David Cameron has talked tough but done very little, and action is long overdue
The Panama Papers have revealed what many of us suspected: some of the most powerful people on our planet have been adept at hiding their fortunes from both the tax man and, in some cases, law enforcement agencies.
And while developments in Panama may sound exotic, many of the most convoluted spider trails of secrecy have run, often via British-protected jurisdictions, right back home to Blighty.
The disappointing evidence from Panama must, surely, put more pressure on David Cameron to stop pussyfooting around the issue of tax havens. Recently he has attempted to brush off criticism by pointing to a conference he is hosting next month against corruption.
But organising a conference to talk about taking action is not the same thing as clamping down on abuse. Seen from Brussels, Cameron’s record is patchy at best, and actively unhelpful at worst.
First, in order to work out where corrupt officials and tax dodgers are hiding their money, the authorities need to know who owns both companies and trusts. It’s great the UK now has a so-called ‘beneficial ownership register’ for companies.
But the UK government led the charge in Brussels to stop new measures to extend this transparency to cover trusts – the oligarchs’ favourite way to hide ill-gotten gains. They also fought to prevent the creation of a pan-EU register, which would have helped journalists and researchers to track funds across countries.
Second, in contrast with Ed Miliband’s threat to take British-linked tax havens to the OECD if they failed to clean up their act, Cameron has talked tough but done very little. Symbolic of this is his failure to ensure that all British-protected jurisdictions create their own registers of beneficial ownership.
The same mantra has been repeated to me by government ministers from both the UK Conservative government and from British-linked jurisdictions: that the latter are independent in virtually all matters aside from defence.
As the Drex case shows, however, in practice there is a close and operational relationship between the UK and these jurisdictions, contrary to this ‘arms-length’ image – and as Jeremy Corbyn has pointed out, precedents exist for the UK intervening in their domestic affairs. Action on tax and money laundering is long overdue.
Finally, the UK under Cameron has persistently dragged its feet when it comes to action against tax dodging at EU level. Last year the European Commission published its first ever list of tax havens. It is also considering my call for tax havens and the companies that use them to be banned from accessing EU funds.
But the UK has persistently argued against almost all action by the EU in this area, and Tory MEPs were almost alone in the European Parliament when they voted against my report calling for this action against tax havens and other facilitators of tax dodging.
Cameron’s actions against tax havens have been as slow as a Panamanian sloth and as rare as its endangered Golden Frog. Hopefully these new revelations from Central America will shift his complacency – and force him to take action.
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