Hopes of G8 tax avoidance breakthrough fading fast as Bermuda refuses to sign up to new rules
Andrew Grice has been Political Editor of The Independent since 1998. He was previously Political Editor of The Sunday Times, where he worked for 10 years, and he has been a Westminster-based journalist since 1982. His column, Inside Politics, appears in The Independent each Saturday.
Thursday 13 June 2013
An international deal to crack down on secretive tax havens is in jeopardy after the British Crown Territory of Bermuda refused to sign up to new transparency rules.
Tax avoidance had been placed top of the agenda for the G8 summit of world leaders meeting next week in Northern Ireland, and David Cameron has called Britain’s 10 overseas territories and crown dependencies to talks on the topic in London this Saturday.
The Prime Minister had hoped to persuade them to agree to a new convention drafted by the Organisation for Economic Co-operation and Development (OECD) to give momentum to his drive for transparency. But the plan is now in doubt.
Mr Cameron and the Chancellor George Osborne have been pushing hard for the British territories to give ground. But the Foreign Office is thought to share the islands’ concerns that major sources of their income will be harmed as they are disadvantaged against offshore competitors in Asia.
Craig Cannonier, the Prime Minister of Bermuda, said: “My understanding is that we are not here to sign something, but simply to agree that everyone needs to get on par.”
He added that the OECD proposals had potentially damaging elements for Bermuda. “There’s some clauses in there that we need to look at, that may need to be adjusted,” he told Reuters. “Our finance ministry is going over it with a fine-tooth comb.”
His statement may encourage others to follow suit and could allow G8 members sceptical about the Cameron plan – such as the United States, Russia and Canada – to tell him to put his own house in order first.
Bermuda has been accused of allowing tax avoidance by multinational firms. The territories – which include the Cayman Islands, the British Virgin Islands and the Turks and Caicos Islands – agreed in May to share taxpayer information with the UK, France, Germany, Italy and Spain, but the OECD convention covers more countries and more information.
Murray Worthy, tax campaigner at the protest group War on Want, said: “Bermuda’s rejection... shows that Cameron’s tough talk of taking on tax havens is just that – talk. If Cameron was actually serious about tackling tax havens, he could simply legislate... [he] has chosen to invite the UK’s own tax havens to sign a deal that only tinkers at the edges of their secrecy.”
He added: “It is an outrage that many of the world’s most significant tax havens that are used to dodge taxes around the world are British. ”
Ministers played down the setback, insisting a majority of the 10 nations intend to sign the convention and they had all pledged to draw up an action plan to disclose who owns and controls companies based in their countries.
As The Independent revealed, Mr Cameron may not secure his aim of persuading the G8 nations to produce “beneficial ownership” registers open to the public. Instead, the summit may agree to leave it up to individual countries to decide whether to limit access to such registers to tax and law enforcement authorities. British officials insist that would still be a breakthrough as it would boost global efforts to crack down on money laundering, tax evasion and terrorist activity aided by tens of thousands of anonymous “shell companies.”
Officials insist progress will be made at the G8 but there are signs Britain is lowering its expectations.
Aid groups welcome Mr Cameron’s transparency drive but believe he has left it very late to broker a G8 deal. Diplomatic sources agree, saying that the prospect of a breakthrough would be greater if the UK was not relying on a last-minute push.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
- 1 Planes go hybrid-electric in important step to greener flight
- 3 Antonio Martin shooting: Mayor says there should be 'no comparison' to Ferguson
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Rozanne Duncan: Ukip expels councillor for 'jaw-dropping' comments made in BBC TV interview
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Panic Saturday: 13 million Britons spend £1.2bn – while 13 million others across the country live in poverty unable to afford food
BBC director Danny Cohen: Rising UK antisemitism makes me feel more uncomfortable than ever
iJobs Money & Business
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...
£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...
£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...
£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...
Day In a Page
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens