Hiding money away in overseas territories starves Treasury, warns MP

Hiding money away in British overseas territories has a knock-on effect for British families, a Labour MP has warned.

Phil Brickell will lead a debate in Parliament on Wednesday, where he will call for Whitehall clarity over ministers’ efforts to tackle financial secrecy in territories where they have some of the levers of power.

Government anti-corruption champion Baroness Margaret Hodge went to the British Virgin Islands (BVI) earlier this year, amid fears authorities in the Caribbean archipelago are taking too long to meet UK minimum standards on so-called dirty money.

London hopes open registers of beneficial ownership will become a “global norm”, for transparency around who has significant control over companies and property.

In a joint communique last year after the annual UK-overseas territories Joint Ministerial Council, the participants noted territories which did not yet have laws to set up a register, with access for people with a legitimate interest, would see them in place and implemented by June 2025 or earlier.

But a coalition of anti-corruption campaign groups, including Transparency International UK and Tax Justice UK, has warned some territories still have inadequate laws.

Mr Brickell will use his Westminster Hall debate to call for an update after Baroness Hodge of Barking’s visit and urge the Foreign Office to set out its expectations for the overseas territories.

“Financial secrecy in the overseas territories makes life so much tougher for hard-working families right across our nations,” the Bolton West MP and Anti-Corruption and Responsible Tax All-Party Parliamentary Group chairman said ahead of the debate.

“From starving the Treasury of vital funding for schools and hospitals, to vape shops blighting our high streets and property prices being distorted beyond the reach of ordinary people, this issue has many very real and far-reaching consequences for our communities.”

Joe Wright, Tax Justice UK’s policy and advocacy manager, said: “The UK is losing at least £15 billion a year to international tax abuse, a loss our communities and crumbling public services cannot afford.

“As we approach the Budget, this Government must take bold action to tackle tax abuse in the UK’s overseas territories and crown dependencies by compelling the territories to implement financial transparency measures and equipping HMRC with the resources necessary to tackle tax abuse by the wealthiest and most powerful.”

Transparency International has previously identified £5.9 billion worth of “questionable” funds invested in UK properties since 2016, purchased using shell companies registered in the overseas territories.

The organisation found more than 90% of these funds went through BVI.

“Ending corporate secrecy is essential to tackling corruption worldwide,” Transparency International UK senior researcher Margot Mollat said.

“For too long, hidden company ownership has allowed kleptocrats and criminals to conceal their stolen wealth.”