Osborne has paid lip service to tackling tax havens, but when will the hard work actually start?

Ten of the world’s tax havens are UK-linked territories - the British Overseas Territories and Crown Dependencies. The clue is in the names.

Share
Related Topics

A year ago none of us expected David Cameron and George Osborne to stand on the UK and global stage and herald themselves the tax heroes that the world desperately needs. But that’s exactly what they have done by promising to tackle tax dodging and tax havens at the UK’s G8 Summit.

It’s about time someone got serious about tackling tax dodging. Today trillions of dollars are stashed offshore in tax havens, far beyond the reach of the tax man. This means that these tropical islands and small land-locked countries are sucking hundreds of billions out of public budgets here and in the poorest countries, forever. This is money that could create jobs and opportunities here in the UK as we continue to be buffeted around on the rocks of austerity, and face draconian cuts to welfare. Crucially for the poorest countries it is money that could, if recouped, help the one in eight people in the world who will go to bed hungry tonight.  

Cracking down on tax havens could be a game changer here in the UK, and around the world.  So far so good.  But today, George Osborne and the other G7 finance ministers will not be talking tax. This close to the Loch Earne Summit, it begs the question: why not?

There is an elephant in the room with George as he sits down today. Ten of the world’s tax havens are UK-linked territories - the British Overseas Territories and Crown Dependencies. The clue is in the names.

Nobody can deny that there is a job to be done to get these territories back on the straight and narrow. The Enough Food for Everyone IF campaign, which is backed by almost 200 organisations including Oxfam, took that message directly to the Treasury yesterday. New research released by the campaign for today’s meeting shows that if the money in the Cayman Islands really did belong to the people of the Caymans, it would mean each of them, on average, was worth $29.3 million. This is not because all Caymanians are dripping in diamonds and sitting on personal fortunes. It’s because their shores are attracting trillions from around the world due to the islands' tax haven status – including secrecy for sale and low tax rates. There are 174 companies operated by Barclays in the Cayman Islands, a territory with a 0 per cent effective corporate tax rate. And the story is not so different in the other UK-linked tax havens.  It is an ugly truth that the UK needs to face up to.

There is a real risk that our leaders see the G8 tax job as done. Last week they did announce co-operation with the British Overseas Territories.  A deal that will see these tax havens – Anguilla, Bermuda, The British Virgin Islands, Montserrat and the Turks and Caicos Islands – sharing tax information with the UK.  This could be good news for us, but does nothing for the poorest countries, so unless there is more in the UK’s bag of G8 tricks, this is far from good enough. It would be a categorical failure on their own objective of ‘putting their own house in order and helping developing countries to prosper’ if this is all they have to give.

It does show that where there's political will there's a way. So the real test now is whether the Government is willing to extend that will to helping the poorest countries in the world. With just 5 weeks to go, it’s time to get serious.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Tradewind Recruitment: English Teacher

Negotiable: Tradewind Recruitment: This post arises as a result of the need to...

Tradewind Recruitment: Class Teacher Required ASAP In Uminster

£120 - £150 per annum: Tradewind Recruitment: I am recruiting on instruction o...

Ashdown Group: Head of Finance - Financial Director - London - £70,000

£70000 per annum: Ashdown Group: Head of Finance - Financial Controller - Fina...

Ashdown Group: Marketing Executive - Wimbledon, SW London

£24000 - £28000 per annum + benefits: Ashdown Group: Marketing Executive - Wim...

Day In a Page

Read Next
 

I’m not sure I fancy any meal that’s been cooked up by a computer

John Walsh
Labour leader Ed Miliband delivers a speech on his party's plans for the NHS, in Sale, on Tuesday  

Why is Miliband fixating on the NHS when he’d be better off focussing on the wealth gap?

Andreas Whittam Smith
Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness
Homeless Veterans appeal: Homeless in Wales can find inspiration from Daniel’s story

Homeless Veterans appeal

Homeless in Wales can find inspiration from Daniel’s story
Front National family feud? Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks

Front National family feud?

Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks
Pot of gold: tasting the world’s most expensive tea

Pot of gold

Tasting the world’s most expensive tea
10 best wildlife-watching experiences: From hen harriers to porpoises

From hen harriers to porpoises: 10 best wildlife-watching experiences

While many of Britain's birds have flown south for the winter, it's still a great time to get outside for a spot of twitching
Nick Easter: 'I don’t want just to hold tackle bags, I want to be out there'

'I don’t want just to hold tackle bags, I want to be out there'

Nick Easter targeting World Cup place after England recall
DSK, Dodo the Pimp, and the Carlton Hotel

The inside track on France's trial of the year

Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
As provocative now as they ever were

Sarah Kane season

Why her plays are as provocative now as when they were written
Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

Murder of Japanese hostage has grim echoes of another killing

Japanese mood was against what was seen as irresponsible trips to a vicious war zone
Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore