Financial Transparency: Overseas Territories

Lloyd Hatton Excerpts

Wednesday 5th November 2025 Westminster Hall

[Lloyd Hatton (South Dorset) (Lab)]

It is a pleasure to serve under your chairship, Mr Twigg. I thank my hon. Friend the Member for Bolton West (Phil Brickell) for securing this timely debate. It is timely for two simple reasons. Just yesterday, the Bureau of Investigative Journalism revealed that HMRC is apparently refusing to publish its official estimate of how much tax is currently being lost due to tax dodging facilitated by tax havens. The Public Accounts Committee, on which I sit, found in July that HMRC simply is not able to track down those individuals who stash their fortunes offshore in tax havens including overseas territories. The Committee has pressed for greater transparency concerning tax that is lost offshore. Without that information we will never be able to properly assess whether HMRC’s efforts are effective, or even adequately resourced. Even more crucially, without that estimate our tax authority cannot effectively pursue those who deliberately avoid or evade paying their fair share of tax. It is very simple: we should be able to assess what tax is owed and then go on to collect it. HMRC must be able to get a firmer grip on the scale of wealth that is currently stashed away offshore, and publish its findings openly. We need to bolster its ability to spot and stop tax dodging offshore by the super wealthy.

That leads me to the second simple reason that this debate is timely. With the Budget fast approaching, in a time when the global economy is uncertain and dysfunctional, collecting the right amount of tax is not just a technical matter; it is about ensuring that everyone pays their fair share for the public services that we all rely upon. Holding even one billionaire to account on their tax obligations can influence the wider public purse. Unfortunately, we know that there are many individuals not paying their fair share, such as the sanctioned oligarch Roman Abramovich, who has used a British tax haven—again, the British Virgin Islands—to avoid paying almost £1 billion in tax owed to HMRC.

[Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)]

This speaks to a wider point about Ukraine. Two years ago Chelsea was sold for £2.35 billion and now a company controlled by Roman Abramovich is demanding a repayment of £1.5 billion. The absolute secrecy and the intricacy of his controlled companies are having a direct effect on humanitarian efforts in Ukraine.

[Lloyd Hatton]

My hon. Friend speaks the truth. Unfortunately, Roman Abramovich is just one of a great many tax dodgers. The only way to ensure that everyone pays their fair share is to finally throw open the books and end decades of secrecy in every British tax haven. The fact that most overseas territories do not publish information on who owns companies registered on their shores makes them a highly attractive destination for tax dodgers. We all know—it is common knowledge—that those tax havens are a go-to destination for would-be tax dodgers looking to reduce their tax liabilities.

As we approach two critical junctures, the autumn Budget and the Joint Ministerial Council, I hope that Ministers appreciate the cross-party strength of feeling on this matter. There must be consequences for failing to end this kind of financial secrecy offshore. At the moment it enables crime, undermines HMRC and deeply weakens our public services. We cannot fail to act any longer.

--- Later in debate ---

[Tom Hayes (Bournemouth East) (Lab)]

I thank my hon. Friend the Member for Bolton West (Phil Brickell) for securing this debate. I recognise that there are many British overseas territories that are trying to do the right thing, but as we have heard today, some are magnets for dirty money and safe havens for the wealth of autocratic aggressors, laundering billions under the British flag. We must put a stop to that now.

Let us be clear about what the offshoring of dirty means here at home, in my constituency of Bournemouth East. It is money stolen from the public purse. Billions are being siphoned away that could go directly into our hospitals and schools, and into lower tax rates. This is about our housing crisis. When the super-rich pour their ill-gotten gains into luxury property in our towns and cities, homes sit empty while families cannot afford a roof over their heads. Young people tell me all the time that they have to move away to get on in life because they cannot afford a home in Bournemouth.

This is about our high streets, where there are trust-owned properties, hidden behind secrecy, lying empty and untouchable. Enforcement officers cannot act because they cannot trace the owners. Our high streets lie empty, robbed of vitality. Indeed, where there is activity, it is in the form of candy or vape shops that are so brightly lit they can be seen from space, themselves a front for money laundering. This is about money being stolen from workers’ wages and from the Treasuries of the world’s poorest nations. Twenty years ago we said, “Make Poverty History”; let us make dirty money history too.

Where does the trail lead? Time and again to the British Virgin Islands. After investigation, I can share that the total number of properties in Bournemouth East reported as offshore entities stands at 82. These are owned through entities based in the Crown dependencies or the overseas territories, and unsurprisingly the BVI figures prominently. Where entities are required to declare their beneficial owners, the choice of jurisdictions appears to be selected for their secrecy. Fifty-seven have not reported the price paid—just 25 have done so. Even when beneficial ownership is shared, details about the person benefiting from the property are not always available to the public.

[Lloyd Hatton]

My hon. Friend speaks very eloquently on that point. Living in communities like Bournemouth or my hometown of Weymouth, individuals and businesses seemingly do not have a choice about registering a business and being transparent about who owns a property and what tax they pay. Does he share my concern that unless we see further action here, there will be one rule for the majority of people in our constituencies, and seemingly a whole separate raft of rules for the very wealthiest?

[Tom Hayes]

I could not agree more. In Dorset, we have constituents who want to play by the rules but are routinely let down by the lack of tax transparency.

For the 25 properties that have reported the price paid, the combined total is £7.2 million. With the 57 shrouded in secrecy, the total sums involved will clearly be significant. The BVI should be supporting action to track down crime. Instead, as we have heard, it is giving criminals a head start, tipping them off when there is an investigation under way. Because half the entities exposed in the Panama papers were linked to the BVI, Parliament acted decisively. A deadline was set and the will was clear. However, here we are years later, and Parliament’s will continues to be flouted by the BVI.

