George Osborne and Ed Miliband have clashed over Labour plans to tackle tax havens, with the chancellor claiming that drawing up a blacklist could isolate the UK from allies in Washington, Paris and Berlin.
It follows Labour’s promise to compile a public register of offshore companies and their owners if it wins the general election in May. A Miliband-led government would sanction overseas territories that fail to draw up a list, a spokesman for his party has said.
On the BBC’s The Andrew Marr Show on Sunday, Osborne said such a policy would lead to the British government falling out with the US, France and Germany, which have no commitment to setting up a public register.
“The new British prime minister would turn up in Washington and say ‘I am blacklisting your country’? I think he makes it up as he goes along,” Osborne said. “The Labour leader is simply not fit for office because he does not think through the consequences of his anti-business, anti-enterprise and anti-our partners abroad policies.”
Miliband’s office hit back, saying Osborne’s claims were “the lamest excuse for inaction yet”. His spokesman said: “No one is saying Germany, the US or France is a tax haven and it is ridiculous to use this as a reason not to act on overseas territories and crown dependencies, which have operated under a shroud of secrecy for too long. Lame excuses may be good enough for David Cameron, but they are not good enough for Ed Miliband.”
Miliband said the overseas territories would have six months to compile a public register of offshore companies. If they failed, they could be put on a “tax havens” list and incur sanctions.
He added that he would send a letter this weekend to British overseas territories – Anguilla, Bermuda, the British Virgin Islands, Cayman Islands, Turks and Caicos Islands, Gibraltar and Montserrat – and the crown dependencies of Jersey, Guernsey and the Isle of Man.
In the letter, Miliband said he would put them “on notice” that his government would refer any that failed to produce publicly accessible central registers of beneficial ownership – who profits from a company – to the Organisation for Economic Co-operation and Development (OECD).
In response, Gibraltar’s chief minister, Fabian Picardo, has written to the Labour leader to tell him the territory is not a tax haven; while the government of Bermuda said it was “surprise and disappointed” to be included on the list of territories that Miliband claimed lacked openness.
The leader of the Gibraltar Socialist Labour party said it was unfair to characterise territory as such because it was also part of the European Union and therefore subject to the same standards as all member states.
Picardo told Sky News’s Dermot Murnaghan: “I have already responded to the leader of the opposition. I have written to him this morning. I’m sure he will have been very disappointed in fact that I had to read his letter in the Guardian newspaper, that I haven’t in fact received his detailed communication.
“I think it is important to be very discerning about what Gibraltar represents. Gibraltar is not just an overseas territory, it is also an important part of the EU. Therefore the standards that apply in respect of financial services and their provision from Gibraltar are exactly the same standards that apply in respect of London, in respect of Frankfurt and the rest of the EU. Therefore it is quite unfair to characterise Gibraltar as a tax haven.”
The premier of Bermuda, Michael H Dunkley, said: “The government of Bermuda remains open to continuing dialogue with the UK government, the UK opposition, and all other interested parties, in sharing best practice across borders in areas of corporate transparency, and the fight against fraud and crime.
“We would also remind Mr Miliband of Bermuda’s strategic economic contribution to the UK, which includes direct and indirect employment in the UK of 100,000 people, as well as our role as a global hub for the reinsurance and insurance industries, providing the critical underwriting required for damage arising from natural disasters and terrorist events.”
Despite a global drive to improve transparency, there is no international standard that requires countries to introduce public registries.
Some offshore centres say their existing system of regulating company service providers is more effective in tackling corporate crime than Britain’s preferred approach. Critics say that the UK’s new law, which puts the responsibility on companies to file information about their ultimate owners by April 2016, will be easily circumvented.
Offshore centres say a requirement to force them to put ownership information into the public domain would drive away business, potentially affecting the flow of investment into Britain.
Miliband has accused Cameron of failing to follow through on demands that all overseas territories and crown dependencies adopt the transparency measures being introduced in the UK. So far none of the countries around the world over which Britain retains sovereignty has accepted the prime minister’s appeal to them to “move forward together in raising standards of transparency” and some have ruled out reform.
Picardo said it was very unlikely Gibraltar would be put on a blacklist, explaining that an anti-money laundering directive – requiring the establishment of a central register – would be adopted in September.
“Mr Miliband is not saying, I’m sure, that he is going to create a blacklist for all those who have a central register whether or not it is public,” he said. “So if I find myself in the company of Germany, Spain and France on a blacklist: that won’t be an uncomfortable place to be,” he said.
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