`Offshore Banking Business, International Crime!
Offshore Banking Business, Happening all the time!
'...Who's got my money, who's got my pence?
Why's everybody trying to steal my pence?
Guy in the city, guy in the news, everybody givin' me the financial blues, I accuse...'
Offshore Banking Business, by the Members (click here to listen while you read)
While it's not currently illegal for companies to be registered offshore, the Paradise Papers, a leak of millions of files, have shown more detail on how the super-rich have sheltered their wealth in tax havens.
It was four years ago when Margaret Hodge MP, Chair of the House of Commons Public Accounts Committee, slammed Peel Holdings and the Peel Group, whose ultimate holding company is Tokenhouse Limited, incorporated in the Isle of Man and controlled by the Whittaker family trust, 1997 Billown Settlement Trust...
"They do not pay their fair share of corporation tax" she said "We are just saying that when you are using taxpayers' money…it ought to be with companies that pay their fair share back into the communal pot. That is all; it is a very simple proposition."
Peel Holdings has since continued to receive millions of pounds in taxpayers' money, via MediaCityUK rents from Salford City Council, the BBC and Salford University, and cheap loans from Greater Manchester Combined Authority (GMCA).
Indeed, only last month, the GMCA, via a report from Salford City Mayor Paul Dennett (Portfolio Holder for Planning, Housing and Homelessness), handed a cheap loan of £2.661million for building apartments in Ordsall to RP2 Development Ltd, whose 'relevant legal entity', 3S Holdings Ltd, is based in Guernsey.
Simon Ashdown, a director of RP2 Development Ltd, is also a director of LPC Living, which has the contract for almost the whole development and masterplan of Ordsall estate. The 'relevant legal entity' for LPC Living is LPC Holding, also registered in Guernsey.
Indeed, many of the companies involved in Salford's regeneration are connected to tax-friendly havens, and any financial trail ends in secrecy with the limited information that's usually just an office address abroad...
For instance, Keepmoat, currently building on Whit Lane and with the contract for refurbishment of Pendleton Together properties, has its ultimate parent company, Cotton Holding S.a.r.l, in Luxembourg. And PFI (Private Finance Initiative) companies involved with schools and Salford Royal Hospital are based offshore...
Salford Royal NHS Foundation Trust has a PFI deal for the new blocks added onto the hospital. By the time the PFI is over, in 2042-43, the total payments for the project are estimated at £705million – from an initial £137million capital cost. In 2015, accounts show that the Trust was paying £5.37million in interest alone.
Balfour Beatty had a fifty per cent holding in Consort Healthcare SPV which had the PFI contract for Salford Royal, and sold it to HICL Infrastructure Company Limited registered in Guernsey.*
Meanwhile, Salford Council had two PFI deals for the building and maintenance of five schools in the city, with final total costs estimated at almost £500million...for schools that cost around £125million to build.
Originally both contracts were with a SPV (Special Purpose Vehicle) called S & W TLP (Project Co One and Two), in which companies Hochtief and Lang O'Rourke held an 80% stake, with Salford Council and Amber Infrastructure holding 10% each. Hochtief and O'Rourke then also sold their stake to the Guernsey based HICL Infrastructure, which continues to reap the profits.
"It's a scandal that hospitals and schools make cuts to staffing and services, while extortionate repayments they are due to pay on their PFI contracts are ring-fenced, even subsidised by Central Government" The People vs PFI campaigner Joel Benjamin told the Salford Star recently. It's even more of a scandal that huge amounts of money appear to be shipped to tax friendly countries.
No-one is suggesting that these Salford-involved companies don't pay any tax at all but it's virtually impossible to work out whether it's the right amount of tax as most are embroiled in a complicated web of different financial vehicles.
This afternoon, HM Land Registry made commercial ownership and overseas company ownership data free of charge...
"Responding to the Government's commitment to drive innovation in the digital economy, HM Land Registry will be opening up more of its datasets externally and across government to promote economic development, financial stability, tax collection, law enforcement and national security" stated the Registry.
Meanwhile, around the same time, Jeremy Corbyn waded into the scandal, tweeting: "Whilst they're hoarding their money abroad, families go hungry as a result of their cruel policies. #ParadisePapers..."
It's just a pity that authorities, like Salford Council and GMCA, are continuing to give cheap loans and huge contracts to companies that, potentially, 'hoard their money abroad'...
* For more details on these PFI deals see previous Salford Star article – click here