Bishop of Oxford welcomes Criminal Finances Bill, calls for further action on tax transparency in UK overseas territories

On 9th March 2017 the House of Lords debated the Government’s Criminal Finances Bill at its Second Reading. The Bishop of Oxford, Rt Revd Steven Croft, spoke in the debate, supporting the Bill and calling for action on tax transparency in UK overseas territories and Crown dependencies.

The Lord Bishop of Oxford: My Lords, I join other noble Lords in thanking the Government for introducing this Bill. I support it. The Government have led on tackling corruption since the then Prime Minister set the issue of tax transparency at the heart of his G8 summit in 2013. He should also be thanked for hosting the anti-corruption summit in May last year. The Bill follows this good record and takes some further welcome steps to try to tackle corruption. The unexplained wealth orders will provide stronger powers for UK law enforcement to seize and repatriate the proceeds of grand corruption. The new corporate offences of failure to prevent the facilitation of tax evasion should be particularly praised because they will apply all over the world. I hope that in due course these offences will apply to all economic crime.

As bishops, we often travel to our linked dioceses all over the world. The global church is present in many developing countries, where corruption can often be a real problem. Some estimates say, as we have heard, that around $1 trillion annually leaves the developing world in illicit financial flows. That is a ​scandal. The secrecy enabled by tax havens across the world costs developing countries at least $100 billion a year, according to the UN. Along with other noble Lords, I press the Government to go further and faster in this area for the sake of the very poorest. Until the UK Government go further in tackling the secrecy that is still enabled by UK tax havens, we cannot claim to be doing all we can to tackle corruption. As we have heard, Ministers have made some progress in recent years in getting overseas territories and Crown dependencies to list who owns which company within their jurisdiction, but unless these registers are published—as the UK’s now is—people in developing countries, who are losing out the most, will never be able to see where their money is going.

Christian Aid and other charities have campaigned vigorously on these themes over a number of years. They tell me that a relative of one African president took and spent $38 million of his country’s money on a private jet using an anonymous company in the British Virgin Islands, according to the case against him made by the US Department of Justice. Without a public central register of beneficial ownership in the British Virgin Islands, we would not know what that company is or who benefits from it, and we would have no guarantee that UK law enforcement would be making the right request to get the information needed. Public registers of beneficial ownership will put this information out into the open, and people in developing countries will be able to see the information that is important and relevant to them, which should be their right.

I urge Ministers and others to aim still higher. We should aim to have public registers of beneficial ownership in the UK’s overseas territories, at the same time as getting the private registers in place by June. I shall be supporting noble Lords who try to use this Bill to put in place a timeline for when we will have that transparency.

I urge all noble Lords to reflect on the scale of the problem. Tax havens are costing developing countries at least $100 billion a year, according to the UN. I read a recent statistic that said that around one-third of rich Africans’ wealth is currently held in tax havens. If this money was held in Africa and taxed properly we would be able to employ enough teachers to educate every child on the continent. That is the scale of the problem we are looking at here and the scale of the good that can yet be done. I welcome this Bill and urge Ministers to act while the Bill is in the House of Lords to ensure that these issues are further addressed in this legislation.

Baroness Whitaker (Lab):… As my noble friend Lord Rosser said powerfully, echoed by the noble Baroness, Lady Kramer, the right reverend Prelate the Bishop of Oxford and others, among the matters which remain to be dealt with are public registers of beneficial ownership in the overseas territories and Crown dependencies, as well as strengthening the capacity to repatriate seized funds. Can the Minister tell us how the Government propose to pursue the highly desirable obligation to declare beneficial ownership in these tax havens?

Baroness Stern (CB): … I am most grateful to the right reverend Prelate the Bishop of Oxford for his remarks about the effects of corruption in poor countries. I have in past years visited a number of countries where grand corruption has penetrated deeply into the administration. The outcomes are hugely damaging to the majority of people in those countries.

Lord Hodgson of Astley Abbotts (Con): ….It is always a pleasure to follow the noble Baroness, Lady Stern, who, as ever, has introduced an informed and incisive view. Like her, the right reverend Prelate the Bishop of Oxford, who is no longer in his place, had some very valuable things to say about the role of this Bill and its impact on the developing world.

Lord Kennedy of Southwark (Lab)… Transparency is one of the most effective ways of dealing with this type of corruption. The right reverend Prelate the Bishop of Oxford spoke about the scandal of the illicit flows of funds from the developing world and the need for firm action to be taken to deal with the issue of tax havens in British Crown dependencies and overseas territories. The lack of transparency is a real problem and prevents individuals from seeing who owns what. It enables criminals to hide behind a cloak of secrecy.

Baroness Williams of Trafford (Con, Minister)… The right reverend Prelate the Bishop of Oxford talked about the large proportion of African wealth invested in tax havens. The UK is working precisely on that to bring corrupt leaders to justice and recover the assets that they have stolen, quite often from their own people, as the right reverend Prelate said.