Last evening I had the opportunity to attend a preview of ‘The Spider’s Web’, a new film about the City of London.
Made on a shoestring budget, it was nonetheless successful at showing how the City has accumulated most of its wealth, not principally by financing the Industrial Revolution* as many of us (me included) had imagined, but by financing the British Empire. When the empire disappeared the City transformed itself by creating other opportunities.
For the loss of the Empire they were gradually able to substitute a British financial empire by exploiting the reserve status of Sterling and its wide trading area, and ensuring that that Sterling trading was concentrated in The City. They then added US Dollar (so called Eurodollar) trading. When gradually the Crown Dependencies and Overseas Territories were all that was left of the Empire they capitalised on this by moving some activities offshore to those same remnants of the empire. These have now been come known as tax havens or, more correctly, secrecy jurisdictions.
Confidential Swiss bank accounts are, apparently, as nothing to the English trust which is then domiciled offshore in a secrecy territory. Over the years these have got ever more complex. David Cameron’s father is supposed to have been a main mover in this speciality and whilst he was reckoned to be worth £9.5million, left only £2.5million on his death. We now all have a reasonable idea where the remaining £7million went.
All this grey area is enthusiastically supported by the big four accountants and some ‘specialist’ law companies. Because of the nature of secrecy this supports – indeed thrives on, criminal funds. The City gets to skim this money whilst still always able to insist they are upright and like Manuel, that they ‘know nothing’ of what goes on in the Cayman Islands – or even Jersey, even though this last actually once advertised itself as an extension of the City of London.
If you want to well up with a sense of pride in Britain then this film may be best avoided. But if you feel you ought to know why the City of London hangs on to such extraordinary wealth, whist hiding behind the Rule of Law, then you have only to endure it for an hour and a half before the lights come back on and you can start cheering up….
The film covers an area of Britain’s economic activity that is so prominent that everyone ought to know about it, whilst remaining an area in which all those smart public school chaps impart profound shame to all the rest of us.
The film will shortly be able to be obtained for showing to interested groups. Information is here under ‘Organise a Screening’.
* Peter Cain contributes a lot of interesting detail on the development of the City and how the industrialists and City financiers were more or less two different breeds. Below is a quite lengthy ‘cutting room floor’ piece, on which much of the film is based and which is fascinatingly instructive.