Prime Minister David Cameron has given the ‘all clear’ to 14 former British dependences and Crown territories that were formerly accused of being tax havens.
Over the past year or so, each of the tiny financial centres has agreed to sign up to a new regime of transparency that does away with exploiting financial loopholes and helping individuals and companies avoid tax.
Cameron explained that each of the centres has embraced the concept of ‘fair and open’ tax systems and could no longer be considered tax havens.
Nevertheless, behind the scenes arguments with France are continuing after Jersey, Bermuda and the British Virgin Islands were added to a blacklist of unco-operative tax regimes.
Jersey sands accused of providing unhelpful data in response to tax inquiries from the French government.
Fair and open
Cameron was speaking at the end of the recent G20 summit, taking questions on tax evasion, mainly by companies.
“It’s not right to refer to any of the Overseas Territories or Crown Dependencies as tax havens,” Cameron said.
“They have all changed the way they work to become fair and open tax systems.
“We need to put this behind us and move on to deal with those countries that really are secretive tax havens.
“The Crown Dependencies and Overseas Territories should be praised for the action they have taken, not castigated.”
Meanwhile financial leaders at three of the leading former tax havens spoke out in support of Cameron.
Geoff Cook, chief executive of Jersey Finance, the island’s trade body for financial firms, has written a blog celebrating Cameron’s support called: “It’s official – Jersey is not a Tax Haven!”
“We have worked long and hard to become a respected and open financial jurisdiction,” he said.
What the financial centres say
“Don’t take my word for it; ask the International Monetary Fund, the World Bank or the Organisation of Economic Co-operation and Development. They support us and so do countless other reports and inquiries.
The blog and a video of Cameron’s announcement are on the Jersey Finance web site
Guernsey Finance, the counterpart of Jersey Finance on the other Channel Island, displays a similar announcement by chief executive Fiona Le Poidevin saying “the Prime Minister is right. We are not a secret financial jurisdiction; calling us a tax haven is not right”.
More information on the Guernsey Finance web site
The Isle of Man treasury minister Eddie Teare has noted what Cameron said and explained: “The OECD, IMF and Financial Stability Board have all been positive about our status. We are not a tax haven.”
Read Eddie Teare’s comments on the IoM government web site
Cameron explained that each of the centres has embraced the concept of ‘fair
and open’ tax systems etc…now would it not be ‘fair’ to pay all ex-pat pensioners the indexed pension that they have paid for ?
This anomaly which deprives just 4% of pensioners who are abroad, mainly in the Commonwealth countries, is now, thanks to the internet, making headlines around the world and it will get worse Mr Cameron. Discrimination by the government of the UK is a very poor example to show the rest of the world how much you consider the worth of pensioners abroad who are ambassadors for British goods and services. How can a country considering a relationship with the UK trust a government that abandons a minority of pensioners for no reason and when questioned fail to justify the action ?
Some of the territories concerned here are victims of this discrimination Mr Cameron.
Why ? And when do you intend to stop that ?
George Morley rightly identifies that a fair and open tax system as envisaged by Cameron has been embraced by these financial centres but, again rightly, questions why the same fairness and openness Cameron extolls does not extend to the frozen pensioner.
One does wonder just how many of the British public are aware of the discrimination that successive governments have employed against one of the most vulnerable sections of UK pensioners world wide.
To have contributed during one’s working life to the NI Fund on the same terms and conditions as everyone else but ti be denied the right to withdraw from the NI Fund, in retirement, on the same terms and conditions as everyone else is, quite simply blatant and unwarranted discrimination.
The government offers no justification for the policy because there is no legal, moral, financial or administrative case to support it.
The pensions of these frozen pensioners, unlike those in the UK, the EEA and some random countries including, for example the USA, Serbia and Israel, are not index linked. Thus, in a genuine case, a centenarian who on retirement went to live with her daughter and only surviving relative in Australia still receives the same full pension she got the day she retired – £6.12 per week – and not the £110.15 she is entitled to by virtue of he full NI contribution record.
Just imagine how the electorate in Witney would react if they were told their pension would be frozen – no increases ever – while those in Doncaster North would still be automatically index linked……or vice versa…..it is the same discrimination….and miles away from fairness and openness, Mr. Cameron.
So the Crown Dependencies and Overseas Territories are now “fair and open” are they? Pity the same can’t be said of Mr Cameron’s government who continue to discriminate against just 4% of state pensioners just because of where they live. British state pensions are up-rated for expats in the USA but not in Canada, for example. Ironically the British Virgin Islands, mentioned in this article, is on the frozen list so expat state pensioners get no annual increases. Entitlement to a state pension is dictated by ones contributions not where one lives and a private pension provider is not allowed to discriminate in this way as the full force of the law would soon descend from a great height. Stop this hypocrisy Mr Cameron, you said before the last election this issue is totally illogical and unfair and yet you have done nothing to end a disgraceful stain on the character and credibility of the present UK government.
Yes, the United Kingdom Virgin Islands are indeed on the frozen pensions list but just ten miles away they are not frozen…in the United State of America Virgin Islands. As you say protempore – totally illogical.