When Prime Minister Theresa May triggered Article 50 last week, she led Britain into the risky, uncertain world of Brexit. While we campaigned passionately for the UK to remain in the EU, Brexit now seems unstoppable. The battle now is what Brexit will look like.
As an MP and MEP who have worked hard on tax, finance and anti-corruption issues in the UK and EU Parliaments, we are convinced of one thing in particular. As part of a post-Brexit, ‘Global Britain’, the UK should prioritise continuing to lead the world on anti-corruption and transparency issues.
Why is this so important to state now? One year ago on 3rd April, the public was rightly shocked and outraged when the Panama papers came to light. The 11 million leaked documents that originated from a Panamanian law firm detailed the dirty underbelly of international tax havens. They revealed money laundering, tax evasion and corruption on a scale that we long suspected but never quite had the evidence for (because of how secretive the offshore financial world is). And they were just the beginning – further similar leaks are coming, and the UK Government should be ready.
Why does the UK have such a special role in this? The most-quoted tax haven in the papers was the UK-governed British Virgin Islands. The UK controls around half of the world’s main tax havens, and together with its tax havens, it is the largest financial secrecy jurisdiction in the world.
Under David Cameron, the UK Government did lead on the anti-corruption, transparency agenda. We were the first major country to introduce a public register of who owns which company, and David Cameron also asked the Overseas Territories and Crown Dependencies to consider introducing similar registers in 2013. But, over three years on, so far only one Overseas Territory, the tiny Montserrat, has agreed to adopt such a register.
This is why it is so important that as part of ‘Global Britain’, Theresa May’s Government should not backtrack on the progress we have begun to make towards transparency. At this turning point in our history, the Government should ensure that Global Britain is more than a slogan – that it is moral, brave and just. Part of this should involve continuing to dismantle the system of offshore secrecy that we govern, that facilitates so much corruption around the world.
This is not just our view as Labour politicians. When I (Margaret) introduced an amendment to ensure transparency in the UK’s Overseas Territories by the time of the next general election, I was supported almost immediately by 87 MPs from eight different parties. These included the former International Development Secretary Andrew Mitchell, and other Conservative MPs such as David Burrowes, Caroline Spelman and others.
In a happy coincidence, on Monday, the anniversary of the Panama Papers, the House of Lords will be discussing a very similar amendment. It is being proposed by a Crossbencher, and supported by a Conservative, Labour and Liberal Democrat Peer. The Bishops support it too. I have said before that passing this amendment would be one of the most significant moments in my career. I urge the Government to strongly consider accepting the amendment. If they don’t, they should at least stop stonewalling it, and properly lay out how they will achieve transparency in the Overseas Territories. At the moment, we seem to have given up even trying to get it.
This week is also the Global Alliance for Tax Justice’s Global Week of action on tax havens. Thousands of campaigners in countries around the world will be calling for transparency in tax havens. Like it or not, this issue is not going away. Rather than backing down, the UK Government should seek to lead action rather than set its face against it.
Why is this all so important? Tax havens cost developing countries hundreds of millions of pounds every year, as money flows out of developing countries and into tax havens. Africa is actually a net creditor to the world, and the amount that developing countries lose to tax havens is far more than they receive in aid. There are countless examples of when UK-governed jurisdictions have facilitated money being hidden away from people in developing countries. For example, the Nigerian dictator Sani Abacha used British Virgin Islands companies to hold at least $450 million of the $2 billion he stole from the government during his time in power.
Progress is being made on these issues. As well as the amendment in the UK Parliament, MEPs in the EU Parliament recently voted for full transparency over company ownership of companies and trusts right across the EU. Businesses such as HSBC are privately expressing their support too. The case for secrecy in tax havens is getting thinner by the day. Transparency is coming. The UK Government can either continue to lead on this agenda, or become a laggard.
As we think about our role in the world post-Brexit, we should continue to lead on issues such as these, to maintain our place at the world’s top table, forge links with fast-developing countries, and ensure that British values of openness and fair play resonate around the world. We urge the Government to keep leading on this agenda, for the benefit of the world’s rich and poor alike.
Rt Hon Dame Margaret Hodge DBE MP is a former Chair of the House of Commons Public Accounts Committee and Chair of the All Party Parliamentary Group on Responsible Tax
Anneliese Dodds MEP is a Member of the Panama Papers Committee in the European ParliamentLike this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today.