Britain is more corrupt than many African countries because of its network of offshore tax havens, a leading economist claimed yesterday. In an extraordinary attack, the UK was described by the tax expert as "high on the list of most corrupt countries."
John Christensen, a former economic adviser to the Jersey government, savaged the Government's track record on hunting down tax dodgers. He said: "It is clear that the UK government is not serious about tackling the tax dodging industry. "I would place the United Kingdom high on the list of most corrupt countries."
He insists it is wrong to associate corruption only with many third world countries due to the widescale tax abuse which is rife in Britain.
He said there is a "class of super-rich" who hold their wealth in offshore tax havens like Jersey, Monaco, Switzerland or the Cayman Islands. "They live more or less where they choose and their main preoccupation lies with staying rich."
The attack comes as the country's 29 million workers are paying huge amounts of tax, having over more than £130 billion in income tax in the last tax year.
Official figures show this is about 70 per cent higher than when Labour came to power in 1997. About two to three million Britons are thought to have an offshore bank account, according to the accountants Grant Thornton.
If they are a UK resident and officially domiciled in this country, they must pay tax on all interest earned from their offshore accounts - yet many do not.
Mr Christensen, director of Tax Justice Network, which campaigns against tax avoidance, said rich people's success in cutting their tax bill is hitting hard-working families.
He said: "Tax dodging by rich individuals forces governments to switch the tax burden to the less well-off, increasing inequality and undermining public confidence in the rule of law."
Celebrities, business executives and other rich people who can afford to pay for expert advice are constantly finding new ways to cut their tax bill.
Helped by offshore trusts and shrewd management, the Rolling Stones managed to pay only 1.6 per cent in tax on earnings of £81.3 million last year.
This compares to the top rate of tax, currently 40 per cent, which is paid by about 3.2 million people - a million more than 1997.
There have been recent signs of a clampdown with the bank giant Barclays ordered to hand over details of their customers' offshore accounts. The Government expects to get a massive £1.5 billion from the bank's customers who failed to pay the tax due on savings, investments and other offshore accounts.
Of a sample of 9,289 offshore accountholders, the investigation found that less than one in five actually file a tax return every year. To make matters worse, just 3.5 per cent of the total have declared any foreign income.
A Treasury spokesman insisted that Mr Christensen's attack, made during a speech to the Economic Geography Research Group last week, was unfair.
He said: "The Government has effectively tackled both corporate and personal tax avoidance structures time and again.
"To suggest otherwise is both misleading and inaccurate. Since 2004, all details of tax avoidance schemes must be disclosed to HM Revenue & Customs by law, making abuse of the tax system even harder."
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