What recent assessment she has made of the effect of low levels of financial transparency in the Crown dependencies and British overseas territories on the economies of developing countries.
Through our presidency of the G8 in 2013 and through the G20 we have led on assisting developing countries in strengthening their tax regimes, and tackling avoidance and evasion. UK overseas territories have agreed to furnish our tax and law enforcement agencies with company beneficial ownership information.
I thank the Minister for that answer, but the world’s poorest countries are deprived of some $1 trillion every year because of money laundering and tax avoidance. Will he call on the British overseas territories to establish a public register of beneficial ownership ahead of next week’s anti-corruption summit in London?
We are light years ahead of where we were, and indeed of any ambition expressed by previous Administrations. Full automatic exchange of taxpayer account information will be available from September this year, and company beneficial ownership information will be available to our tax authorities by June next year.
I acknowledge the progress made by previous Governments and this one on this issue, but is it not time, in advance of the anti-corruption summit, to require overseas territories and Crown dependencies to provide public registers of beneficial ownership?
We have advanced a huge amount by agreement and leadership, not by having recourse to compulsion. The overseas territories are now well in advance of many of our major trading partners. It is better to proceed by agreement. Much of the information will be available through the initiative for automatic exchange of beneficial ownership registers, to which 33 countries have now signed up.
Does my right hon. Friend agree that we need to look very carefully at the purpose of this? Its purpose is not simply to deal with excessive avoidance and evasion schemes—they often mask deeply corrupt and criminal activities. What has been achieved is the ability for our law enforcement agencies to get in there and get that information, without tipping off the criminals we are seeking.
The questions asked by the hon. Ladies are entirely legitimate, and the Minister has replied well. The added liquidity that comes as a result of moneys coming in—often from parts of the developing world—to places such as the overseas territories and the Crown dependencies can lead to a range of project finance initiatives that benefit many people in the developing world. It is not as straightforward as suggesting that moneys in tax havens do not have a longer-term benefit, particularly in those parts of the world that the Department holds close to its heart.
My right hon. Friend is right. The common reporting standard is vital, together with the automatic exchange of taxpayer account information. Precisely because of that, we have a pilot running in Ghana to draw developing countries into that arrangement.
The Minister will be aware that tax avoidance in developing countries costs them three times what they get in aid. Why will the Department not put pressure on Government colleagues to insist that offshore centres such as the British Virgin Islands and the Cayman Islands set up registers of beneficial ownership that are open to the public?
We are vastly in advance of the situation left by previous Administrations, and we are advancing by agreement. That information will be available if countries sign up to the initiative for the automatic exchange of beneficial ownership registers, and next month the United Kingdom will be the first country to publish that information.
Another way that the UK can increase transparency and help to lead the world towards more open communication and higher revenues for developing countries is to support strongly the extractive industries transparency initiative. The previous Government signed us up to that, after too many years in which we had stood aside from it. Will the Minister confirm that we will be leading other parts of the British overseas territories, and signing up to the EITI?
Those territories certainly have extractives, and we are pushing that agenda. I regularly meet representatives of the extractives industry to drive forward this initiative.