Which is more important: cat videos or investment?
The House of Commons is in the middle of one of its fits of inconsistent moralising.
They are creating a panic about data protection; worried that our private information is being sold and must be protected. Facebook can somehow tell what we might be persuaded to buy based on which cat videos we like; more amazingly, people believe that Cambridge Analytica used the same information to change how we voted (Cambridge boffins joining with Russia to subvert Western democracy?! It’s like being back in the ‘70s).
The House of Commons is in full “something must be done” mode, trying to force Mark Zuckerberg to appear before its committee to answer questions. More strongly, later this month the GDPR (General Data Protection Regulation) comes into force; a new expensive, bureaucratic and complex system to protect our data and ensure that it is not used without our permission.
The principle behind all of this is that our personal information should remain private, used only for authorised purposes, and this is apparently so important that it must be protected by law.
Yet the same month that this is happening, the same House of Commons voted to force the UK-linked Overseas Territories (such as the Cayman Islands, British Virgin Islands and Gibraltar) to publish their registers of the beneficial owners of shares in all companies registered there.
This is said to be necessary to combat tax evasion, but that is simply not true; the shareholder registers already exist, and are available for inspection by tax authorities around the world. All this will do is force the same information to be made available to the public.
Rather than helping stop tax evasion, public registers will make the tax authorities’ job more difficult. People will be less willing to have their personal information made public, and so will either hide their ownership or shift their investments to jurisdictions where such information is not available to anyone. The wide ranging and accurate information currently available privately to tax authorities will be reduced by this reform.
The only people who are pushing for this information to be made public are tax campaigners. But from what we have seen of previous data leaks (the Panama Papers and so on), there will be little careful analysis of the information, to see who might be engaged in tax evasion, but lots of searching for famous names to smear people who are in the public eye.
The last round of media investigation into “offshore” companies attacked David Cameron over his father’s investment company, despite the fact that Cameron had paid his tax in full. It also outed actress Emma Watson for using an offshore structure to hide her London address from obsessive fans (due to the government’s tough laws against offshore investment in the housing market her scheme would probably have increased her tax bill, not reduced it).
But the media’s gleeful publicity is only part of the problem. Once public, this data can be abused. Of course it has been before.
Scammers already use publicly available information about shareholders to target people who may be tricked into investing in fraudulent schemes; increase the data available and you make their life easier, increasing the risk of people losing their savings.
But worse, there are many places in the world where public registers risk much more than a ‘phone call from a dodgy investment scammer'. Countries where being known to have money makes you, and your family, a target for thieves, kidnappers and extortionists. There is a good reason why a lot of South American money, for example, is kept in the Caribbean; it is simply not safe to keep it at home.
The House of Commons is being very parochial, viewing the rest of the world by British standards and forgetting that many of our Overseas Territories have a much more internationalist approach than our MPs do. Public registers will mean that people from dangerous countries will be pushed out of the British overseas territories. Their need for confidentiality, for personal safety, will mean that they will instead have to put their assets into less regulated jurisdictions where it will be more difficult, not easier, for tax authorities to get the information they need.
Do our politicians never think through their demands in a joined-up manner? They say that data protection is important. But which is more important: that our financial details are confidential (open to tax inspectors, yes, they have been for years, but not made public for anyone to see), or hiding our social media likes?