Overseas Territories Joint Ministerial Council

Thursday 3rd December 2015 Commons Chamber

10:35

[Mark Durkan (Foyle) (SDLP)]

(Urgent Question): To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the meeting of the Overseas Territories Joint Ministerial Council.

[The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (James Duddridge)]

I thank the hon. Member for Foyle (Mark Durkan) for his urgent question, which gives me an opportunity to talk about the excellent work of the Overseas Territories Joint Ministerial Council. The meeting formally concluded late last night, but in reality it will carry on today with a number of bilateral meetings across Whitehall, including with me.

The Joint Ministerial Council is the highest political forum established under the 2012 overseas territories White Paper. It brings together Ministers, elected leaders and representatives from the overseas territories for the purpose of providing leadership and shared vision across the territories.

At this year’s meeting we discussed a large range of subjects, including child safeguarding, economic development, financial services transparency, climate change, sustainable energy, education and skills and the challenges of providing healthcare in small jurisdictions. We also discussed sports participation by the overseas territories, pension arrangements with the Department for Work and Pensions, governance and security. We had a very full communiqué establishing how we would work together over the coming year. It has been very successful and I look forward to further meetings later today, following up on some of the commitments made last night.

[Mark Durkan]

Thank you, Mr Speaker, for granting this urgent question, which I have asked from my perspective as an officer of the all-party group on anti-corruption. I welcome what the Minister has said about what he regards as the success of the council meeting, and I hope that we can see evidence of that in relation to key issues, such as child safeguarding and climate change.

However, in relation to financial services transparency, which is what most concerns us, how satisfied is the Minister that there really has been significant progress on, for example, the signal stance that the Prime Minister has taken against corruption and the strong indications that were made about the criteria set down by the Treasury on the requirements for real transparency and proper registers of beneficial ownership of companies in the overseas territories, because they provide the shelter for all the tax scams and shams? This is not just populist tax jealousy; these scams and shams scandalise legitimate businesses and rob developing countries of key moneys. It is not a victimless crime.

Are the overseas territories co-operating? As I understand it, only Montserrat has agreed to the standards that are sought. Where are the other overseas territories on that? In the ongoing bilateral meetings today, will we really see moves from others? Is it true that the Cayman Islands have flatly refused and are making no moves on these matters?

When will we hear from the Treasury, if not from the Foreign and Commonwealth Office, on how detailed the commitments are going to be on meeting the requirements that it has set down for real transparency, because other businesses and professionals need to see them? Organisations that are working on behalf of global tax justice, such as Oxfam, Christian Aid, ActionAid and Global Witness have concerns and want to support the Government’s efforts. When will we know more?

[James Duddridge]

An enormous amount of progress has been made over the past few years in relation to financial services transparency, particularly openness on tax. I think the hon. Gentleman wants to probe me more on beneficial ownership and the transparency around company ownership. I will quote from the joint communiqué that was issued overnight and is found on the Foreign Office website. When further bilateral meetings are held, the Government usually issue a written statement the following week, as we intend to do when we have had the benefit of the additional post-JMC bilateral meetings.

The communiqué was written by all members of the overseas territories, signed up to by all members, and agreed to by the UK Government. The members

“agreed to hold beneficial ownership information in our respective jurisdictions via central registers”.

There is a lot more text, but I will end with the final sentence:

“We agreed that addressing this issue would be given the highest priority and that progress on implementation would be kept under continuous and close review.”

I have had several meetings today, it will be high on my agenda over the coming months, and we will make progress. However, some of the detail is quite technical. I think that some of the hon. Gentleman’s views of this issue are a snapshot of the situation in the middle of the JMC. There is often quite extensive, and sometimes quite robust, discussion, but late last night we got to a shared understanding that moves us further forward.

[Crispin Blunt (Reigate) (Con)]

The Minister will know that three quarters of the jurisdictions of the Commonwealth continue to criminalise same-sex sexual activity. Happily, that is not the case in the overseas territories, where the only discrimination is in Bermuda and the Cayman Islands, which have different ages of consent. Only Gibraltar and the Pitcairn Islands recognise same-sex unions and facilities for same-sex adoption. What discussions has the Minister had with our overseas territories about their continuing to improve their position in respect of anti-discrimination measures towards their lesbian, gay, bisexual and transgender citizens?

