. Last week's report by the Treasury Select Committee was pleasingly direct and angry, attacking Bob Diamond, the former CEO of Barclays, and the regulators for the Libor interest-rate stitch-up. But in practical terms, little so far has changed. Her Majesty's Revenue and Customs still does sordid deals with banks and big corporates that try to shy away from their obligations, refusing to divulge their details under the spurious justification of client confidentiality. Instead, they should be naming and shaming, inducing change via public opprobrium.

Monti will not win his "war" through rhetoric alone. In fact, he almost certainly won't win at all. The best that can be hoped is that he makes inroads. And if Italy, for all its history of dodgy dealings, can give it a go, then there is no reason we can't too.

John Kampfner is the author of 'Blair's Wars' and 'Freedom For Sale'. twitter @johnkampfner; jkampfner.net

React Now

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

Primary Teacher

£100 - £130 per day + Excellent rates of pay, Free CPD: Randstad Education Sou...

Supply Teachers Required

£100 - £130 per day + Excellent rates of Pay, Excellent CPD : Randstad Educati...

NQT and Experienced Primary Teachers Urgently required

£90 - £150 per day: Randstad Education Leeds: NQT and Experienced Primary Teac...

Year 1 Teacher

£100 - £130 per day + Excellent rates of pay, Free CPD: Randstad Education Sou...

Day In a Page

Read Next
Israeli President Shimon Peres (L) stands next British Prime Minister David Cameron (R) as he signs the guestbook during a welcoming ceremony at the presidential compound in Jerusalem on March 12, 2014.  

The truth about the UK's pro-Israel lobbies

Mira Bar Hillel
 

In Sickness and in Health: It’s been lonely in bed without my sleep soulmate

Rebecca Armstrong
Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York
Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

'I like Orwell's writing as much as the next talented mediocrity'

Will Self takes aim at Orwell's rules for writing plain English
Meet Afghanistan's middle-class paint-ballers

Meet Afghanistan's middle-class paint-ballers

Toy guns proving a popular diversion in a country flooded with the real thing
Al Pacino wows Venice

Al Pacino wows Venice

Ham among the brilliance as actor premieres two films at festival
Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

Neil Lawson Baker interview

‘I’ve gained so much from art. It’s only right to give something back’.
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
Fashion walks away from the celebrity runway show

Fashion walks away from the celebrity runway show

As the collections start, fashion editor Alexander Fury finds video and the internet are proving more attractive
Meet the stars of TV's Wolf Hall... and it's not the cast of the Tudor trilogy

Meet the stars of TV's Wolf Hall...

... and it's not the cast of the Tudor trilogy
Weekend at the Asylum: Europe's biggest steampunk convention heads to Lincoln

Europe's biggest steampunk convention

Jake Wallis Simons discovers how Victorian ray guns and the martial art of biscuit dunking are precisely what the 21st century needs
Don't swallow the tripe – a user's guide to weasel words

Don't swallow the tripe – a user's guide to weasel words

Lying is dangerous and unnecessary. A new book explains the strategies needed to avoid it. John Rentoul on the art of 'uncommunication'
Daddy, who was Richard Attenborough? Was the beloved thespian the last of the cross-generation stars?

Daddy, who was Richard Attenborough?

The atomisation of culture means that few of those we regard as stars are universally loved any more, says DJ Taylor