It’s time the UK acted on tax havens

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The Guardian has reported this morning that:

The UK has failed to join a new international crackdown on financial secrecy and tax havens by more than 50 countries, including Germany, France and Spain - part of a package of measures to restore the world's economy to health.

Failure to participate in the formation of the new Taskforce on Financial Integrity and Economic Development, launched in Washington DC this week, is part of a pattern of UK opposition to key financial transparency reforms. Campaigners argue that the UK's seeming desire to protect the City of London threatens to isolate Britain as international momentum for fundamental changes to tax secrecy grows.

Richard Murphy, the forensic accountant who is a key member of the taskforce, said: "The UK was invited to participate. They haven't and they show no indication that they will engage with this. Other European partners are interested and we've seen what's happened in the States. It's obvious Obama is interested yet the UK remains coolly indifferent."

The taskforce is demanding that the beneficial ownership, control and accounts of companies, trusts and foundations be available on public record to facilitate due diligence. It wants mandatory exchange of information between tax and governmental authorities on income, gains and property received by non-resident individuals, corporations, and trusts and that offences for money-laundering charges be harmonised across the world. It also calls for an end to the practice of transfer pricing, whereby companies manipulate the cost of trading goods to reduce the tax.

Last night, the Treasury said: "We are committed to addressing these issues the taskforce has raised through the G20. We are definitely putting these issues on the agenda."

But last autumn, the UK opposed the upgrading of a United Nations sub-committee on tax to powerful intergovernmental status. It has also voiced concern about reforms to the EU's savings tax directive, which will close tax avoidance loopholes. And last week, a leaked letter by Alistair Darling exposed the UK's negotiation stance before the G20 summit this April in London . Darling stressed that the G20 must maintain open, lightly regulated capital markets.

The issue is this: the time has come for action. And I do not for one minute think the UK is putting these issues on the G20 agenda.