Update: the Financial Times has picked this up, here.
Guest blog by Joseph Stead, Christian Aid
The 10-point Lough Erne communique contained 13 uses of the
word ‘should’ and not a single use of the word ‘will’.
Perhaps David Cameron, the UK Prime Minister,
was hoping that no-one would notice the difference and that the British public
anger about tax dodging would be satisfied without any actual action.
commissioned by Christian Aid
shows that that gamble has failed and that the British public remain as angry,
if not more so, than before the G8.
When a previous poll was undertaken in February, 80% of the
public were angry about tax dodging, and 34% were boycotting products because
of companies’ tax practices. The same
percentage are still boycotting products - and 84% are now angry.
While one of the G8 ‘shoulds’ was for tax authorities to get
more information from multinationals, the public are clear that they expect
more. Our ComRes poll found that 87%
want MNCs to be more transparent with their accounts. Both companies and government are seen as
complicit in the problem, with 83% saying that MNCs get treated more leniently
by the tax man, while 58% think that tax avoidance by MNCs is immoral.
Furthermore, despite the pre-G8 commitments made by the UK’s
Overseas Territories and Crown Dependencies, there is also clearly a desire for
further reform in UK-linked jurisdictions.
Of the 2,028 Britons questioned, 74% agree with the statement that ‘the
UK is responsible for these territories and should force them to make
information about company ownership publicly available by using all available
While I’d love to be able to say what the UK government response
to this will be, I can only point out what our poll suggests it should be.
Cameron made transparency of company ownership a key part of
the G8, and it’s not hard to understand why.
The Africa Progress Panel highlighted how the use of anonymous companies
registered in the British Virgin Islands involved in just five mining deals in
the Democratic Republic of Congo cost the citizens of the DRC $1.35bn, or more
than twice their annual health and education budget combined.
As Kofi Anan, former UN Secretary General and head of the
Africa Progress Panel said: ‘When foreign investors make extensive use of
offshore companies, shell companies and tax havens, they weaken disclosure
standards…such structures also facilitate tax evasion and, in some countries
corruption, draining Africa of resources that should be deployed against
poverty and vulnerability.’
Cameron himself agrees, saying much the same: ‘A lack of
knowledge about who ultimately controls, owns, and profits from companies leads
to aggressive tax avoidance, tax evasion and money laundering, undermining tax
bases and fuelling corruption across the world’.
The public get it, too.
When asked why people might want anonymous companies, the leading
answers were: for tax evasion and avoidance (78%), to hide their true wealth
(70%) and to hide criminal behaviour (59%).
But having made company ownership transparency a key part of
the G8, Cameron stopped short of doing what he wanted to. He said he personally
supports a public register of the real owners of companies but when it came to
the G8, he stopped just short of taking that step.
He’s decided to have a consultation instead. There is still a while to go before the
consultation closes on 16th September, but the people we polled had
a fairly clear view, with only 9% agreeing that the owners of companies have a
right to privacy.
With the UK committed to establishing a registry, making it
public should be a no-brainer, as some in the business world have agreed. The extra cost would be minimal. It would ensure that developing countries could
access the information easily and quickly, without the need for treaties to
allow exchange of information. It would
allow many eyes to analyse the data to spot both areas of concern and errors.
Knowledge that there would be many eyes would also deter
many from even trying. It would also
help make banks perform due diligence both quicker and more effectively and would
be a first step in building back trust and confidence in businesses. That, in
turn, would support both access to credit and the rebuilding of some of the social
trust that business has lost in recent years.
All of this the government knows, indeed it has known for years, because it did a
comprehensive cost benefit analysis in 2002, which came out in favour of a
public registry as the most cost effective option.
The public is also clear that the UK should extend
requirements for public registries to the Overseas Territories and allow the
citizens of the DRC to see who controls the BVI companies that have stolen
So, public registries are something that the Prime Minister
wants, something that many in businesses support, something that the public
want, something that would benefit developed and developing countries alike and
also a means of to tackle corruption, tax evasion and money laundering.
That we should do this seems entirely clear.
Whether the UK government will do it remains
to be seen.
Joseph Stead is Senior Economic Justice
Adviser at Christian Aid. Christian Aid
have just launched a new campaign in the UK calling for public registries of beneficial