British Virgin Islands

Q&A with David Lidington, Minister of the Cabinet Office


By (01/09/2018)

The UK’s secure relationship with the British Overseas Territories (BOTS) has been thrown into question. A vote by the UK parliament to implement public registers of beneficial ownership in the Overseas Territories has been met with both anger and frustration -- the move being perceived as an infringement of the constitutional rights of the islands. The IFC Economic Report spoke with Tory MP, David Lidington, to get his view on where the UK government stands on its relationship, not only with the BOTs, but with the Crown Dependencies as well.

IFC: Should the UK be pushing for greater integration with the Crown Dependencies and the British Overseas Territories to compensate for the costs of Brexit?

David Lidington: The UK, the Overseas Territories and the Crown Dependencies have deep, rich and historic ties and shared links. The UK’s relationship with its Territories and Dependencies is a modern one, based on partnership and shared values. All recognise that our relationship brings mutual benefits and responsibilities. The longstanding constitutional relationships between the UK and the Crown Dependencies and the Overseas Territories will be unaffected by the UK’s decision to leave the EU.

IFC: Andrew Mitchell and fellow MP, Dame Margaret Hodge, have confirmed that they will be attempting to convince the Crown Dependencies to adopt a public register of beneficial ownership of companies this autumn. How successful do you think their bid will be, and to what extent can the UK government enforce these island states to comply?

David Lidington: Beneficial ownership is primarily a domestic responsibility of the Crown Dependency governments. We respect the constitutional relationship with the Crown Dependencies and feel that progress is best achieved by working in cooperation with them. We have also made clear that the government will work to promote public registers of company beneficial ownership as the global standard by 2023. We would also expect the Crown Dependencies to adopt public registers in that event.

IFC: Overseas territories such as Bermuda and the BVI have already hit back against the UK parliament’s decision to enforce a public register of beneficial ownership before the end of 2020 and are now putting forward proposals for greater self-determination, with some parties even suggesting independence from Britain. What is your take on this?

David Lidington: I cannot reiterate strongly enough the importance we attach to the Territories as part of the UK family. We believe that the Overseas Territories and the UK are much stronger together. We have a close working relationship with the Overseas Territories and each UK department has responsibility for supporting the Territories in its own areas. The annual joint ministerial councils (JMCs) bring together UK ministers, elected leaders and representatives of the Overseas Territories to provide leadership and a shared vision for the Territories. Their mandate is to monitor and drive forward collective priorities for action in the spirit of partnership. The additional JMCs on EU exit (for Gibraltar and the other Overseas Territories respectively) ensure that we are fully involving the Territories as we negotiate our exit from the EU to ensure their priorities are taken into account. Our long-standing position on independence for the Territories is unchanged. As set out in the 2012 Overseas Territories White Paper, any decision to sever the constitutional link between the UK and a Territory should be on the basis of the clear and constitutionally expressed wish of the people of the Territory.

IFC: In your view, how do the Crown Dependencies and Overseas Territories’ (CDOTs) transparency laws compare to those applied by the City of London, or onshore financial centres more generally?

David Lidington: The Crown Dependencies and Overseas Territories have undertaken significant reform to increase transparency in their jurisdictions, and are committed to global transparency standards. All Crown Dependencies and all Overseas Territories with a financial centre are members of the OECD’s Global Forum for Tax Transparency, and are independently peer reviewed to assess their compliance with the global standard for the exchange of information on request for tax purposes. They automatically exchange taxpayer financial account information under the Common Reporting Standard, making it harder for people to dodge taxes by hiding their money abroad.

The Crown Dependencies and relevant Overseas Territories have also agreed to provide UK law enforcement and tax authorities with near-real time access to information on company beneficial ownership. These commitments exceed current Financial Action Task Force standards and put them ahead of most jurisdictions, including many of our G20 partners and other major corporate and financial centres.

IFC: A UK newspaper recently suggested that the EU is using the CDOTs as Brexit negotiation bargaining chips with aims to pursue the territories for revenue post-withdrawal. Is this true?

David Lidington: The UK Government is committed to engaging fully with the Crown Dependencies and Overseas Territories, including Gibraltar, as we exit the EU, to ensure that their interests and priorities are properly taken into account. The UK supports the territorial scope of the draft Withdrawal Agreement, which explicitly includes the Crown Dependencies, Gibraltar and the other Overseas Territories. We are negotiating our exit on behalf of the UK family and want a deal that works for all.

IFC: How do you expect the UK’s relationship with the CDOTs to change over the next five years?

David Lidington: We have a long-standing partnership with both the Crown Dependencies and the Overseas Territories and we intend to continue to work consensually on our shared priorities. In terms of the next five years, the EU exit will create new opportunities for the Crown Dependencies and Overseas Territories and we will work closely with them to ensure the benefits are realised.

 

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