Leaders of
overseas territories, including Bermuda and Jersey, summoned to London in move
to tackle tax evasion
The Guardian, Patrick Wintour, political editor, Tuesday 4 June 2013
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| Jersey, in the Channel Islands, is among overseas territories being asked by the government in Westminster to share tax information. Photograph: Chris Coe |
David Cameron has asked the senior ministers of all Britain's overseas territories –
including Bermuda, Jersey and the British Virgin Islands – to London on the eve
of this month's G8 summit to urge them to root out the multibillion-pound
evasion industry by signing up to agreements to share tax information.
Britain has
made a clampdown on corporate and individual tax avoidance the central theme of
its chairmanship of the G8 summit in Northern Ireland on 17 and 18 June, and
Cameron has decided that he cannot be a credible chair of the summit if he is
not seen to be trying to put Britain's own house in order.
The
intensity of the pressure that Cameron will place on the 10 crown dependencies
and overseas territories to be more co-operative has, however, not yet been
determined, amid signs there are some disputes between Downing Street and the
Treasury on what to demand, and whether excessive public pressure will lead
them to refuse to co-operate.
Cameron
wants British offshore havens to sign an OECD convention to give mutual
assistance in tax matters, which provides for the sharing of information
between countries, seen as key to ending evasion.
Some of the
British havens have agreed to the automatic exchange of information with some
western economies, but not as widely as prescribed by the convention.
The prime
minister plans to chair a tax and transparency conference alongside Nick Clegg
on the weekend before the G8 summit itself. Cameron is looking at the
possibility of the UK dependencies and overseas territories formally signing
the OECD convention in the cabinet room on Saturday, but government sources
said the plan could yet unravel in the face of hostility from the overseas
territories.
The precise
constitutional relationship between the UK and the overseas territories is a
matter of dispute, but some aid agencies claim the UK can in effect force the
crown dependencies to close down the tax loopholes.
Cameron
wrote to the crown dependencies and overseas territories in May saying he
wanted the G8 to "knock down the walls of company secrecy" to reveal
who really owns and controls firms.
The letter
calling for action on tax information exchange and beneficial ownership was
sent to leaders in Bermuda, the British Virgin Islands, the Cayman Islands,
Gibraltar, Anguilla, Montserrat, the Turks and Caicos Islands, Jersey, Guernsey
and the Isle of Man.
Many of
them are furious at being labelled tax havens, and fear the basis of their
economies is being threatened, and that they will be put at a competitive disadvantage.
ActionAid
claims nearly one in every two dollars of large corporate investment in
developing countries was routed through a tax haven. It claims 98 of the FTSE
100 multinational groups have companies in tax havens.
Melanie
Ward, head of advocacy at ActionAid UK, said: "It is perfectly possible to
achieve a G8 deal to tackle tax dodging that works in the interests of rich and
poor countries alike. The prime minister has said that he will do this, but the
question is whether he has the clout to achieve it.
"The
first test is in the UK's own backyard, and is whether he will pull all 10 of
the UK's own tax havens – the overseas territories and crown dependencies –
into line.
"At
the pre-G8 tax and transparency event on 15 June, David Cameron must ensure
that all 10 sign up to the existing multilateral convention on tax information
exchange."
Brenda Cox,
spokesman for the If campaign, a coalition of 200 groups campaigning in the
run-up to the G8, said: "Cameron has to walk the walk, as well as talk the
talk. By getting the UK house in order, he will have the opportunity to make a
wider breakthrough at the summit itself on the issue of beneficial ownership,
the way to get behind the anonymous shell companies."
Cameron and
the chancellor, George Osborne, are still gauging how far to push the G8 on
measures to make it easy to establish the real owners of companies and assets,
in the face of hostility primarily from America and Canada.
Osborne is
also facing a push-back from business about imposing excessive regulatory
burdens on companies to report their profits on a country by country basis.
Ahead of
the summit, Cameron will meet the European commission president, José Barroso, this
week, prior to a nutrition summit this weekend.
In the week
running up to the G8 summit itself, Cameron will set out his vision of
Britain's role in the world and the continuing relevance of the G8.
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| Offshore Secrets |
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