Beneficial Ownership Registers: Overseas Territories and Crown Dependencies

Marie Rimmer Excerpts

Thursday 7th December 2023 Commons Chamber

[Ms Marie Rimmer (St Helens South and Whiston) (Lab)]

I thank my right hon. Friend the Member for Barking (Dame Margaret Hodge) for securing the debate.

Our country, with its Crown dependencies and overseas territories, is responsible for 35% of global tax loss. The UK tax gap is estimated by His Majesty’s Revenue and Customs to be worth £36 billion. Those billions of pounds could be spent helping our NHS or fixing our schools’ leaking roofs, but sadly, they are instead propping up Putin and his cronies as they try to destroy Ukraine. The past year has put a spotlight on dirty money laundered and hidden here, yet that problem has been around for years. We must act now to ensure that we are not indirectly responsible for horrors continuing to occur by failing to tackle dirty money, be it in London, the British Virgin Islands or one of our other territories. We have a duty to the people of Ukraine to do our bit.

We have heard many times from the Dispatch Box about how much support we are rightly giving to Ukraine, but the Government must press our Crown dependencies and overseas territories, which are the Russians’ laundromat of choice, to do the same. Transparency International has identified 237 cases of corruption enabled by companies based in the overseas territories. Those cases are worth an astonishing £250 billion, which was diverted via rigged procurement, bribery, embezzlement and the unlawful acquisition of state assets. All those cases passed through companies registered in our overseas territories. The presidential family of the Republic of Congo have enriched themselves to the sum of at least £500 million by completing dodgy oil deals through companies based in Anguilla, all while the Congo sits in billions of pounds of debt.

Of all the cases, 92% of those were registered in the British Virgin Islands. The scale of the financial damage caused by those companies is £196 billion, which is greater than the UK’s foreign aid budget over the past 20 years. We in this House often talk about our responsibility to the world and to mankind, and about our duty to help the world’s poorest—that is why we believe in foreign aid—yet monumental sums are being robbed from countries around the world by despots and dictators and then stored in our territories. Our duty to the world requires us to do more to crack down on it. Quite frankly, every time there is a series of leaks—from the Panama papers and the Paradise Papers to the “Cyprus Confidential” dossier—it is an embarrassment to our country, and it is not going away.

As has been set out, one of the most effective ways to crack down on the problem is with public registers of who owns the companies in our overseas territories and Crown dependencies. There has been enough talk about cracking down on tax avoidance for decades; it is now time for realistic and pragmatic action for good. Fraud, tax and sanction avoidance, and other economic crime can be cracked down on only if it is possible to follow the money. The Government cannot expect law enforcement to crack down on tax avoidance if it is not given the tools it needs to do it. We can do it and we have said we will do it, so we should get on and do it!

Public registers can also help to restore public faith in the tax system by helping to expose the high levels of aggressive tax avoidance and evasion that we know take place. In the long term, public registers can contribute to creating a fairer and less lopsided tax system. That allows the Government of the day to collect tax effectively, and fairly invest in our public services and infrastructure. Public registers of beneficial ownership are a sensible transparency measure, with broad cross-party support. The Government have repeatedly expressed their support for establishing public registers, but we are still waiting for them to be set up. They were supposed to be set up by the end of 2023. This situation cannot go on. The Foreign Secretary needs to get this over the line. We need to be able to identify who the true owner of offshore wealth is. We need to be able to uphold the law and make sure that tax is paid. We need to remove the veil of secrecy that, sadly, exists in too many of our territories and dependencies.