My question to the Minister, who I know is an excellent tax transparency campaigner of many years, is: when the remedy exists, are the Government open to using an Order in Council if progress is not made in the next year? Without transparency, we cannot follow the money, and if we cannot follow the money, we cannot truly fund our public services. Without action to correct tax secrecy, we cannot claim to stand for integrity, and without integrity, we cannot truly say that democracy works in the interests of everyone.

Sanctions Implementation and Enforcement

Lloyd Hatton Excerpts

Thursday 15th May 2025 Commons Chamber

[Stephen Doughty]

The right hon. Gentleman knows the industry and these measures—of course, he also held senior roles in government that were responsible for these matters—so he will understand that I am not going to go into the technical details of every individual case. However, I can tell him that, for example, His Majesty’s Revenue and Customs has issued six compound settlements since 2022 against UK companies that have breached the Russia trade sanctions, for a total of £1,363,129. Those include a compound settlement in August 2023 for £1 million, so I feel absolutely justified in saying that avoiding sanctions does not pay, and I am committed to ensuring that we have more of these actions in future. Some of them will be public, while others will not be—a range of measures is in place. We are introducing new powers, particularly to find ways of settling cases in which companies have come forward and voluntarily disclosed, but equally so that those that do not do so will face penalties.

[Lloyd Hatton (South Dorset) (Lab)]

Too often, sanctions evasion happens via our British overseas territories, particularly through secretive havens such as the British Virgin Islands, and a lack of public ownership records complicates efforts to find out who is involved in sidestepping our sanctions regime. With that in mind, can the Minister set out how he is working with all of the overseas territories to finally meet their commitments to introduce registers of beneficial ownership, and can he reassure this place that our sanctions are robustly enforced across the entire UK family?

[Stephen Doughty]

My hon. Friend is absolutely right to raise this issue, which I have repeatedly raised with the leaders of the overseas territories and indeed with the Crown dependencies. We have seen robust action on sanctions, both in implementing sanctions and working with our authorities to ensure that we have the biggest enforcement effect. I have mentioned the recent meetings we had at Lancaster House with sanctions enforcement officials, as well as the specific example of BVI. The National Crime Agency has been working with the British Virgin Islands on a range of issues, and that work has been very productive, but my hon. Friend is absolutely right that transparency contributes to effective sanctions. I have repeated my expectation that OTs and CDs should introduce fully accessible public registers of beneficial ownership, but the OTs also agreed at last year’s Joint Ministerial Council to introduce legitimate interest access registers. We have seen real progress from a number of them, although some others are not quite there yet. My hon. Friend can be assured that I am not resting in raising serious concerns about this issue, and I will continue to do so over the weeks ahead.

Oral Answers to Questions

Lloyd Hatton Excerpts

Tuesday 25th February 2025 Commons Chamber

[Anneliese Dodds]

The hon. Gentleman is right to raise the importance of funding for global health. Of course, this is not just important for those directly impacted; it is important for us here in our country, because we know that diseases do not respect borders. I set out a few moments ago the fact that the Prime Minister is committed to that Global Fund replenishment, and rightly so.

[Lloyd Hatton (South Dorset) (Lab)]

3. What assessment he has made of the effectiveness of steps taken by the British Virgin Islands to tackle illicit finance.

[The Secretary of State for Foreign, Commonwealth and Development Affairs (Mr David Lammy)]

The overseas territories, including the British Virgin Islands, work to uphold international standards on tax transparency and illicit finance and enforce UK sanctions. The overseas territories agreed to implement corporate registers that are accessible at least to those with legitimate interest by June 2025. We are aware of BVI’s public consultation on its register and are working with it to improve its proposal.

[Lloyd Hatton]

The BVI will soon close the consultation on its proposal to grant only limited access to a register of beneficial ownership. That proposal means that it will be virtually impossible for even a select few to trace those using the BVI as a place to secretly stash their cash, and this comes some five years after the first deadline to set up a register was missed. I know that the Secretary of State agrees that sunlight is the best disinfectant when it comes to combating illicit finance, so what steps is he taking to ensure that the BVI establishes a genuine and fully transparent register of beneficial ownership?

[Mr Lammy]

The BVI committed at the Joint Ministerial Council to improving access to its corporate register by June. I met BVI representatives just after that time at the end of last year, and my hon. Friend the Minister of State will meet the BVI again in the coming weeks. It is important that that public consultation on the proposed register will close this Friday, and we are working with the BVI to improve its proposal.

Oral Answers to Questions

Lloyd Hatton Excerpts

Tuesday 30th July 2024 Commons Chamber

[Lloyd Hatton (South Dorset) (Lab)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Foreign, Commonwealth and Development Affairs (Mr David Lammy)]

The Government are reconnecting Britain with the world in European capitals, in NATO and at Blenheim, and I have been resetting relations with Europe and reinforcing support for Ukraine. I have also deepened partnerships with the global south to tackle the climate crisis and unlock economic growth, and I am taking a balanced approach on the middle east, calling for an immediate ceasefire, the release of all hostages and more aid into Gaza.

[Lloyd Hatton]

A builder living on Portland, a B&B owner in Weymouth and a shopkeeper on Swanage high street all pay their fair share of tax, yet some individuals take advantage of offshore tax havens such as the British Virgin Islands to avoid paying their fair share. My constituents play by the rules; we ought to know a bit more about those who choose not to. Can the Secretary of State set out what steps his Department is taking to throw open the books in British tax havens and implement public registers of beneficial ownership?

[Mr Lammy]

I raised this issue in opposition—I think it was the subject of the last speech I gave before the election—and it is an issue that I intend to take up with full vigour. We were concerned that parts of the last Government were turning a blind eye to these issues. I hope to come forward with further proposals in the coming weeks.