Threats by the Labour Shadow Chancellor to crackdown on British offshore finance centres have been dismissed as just a ‘cheap shot’ by outgoing Chief Minister Allan Bell.
John McDonnell made his comments at least week’s Labour Party Conference in Liverpool.
He told delegates that a future Labour Government will ensure all British Crown Dependencies and Overseas Territories will come clean over company owners and beneficiaries to end tax dodging.
In his speech he said: ‘In government we will end the social scourge of tax avoidance.
‘We will create a new Tax Enforcement Unit at HARK, doubling the number of staff investigating wealthy tax avoiders. We will ban tax-dodging companies from winning public sector contracts. And we will ensure that all British Crown Dependencies and Overseas Territories introduce a full, public register of company owners and beneficiaries.’
But Mr Bell said: ‘I don’t think he will ever be in a position to carry out these threats. He had made these comments previously about closing down “tax havens” as he sees them.
‘This is just a cheap shot on the part of Mr McDonnell to get a good headline with his followers.’
He said that the Shadow Chancellor’s main advisors are the Tax Justice Network including well-known tax haven critic Richard Murphy.
It is Mr Murphy who claims credit for the Isle of Man losing £200m a year in VAT revenue.
The UK has very recently established a public register of beneficial ownership.
But while the Manx government is committed to setting up a central register of the real owners of companies, it says it will not make that public register - unless that becomes the standard internationally.
Mr Bell said: ‘Labour say they led the drive for greater transparency but it was David Cameron who was responsible for the most recent drive for a public register of beneficial ownership.
‘We have led the way towards greater transparency. We are very much ahead of the game in terms of providing access.’
The Chief Minister signed an agreement in April with the Financial Secretary to the UK Treasury David Gauke MP, committing the island to setting up and maintaining a central electronic register of information that will allow accurate and current information to be provided to law enforcement and tax authorities as quickly as within one hour in urgent cases.
Mr Bell has previously said a public register is a red line that the government will not cross.
But following his attendance at an anti-corruption conference in London he said: ‘If a public register becomes accepted as the clearly identified global standard, the island would consider its position. But there is a long way to go on that.’
He won applause from delegates at that conference when he pointed out that the United States has much work to do on tax transparency and company secrecy.
Mr Bell made reference to one building in the Delaware where no fewer than 285,000 companies are registered - and no one is able to find out who the beneficial owners of these companies are.
Christian Aid has led calls by civil society organisations for the island’s register to be made public to ensure ‘those who seek to abuse the privilege of company ownership for secrecy purposes are left with nowhere to hide’.