[James Duddridge]

I thank the Chair of the Foreign Affairs Committee for raising this issue. Progress has been made. He mentions the Cayman Islands, and only this week their Premier reported to their parliament on their recognising equal marriage, which is a great step forward. Small territories have legislative constraints on time, and it may take them longer to get all the legislation through that they would want. However, this is a priority for a number of territories, and we will do all we can to support them in bringing forward modern legislation that we would like to see around the world so that everybody, regardless of their sexuality, is treated equally.

[Catherine West (Hornsey and Wood Green) (Lab)]

Only last week, Mr Speaker, you told the House that we should be doing more to celebrate the progress being made by the overseas territories on transparency of the affairs of companies based in those territories. I will welcome progress where progress is made. The hon. Member for Foyle (Mark Durkan) mentioned Montserrat in particular, which should be commended for introducing a public register for its small financial sector. It is also commendable that the overseas territories have been leading the way with the commitment to automatic exchange of information.

However, we all know that there is much more room for improvement. Most developing countries remain outside these new commitments to exchange information, and there is much more that the UK and the territories can do to help bring them in. A clear commitment to providing information to developing countries on a temporary, non-reciprocal basis would help, as would producing statistics on the source of assets in our financial institutions. That would genuinely be something to celebrate. All the world’s major financial centres have agreed to the same standards as the overseas territories on information exchange, as the G20 has made clear. It is the new global standard, and we should expect nothing less.

On company ownership transparency, we will celebrate when the UK Government commit to supporting Montserrat in making access to its register free, online and in open data format, and when we see such public registers implemented across the rest of the overseas territories. Anguilla, Turks and Caicos Islands, Bermuda, the Cayman Islands, the British Virgin Islands: none is inclined to change its position at all, despite even the Prime Minister watering down his demands. Instead of demanding public registers, as the Prime Minister once advocated, the Department devised three tests for the territories’ regimes to meet: first, access to company ownership information without restriction; secondly, an ability quickly to identify all companies that a particular person has a stake in; and thirdly, a requirement that neither the companies nor their owners are tipped off. All those are good things, but they are the minimum that should be done. The Government are responsible for good governance in the territories, not for a minimal standard of governance. There is a real lack of ambition on this crucial question.

As the events of this year’s council have shown, there is some disappointment. The Financial Times reported this week that the Cayman Islands have flatly refused the UK’s request to give law enforcement agencies access to beneficial ownership information, arguing that such a basic measure as allowing investigators to trace the proceeds of corruption poses a “competitive disadvantage”. The Prime Minister has called on the territories to act since 2013. Surely it is now clear that his Government need to redouble their efforts to bring standards up to scratch.

In fiscally difficult times at home, the overseas territories, as leaders in international finance, should have world-leading standards, not be world leaders in enabling corruption and tax evasion. My party made a manifesto commitment to require the overseas territories to produce publicly available registers of the real owners of companies based there. When will the Government match our, and indeed the general public’s, ambition in this regard?

[Mr Speaker]

Order. I thank the hon. Lady for her contribution, but before the Minister answers, let me just say to the House—I hope, for the last time—that from now on I am minded to insist on the time limits for these exchanges. The first point is that the hon. Lady was supposed to take two minutes, but she took over three. She is by no means the only offender, and I recognise her sincerity and commitment, but she was over her limit. It is as simple as that.

The second point is that, where there is an urgent question or a ministerial statement, the shadow Minister is not supposed to come in to deliver a speech, but to give the briefest reception to the statement by the Minister and then ask a series of pithy questions. It is not a speech in a debate, but a series of questions.

As I say, I recognise that the hon. Lady is new to the House, though a very capable individual indeed, but in future we will have to observe the time limits and the appropriate format. I give notice that if those are breached, I will simply cut the question off. I do not intend any discourtesy, but if we have rules, we must stick to them.

