Question asked by : To ask Her
Majesty’s Government what assessment they have made of revelations
contained in the Paradise papers, particularly in relation to the
British Overseas Territories and Crown dependencies.
The Minister of State, Department for International Development
(Lord Bates) (Con)
Very good. My Lords, HMRC takes allegations of non-compliance on
tax seriously regardless of where it takes place in the world.
HMRC is looking closely at all the information the ICIJ has
publicly released in the Paradise papers to see whether they
reveal anything new that could add to its existing leads and
investigations.
My Lords, the Government may be looking closely, but they have
been looking closely at this issue for a long time with very
limited action. When will the Government accept that there is
deep anger among taxpayers in this country about the revelations
that the rich and powerful are able to get away with aggressive
tax avoidance, and that transparency is the best antidote? Will
they give a fixed date by which the overseas territories and
Crown dependencies will have to open a public register of the
beneficial ownership within their jurisdictions?
The noble Lord is right that we have been looking at this for a
long time, but we have also been acting for a long time. Since
2010, we have introduced almost 100 measures that have raised
£160 billion in tax revenue. That is more than the combined
health budget for England, Wales, Northern Ireland and Scotland.
We have one of the lowest tax gaps in the world—certainly the
lowest on record in this country. We have been working very hard
and taking this very seriously and will continue to do so.
As regards the overseas territories and Crown dependencies,
again, this has been taken very seriously. Just two weeks ago at
the joint ministerial council, the Prime Minister stressed the
importance of this. We already have central registers in four of
those authorities, including the Cayman Islands, Bermuda and
Gibraltar. Montserrat and Anguilla will have registers by April
of next year. The Turks and Caicos Islands have been particularly
affected by the hurricane, so they have been given a little extra
time, but we are very clear that action needs to be taken.
(LD)
My Lords, the Council of the European Union, meeting in Brussels
a week last Monday, issued its blacklist of tax havens. Its
conclusions reveal that a number of British dependencies and
overseas territories on the grey list have entered into
commitments with the EU to implement tax good governance
principles. Specifically, Bermuda, the Cayman Islands, Guernsey,
the Isle of Man and Jersey have undertaken to address concerns
about their tax regimes, which produce profits without real
economic activity. Do the Government support the EU in this
initiative, and will they impose the same sanctions on
non-compliant countries after Brexit as the EU proposes?
We certainly support the work that ECOFIN has undertaken in
producing this report. We have been at the forefront of the whole
process. We recognise the statements on, and identification of,
those jurisdictions that are co-operative. That is an important
point to stress: none of the Crown dependencies or overseas
territories was listed as non-co-operative; they were all on the
co-operative list. Areas in which the Council wants activity to
take place have been identified, and we fully support that.
(Con)
My Lords, the disinformation generally surrounding this issue is
just staggering, as is the conflation of illegal tax evasion,
lawful tax avoidance and money laundering. Does my noble friend
agree, particularly in light of his previous answer, that the new
gold standard of proactive reporting and transparency in favour
of tax authorities in respect of the capital and income of any
legal person, trust or individual using its financial services
industry, is in fact, the Cayman Islands?
The Cayman Islands has work to do, as have all jurisdictions to
meet the standards that have been set down. However, it is true
to say that with its centrally held register, the Cayman Islands
at the moment is going above and beyond what is required by the
Financial Action Task Force. We are absolutely resolute about
making sure that all UK citizens pay all tax due by them,
wherever it is held in the world. That is a very important
commitment, and we intend to ensure that all jurisdictions hold
to it.
(Lab)
My Lords, given the level of public shock at what was revealed in
the Paradise papers, the Minister’s answers today follow the same
emollient pattern of recent years, in which it has been said, “We
are doing what we can and we are getting certain proceeds”. Yet,
the Paradise papers reflected that a whole range of individuals
and companies owe tax on a massive scale, and are putting
themselves under the jurisdiction of these islands and escaping
taxation that is owed to this country. I ask the Minister to
respond to my noble friend’s Question with the degree of
forthrightness it demanded.
The question was about a public register. The UK is the first
major economy to issue a public register of foreign-owned
companies. We are leading in this; it was a landmark commitment
given at the global Anti-Corruption Summit, which initiated. So far, it is not
required to make sure there is a public register in other
jurisdictions. It has to be available to tax authorities and to
security authorities in the case of counterterrorist finances.
That is what is happening in those jurisdictions at present, but
there is still more to do and we are far from complacent.
(Lab)
My Lords, does the Minister think the problem might go away
because we have responsibility for defence and security of our
overseas territories but so few ships that we cannot do it? If we
are unable to defend them, maybe they should no longer be British
Overseas Territories.
The overseas territories and the Crown dependencies are a very
important part of the British family and will be a very important
part of global Britain going forward. It is important that, as
part of that family, everybody works together to ensure that
people who have assets held overseas make sure that they report
them in an accurate and timely way to the tax authorities of
their countries.
