A Fine Balance: The EU Referendum

A friend asked me the other day how I would vote in the EU referendum. I was considering my response – thinking I don’t have the facts, but it would be good to stay in. Is it too much to ask for a more democratic, efficient, reformed EU? Perhaps. But how come other EU members don’t want the same things? As David Cameron was unable to secure any real changes, how can we expect things will get better going forward? And, if there is a Brexit will the UK not face years of uncertainty, loss of investments, stock market volatility etc.? How will that help? Then remembering the words of Gandhi, I replied: ‘It would be a good idea – if we could stay in and bring about the change we want…’ I knew it was unrealistic, hopeless even, like marrying someone for the second time with a view to changing them! My friend, interrupting my thoughts, announced: ‘Shanta, you are the only person we know who is going to vote yes, to stay in!’ I was stunned. I’d always considered her more European than me.

It would be pretentious of me to think I am European. If truth be told, I struggle to see myself as British, and these days sadly every time I visit India I feel a little bit less of an Indian. The India I grew up in has more or less disappeared. Besides, as L.P. Hartley wrote, the past is an alien country, “they do thing differently there.” I find myself in a difficult place – not knowing where I belong. Was being HUMAN not enough? Perhaps being European or not had nothing to do with voting to remain in the EU. Did Gisela Stuart, born and raised in Germany, not advocate leaving? What did my friend and Gisela know that I didn’t, why are they so sure of the advantages of a Brexit? Another thing was also bothering me – surely the point of belonging to any club is to benefit from collective membership, making sure that standards didn’t plummet to the lowest common denominator but rose to the highest, the best? If the British are worried about certain issues why are the other EU members not concerned?

A few days later I shared my dilemma with another friend and he said, without any hesitation: ‘I’d rather be a part of an inefficient and undemocratic Europe than a Little Englander!’ My friends, I thought, needed to meet each other, expand their horizons. Unsurprisingly, the more people I speak to the more such views and prejudices I encounter. It made me wonder if the rest of Europe was as schizophrenic as the British. It is good to be sceptical, to ask questions and keep things on an even keel. But what I encountered was not a healthy open mindedness. The number of people who had their minds made up was surprising. So, where are my prejudices, are we not all a complex combination of prejudices? I asked myself. While I have no desire to start an independent Sit-on-the-fence or Stay-on-the-couch party, I believe it reasonable to be acquainted with the facts before making up my mind.

Anticipating the dilemma of baffled and undecided voters like me, the UK government announced that we’ll be sent a leaflet with the facts – along with a bill for £9.3 million! It would still not solve the problem – as the so-called ‘facts’ would be in favour of staying in. What about the ‘facts’ in favour of leaving? No one seems to provide a satisfactory explanation of what the net £154 million we contribute daily to the EU is for? I too enjoyed the Monty Python sketch about the benefits the EU brings to us. But do we really need to stay in the EU to protect our human rights, clean beaches, etc.? Is that worth £154 million per day – as it appears we might end up spending more or less the same to renegotiate the innumerable contracts with the EU? Then at Question Time (on 7 April 2016), the two non-political persons on the panel – Irvine Welsh and Ruth Lea – one a writer and the other an economist were both in favour of Brexit. Now that was fascinating.

As if all this was not interesting enough, the fact that there are no facts – only views and opinions – the Panama Papers leak, revealing how the rich and powerful have been siphoning away their ill-gotten gains with the help of shell companies and tax shelters was nothing if not a FACT! Well, we all knew that a certain amount of tax evasion disguised itself as tax planning, but the 11.5 million confidential documents, all facts, are clear testimony of what is not right with our world. A partner at Mossack Fonseca, the Panamanian law firm at the centre of this leak, claimed the firm had not broken any laws, and had been delivering the highest quality of service to their clients for almost half a century. On the contrary, he claimed the firm was a victim of a hack. If that is indeed the case, such whistle-blowers need to be rewarded. The leak signaled something fundamentally corrupt – a shocking revelation that much of this activity is legal, and the game is rigged in favour of the rich and powerful who are far from just or moral. We knew all this already, but sometimes one needs to be reminded of how bad things are. According to some economists, 8% of the world’s wealth (£5.3 trillion, $7.6 trillion) is held in tax havens. The loss of global tax revenues is staggering – a total $200 billion annually.

The revelations sparked political reaction in several countries where high-profile figures have been implicated. Iceland’s Prime Minister, Sigmundur Davíð Gunnlaugsson, stepped down after the documents showed he owned an offshore company with his wife but had not declared it when he entered parliament. He did not do so out of the goodness of his heart, he was forced out by people power. The biggest corporate data leak in history had reverberations not only in Iceland, but in Britain, China, Russia, Argentina along with some 50 other countries. One can only hope such events bring about real change.

I seem to recall it was David Cameron who pointed out that aggressive tax avoidance was immoral, unethical – referring to the grey area between tax evasion and planning. The way I see it is – if something is immoral, why not make it illegal? Human beings are not angels, and if there is no incentive to do the right thing, most people will do as they please. After all, we no longer live in a society where morality and ethics are things we share. There is no reason for most people to think they are doing anything wrong by minimizing their tax liability. On the contrary, it would be imprudent not to do so. And, if it is legal then individuals and corporates will employ the best tax consultants they can afford to find all the ways and means to avoid paying tax. Our annual tax return form, for example, allows each one of us to lower our tax liability by contributing to a pension, making donations to charities or investing in certain kinds of investment trusts. Taking advantage of such provisions does not makes us better or worse as human beings, nothing moral or immoral about it.

If we need to encourage certain types of investments and thus make it tax deductible, so be it. But it would be laughable if the incentives were such that we ended up not having to pay any tax, or as little tax as possible. We agree that tax evasion is illegal. Then why not plug all those loop holes, make sure everyone pays their share – individuals as much as companies? How else can we ensure a world class National Health Service, public education, infrastructure etc.?

I know I am digressing, but will being in the EU help get everyone to pay their share of taxes? The recent announcements made by the EU – asking companies to disclose the amount of taxes they pay in various EU jurisdictions does not solve the problem. How is that going to stem aggressive tax planning? Why is it difficult to identify income earned by a company in a country and to make sure the company pays tax on that income in the same jurisdiction? Tax havens and tax planning exist with the blessing of governments. If governments truly represent the people, as they claim to, they need to represent all of us and not just the rich. It is true that 1% of the wealthy and powerful (who pay taxes in the UK) account for 28% of our country’s tax receipts. And the picture is similar worldwide. Surely, it is time to act. When Labour was in power, they did not put an end to such behaviour. If the Conservatives can do the right thing, they will get my vote. I only hope the deep division in the party with regard to EU membership, does not stand in the way. I am also hoping that more leaks of a factual nature may prove enlightening – as far as membership of the EU is concerned. We are still not getting all the facts. I can’t be the only one suffering from a split personality – this Janus-faced quality – this ability to look at both sides, appreciate both points of view, with no clear choice in the horizon.

16 April 2016


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