The news on Tuesday afternoon and evening was full of a UK Government climbdown on tax havens. Amid the Parliamentary drama and the claims and counter claims, what was it that actually happened? 

Why yesterday’s result matters

Let’s be clear. Yesterday’s result was a huge moment in the global fight for tax justice and transparency that has been waged by NGOs such as Tax Justice Network, Christian Aid, Transparency International and Global Witness for around 15 years. The global world of financial secrecy that was in part revealed by the Panama Papers and Paradise Papers has been bust wide open. Other tax havens such as Delaware in the US are already being put under pressure to also adopt similar transparency measures, whatever Trump might want!

The UK’s Overseas Territories, places like the British Virgin Islands, will be forced by 2021 to reveal who really owns companies registered there. Given that the British Virgin Islands in particular has been linked back to major corruption cases all over the world, this is a seriously big deal. Tax dodgers and the corrupt will lose out, whilst developing countries who are estimated to lose hundreds of billions of dollars to tax havens every year will hopefully gain.    

What will this Bill achieve?

The real credit for yesterday’s win belongs with Margaret Hodge and Andrew Mitchell who jointly tabled the amendment, and worked furiously hard to ensure it was adopted. The amendment was tabled to the UK Government’s Sanctions Bill – one of many pieces of legislation that are going through Parliament at the moment to help the government adopt Brexit. The legislation now goes back to the House of Lords for approval, but I urge Peers not to try to amend or remove this new amendment, which has so much cross-party political and public support.

This Bill will finally achieve the same level of transparency in the UK’s Overseas Territories as we have in the UK – so called public registers of beneficial ownership. David Cameron first pushed for these in 2013. Its taken us five years to get them, but we’re finally now on the right path following years of the UK Government and most of the territories doing everything they could to avoid transparency.

It has already sent shockwaves around the world. I expect that in the coming days and weeks the Overseas Territories will push back strongly, saying that the UK shouldn’t be legislating for them. The truth is that many major corruption cases link back to the Overseas Territories, and they have already had five years to clean themselves up. Margaret’s amendment will give them a further three years. To my mind that is plenty enough, and they should now adopt transparency willingly. They will undoubtedly face challenges, and the UK Government should do much more to help and support them in the coming months and years.

But for now, cross-party politicians, journalists, NGOs and campaigners have struck a major blow against secrecy and corruption. We’re one step closer towards fairness, but there’s still a long way yet to go.