Time to Tackle the UK's Tax Havens

12/05/2016 09:44 | Updated 12 May 2016

Today, the Prime Minister will be hosting a gathering of world leaders aimed at tackling corruption.

Corruption and tax dodging eat away at societies and hurt the poorest, especially women and girls. When poorer countries are unable to collect a fair share of tax, vital public services like schools and hospitals can be left to crumble.

Today's Anti-Corruption Summit in London is a golden opportunity to deliver on promises the Prime Minister made in 2013, and open up a new era of transparency and openness, with the UK at the forefront.

Unfortunately, it looks as though what we will see instead is business as usual, with developing countries continuing to lose out as money that could build schools and staff hospitals for the world's poorest people is stashed in secret offshore accounts.


Poor countries miss out on billions every year in tax revenue - money that is urgently needed to fund the fight against poverty. The Mossack Fonseca leak has shone a spotlight on secrecy jurisdictions such as Panama, but the problem exists much closer to home: nearly half of all the shell companies listed in the Panama Papers were registered in the British Virgin Islands. Places such as this and the Cayman Islands or Bermuda - whose citizens hold British passports - are currently havens of secrecy, where shell companies can be used to hide money from law enforcement or tax authorities.

Allowing this situation to continue is not in line with this Government's record of working to tackle global poverty and promote tax transparency - through meeting the target of 0.7% of GNI on international aid, putting tax and transparency on the international agenda at the 2013 Lough Erne G8 meeting, and most recently creating a public register of beneficial ownership for the mainland UK. When this is launched in June the media, investors, law enforcement, and civil society will all be able to see who really owns and controls companies registered here, making tax dodging and corruption much easier to root out.

The Prime Minister has said in the past that he would like the UK's overseas territories to follow suit and introduce public registers of their own. In a letter sent to the heads of these territories in 2014 he said that he was "of the view that making company beneficial ownership information open to the public is by far the best approach". The Nigerian government agrees, and have called for public registers to be one of the key outcomes from the Anti-Corruption Summit that they will attend this week. Even if the UK's tax havens resist, the UK has unlimited power to legislate for these territories, as it has done in the past on issues such as capital punishment. So it is all the more surprising that the British Virgin Islands have not even been invited to the Summit this week.

Without further action, the UK will continue to be a central part of the broken global tax system. The announcement last month that the overseas territories will make ownership information available to UK law enforcement, rather than making the information public, will not help developing countries to track the money leaving their borders. Nor will it enable journalists and civil society campaigners to find out who ultimately owns hidden companies and act as a check on tax fraud and corruption.

The tax and anti-corruption summit today presents the Government with a unique chance to turn its promises into concrete action. Anything less than fully public registers of beneficial ownership in all UK territories will constitute a failure. It will mean that money which could be used to provide healthcare, education and other basic services to women and girls in the world's poorest countries will continue to be siphoned off and hidden out of view.

They deserve better - it's time for the Prime Minister to deliver.