UK’s overseas territories will not be required to end tax secrecy

The UK will not require its overseas territories to end their tax secrecy at an anti-corruption summit, the minister for the territories has confirmed.

The Guardian reports that James Duddrige praised the territories tax transparency, pointing to their agreement to set up a register of beneficial ownership. More than half of the companies found in the Panama Papers are registered in UK overseas territories and Crown dependencies.

Comparing them with some US states, he said they had made “superb progress”. Britain has 17 overseas territories and Crown dependencies under British sovereignty, including Jersey, the Falkland Islands, Bermuda and Gibraltar. However, their domestic affairs are their own and they are not part of the UK.

But Shadow Foreign Secretary Hilary Benn has asked the Foreign Office why it is not seeking a central registry for the overseas territories in keeping with the one being brought in by law in the UK in June.

The Prime Minister, David Cameron, said this week all territories, apart from Guernsey and Anguilla, had agreed to establish registers open to law enforcement agencies.

However, it is not yet clear the degree of notice agencies will need to give before accessing registers and whether companies will know they are being investigated.

The Cayman Islands premier, Alden McLaughlin, said: “This is what we wanted, this is what we have been pushing for three years, for a disaggregated system which leaves the beneficial ownership information intact with the service providers.”

Toby Quantrill, principal adviser on economic justice at Christian Aid, said: “The prime minister himself knows that central registers do not solve the problem and that to curb the sort of activities exposed in the Panama Papers, the public, journalists and other businesses must be able to see those registers.”

Labour’s John McDonnell, the Shadow Chancellor, said: “The Cayman Islands premier has let the cat out the bag, the truth is that the Tories are really playing into the hands of those who want to dodge their taxes.

“A register of beneficial ownership will be accessible only to local tax officials and only on request. Labour is clear that any register must be public so that wrongdoing can be spotted, rather than only when a company is already under suspicion.”