Chris Blackhurst: Britain’s island tax havens need action
Amid all the diplomatic comings and goings on Syria and how to tackle Islamic State, an important but little-noticed high-level gathering has been taking place in London.
The Overseas Territories were holding the fourth meeting of their Joint Ministerial Council at Lancaster House.
Leaders from Anguilla, Bermuda, British Virgin Islands, Cayman Islands, Falkland Islands, Gibraltar, Montserrat, Pitcairn, St Helena, Ascension and Tristan da Cunha, and the Turks and Caicos Islands were hosted by a team from the Foreign Office, led by James Duddridge MP, the minister for the Overseas Territories.
The sessions were private, but Bermuda’s Cabinet Office said, ahead of the meeting: “It is anticipated that there will be a lengthy agenda for this week’s OT JMC with issues such as economic diversification and development, regional border security, global standards of financial regulation accountability and transparency and environmental sustainability being discussed.”
You bet. It’s to be hoped, too, that Duddridge told them in no uncertain terms what the Government thinks of them.
Because just look at the list of attendees. As some of the most secretive places on Earth they take some beating.
Anguilla, Bermuda, BVI, Cayman Islands, Gibraltar, Montserrat, and Turks and Caicos are in the first rank of offshore tax havens.
One of them, Cayman Islands, can even lay claim to be the world’s fifth-largest financial centre, after London, New York, Tokyo and Zurich.
Ugland House, just one commercial building among several in its capital, George Town, is the registered office to no less than 18,000 corporations.
Doubtless, the Overseas Territories will insist the services they provide are all above board, and their clientele are conducting legitimate business.
In which case, why the need for secrecy? As the former business secretary, Vince Cable, put it so succinctly:
“No one keeps their cash in tax havens for the quality of investment advice; these are sunny places for shady people.”
Several of those sitting opposite Duddridge represented territories branded by the EU in June this year as among the very worst global offenders: Anguilla, Bermuda, BVI, Cayman Islands, Montserrat, and Turks and Caicos.
They were on a black list issued by the EU for not doing enough to crack down on tax avoidance.
The European Commissioner for economics, taxation and customs, Pierre Moscovici, said he was publishing the roll call of “non-cooperative jurisdictions” in the hope they might adopt international standards.
“Our citizens can no longer tolerate that certain companies, often the most prosperous, avoid fair tax contributions and that certain tax regimes encourage them on this path,” said Moscovici.
Hmmm. Pierre, judging by their public utterances and posturing you’ve no chance.
Putting a figure on how much is stashed in tax havens is impossible. But the most recurring statistic, used by the various watchdogs, is north of $20 trillion.
Much of that is held in accounts listed in places called home by some of the leaders facing Duddridge.
Successive UK governments have repeatedly moved against tax dodging, promising they will crack this perennial problem. So far, they’ve got absolutely nowhere.
Meanwhile, they’ve been powerless to watch as properties in London and elsewhere in England and Wales continue to be snapped up by buyers registered in overseas tax havens.
In all, £150 billion-worth is thought to be in the hands of foreign purchasers hiding behind companies based in the likes of the BVI and Cayman.
In attempting to establish their identities, the Government has asked the Overseas Territories to publish a central register of corporate ownership.
Cameron said it was vital for improving transparency and meeting “the urgent challenges of illicit finance and tax evasion”.
He was told where to go. Orlando Smith, premier of the British Virgin Islands, said his and the other territories were against the idea.
Consultations with the finance industry and stakeholders, said Smith, had shown them to be opposed. Now there’s a surprise.
Smith and his colleagues must be told in no uncertain terms that the world has changed. Cameron hinted as much when he referred to “illicit finance”.
Of course, non-payment of tax is a major issue, but we also live in an era of international terrorism, drug gangs, trafficking in weapons, and politicians and officials wreaking untold damage to entire continents by their grasping corruption.
These, don’t forget, are our territories. They belong to Britain; they fall under our jurisdiction and sovereignty. Indeed, until 1983 they were known as the British Crown Colonies.
The names of the people who own and control companies registered in the Overseas Territories must be put in the public domain.
That’s the beginning. After that, the Channel Islands and Isle of Man, which are Crown Dependencies and have a different constitutional relationship with the UK, have to be required to do the same.
Only then, once we have put our own house in order, can we demand the same of the other, non-British-linked tax havens, among them Liechtenstein, Luxembourg, Switzerland and Panama.