Anal­y­sis May must take ac­tion over tax havens or be judged com­plicit

The Guardian - - NATIONAL - Juli­ette Gar­side The UK’s net­work of tax havens stretches as far as the Caribbean Pho­to­graph: Cd­wheat­ley/Getty /iS­tock­photo

David Cameron said it when he was prime min­is­ter, and the Labour MP Mar­garet Hodge has now made the same point. When it comes to clean­ing up tax havens, sun­light is the best dis­in­fec­tant.

It was at the G8 sum­mit in 2013 that Cameron first called for trans­parency. He urged the govern­ments of the UK’s net­work of off­shore cen­tres, which spreads from the Caribbean to the Chan­nel, to make pub­lic the names of those in­di­vid­u­als hid­ing be­hind shell com­pa­nies in­cor­po­rated on their shores.

His ef­forts were frus­trated by lob­by­ing from the off­shore in­dus­try, in­clud­ing Ap­pleby, the law firm at the cen­tre of the Par­adise Pa­pers.

Four years and three big data leaks later, the Bri­tish gov­ern­ment has yet to push through this re­form. Files from HSBC’s Swiss bank, and then from the Panama firm Mos­sack Fon­seca, ex­posed an orgy of tax dodg­ing, money laun­der­ing and cor­rup­tion.

The Par­adise Pa­pers leak shows off­shore ac­tiv­ity is con­tin­u­ing, even es­ca­lat­ing. In an emer­gency de­bate on tax avoid­ance and eva­sion held in the House of Com­mons yes­ter­day, MPs on both sides called once more for the gov­ern­ment to act on trans­parency. Those calls are be­com­ing in­creas­ingly dif­fi­cult to re­sist.

Hodge, who put tax avoid­ance on the po­lit­i­cal map in her time as chair of the pub­lic ac­counts com­mit­tee, took no pris­on­ers as she opened the de­bate. De­scrib­ing Bono as a “self-ap­pointed phi­lan­thropist”, she asked whether the rock star, who has a cameo in the Par­adise Pa­pers, would have used tax havens if he had thought we would all find out. The Queen’s fi­nan­cial ad­vis­ers will now be ask­ing them­selves the same ques­tion.

The gov­ern­ment does have the power to leg­is­late for change in those ter­ri­to­ries that recog­nise the Bri­tish monarch as their head of state, and her privy coun­cil as their supreme court.

It has used those pow­ers be­fore, to out­law dis­crim­i­na­tion against gay peo­ple and to end cap­i­tal pun­ish­ment.

The Con­ser­va­tive MP Andrew Mitchell agreed with Hodge. He be­lieves the time has come for the gov­ern­ment to act on pub­lic reg­is­ters.

In yes­ter­day’s de­bate, Mitchell sug­gested mea­sures could be in­cluded in the forth­com­ing fi­nance bill, which is ex­pected to pass next year.

Those havens that em­braced open­ness would get first-mover ad­van­tage, he pre­dicted, by at­tract­ing the lion’s share of the le­git­i­mate off­shore busi­ness.

If such ar­gu­ments can­not con­vince Bri­tain’s tax havens to open their own shut­ters, Mitchell be­lieves West­min­ster should use its pow­ers to let in the light. As a for­mer chief whip and Trea­sury rep­re­sen­ta­tive, pre­sen­ta­tive, his words carry weight.

Should the prime min­is­ter fail to act, she risks s look­ing com­plicit in wrong­do­ing.

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