CITIZENS

020 7738 2348
October 2015
Opinion & Comment
Kensington, Chelsea & Westminster Today 19
online: www.KCWToday.co.uk
‘Our’ NHS?
by John Furse
Hidden behind its trusted logo ‘our’
NHS is becoming ‘their’ NHS,
its services increasingly outsourced
to private sector providers. And at a
far greater cost to the NHS than if it
remained its own provider. Because
private providers incur hefty additional
legal and management fees, profit
margin requirements and private finance
costing a lot more than State funding.
Is it surprising that NHS costs, as a
percentage of GDP, have doubled since
the first major privatisation legislation in
1990?
‘NHS Detectives’ (http://bit.ly/join
TheNHSDetectives) is a 999 Call For
The NHS website for the public to pool
their discoveries about who their local
service providers really are - Healthcare
& Transport Services, G4S, x9 Services,
Serco, ICS, Care UK, BUPA, InHealth,
Bain Capital, Virgin et al. These private
companies already provide blood,
agency nurses, scanning and diagnostic
services, ambulances, disabled transport,
portering, cleaning, catering, hospital
buildings, post-operative beds and care
homes. And the list grows.
Imperial College Healthcare NHS
Trust - a mash-up of Charing X,
Hammersmith, Queen Charlotte’s &
Chelsea, St Mary’s and Western Eye
hospitals - has Sir Richard Brook Sykes
as chairman. A prominent biochemist
his cv includes chairmanships of
GlaxoSmithKline and currently three
biotech/health tech companies. He’s also
chair of think-tank Reform who want
total public spending cut along with taxes
so that individuals can provide for their
own healthcare needs and obtain high
quality services more ‘efficiently’. Paying
for your GP visits is one such idea.
This doubtless chimes well with big
hitters like United Healthcare, the USA’s
largest health insurance and services
provider, lining up for the rich pickings
to be had from the marketisation of the
NHS, the fourth largest business in the
world. And with Simon Stevens, United
Health’s former head of global health,
now CEO of NHS England.
As NHS funding is bled away by
costly private providers NHS services
become overstretched, wrung-out
staff quit and waiting lists mount. The
privateers’ hope is that we will seek
expensive private health insurance. A
US-style insurance-based health service
is what leading health and social policy
expert Professor Allyson Pollock sees
being prepared for us. “We’re facing the
Americanisation of our public services,”
she says. And we all know the ‘Don’t Get
Sick In America’ mantra.
The Imperial Trust has other nonexecutive
private sector notables on its
board, Jeremy Isaacs, founder of hedge
fund JRJ with an arm in tax haven Jersey.
His CV includes spells as a Goldman
Sachs director and a Lehman’s overseas
CEO until 2008, Lehman’s annus
implodius. Rothschild executive vice
chairman Dr Andreas Raffelm and
Sarika Patel, partner in Zeus Capital,
an investment bank heavily into
infrastructure and real estate, are also
Imperial Trust board members.
Patel has held ‘key roles’ at
accountancy giant Grant Thornton. Such
accountancy behemoths are the ‘enablers’
between corporate and investment big
hitters and their targets. Imperial has
a biggie in Sir Gerald Acher, a senior
partner at mega auditors KPMG.
Chelsea & Westminster Hospital
NHS Foundation Trust’s non-executive
chair is Sir Thomas Hughes-Hallett, a
former banker who promotes the line
that “The NHS can’t afford to treat us all
for free”. Begging the obvious question
that if we could bail out his lot why not
the NHS?
His vice-chair is Sir John Baker,
whose CV includes leading the UK
electricity privatisation programme
before becoming CEO of privatised
National Power plc. Chelsea &
Westminster Trust non-executive
director is Jeremy Jensen, director
of Aaronite Partners, specialists at
‘restructuring’ distressed businesses.
He’s also director of MPG Hospital
Holdings who own, operate and lease
UK hospitals. Adding her mergers and
acquisitions expertise is former BP exec
Eliza Hermann.
The US-based Commonwealth
Fund recently found NHS performance
to be at the top of their league tables
despite chronic underfunding (the US
came bottom). And a publicly funded
and serviced NHS is far cheaper
than a privatised one. Bank bailouts
and Quantitative Easings (QE) have
been a revelation - governments can
actually print billions without causing
rampant inflation or the collapse of their
currencies.
