If David Cameron wants to achieve anything at the anti-corruption summit this week, he must do this

Secrecy helps corruption to flourish. The Prime Minister must stamp it out

David Cameron leaves his home at Number 10, Downing Street (Getty Images)

Corruption can take root whenever self-interest and opportunity meet, but it requires secrecy in order to flourish.

As the publication of the Panama papers showed, there are currently too many hiding places around the world where money derived from illegal activities can be placed beyond the gaze of the governments and institutions whose job it is to stamp out corruption.

If dirty cash can’t be seen it cannot be tracked and its origins are easy to obscure. That is why we need urgent action on tax havens. If they can’t be closed, then they must show the same commitment to transparency that other financial centres have been forced to adopt (albeit, in some cases, reluctantly).

That is the message David Cameron needs to deliver to world leaders when he hosts the anti-corruption summit in London on Thursday. There are three steps the Prime Minister can take this week that will make a genuine and lasting difference in the fight against corruption.

First, he needs to acknowledge that tax havens based in British territories cannot end their dependency on the financial services industry overnight. In many cases, banking and finance are a legacy of our presence in countries that were once part of the British Empire. Cameron should acknowledge they may need financial assistance to diversify economically and enable alternative industries to take hold.

Turning a blind eye to the damage corruption causes in the developing world inflicts further misery on some of the most deprived populations on the planet, by allowing money that would otherwise be spent on vital infrastructure and public services to line the pockets of a few.

Baroness Patricia Scotland, the Commonwealth General Secretary, has said overseas aid should be conditional on member countries meeting strict anti-corruption standards. But far more needs to be done. In our own country, the tax authorities have been starved of money and personnel. In poorer countries the situation is infinitely worse.

The Prime Minister needs to work towards an agreement from world leaders on Thursday to fund a team of global auditors and tax collectors.

The Prime Minister must also acknowledge that tax avoidance is not a problem for the developing world alone. In the UK we must stamp out corruption by committing to a public register of beneficial ownership of all properties in the UK and have a system that allows us all to see who owns the companies that operate here.

This week, the Government confirmed once again that it has no plans to force crown dependencies to reveal details of beneficial ownership through a public register. That is regrettable.

Beneficial ownership allows corrupt regimes, criminals and unscrupulous businesses to hide what they own from tax authorities and from the public. Almost every NGO believes a public register would lift the veil of secrecy which allows them to behave with impunity and without fear of being caught.

If David Cameron won’t support a public register, he must negotiate a global agreement on Thursday that requires offshore territories to exchange information on beneficial ownership with each other and with tax authorities in other countries whenever they request it.

We also need legislation to make companies criminally liable for the actions of their employees that facilitate corruption, tax evasion, money laundering and fraud. And we also need new legal powers to strengthen the UK’s assets recovery regime.

The joint Ministerial Council, whose members include UK ministers and the leaders of overseas territories, need to find the political will to act.

The UK overseas territories fall under our jurisdiction and sovereignty; we provide defense and stand behind them fiscally. If something goes wrong in those territories, it is the UK taxpayer that may end up bailing them out.

We must be clear: if our territories want to rely on UK armed forces and UK taxpayers, they need to adhere to British standards of transparency.

We must send a clear message to the rest of the world that corruption on an industrial scale will not be tolerated. David Cameron has admitted that ‘corruption is one of the greatest enemies of progress in our time’. History will not be kind to him if he fails to make progress on Thursday.

Tom Watson is Deputy Leader of the Labour Party