October 21, 2016

Opposition calls on Cameron to tackle British tax havens

Britain’s Prime Minister Cameron

The leader of Britain’s main opposition party called on government on Tuesday to tackle tax havens, saying it was time British Prime Minister David Cameron stopped allowing “the super rich elite dodge their taxes”.

After leaked documents from a Panamanian law firm how the world’s rich and powerful used secretive offshore company structures to stash their wealth, Cameron has come under pressure to clamp down on tax evasion in British-linked territories.

Cameron has so far been silent on the release of the so-called Panama Papers, declining to comment on the naming of his late father and members of the ruling Conservative Party among the list of clients who used the law firm, Mossack Fonseca.

On Monday, his spokeswoman said it was a “private matter” when asked whether the leader’s family had money invested in offshore funds set up by his father. The government has promised to investigate the leaked data.

Leader of the opposition Labour Party, Jeremy Corbyn, called on Cameron to do more.

“There cannot be one set of tax rules for the wealthy elite and another for the rest of us,” Corbyn said at the launch of Labour’s campaign for local elections next month.

“The unfairness and abuse must stop. So I say this to the government and to the chancellor (finance minister), no more lip service, the richest must pay their way.”

Corbyn said Britain had a “huge responsibility” as many tax havens are British overseas territories, like the British Virgin Islands and Cayman Islands, or Crown Dependencies, such as Jersey or the Isle of Man.

In 2013, Cameron put tackling tax avoidance at the heart of his agenda when hosting a G8 summit, especially in some of Britain’s former colonies, which increasingly rely on a combination of tourism and revenues from shell companies and trusts which often hide wealth.

Three years later, some opposition lawmakers say the release of the Panama Papers show that the battle is far from won and are demanding that the British leader stamp British control over its overseas territories, most of which are self-governing.

According to media which have seen Mossack Fonseca’s files, more than half of the 200,000 companies set up by the firm were registered in the British Virgin Islands, where details of ownership do not have to be filed with the authorities.

The Financial Secrecy Index puts the British Virgin Islands 21st out of 92 countries ranked according to their secrecy and scale of their offshore financial activities.

But Dominic Grieve, a former attorney general and Conservative chair of the Intelligence and Security Committee, said that preventing overseas territories from running their own financial services would push criminality elsewhere.

“I think the government has a responsibility towards encouraging overseas territories to find legitimate ways of economic development and the financial sector is undoubtedly such a legitimate method,” he told BBC radio, adding that people only use tax havens if their own systems were “onerous”.

“The best way of ensuring that … people do not want to go to the BVI is to provide the right environment domestically.”

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