I have joined with over 80 MPs to table an amendment to the Criminal Finances Bill.
The overall aim of the amendment is that by 2020 we will have public registers of beneficial ownership in all the UK’s Overseas Territories (OTs). This is a cross-party amendment. To date, only one OT, Montserrat, has committed to a public register. This amendment is designed to encourage the OTs to speed up progress in committing to public registers. It would strengthen the Government’s hand in its negotiations with the OTs, and would make public registers in the OTs more likely.
This amendment is needed because:
• Tax havens like the OTs are costing developing countries at least $100 billion a year according to UNCTAD. The OECD has said that tax havens are costing developing countries a sum of up to three times the global aid budget.
• The International Development Select Committee recently said, “lack of transparency in the OTs will significantly hinder efforts to curb global corruption and continue to damage the UK’s reputation as a leader on anti-corruption.”
• The British Virgin Islands was the most used tax haven in the Panama Papers.
• Transparency progress from the OTs has not been quick enough. More than three years after first being asked by the Prime Minister, only one OT has committed to a public register.
• The UK along with its OTs and Crown Dependencies is still the biggest secretive tax jurisdiction in the world. If we want other countries to follow the UK in introducing public registers, we should lead in all our jurisdictions.
• Public transparency of company ownership information in the OTs would allow corruption to be rooted out in the most effective way. NGOs, journalists and people in developing countries would all be able to see the information, and hold companies to account.
• Public registers in the OTs would promote investment – investors would be able to see who they are doing business with.
• The new Prime Minister recently promised a crackdown on companies’ use of tax havens. Public registers would be the first step in this important work.
In order to allow the proceeds of crime to be recovered, to tackle money laundering and corruption, and to counter terrorist financing, the amendment requires the Home Secretary to take two steps. First, she will be required to provide all reasonable assistance to OT Governments to help them to establish a public register of beneficial ownership. Second, if any OTs are yet to introduce a public register by the end of 2019, she will be required to prepare an Order in Council to require them to do so. No-one hopes that this constitutional backstop will be used, but in order to ensure quicker action from the OTs, it is necessary to keep it as an option for the UK Government. The amendment is a compromise following Ministerial concerns about the pace of action, and the difficulty of requiring Crown Dependencies (CDs) to act. We have allowed the longest possible timeline within this Parliament, and have focussed the amendment on the OTs, where the constitutional right of the UK to legislate if necessary is clearly set out both in law and in UK Government policy.
When I speak with local businesses in Delyn a recurring theme is that the system is being manipulated by large multi-national corporations to minimise their tax liability, yet small and medium sized businesses based in Delyn play by the rules and pay their full tax bill. This is clearly unfair and we need to crack down on businesses and countries, who are Overseas Territories of the UK, which operate in this manner.
The amendment I have tabled with other Labour MPs seeks to bring about an end to these unfair practices. I very much hope the Government will make the right choice and support the amendment in the Criminal Finances Bill. It would be a sign to people and businesses in Delyn that the Government were finally serious about tackling tax avoidance and evasion.
The Bill will be read at Report Stage in the New Year and I know the adoption of this cross-party amendment would be an excellent way for businesses in Delyn to start 2017. Failure to support the amendment will continue the status quo of allowing multinationals to ride rough shod over our vitally important small and medium businesses who provide decent employment in Delyn.