By Mark Field MP - 21st July 2010
Mark Field MP writes for ePolitix.com ahead of his Westminster Hall debate on offshore financial centres.
As international organisations and major governments seek to understand the cause of the global financial crisis, small international financial centres (IFCs) have repeatedly endured political attacks and misguided criticism. From pejorative sniping about their being tax havens for avaricious bankers, to allegations that they provide secrecy jurisdictions for shady figures in the international business community and are in part to blame for shortcomings in the financial markets, the debate over the role of small IFCs has been, to date, remarkably one-sided. This is unfortunate as it demonstrates a fundamental lack of understanding of their function and the benefits they provide to the wider global economy.
Before the UK and our international partners look to develop further international standards on financial regulation, it is critical that politicians and policymakers formulate and implement policy in an informed, consistent and balanced manner. As such, it is vital that we now take a dispassionate view of IFCs that looks sensibly at the benefits they can offer our nation as well as the broader global financial system. We should also dispel some of the myths that surround small IFCs (that they have a negative impact on global economic growth; that they played a part in causing the global financial crisis; that they engage in harmful tax practices; that they have a negative impact on transparency, regulation and information exchange; that they do not benefit developing countries; and that they are fiscally unsustainable).
The UK has a unique position in this debate. We have a constitutional relationship – through our crown dependences and overseas territories – with half of the top thirty offshore financial centres. With the Chinese government successfully lobbying the G20 to have both Macao and Hong Kong excluded from any OECD grey list on matters of tax transparency, it looks increasingly likely that the standards and regulations currently being formulated may well be imposed in some jurisdictions yet overlooked in others. Not only is this incompatible with the need to find a global response to the formation of new financial regulation, but it risks undermining the UK's financial sector and the wider British economy which is a major recipient of investment capital raised through small IFCs.
Article Comments
The question I'm struggling with is:
What are the benefits of the various tax havens that are crown dependencies and overseas territories to the UK? Or put another way, how would damage be done to the UK if they stopped being tax havens?
Michael Rans
21st Jul 2010 at 12:56 pm
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