Very good. My Lords, HMRC takes allegations of non-compliance on tax seriously regardless of where it takes place in the world. HMRC is looking closely at all the information the ICIJ has publicly released in the Paradise papers to see whether they reveal anything new that could add to its existing leads and investigations.
My Lords, the Government may be looking closely, but they have been looking closely at this issue for a long time with very limited action. When will the Government accept that there is deep anger among taxpayers in this country about the revelations that the rich and powerful are able to get away with aggressive tax avoidance, and that transparency is the best antidote? Will they give a fixed date by which the overseas territories and Crown dependencies will have to open a public register of the beneficial ownership within their jurisdictions?
The noble Lord is right that we have been looking at this for a long time, but we have also been acting for a long time. Since 2010, we have introduced almost 100 measures that have raised £160 billion in tax revenue. That is more than the combined health budget for England, Wales, Northern Ireland and Scotland. We have one of the lowest tax gaps in the world—certainly the lowest on record in this country. We have been working very hard and taking this very seriously and will continue to do so.
As regards the overseas territories and Crown dependencies, again, this has been taken very seriously. Just two weeks ago at the joint ministerial council, the Prime Minister stressed the importance of this. We already have central registers in four of those authorities, including the Cayman Islands, Bermuda and Gibraltar. Montserrat and Anguilla will have registers by April of next year. The Turks and Caicos Islands have been particularly affected by the hurricane, so they have been given a little extra time, but we are very clear that action needs to be taken.
My Lords, the Council of the European Union, meeting in Brussels a week last Monday, issued its blacklist of tax havens. Its conclusions reveal that a number of British dependencies and overseas territories on the grey list have entered into commitments with the EU to implement tax good governance principles. Specifically, Bermuda, the Cayman Islands, Guernsey, the Isle of Man and Jersey have undertaken to address concerns about their tax regimes, which produce profits without real economic activity. Do the Government support the EU in this initiative, and will they impose the same sanctions on non-compliant countries after Brexit as the EU proposes?
We certainly support the work that ECOFIN has undertaken in producing this report. We have been at the forefront of the whole process. We recognise the statements on, and identification of, those jurisdictions that are co-operative. That is an important point to stress: none of the Crown dependencies or overseas territories was listed as non-co-operative; they were all on the co-operative list. Areas in which the Council wants activity to take place have been identified, and we fully support that.
My Lords, the disinformation generally surrounding this issue is just staggering, as is the conflation of illegal tax evasion, lawful tax avoidance and money laundering. Does my noble friend agree, particularly in light of his previous answer, that the new gold standard of proactive reporting and transparency in favour of tax authorities in respect of the capital and income of any legal person, trust or individual using its financial services industry, is in fact the Cayman Islands?
The Cayman Islands has work to do, as have all jurisdictions to meet the standards that have been set down. However, it is true to say that with its centrally held register, the Cayman Islands at the moment is going above and beyond what is required by the Financial Action Task Force. We are absolutely resolute about making sure that all UK citizens pay all tax due by them, wherever it is held in the world. That is a very important commitment, and we intend to ensure that all jurisdictions hold to it.
My Lords, given the level of public shock at what was revealed in the Paradise papers, the Minister’s answers today follow the same emollient pattern of recent years, in which it has been said, “We are doing what we can and we are getting certain proceeds”. Yet, the Paradise papers reflected that a whole range of individuals and companies owe tax on a massive scale, and are putting themselves under the jurisdiction of these islands and escaping taxation that is owed to this country. I ask the Minister to respond to my noble friend’s Question with the degree of forthrightness it demanded.
The question was about a public register. The UK is the first major economy to issue a public register of foreign-owned companies. We are leading in this; it was a landmark commitment given at the global Anti-Corruption Summit, which David Cameron initiated. So far, it is not required to make sure there is a public register in other jurisdictions. It has to be available to tax authorities and to security authorities in the case of counterterrorist finances. That is what is happening in those jurisdictions at present, but there is still more to do and we are far from complacent.
My Lords, does the Minister think the problem might go away because we have responsibility for defence and security of our overseas territories but so few ships that we cannot do it? If we are unable to defend them, maybe they should no longer be British Overseas Territories.
The overseas territories and the Crown dependencies are a very important part of the British family and will be a very important part of global Britain going forward. It is important that, as part of that family, everybody works together to ensure that people who have assets held overseas make sure that they report them in an accurate and timely way to the tax authorities of their countries.