Ministers surrender to MPs' demands they force Britain's offshore tax havens to be more transparent rather than face inevitable defeat to Tory rebels

  • Amendment on transparency in British overseas territories will be accepted later
  • Ministers have ended their opposition in the face of certain defeat to rebel MPs 
  • Measure will require the BOTs to publish beneficial ownership registers  

Ministers have surrendered to MPs' demands they force British tax havens to be more transparent rather than face inevitable defeat at the hands of rebel Tories. 

The Government has insisted for weeks the convention it does not directly impose rules on British Overseas Territories - such as the Cayman Islands and the Falklands -  meant it could not accept a Labour amendment.

But after almost 20 Conservative MPs signed the proposal tabled by Labour grandee Dame Margaret Hodge ministers were forced to backdown.

Foreign Office Minister Sir Alan Duncan admitted the Government would lose any vote called on the Sanctions and Anti-Money Laundering Bill amendment and announced he was withdrawing opposition.

Once law, the measure will require the Foreign Secretary to take steps to provide that British Overseas Territories establish publicly accessible registers of the beneficial ownership of companies.

Foreign Office MInister Sir Alan Duncan (pictured in today's debate) today signalled Government surrender to MPs' demands they force British tax havens to be more transparent

Foreign Office MInister Sir Alan Duncan (pictured in today's debate) today signalled Government surrender to MPs' demands they force British tax havens to be more transparent

Sir Alan admitted the Government would lose any vote called on the Sanctions and Anti-Money Laundering Bill amendment and announced he was withdrawing opposition

Sir Alan admitted the Government would lose any vote called on the Sanctions and Anti-Money Laundering Bill amendment and announced he was withdrawing opposition

MPs and campaigners have said public registers would make it easier to uncover money-laundering, corruption and tax-dodging.

Before his climbdown Sir Alan insisted British overseas territories are separate jurisdictions with democratically-elected governments, responsible for their fiscal matters and unrepresented in the UK Parliament.

He warned that legislating without their consent 'effectively disenfranchises their elected representatives'.

Sir Alan added that a consensual approach with the territories would have been preferred to make the registers publicly available. 

Sir Alan added: 'I give the overseas territories the fullest possible assurance that we will work very closely with them in shaping and implementing the order in council which this Act of Parliament might require.

'To that end we will offer them the fullest possible legal and logistical support that they might ask of us.

The Government has insisted for weeks the convention it does not directly impose rules on British Overseas Territories - such as the Cayman Islands and the Falklands - meant it could not accept a Labour amendment

The Government has insisted for weeks the convention it does not directly impose rules on British Overseas Territories - such as the Cayman Islands and the Falklands - meant it could not accept a Labour amendment

'Alongside that we retain our fullest respect for the overseas territories and their constitutional rights and we will work with them to protect their interests.'

Shadow foreign minister Helen Goodman welcomed the Government's 'change of heart'.

She told MPs: 'I am extremely pleased that the minister said what he did about not opposing (Dame Margaret's) new clause 6.'

Ms Goodman also called for more transparency in the crown dependencies, after Labour former minister Liam Byrne warned that 'dark money will move to wherever the law is darkest'.

He said: 'If we bring transparency to the overseas territories most of it is simply going to relocate to the crown dependencies if we don't change the law there too.'

Almost 20 Conservative MPs signed the proposal tabled by Labour grandee Dame Margaret Hodge (pictured in today's debate) ministers were forced to backdown

Almost 20 Conservative MPs signed the proposal tabled by Labour grandee Dame Margaret Hodge (pictured in today's debate) ministers were forced to backdown

Ms Goodman said: 'He's absolutely right and that's why I think we need to make changes on the crown dependencies because we are going to make changes on the overseas territories.'

Duncan Hames, Transparency International UK's director of policy, welcomed the Government's decision to accept the cross-party new clause on public registers for Britain's Overseas Territories.

He said in a statement: 'These jurisdictions have long been the Achilles Heel of our defences against dirty money. Agreement on this represents a hugely significant moment in the fight against corruption, not just in the UK but around the world.

'This afternoon, corrupt individuals everywhere will be deeply concerned that they are about to lose the secrecy afforded by the British Overseas Territories that has until now given them an easy route to launder their ill-gotten gains.'

'We hope that those territories will now use the opportunity they have over the next 18 months to implement these registers and shut the door to dirty money.'