Treasure Islands by Nicholas Shaxson

After the revelation of the Panama papers, Nicholas Shaxson's book on tax havens and offshore investments is more relevant than ever. In this new preface for post-Brexit Britain, he explains why

I’m writing this a couple of weeks after the latest jolt to the system, Britain’s Brexit vote.

A plausible post-Brexit scenario sees a mischievous Britain, unmoored from Europe’s moderating influences, reinvigorating its already dominant offshore establishment and pitching itself into a new sprint to become ever more haven-ish. If Brexit deprives the City of London of its privileged access to huge European markets, the anti-tax, anti- regulation fantasists will urge Britain to race faster to the bottom to attract the world’s hot money, and to emulate places like Panama, the British Virgin Islands, or mucky little Luxembourg. These countries’ core business model is to turn ever more of a blind eye to the criminal or unhealthy origins of the money that’s handled through their territories, and in Britain’s case to indulge the world’s banks and shadow banks who want to use London as an ever more unregulated offshore playground to engage in profitable risk-taking and crookery – at everyone else’s expense. If you think the City of London is corrupt today, wait and see what the Brexit-boosted lobbyists and fantasists have in mind.

Within hours of the Brexit vote, these fantasists were already com- ing out of the woodwork. The Swiss Bankers’ Association suggested a so-called ‘F4 Alliance’ of financial centres, with Switzerland and the UK joining the fast-rising tax havens of Hong Kong and Singapore to present a strong and united bloc to push for the interests of offshore finance. Chris Cummings, the Chief Executive of the lobbying body TheCityUK, an influential outgrowth of the City of London Corporation, began calling for steps to reinforce the ‘competitiveness’ of the UK in financial services. That c-word is often code for an ideology that says we must constantly shower the biggest players with tax cuts, deregulation and other goodies, for fear they’ll all run away to Geneva, Dublin or Hong Kong.

Meanwhile, outgoing UK Chancellor George Osborne, in an appar- ently panicky reaction to the Brexit vote, said he’d cut corporate taxes to just 15 per cent – a brutal slashing from the 26 per cent that prevailed when Treasure Islands was first published, and a move that would be devastating for public finances. Days later, officials in the Netherlands promised to follow suit, in a tit-for-tat. Others will no doubt join in.

The Brexit vote was, in the end, about globalisation. The hottest issue was immigration, which is, as Professor John van Reenen of the London School of Economics points out, ‘globalisation made flesh’. But behind the vote we can also discern a powerful role played by tax havens, the dark twisted souls of financial globalisation.

For one thing, the Brexit vote was a once-in-a-lifetime opportunity for exasperated people to kick Britain’s rotten establishment in the teeth. The discovery that David Cameron had once had a stash in a family fund in the tax haven of Panama was just the most pointed recent example of a system-wide problem.

On the other hand, and more importantly, the offshore system has been engineering a gigantic and ever-rising transfer of wealth from ordinary taxpayers to our offshore-diving corporations and wealthy individuals, in multiple ways. This has worsened economic and political inequality in Britain, heightened the popular rage – and as a result, hastened Brexit.



There’s no need to embellish the stories. Because the facts are just so amazing.


The offshore system boils down to two words: ‘escape’ and ‘elsewhere’. You take your money elsewhere to escape whatever rules and laws you don’t like. Tax havens are a financial technology to create these escape routes. So this book isn’t, as some have suggested, merely about ‘tax avoidance’, or even really about tax. It’s about a far bigger geopolitical phenomenon, of which tax is just one of many moving parts.

But there is a new hope abroad, which wasn’t the case when Treasure Islands was first published. Something in the Zeitgeist has changed. I’ve been watching closely, and I see the cultural and social acceptability of this stuff being transformed. Ordinary people and world leaders are now talking seriously about tackling tax havens, in way I could hardly have imagined five years ago. Efforts to reform the system, though messy and disappoint- ing so far, contain some real substance for the first time.

In this Trumpy, Brexity world, the old certainties of left and right are broken, and the pieces are still up in the air. A new system hasn’t coalesced yet. It is a time of rapid change, pregnant with possibilities. If we can harness the anger so many people feel about the system now, this is an opportunity for positive change that may not come around again for a very long time.

I’m far from the only one working in this area. This book rests on decades of work by a few offshore dissident pioneers, mostly now associated with the Tax Justice Network. Together we’ve created a completely new story about financial globalisation: a new lens through which to understand the world.

Treasure Islands is a furious book. It could hardly be otherwise: offshore is corrupting our world economy and our societies and cultures. But the anger embedded in the pages to come doesn’t lie in the adjectives. In the words of David Marchant, an offshore fraud investigator who’s seen it all, there’s no need to embellish the stories. Because the facts are just so amazing.

Find out more about the author

Treasure Islands

Nicholas Shaxson


Billionaire Warren Buffet, currently the third wealthiest man in the world, paid the lowest rate of tax among his office staff, including his receptionist.

In 2006 the world's three biggest banana companies did nearly £400 million worth of business in Britain but paid just £128,000 in tax between them.

In January 2009, US law enforcement fined Lloyds TSB $350 million after it admitted secretly channelling Iranian and Sudanese money into the US banking system.

Tax havens are the most important single reason why poor people and poor countries stay poor. They lie at the very heart of the global economy, with over half the world trade processed through them. They have been instrumental in nearly every major economic event, in every big financial scandal, and in every financial crisis since the 1970s, including the latest global economic downturn.

In Treasure Islands, Nicholas Shaxson shows how this happened, and what this means for you.

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