Overseas Territories: Tax Transparency

Phil Brickell Excerpts

Wednesday 5th February 2025 Westminster Hall

[Phil Brickell (Bolton West) (Lab)]

It is a pleasure to serve under your chairship, Mr Turner. I congratulate my hon. Friend the Member for Kensington and Bayswater (Joe Powell) on securing this crucial debate on tax transparency in the overseas territories, which goes to the heart of three issues that I will cover.

First, there is the matter of tax justice. Reporting from the Bureau of Investigative Journalism only last week found that sanctioned Russian oligarch Roman Abramovich dodged up to £1 billion of UK tax by structuring the ownership of his fleet of yachts and his hedge fund through the British overseas territories. I will bring this to life with the example of Mr Abramovich’s mega-yacht Eclipse.

According to corporate records, Eclipse was owned directly by Kane Global Holdings Ltd, which was incorporated in the British Virgin Islands. Kane was, in turn, owned by Lindeza Worldwide Ltd, incorporated in the BVI. Lindeza was owned by Electus Investments Ltd, held on trust in Cyprus and the BVI. Above Electus sat the Sara Trust, registered in Cyprus. Finally, there was the ultimate beneficial owner: Mr Roman Abramovich.

Let us be clear. This is a complex web of deceit intended to prevent taxes from being paid where they are due. It is conducted on an industrial scale and involves an army of immoral corporate service providers, lawyers and accountants who are only too happy to facilitate such demands. But this is not just about Mr Abramovich. Indeed, journalists in the Organised Crime and Corruption Reporting Project have reported on dozens of cases involving suspicious transactions linked to high-profile businesspeople from Bulgaria, Georgia and further afield, all systematically channelling money and assets into these jurisdictions to escape their tax liabilities in the UK and elsewhere.

It is simply unacceptable—indeed, it is morally indefensible—that we find ourselves in a situation in which a number of British overseas territories continue to incorporate entities hiding behind the corporate veil of secrecy. All the while, our constituents pay their taxes in good order.

Secondly, there is a corrosive impact on the social contract between British citizens and the state. If it matters so much to the UK Government that UK taxpayers front up to fund our public services, why does it not matter that the mega-rich are exploiting the overseas territories? How can we look our constituents in the eye and say in good faith, “We are pursuing every avenue to pump much-needed resources into our NHS, our police service and our schools,” when the mega-rich and multinational corporations can escape their taxes by squirrelling their money away in British territories offshore?

Thirdly, at a time when the Government are focused on driving economic growth and unleashing the full potential of the private sector, we find ourselves in the bizarre situation that continued secrecy in the overseas territories places an immense regulatory burden on UK firms. As a former financial crime compliance officer in two UK banks, I know only too well the huge investment put into armies of due diligence professionals, who, unable to ascertain the ultimate beneficial ownership of entities incorporated in the overseas territories, spend an inordinate amount of time chasing their tails. That has a simple economic cost for UK businesses and consumers, and the British economy. That burden stands firmly at odds with the Government’s drive to deregulate and to drive up competitiveness.

We have a moral obligation, a societal imperative and an economic impetus to act. That is why we must have publicly accessible registers of beneficial ownership in the British overseas territories. That certain overseas territories continue to hide, obfuscate and deny, and prevent long-overdue reform, is a stain on our collective conscience.

The Minister of State, Foreign, Commonwealth and Development Office, my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), confirmed in response to a written question of mine:

“We consider publicly accessible registers of beneficial ownership (PARBOs) a vital tool for combatting financial secrecy.”

He went on to say:

“I have been clear to OT leaders that full PARBOs are our ultimate expectation.”

The Minister for Security confirmed in response to another written question I submitted that the UK Government

“expects implementing legitimate interest access is an interim step to publicly accessible beneficial ownership registers”.

I sincerely hope that the Exchequer Secretary can provide similar assurances today that His Majesty’s Government are committed to working across Government to drive transparency in tax matters, and that it remains the case that they expect publicly accessible beneficial ownership registers to be implemented in the overseas territories.

Time is of the essence. We cannot allow secrecy to be used as a barrier to tax justice. That much I owe to my Bolton West constituents and we, as parliamentarians, owe to this country at large.

[Several hon. Members rose—]