[James Duddridge]

In relation to Montserrat, I do not know what discussions the hon. Lady has had with Premier Don Romeo, but one of the reasons why it was easy for Montserrat to comply with some of our earlier requests was the lack, sadly, of a financial services industry, which is still developing there. There are many enormous challenges in Montserrat, but quite frankly, financial services is not one of them. It is easy to be fleet of foot when an extensive industry is not already in place.

There is much more of a challenge for the British Virgin Islands, the Cayman Islands and Bermuda, where we are focusing our attention. It is wholly untrue to say that the position at the end of the Joint Ministerial Council was one of obstruction by the Cayman Islands or, indeed, any other territory. I will have further discussions with the Cayman Islands today, but they and everyone else signed up to the following language:

“We discussed the details of how these systems”—

the central systems—

“should be implemented, including through technical dialogue between the Overseas Territories and UK law enforcement authorities on further developing a timely, safe and secure information exchange process to increase our collective effectiveness for the purposes of law enforcement.”

Some of the technical detail is quite tricky—there are different systems in different jurisdictions—but there is an ongoing and close dialogue with the National Crime Agency about how we can achieve such things.

A number of comments have been made that I would say are not misleading but perhaps slightly out of date. Once hon. Members have had time to digest the communiqué, they may wish to find an opportunity to discuss the subject again in more detail so that we can have a robust exchange, consider how we can make further improvements and get a shared understanding, because we all want the same thing.

[Mark Field (Cities of London and Westminster) (Con)]

I congratulate the Minister on the Joint Ministerial Council and wish him all the very best in the bilateral discussions he will have over the next 24 hours. I want to reflect on what the hon. Member for Hornsey and Wood Green (Catherine West) said. I hope she recognises that there has been and will continue to be progress. It is fair to say that, although we must insist on co-operation with tax authorities and law enforcement agencies, there is a distinction between secrecy, of which we do not approve, and the demand for privacy by those who use banking services not just in the overseas territories, but in the UK. That line should also be respected in dealing with these matters.

[James Duddridge]

I know that my right hon. Friend follows these issues carefully. We have had a number of discussions about this very subject, including late last night after the Syria vote. Privacy is important, but it should not be used to disguise corrupt practices, international terrorist moneys or the avoidance of taxation. It is very much a balancing act. The UK is on the side of greater transparency. The Prime Minister has led that charge internationally and will do so over the next year, including at a big global conference on corruption early in the new year.

[Patrick Grady (Glasgow North) (SNP)]

The Minister and I were at the same Africa all-party group this morning, where the importance of domestic resource mobilisation for development was discussed. Of course, it is almost impossible for African Governments to mobilise domestic resource when multinational companies hide their profits through offshore tax havens.

How has the JMC paved the way for the anti-corruption summit that the UK Government will host next year? What discussions took place in preparation for that summit, and how many overseas territories are expected to attend it? Generally, how are we getting our own house in order and those of our overseas territories before we start demanding the same of others?

[James Duddridge]

The Prime Minister and the UK are leading the way, and we are ahead of the G20 standards. The issue is not the tardiness of the overseas territories, but our concern that they go beyond what is required by the G20. Effectively, there is an arbitrage problem, in that the business will carry on being done, be it corrupt business or the movement of terrorist moneys, but will simply be done in a different jurisdiction. We do not want to move corrupt moneys, corrupt practices and tax evasion and avoidance; we want to eliminate them and to do so everywhere. It is therefore important that all international partners move forward at the same pace. The UK has taken the lead and the overseas territories are increasingly stepping up to the mark and delivering.

[Mr Nigel Evans (Ribble Valley) (Con)]

The overseas territories are some of the most beautiful places on earth, and I have been blessed to visit some of them over my 23 years as a Member of Parliament. I am encouraged by what the Minister said about the advances in LGBT rights in the overseas territories. Perhaps in his discussions with representatives of the overseas territories, he might drop it into their ears that not only is this a matter of equality and human rights, but, given that the pink pound is rather strong, they may be able to open their doors to hundreds of thousands more LGBT visitors from the United Kingdom.

