Monday, April 27, 2009

Climate of fear in British tax haven

Take a look at these remarkable words published in Britain's Hansard (official parliamentary publication) last Thursday, concerning a British Foreign Affairs Committee inquiry into Britain's Overseas Territories, notably looking at the Turks & Caicos islands. Here is a statement by one member of the inquiry:

"The memorandums that we received were unprecedented, in my experience on the Committee, with respect to their volume and, sinisterly, in the degree of fear that lay behind them, for those submitting them. Considerable numbers were sent anonymously because people were not prepared to divulge their names

. . .
Citizens of a British overseas territory were afraid to be seen in public with Members of this House, afraid to give evidence and afraid even to be seen at a reception talking to us. The only other places I have been to on overseas visits where people were in fear of talking to me as a Member of Parliament are places such as the People’s Republic of China. Does the right hon. Gentleman agree that that was a shocking thing?"

Others on the team - note Sir John Stanley's comments too, for example - confirmed this climate of fear. And the conclusion - which goes to the heart of Britain's relationships with some of the world's dirtiest tax havens - is extremely important.

Sir John Stanley: "Does not what the right hon. Gentleman has read out from the report of the independent inquiry appointed by the FCO say something about the stewardship of the Foreign Office over many years? Its man was there—I am not referring to any particular individual but to governor after governor. There is something wrong in London as well as in the territory on the stewardship issue."
. . .
Andrew Mackinlay MP: "What disturbed me—I think you will share my view, Mr. Bercow—is the uncertainty of our assumption that the House is ultimately the Parliament for all the overseas territories. They may have delegated legislatures, but if the House decides to go to war, those territories go to war. They do not have an op-out. This is their Parliament, and the UK Government can rescind and vary their constitutions as and when they wish. We cannot escape our responsibility.

In short, Britain has a lot of control and influence over its tax havens, and it could and should act. It seems to have been a heated session in parliament:

"The reason why I erupted is that financial regulation on the Cayman Islands is wholly the responsibility of the United Kingdom Government. In their jurisdiction, over which they have responsibility, the British Government here in London—not the overseas territory’s Government—are acquiescing in something that offends the OECD guidelines, and that is happening with their full knowledge and full consent. On the Cayman issue, therefore, they do not even have the fig leaf of suggesting that these things are happening because the overseas territory Government and legislature are dragging their feet."

But read through the whole section - it is just fascinating.

And, we should add, there is something very rotten indeed in the Crown Dependencies too - look no further than this example.

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