Justice unaffordable, calculate accountants

There's been an interesting development in the long and shameful story of the Chagos islanders, those inhabitants of a British overseas territory who were forcibly expelled from their home islands by the British authorities in the late 1960s/early '70s and have been prevented from returning home ever since. According to the Graun:

...there is a real possibility that the survivors and their children will finally be allowed to go home...

The key to whether their hopes are realised resides in a feasibility report ... due to be published within days. An interim report confirmed re-homing them on Diego Garcia was viable. The final report is expected to reach the same conclusion. The government will outline how it intends to proceed in March.

Good news. There is a snag, though. The report suggests that allowing the Chagossians to return to Diego Garcia would cost at least £64m, spread over three years, raising the 'fear that the figure may be seized upon by a government determined to slash its deficit as an excuse for kicking the issue into the long grass again.'

And who produced the costing which will, in all probability, be seized on as another excuse for not righting the wrong done to the Chagossians? None other than that well-known provider of audit, tax, and advisory services, KPMG. Yes, that KPMG:

In 2005 one of the giant ‘Big Four’ international accountancy firms, KPMG, admitted criminal tax fraud and agreed to pay $456 million in penalties. Between 1996 and 2003 it sold transactions that created $12 billion in sham losses and cost the US Treasury $2.5 billion in unpaid tax. BLIPS – ‘bond-linked issue premium structures’ – were bought by 186 wealthy individuals and generated some $5 billion in tax losses. FLIP and OPIS, two other financial instruments, involved no-risk investment swaps through the Cayman Islands, a well-known tax haven. KPMG was not alone. The ‘alphabet soup’ of tax dodges was closely related to the ‘financial instruments’ that created the ‘credit crunch’ in August 2007.

So, a firm that's intensely relaxed about massaging figures on behalf of whoever happens to be paying for its services, whether it's wealthy tax avoiders or the providers of lucrative government contracts, just happens to have found another convenient excuse for those in power not to do the right thing by the wronged and powerless.

But let's just assume, for the sake of argument, that it really would cost over £64 million to do the right thing. I still wonder whether the precedent of what Britain did to the Chagos Islands opens up another possibility. If the UK government has the power to deport the entire population of one of its overseas territories and send every single man, woman and child into exile for 45-odd years, maybe for ever, why can't it decide, in the national interest, to shut down the tax havens operating in some of the other ones?

The revenue wouldn't necessarily get its hands on all the money hiding in places like the Caymans, but recovering even a fraction of the money lost to the Exchequer would make this £64 million stumbling block look like small change. But, government contracts aside, I guess that tax haven-dependent organisations like KPMG also like to stay close to government to make sure that nothing like that ever happens.