[Mr Speaker]

The hon. Gentleman is most certainly a notable globetrotter. That is well recognised throughout the House.

[James Duddridge]

To clarify, Mr Speaker was talking about my hon. Friend the Member for Ribble Valley (Mr Evans), rather than me.

I certainly support the moves that my hon. Friend describes. This is not just an issue of equality. A number of the territories are incredibly beautiful places and a lot of money comes into them through tourism. Even more money could come in through tourism. There needs to be greater diversity of income and a move away from financial services. Attracting everybody, regardless of their sexuality, is good for business, as well as being the right thing to do.

[Tom Brake (Carshalton and Wallington) (LD)]

The UK Government have made a commitment to consult on the best way to stop the UK property market becoming a safe haven for corrupt money. Has that been discussed with the overseas territories, and what progress is being made on it?

[James Duddridge]

That matter has been discussed. We discussed specific examples of individuals arrested in the United Kingdom. When we have looked at their assets, we have found that they were renting property, but that, on closer examination, they owned the property through offshore companies. We want to open up beneficial ownership so that we can interrogate the actual position and seize assets in a timely manner. In a number of cases, assets can be sold or transferred quite quickly, so that they are out of the reach and jurisdiction of the UK Government. One reason we place so much emphasis on financial services transparency is so that our law enforcement agencies can get their hands on assets as quickly as possible before they are moved somewhere else around the world.

[Mark Garnier (Wyre Forest) (Con)]

To what extent is the Joint Ministerial Council driven by the Foreign Office? Will the Minister advise the House how the Foreign and Commonwealth Office works with Departments such as the Treasury to tackle issues such as money laundering and tax evasion, which the hon. Member for Foyle (Mark Durkan) raised?

[James Duddridge]

The Foreign Office leads on collating the Government response on overseas territories, although in all candour, over the two days probably 70% or 80% of sessions were led by other Departments, rather than the Foreign Office. We had heavy participation from the Department for International Development, and others spoke on specific issues. My hon. Friend the Under-Secretary of State for Culture, Media and Sport made a contribution, as did a Health Minister. The Department for Education was represented, leveraging in its understanding of child abuse. The Department for Work and Pensions spoke on pensions, and the Minister for the Armed Forces and the Solicitor General—both of whom are in the Chamber today—showed great interest in the overseas territories and have been supportive in developing our relationship with them. It is very much an effort by Her Majesty’s Government, rather than just the Foreign Office.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for his statement. He mentioned child abuse and child safety, and we are aware that paedophile rings operate not only in the overseas territories but across the whole world. We need to have an exchange of information, and joint police forces working together. Will the Minister tell the House what was discussed in relation to that matter?

[James Duddridge]

A vast number of initiatives were discussed, and the hon. Gentleman is right to say that increasingly international rings are smuggling children across jurisdictions and borders, and procuring individuals for sex. Increasingly, the internet is used, and a much more co-ordinated approach is required. That was discussed in some detail at the JMC, and leaders of all the overseas territories outlined what they had done in-territory. There was a commitment to pull those actions together and to learn from best practice.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

The Foreign Affairs Committee met leaders of the British overseas territories this week, and they raised various issue that we will write to the Minister about. One thing that struck me is that they were hoping for a new relationship in the way that governors are appointed, and they would like more input in that. I believe that modernising the whole system is a perfectly sensible proposal, and I would be interested in the Minister’s views.

[James Duddridge]

I thank the FAC for meeting leaders of the overseas territories, and I have already had a chat with other Committee members about what was discussed. The appointment of governors is a matter for the Foreign Office. Ministers do not get directly involved in decisions on who should be governor, but we do get involved in the process. I had a meeting about the governor in Bermuda, and I made a number of promises to the Premier, Michael Dunkley, about how we would take seriously his desires to get the right type of candidate to replace our current excellent governor who so ably hosted me in August.

[Mr Peter Bone (Wellingborough) (Con)]

I congratulate the hon. Member for Foyle (Mark Durkan) on this urgent question. Clearly, we do not talk about the overseas territories enough, and the shadow Minister wanted to raise a lot of issues. Does the Minister agree that at least once a year in Government time we should have a formal debate about our overseas territories with the Minister responding, so that we can discuss all the matters raised today?

