The stories we’ve seen over the past 24 hours should rightly make us angry. Lurid tales of celebs, politicians and even royalty seemingly caught stashing their cash on paradise islands while many scrape by will spark outrage. Quite rightly, there will be calls for those identified to be held responsible.
But after the initial outcry, there’s a much larger conversation to be had.
What does it say about our society, the way our economy is run, and the way we regulate our businesses, that such clearly morally unacceptable behaviour has become so commonplace in so many areas of public life, and has become seemingly so easy?
Esoteric financial practices and opaque dealings used to be the preserve of the super-rich – confined, we’d like to believe, to Bond-style villains corners of the casino economy. The Paradise Papers reveal that these kinds of practices are in fact endemic. Far from being restricted to the wheeler-dealers, these days, everyone from sitcom actors to comedians and washed-up musicians are involved, in some cases, without even knowing it.
And that’s the point. In an economy this rotten, if you aren’t scrupulous about asking questions, it’s easy to find yourself making money from businesses that make millions by preying on Britain’s poorest families, or to plunder a company’s pension pot before putting hundreds of its employees out of work.
How easy? Just ask the Duchy of Lancaster.
But the rest of us need to look out too.
Billions of pounds of our money is tied up in pension funds, many whom provide healthy returns to support our retirements via myriad investments in fossil fuels, payday lenders and arms companies.
It’s worth all of us asking questions about what’s being done with our money, because in an economy where rate of return overrides all else, if you don’t, there’s no guarantee anyone else will.
Since the ‘big bang’ of the 1980s which saw large areas of our economy opened up to increased financialisation and privatisation, the link between the people who own companies and those who manage them has grown ever wider and more opaque.
Far from ushering in a ‘shareholder democracy’ in which we all have a stake and a say in the companies we spend with and invest in, the opposite has occurred. Large sections of our economy now appear to be an Alice-in-Wonderland-style universe in which the normal rules of morality and acceptability no longer apply, with ownership and accountability hidden in a disorienting maze of relationships and ownership structures that defy comprehension.
So how do we clean up this mess?
It starts with all of us taking it upon ourselves to ask the right questions. Consumer-powered schemes like the Fair Tax Mark are giving people the means to choose to shop with companies who pay their fair share, and to shun those who don’t. It’s being championed by the Co-operative movement, and the Co-operative Party is the first political party in the UK to be given a clean bill of health for its own tax affairs. By strengthening rules around company reporting, the Government could put even greater power in consumers’ hands.
Groups like ShareAction are working for savers and pension-holders – campaigning to reform the system to empower individual shareholders to ask questions and to ensure their money is being used for good. And in corporate governance itself, there’s a growing movement to reform company law, ensuring stronger oversight and greater accountability.
But ultimately, if we’re sick of this broken economy, it’s up to us to choose a new one, with openness and accountability hardwired in.
There’s no reason our largest businesses ought to be owned by a small number of wealthy shareholders, with influence and accountability filtered through multiple layers of ownership and secretive shell companies based on islands on the other side of the World.
We can choose a different model – one in which companies are owned by the people who use and work in them, and in which those member-owners can hold the company accountable for how it behaves.
They’re called co-operatives, and working with the next Labour government, we’re developing plans to double the role they play in our economy, making them the norm, not the exception.
After today’s revelations, up to all of us to ask more questions, and then to choose set our economy on a different path.