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Theresa May urged to finally get tough on tax havens

87 MPs from eight parties led by Margaret Hodge and Caroline Flint call on Theresa May

to tackle UK tax havens, the Overseas Territories.

 

 

MPs from eight parties are backing an amendment, tabled by Margaret Hodge and moved by Caroline Flint, to the Government’s Criminal Finances Bill that would finally ensure that the UK’s Overseas Territories adopt the same transparency standards as the rest of the UK by 2020.  

They would be required to introduce public registers of beneficial ownership which would publicly disclose who owns the anonymous companies they host, shining a light on the huge wealth hidden offshore.

 

Caroline Flint MP said: “This is a cross-party, compromise amendment. We’re delighted to have so many MPs from right across the House of Commons supporting it.  I hope that all MPs, and the Government, will back the amendment.

 

“The public are fed up of paying their taxes fairly, whilst the super-rich can hide their money away in secretive offshore accounts. And we know how much tax havens cost developing countries. The OECD has recently estimated that they cost developing countries around three times the global aid budget.

 

“I hope the Government will listen to the public mood and back our amendment on Tuesday, so that we can finally get some transparency in the UK’s tax havens.”  

 

On launching the amendment in December, Dame Margaret Hodge MP said: “The Government published the Criminal Finances Bill to try and tackle corruption. While it includes some important and welcome measures, it is astonishing that the bill doesn’t even mention the UK’s tax havens. The MPs supporting my amendment are saying that the Government can’t possibly claim to be tackling corruption without getting a grip on its Overseas Territories, which are governed by the UK and facilitate all kinds of corruption and tax avoidance and evasion right across the world.”

 

“Over half of the corporate entities exposed by the Panama papers were registered in the British Virgin Islands (BVI). BVI is a British Overseas Territory. The UK is at the centre of a global web of tax havens which are costing UK taxpayers and developing countries huge sums of money.”

 

“David Cameron asked the UK’s Overseas Territories to consider adopting the same level of transparency as the rest of the UK over three years ago. Since then we have seen dither from the UK and delay from our Overseas Territories, and now Ministers seem to have completely given up on getting our Overseas Territories to do the right thing. Our amendment would ensure that they are given a clear time frame in which they need to agree the transparency which is vital to tackle corruption.

 

“Theresa May has said some good things on tackling tax avoidance and stopping businesses from using tax havens. It’s time for her now to put her good words into action by accepting this cross-party amendment. Giving Overseas Territories three years to prepare for change is reasonable and the Government can and should provide the necessary support to the Overseas Territories so that they can adjust their economies. Britain should as David Cameron said lead by example and not allow the Overseas Territories to be the last kids on the block.”

 

On launching the amendment in December, former International Development Secretary Andrew Mitchell MP said of the amendment, “The Coalition Government, led by David Cameron, led the world in tackling corruption and tax evasion, and should be congratulated for being the first G20 country to publish a register of who owns which companies. Some good action has been taken on ensuring that the UK’s Overseas Territories follow suit. I hope this amendment will help the UK Government to persuade the Overseas Territories to adopt the same level of transparency as the UK. This is so important for people in developing countries who are losing out due to tax dodging. For example, Africa is actually a net creditor to the world. I encourage other Conservative MPs to support the amendment, and I hope the Government will support it and ensure transparency in our Overseas Territories.”

ActionAid Head of Advocacy Ms Charlie Matthews said:“Nearly a year after the Panama Papers scandal meaningful progress towards transparency in UK-linked tax havens seems to be grinding to a halt.   

 

“The world’s poorest countries suffer the most when money disappears offshore instead of being invested in schools and hospitals.

 

“The UK was the first G20 country to introduce a public register and has led the way on global transparency. However, the slow pace of change in the Overseas Territories is undermining this progress. It’s now time for Theresa May to take the next step and bring these UK-governed tax havens into line.”

 

Christian Aid’s UK Parliamentary and Political Adviser Simon Kirkland said: “Since 2013, the UK Government can be proud of action it has taken to lead the world in tax and transparency, and the 2015 Conservative Party’s manifesto pledged that this would continue.

 

“We’re extremely worried that action is now stalling, and thank the MPs who are supporting this amendment for working to ensure that the Government delivers on its previous commitments.

 

As the UK considers what role it will play in the world post-Brexit, we hope that continuing to lead on transparency and anti-corruption issues will be an important part. Now is not the time for the UK to back away from its leadership role. Accepting this amendment would be a good first start in this important work.”

 

The amendment comes as UK Government Ministers in recent weeks seem to have given up on getting the same transparency in the Overseas Territories as in the rest of the UK. While Ministers have been asking the Overseas Territories to introduce transparency for over three years, they now seem to have given up - and are simply saying that the Overseas Territories will be expected to follow the rest of the world. Campaigners say that without the Hodge amendment, which will be voted today, it is unlikely that transparency will be introduced in the UK’s Overseas Territories for many years to come.    

 

The UK’s Overseas Territories include the British Virgin Islands, Bermuda and the Cayman Islands - some of the world’s most notorious tax havens. These low tax and secretive islands provide the perfect place for criminals and those avoiding tax to hide their money. More than half of the companies revealed in the Panama Papers leak were registered in the British Virgin Islands. Campaigners estimate that as much as $32 trillion may be hidden in tax havens worldwide.  

 

Tax havens have a particularly damaging effect on poorer countries. The UN Conference on Trade and Development estimate that tax havens cost developing countries at least $100 billion a year in lost revenue.

 

The amendment is supported by senior MPs from eight parties. They include the former International Development Secretary and Chief Whip Andrew Mitchell MP (Conservative), DUP’s Westminster leader Nigel Dodds MP, Labour’s former deputy leader Harriet Harman MP, Public Accounts Committee Chair Meg Hillier MP, the SNP’s Brexit spokesman Calum Kerr MP, the Liberal Democrats’ Foreign Affairs spokesman Tom Brake MP and the Green Party co-leader Caroline Lucas MP.

 

The amendment is also supported by ActionAid, Christian Aid, Save the Children, Global Witness, Transparency International, Oxfam, Publish What You Pay UK and many others.

 

Polling has consistently shown that a majority of the public back this action. The most recent ComRes poll showed that around two-thirds of the UK public want the UK to insist that its tax havens adopt the same transparency as the rest of the UK.

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