Government Must Work Against Global Corruption, MPs Say

Government Must Work Against Global Corruption, MPs Say
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The Government must do more to stamp out corruption, money laundering and tax evasion which is having a "devastating" impact on the world's poorest countries, MPs have said.

The Commons International Development Committee (IDC) said companies and individuals in the UK and its network of Crown Dependencies and Overseas Territories were playing a "major role" in facilitating global corruption.

It highlighted official figures estimating that between £23 and £57 billion was being laundered through the UK each year while it pointed to the role of British overseas territories in facilitating global tax avoidance and evasion.

Around half the companies featured in the leaked "Panama Papers" of law firm Mossack Fonseca - some 113,000 in all - were registered in the British Virgin Islands, while the UK was second only to Hong Kong for the number of facilitators of tax evasion and avoidance it hosted.

While committee welcomed the lead taken by former prime minister David Cameron in hosting the London anti-corruption summit earlier this year, it said Britain needed to "get its own house in order".

In particular, it urged the Government to use the "full weight of its influence" to persuade the Overseas Territories and Crown Dependencies to publish registers of "beneficial ownership" so they could no longer be used by companies to shield their profits from the tax authorities.

"It is clear from the evidence we received that companies and individuals in the UK, Crown Dependencies and Overseas Territories play a major role in facilitating global corruption," the committee said.

"Lack of transparency in the Overseas Territories and Crown Dependencies will significantly hinder efforts to curb global corruption and continue to damage the UK's reputation as a leader on anti-corruption.

"It is disappointing that the Government has missed an opportunity to build on the momentum of the anti-corruption summit."

It said action was needed as corruption disproportionately affected the poor, with according to one estimate, 1 trillion dollars (£813 billion) being lost to developing countries each year through tax evasion, money laundering and bribery worldwide.

The committee chair Stephen Twigg said: "The IDC has previously called on the UK Government to get its own house in order. This remains the case.

"Huge amounts of money are lost every year through illegal tax evasion, money laundering and bribery. The people most at risk from this scourge are the world's poorest, who lose out on education, healthcare and infrastructure; not to mention the impact of petty corruption on their daily lives.

"It is vital that the UK's established commitment to anti-corruption measures places their needs first and foremost."

A Government spokesman said: "The UK is a global leader in the fight against corruption, and this report rightly recognises the Government's summit in May as a significant moment in international efforts to tackle corruption.

"Helping the world's poorest stand on their own two feet by tackling poverty overseas while stopping organised crime, money laundering and tax evasion is firmly in the UK's interests. The UK is fully committed to delivering on the promises made at the anti-corruption summit."