British Overseas Territories

Lord Bishop of Ripon and Leeds Excerpts

Thursday 10th March 2011 Lords Chamber

[The Lord Bishop of Ripon and Leeds]

My Lords, I am grateful to the noble Baroness, Lady Hooper, for securing this debate, and for the breadth of her contribution and those of the speakers whom we have heard so far on the multifarious issues that affect the British Overseas Territories. I look forward to the contribution of the noble Lord, Lord Ribeiro.

I will concentrate on the responsibility and opportunity for Britain in the role of many overseas territories as tax havens and on the need for us to face the financial element in the role of those territories to which attention was drawn by the noble Baroness and the noble Lord, Lord Luce. The issues surrounding the tax haven status of some territories are made more important by the secrecy that has developed around them over the years. In the 2008 presidential election campaign, Barack Obama claimed:

“There is a building in the Cayman Islands that houses supposedly 12,000 US-based corporations. That is either the biggest building in the world or the biggest tax scam in the world”.

At a time of cuts in this country that are bearing down hard on all of us, not least on the most deprived, it is crucial that no quarter is given to corporations that hide profits in tax havens in order to avoid tax. I hope that the Government will assure us that they will take the opportunity of the November G20 summit to ensure that the present secrecy laws will continue to be disbanded and that they will use their authority and influence over the overseas territories to ensure that they will be among those who give a lead. I am delighted by the developments in Gibraltar, to which the noble Lord, Lord Luce, referred. I am delighted at the way in which the OECD regulations are developing openness and transparency. However, there is a long way to go.

This is not just a matter of business integrity, crucial though that is. Much of the wealth that is hidden in the tax havens is siphoned from the poorest countries of the world. I am grateful for the Government’s defence of the aid budget in tough times, but I remind noble Lords also of the comments of Andrew Mitchell, the Secretary of State for International Development, that 21st-century development is about much more than aid. It is about creating opportunities across the policy spectrum. This is an area where that could be crucial. Christian Aid estimates that tax havens cost poor countries some $160 billion per year in lost tax revenue. At worst, the aid budget pours into poor countries money that leaks out again to tax havens. What policies do the Government plan to promote to enable poor countries to collect the tax owed to them and to remove the structural barriers to their doing so?

One important point is the extent to which some British Overseas Territories have become dependent as communities on their status as tax havens. Among the responsibilities of the Government must be to help our overseas territories to diversify their economies so that the abolition of tax haven status does not simply create poverty for the people there. To live in a tax haven does not mean that you are rich. There is a desperate need in the Turks and Caicos, as we have heard, and in other countries as well, for the reskilling of people and the acquisition of new knowledge bases. I would be grateful to hear more about plans to support and encourage that diversification, whether it is into agriculture, fishing or tourism. More effort must be made to assist those territories to create economies that are not as dependent as they are now on the financial system.

The historical ties between the United Kingdom and its overseas territories need to be cherished. They are highly valued by the people of the territories. I look forward to promises from the Government that they will enhance those links by aiding the development of those economies in ways that cease to encourage them to be an instrument of oppression for the poorest countries of the world.

In conclusion, I return to the ecological point raised by the noble Baroness, Lady Hooper. The territories have an extraordinarily exciting and important ecological base. They contain a significant number of the species of birds, animals and plants that are in danger and under threat of extinction. Britain is committed to the target of ending the loss of global diversity by 2020, which I very much welcome. The overseas territories are crucial to this aim and I hope that the Minister will tell us more about what plans there are to maintain that diversity. There is a right and developing concern about animal, bird and plant species in the UK. The challenge is far greater in these beautiful and exciting islands.