David Cameron says it is 'unfair' to criticise British-controlled tax havens

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David Cameron has defended a group of notorious British-controlled tax havens – arguing that criticism of their offshore regimes is “unfair”.

The group of territories, which includes the British Virgin Islands – at the centre of the Panama Papers storm – have long been criticised by campaigners for secrecy and sheltering wealthy individuals and companies from tax.

But the Prime Minister said the UK’s assorted Crown Dependencies and Overseas Territories were now being cooperative and praised their pledged adoption of new rules.

The statement following the Panama Papers scandal is a change of tone – as UK Foreign Office ministers last year said they were “disappointed” in the territories’ approaches.

Mr Cameron also ruled out blacklisting countries on the basis that they were zero- or very low-tax jurisdictions.

“In terms of who is at the top of the pyramid of tax secrecy, I think it is now unfair to say that about our Crown Dependencies and Overseas Territories,” the PM told the House of Commons at Prime Minister’s Questions.

“They are now going to cooperate with the three things that we asked them to do in terms of the reporting standard, the exchange of tax information, and now the register of beneficial ownership.”

Asked about blacklisting tax havens, the PM said: “We’re happy to support blacklists but we don’t think we should draw up a blacklist solely on the basis of a territory raising a low tax rate – we don’t think that’s the right approach.”

Overseas territories are not independent of the UK but are generally autonomous in their own affairs. The UK provides diplomatic and defence support for the countries, and they are ultimately accountable to the UK parliament.

Labour leader Jeremy Corbyn criticised Mr Cameron’s approach.

“It’s interesting that the premier of the Cayman Islands Alden McLaughlin is today apparently celebrating his victory over the Prime Minister because he is saying that the information certainly will not be available publicly or available directly by any UK or non-Cayman Islands agency,” the Labour leader said.

“The Prime Minister is supposed to be chasing down tax evasion and tax avoidance, he’s supposed to be bringing it all into the open.”

Cayman’s premier Mr McLaughin had said the deal struck with the UK was “what we wanted” and that Cayman had “been pushing for [it for] three years”.

The charity Oxfam however accused the PM of having allowed himself to be “dictated to by tax havens”.

Mark Goldring, its chief executive, said: "It's deeply disappointing that the Prime Minister is allowing himself to be dictated to by tax havens, especially given the huge public anger about tax dodging following the Panama Papers' publication. Instead of delivering on his promise to make tax dodgers 'wake up and smell the coffee', the Prime Minister today put up a Do Not Disturb sign.

"David Cameron has often stressed the importance of transparency in tackling all forms of corruption but by dropping efforts to end offshore secrecy he is failing to act in the interests of the UK and the world's poorest people - both of whom lose out to tax dodgers.

"The UK is about to introduce a public register of the real 'beneficial' owners of companies - if Britain is able to do this without problems, why can't the British Virgin Islands and other UK-linked territories too?”

The Labour leader has said uncooperative British Overseas Territories that act as tax havens should be taken under direct control of the UK if they persist.

David Cameron however said that “the British [register] will be public”.

The row comes after Mr Cameron and Mr Corbyn released details of their own tax affairs in the wake of the Panama Papers scandal.

A massive leak from law firm Mossack Fonseca provided details of over 200,000 offshore companies, most of which were set up in the British Virgin Islands.