[James Duddridge]

I am disappointed that my hon. Friend thinks I am so naive as to be tripped up by such a question, but our colleagues will be listening. [Interruption.] It has been pointed out to me—as if I did not already know—that perhaps that could be a subject for the Backbench Business Committee.

[Nigel Mills (Amber Valley) (Con)]

Does the Minister agree that our overseas territories should be taking the lead in preventing the flow of corrupt criminal and terrorist money, rather than waiting for everybody else to do it at the same time? Will he set out a timetable for when the overseas territories will have in place the registers and access rights that we need?

[James Duddridge]

As it differs from territory to territory, I will struggle to give my hon. Friend an absolute date by which that will be done. I am reviewing what we are doing this year, and that is one checkpoint. Another checkpoint will be the end of February, which sits halfway between the beginning of the new year and the Prime Minister’s conference on corruption. I expect significant progress to be made during that time. A lot of that progress, however, will be what is committed rather than what is done. We will need to commit to a precise timescale. I think that timescale will vary quite significantly from territory to territory depending on how they hold their data—in paper or electronic format and whether that is in a central place—and whether they need to change legislation to bring all the information together once they have agreed in principle to do so.

I should be able to give my hon. Friend a better answer early next year once we have gone through the process. The timescales should be challenging not only in reaching agreement on what should be done but, as he says, in terms of what is done.

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

As the Minister knows, the Chancellor announced in the March Budget that the waters around the Pitcairn Islands would be a marine protected area, something in which Plymouth Marine Laboratory, the university and the Marine Biological Association take a great deal of interest. Will my hon. Friend explain how this process is moving forward, so that other overseas territories are able to consider becoming marine conservations areas, too?

[James Duddridge]

Marine biodiversity around overseas territories is enormous. In fact, a large percentage of global biodiversity, on both land and sea, is in and around the overseas territories. The Pitcairn Islands provide a strong example of how a marine protection area can work. There are similar investigations on Ascension Island. We are working collaboratively with other territories to consider how this scheme might be extended. It was in the Conservative party manifesto to extend a blue belt across the overseas territories. In reality, I think that will mean a different type of solution for some islands, but this issue is discussed every time we meet and every time we meet we make further progress in protecting biodiversity.

[Chris Green (Bolton West) (Con)]

Will the Minister update the House on child safeguarding opportunities in the Falkland Islands?

[James Duddridge]

The hon. Gentleman is clearly very well informed. The Falkland Islands are leading the way on child safeguarding issues, specifically co-ordination. We aspire to having the same standards everywhere that are the best internationally. It is sometimes difficult, however, for an island of 4,000 people to have exactly the same arrangements as an island of our size or a smaller island. The Falkland Islands, with the permission of the rest of the Joint Ministerial Council, are co-ordinating work on behalf of all the overseas territories to learn not only from their excellent experience but to ensure that best practice and resources are shared on this important subject, which was the first item on the JMC’s agenda. It was the only time during the JMC that we had multiple Ministers and Departments at the meeting. It was incredibly important and I congratulate the Falkland Islands on leading the way.

[Henry Smith (Crawley) (Con)]

I congratulate the Government on setting up the overseas territories’ Joint Ministerial Council. I also congratulate the Government on introducing a feasibility study into the resettlement of the British Indian Ocean Territory. Will my hon. Friend update the House on when a decision on the resettlement of the Chagos islanders might be known, so that they can join the overseas territories family?

[James Duddridge]

I thank my hon. Friend for that question. He is a great advocate on this subject on behalf of his constituents and the people who used to inhabit the islands. As he knows, an extensive KPMG report has been published. Following that report, there was a consultation, the results of which have not yet been produced. It would be wrong for any Minister at the Dispatch Box to draw too many conclusions without having seen the full facts. I am, however, more than happy to meet him privately to discuss the process, and I am more than happy to be totally transparent in the House when the report comes out and to answer questions on this subject in any way that the House desires.