Whether through QE, taxes and/or
bonds our government could in fact fully
fund the NHS, particularly with interest
rates set to remain at historic lows. It’s
also an investment that produces tens of
thousands of jobs, healthy workers and
consumers old and young with spending
power to stimulate the economy.
But the NHS, like most of our
politicians, has been infected by 30 years
of a free-market ideology whose true
workings have been exposed by the 2008
Banking Crash and its aftermath. The
boards of our local hospitals overseeing
the turning over of NHS assets and
services to the private sector are
symptomatic of that infection.
www.johnfurse.wordpress.com
Offshore tax
havens and
London property
Tax avoidance and money
laundering
Let’s say you’re a gardener and fancy
not paying some tax. What you’d do is
work cash in hand and not declare your
earnings. This is tax evasion, and illegal.
Now let’s say that you’re very rich and
fancy not paying some tax. What you
would do is register a company in an
offshore tax haven – ideally one that
is, as most are, also a secret jurisdiction
so you can control it anonymously –
and then move your money into the
company. This anonymously-owned
offshore then buys and sells your
residential property. Congratulations,
you have just avoided a whole swath
of taxes - stamp duty, possibly capital
gains, maybe inheritance tax. This is tax
avoidance, and legal.
The reality is more complicated, but
that’s the general gist of things. The cost
to HMRC of this sort of ‘tax planning’
is hard to calculate. Transparency
International UK (TI-UK), using data
from the Land Registry from July 2014,
estimates at least £122 billion worth
of property in England and Wales was
held by companies registered in offshore
secrecy jurisdictions.
London, especially Westminster,
Kensington, and Chelsea, is a hot
spot for this sort of activity. As of
2014, 40,725 properties in London
are registered to overseas companies,
representing at the time 1.3% of
London properties. Of these foreign
company owned properties, 89.2% are
incorporated in secret jurisdictions, and
48% of those are in Westminster or
Kensington and Chelsea, 11,457 and
5,836 properties respectively. Almost one
in ten (9.3%) properties in Westminster
are registered to a tax haven based
company, and 7.3% in Kensington and
Chelsea. It is reasonably safe to assume
that these boroughs are popular because
they are so expensive to buy in; it’s worth
the hassle to avoid the tax.
It should be noted that a lot of the
occupiers of those properties will be
used legitimate businesses using them
for completely legitimate means. For
example, 99-121 Kensington High
Street, the building which M&S, H&M,
and Gap are in, is owned by Cartina
Kensington Limited, registered in the
British Virgin Islands.
Tax avoidance is, however, not
the dark side of offshore companies
based in secret jurisdictions purchasing
properties, that honour goes to money
laundering. Let’s say you’re a minister in
a developing country, and you routinely
syphon off international aid funds to
line your own pocket (in 2014 the ONE
campaign, an international nonprofit
that fights extreme poverty, estimated
that at least US $1 trillion is taken
out of developing countries each year
through corrupt activity). Anyway, you
now possess ‘dirty’ money. In order to
clean this cash, you first set up a series
of transfers through trusts, companies,
and bank accounts in various secret
judiciaries, a process called ‘layering’
done in order to conceal your identity.
You then purchase property, let’s say
an ‘ultra-prime’ (valued at over £2000
per square foot) in Westminster, and
thus ‘integrate’ the funds into the legal
market; clean money.
As with tax avoidance, London is
a good spot for this sort of activity.
Expensive properties mean more money
can be laundered at once, the UK is
politically stable, and, perhaps most
importantly, anti-money laundering
regulations in the UK only require estate
agents to carry out due diligence on the
seller, not the buyer.
The scale of this activity is hard to
gauge. Since 2004, over £180 million
worth of property in the UK has been
brought under investigation as the
suspect proceeds of corruption. Of
those properties, over 75% used offshore
corporate secrecy to conceal the owner’s
identity. And most importantly, the
UN estimates that, typically, only 1%
of money laundering flows are detected
by law enforcement officials. Even if
we generously bumped that percentage
up for a first-class police force like the
Met, chances are that millions of pounds
of dirty money is being laundered,
unnoticed, through the ultra-prime
London property market.
© Ordnance Survey