Butler to the World
How Britain Became the Servant of Tycoons, Tax Dodgers, Kleptocrats and Criminals Oliver Bullough Profile, £20
The sanctions imposed in the wake of Russia’s invasion of Ukraine have thrown into sharp focus how much of Britain’s landmark assets, from property to football clubs, are in the hands of dubious figures. Butler to the World, by Oliver Bullough, argues that this is no unhappy accident. It is the result of decades of policy, pursued by the government and the City of London, which threw Britain wide open to inflows of dirty money and deliberately encouraged and facilitated its entry into the City.
A pivotal moment, says Bullough, was the Suez crisis in 1956. The failure of the campaign to retake the canal spelled the effective end of Britain as a major military superpower. Britain then decided to reinvent itself as an offshore financial centre. This began with the circumventing of the US Federal Reserve’s restrictions on overseas dollar loans through the creation of the Eurodollar market. It then picked up momentum in the 1960s and 1970s, when Britain’s overseas territories helped companies and individuals shield their money from the taxman and police. Britain’s lax rules on money laundering and disclosure also made it an attractive jurisdiction for kleptocrats and criminals.
Critics will argue that Bullough takes his argument too far. If London’s success as a global financial centre were simply down to its willingness to turn a blind eye to the sources of capital inflows, rather than to the quality of its institutions and respected legal system, then it would have been supplanted by even less scrupulous jurisdictions long ago. Not everyone who deposits their money offshore is a crook – many have a legitimate reason to seek a safe haven, especially if their domestic government is unstable. The US approach, which the author lauds, is seen by many as too aggressive and unfair on those accused.
Still, it’s hard to dispute that the British government could do a lot more to discourage the influx of tainted funds. As Bullough correctly notes, even when the UK has passed regulations requiring banks to do some perfunctory checks, it has failed to give the various agencies tasked with enforcing the rules enough resources to make sure they are properly implemented. Britain’s continued tolerance of tax evasion by companies operating in overseas territories has hurt the treasuries of countries around the world, including the UK’s. Butler to the World is a timely book that should provoke some soul searching among policymakers in the government and the City – and hopefully prompt some more action.
“Britain’s lax rules on money laundering and disclosure have made it attractive to kleptocrats and criminals”