The anti-poverty charity War on Want has dismissed David Cameron’s summit with Britain’s overseas territories as “all show and no substance” and demanded legislation to abolish all the UK’s tax havens.
The Prime Minister invited senior ministers from the territories to London for high-level talks on 15 June ahead of the Northern Ireland summit for the G8 group of leading economies, with tax avoidance and evasion set to be high on the agenda.
David Cameron has called on the jurisdictions to sign an international tax treaty to offer to share information about companies’ and individuals’ offshore wealth with tax authorities in other countries.
War on Want tax campaigner Murray Worthy said “The treaty Cameron is asking British tax havens to sign only tinkers around the edges of their secrecy. It will still leave the UK running many of the world’s most significant tax havens.
“This summit is all show and no substance. Cameron is desperate to be seen to be taking tough action against Britain’s own tax havens, ahead of the G8 next week. But, in reality, this summit will do almost nothing to stop the UK’s tax havens being used to dodge taxes.
“It is an outrage that the government continues to allow multinational companies and rich individuals to use the UK’s tax havens to dodge taxes around the world, robbing the world’s poorest countries of vital revenue. Cameron can and must legislate to abolish British tax havens if he is to have any hope of following through on his tough tax talk.”
Many of the world's most significant tax havens are British, including overseas territories such as the Cayman Islands, Bermuda and British Virgin Islands, and the Crown Dependencies like Jersey, Guernsey and the Isle of Man. It is estimated that around £2 billion worth of assets are held through secretive trusts in Jersey alone.
Campaigners have criticised the treaty for only requiring jurisdictions to share information 'on demand', rather than automatically sharing information with other authorities. Activists say the treaty is also limited in just forcing jurisdictions to share information they already collect. This renders the agreement virtually meaningless for tax havens that refuse to collect key information on taxpayers. In addition, there is little incentive for tax havens to comply with the terms of the deal.
War on Want has called on the government to introduce legislation to abolish all of the UK’s tax havens, ending their jurisdictions secrecy, establishing rigorous financial regulation and making profits and wealth subject to effective taxes.
The British government has acknowledged its full ability to enforce financial regulation on the UK’s tax havens. The Organisation for Economic Cooperation and Development noted in a 2012 report on implementing the Anti-Bribery Convention “the UK acknowledged that – from a constitutional perspective the UK has unlimited power to legislate for the OTs [Overseas Territories]”.
Mr Cameron announced his intention to tackle tax havens during his G8 presidency last November , saying “There are too many tax havens, too many places where people and businesses manage to avoid paying taxes.”