Ex-MI5 man says tax law aids crime

The Government is helping organised crime by refusing to deal with bank secrecy in offshore tax havens, MI5's former top law official said yesterday.

David Bickford, who was the legal adviser to the security services MI5 and MI6 until earlier this year, launched a stinging attack on the Government's traditional willingness to turn a blind eye to the way in which serious crime is using offshore tax havens such as the Channel Islands, Isle of Man, Gibraltar and the Caribbean dependencies including Antigua to launder cash.

His criticism, made at an international fraud conference in Cambridge, is the first time a former law officer from the notoriously publicity shy security services has gone on the record

It will come as a serious embarrassment to the Government. President Bill Clinton recently issued a warning of possible sanctions against unco- operative tax havens in an effort to stamp out drug trafficking, which he sees as a serious threat to US national security.

Mr Bickford, now a consultant, said that removing financial secrecy in the territories Britain controls seemed little enough to do considering the sacrifices being demanded of other governments, such as Columbia, to control organised crime.

There was no decent reason for offshore bank secrecy to continue. "Legitimate arrangements can be declared to the taxing authorities. The only reason for not doing so is that the scheme is designed to avoid detection." There was no justification for such secrecy other than to protect criminals.

He said the only reason he could see for maintaining bank secrecy was that the government thought the British taxpayer might be forced to bail out the inhabitants of the islands if the islands' status as tax havens was ended because it was such vital economic benefit.

That that justification was put forward at all, Mr Bickford said, "is an example of the overwhelming subversive corruptive influence of organised crime which has managed to magic a seemingly acceptable position out of the sheer weight of its financial proceeds from narcotics, fraud, extortion and other criminal enterprise."

He said the UK "should be the first to abolish this secrecy, given their control of their dependent territory offshore centres".