British Overseas Territories are British, even if they are tax havens
By Ricky Browne
In its effort to draw Conservative MP Geoffrey Cox into the story on supposed government corruption, the Labour party is now throwing shade on the sunny British Virgin Islands.
Following the resignation of MP Owen Paterson over his work as a lobbyist, media attention turned onto Conservative MP Geoffrey Cox, who has apparently made some £970,000 last year in his role as a Queens Council, working for the government of the British Virgin Islands.
While many MPs, including opposition MPs such as Keir Starmer, have made money from carers outside politics while working as an MP, Cox has done better than most.
Starmer in comparison has made “only” £100,000 or more in his work as a lawyer since he became an MP in 2015. He hasn’t held a second job since becoming leader of the opposition.
Cox says he doesn’t believe he had broken the rules, and given that he is a top notch lawyer, who was giving his expertise to the BVI on the area of corruption – one would hope that he had sufficiently covered his bases.
But the problem with Cox, according to much of the media, might not be the amount of money he has made, but that he may have been in his Parliament office on some of his video calls to the BVI.
“A Conservative MP using a taxpayer funded office in Parliament to work for a tax haven facing allegations of corruption is a slap in the face and an insult to British taxpayers,” said Deputy Labour Leader Angela Rayner – who previously slapped Conservative voters by calling them scum.
“The prime minister needs to explain why he has an MP in his parliamentary party that treats Parliament like a co-working space allowing him to get on with all of his other jobs instead of representing his constituents.”
Referring to the British Virgin Islands as a tax haven suggests that it is the equivalent of a place like Monaco or Switzerland or Hong Kong – with nothing to do with the UK.
The fact is that the British Virgin Islands are British. The hint is in the name. Once called colonies, the preferred name for such places is now British Overseas Territories.
It could be argued that doing work for the BVI – on corruption mind you – is comparable to doing work for Manchester or Nottingham. Or maybe the Isle of Man.
The residents of the British Virgin Islands hold British passports. They are not independent – but rely on Britain and the British tax payer.
But its better to throw some shade on the BVI and distance the UK from it as much as possible, by referring to it only as tax haven.
Whatever the BVI is, is a reflection on the UK, because it is British – and has been whether the government in power is Conservative or Labour.
Just because most of the people from the BVI are black, doesn’t make them any less British than the people from mainly white places like the Falkland Islands, or Gibraltar or Jersey.
Mind you, its true that the BVI is considered to be a tax haven, topping many lists.
One such list from 2021 by the Tax Justice Network .puts the BVI at the top of its list of the world’s top 10 biggest enablers of global corporate tax abuse.
It is followed on the list by the Cayman Islands (also a British Overseas Territory) , Bermuca (ditto), the Netherlands, Switzerland, Luxembourg, Hong Kong (previously a British Overseas Territory) Jersey (a British Crown Dependency), Singapore (previously a British colony) and the United Arab Emirates (previously British as well).
In fact, the UK is seen as the main enabler of corporate tax abuse, followed by the Netherlands and Switzerland, the Tax Justice Network says.
The Tax justice network notes that the top three tax havens – the BVI, Cayman and Bermuda “are three British Overseas Territories where the UK government has full powers to impose or veto law-making and where power to appoint key government officials rests with the British Crown.”
So any shade that is thrown at the BVI also covers the UK.
It is probably due to this negative image of the BVI why the government there hired Cox to help them to reduce if not corruption, the appearance of corruption.
But the plan has clearly backfired, as now opposition members in parliament are dismissing the BVI as a tax haven with the suggestion that is completely a completely separate entity than the UK.
The British Virgin Islands are in the Caribbean, alongside the US Virgin Islands. Its 16 inhabited islands and 20 uninhabited ones make up a total area of 151 square kilometres. It has a population of about 38,000 people – or about the size of Bishops Stortford, near Stansted Airport. Its capital of Road Town has about 15,000 people.
The country depends on tourism, and uses the US dollar as its currency – as does the neighbouring US Virgin Islands.
According to the World Factbook, the economy of the BVI is one of the most stable and prosperous in the Caribbean . A per capita income of about US$34,000. makes it comparable to European countries like Spain (US$36,000) and Poland (US$32,000)
Tourism generates 45 percent of the national income, with mainly American tourists.
But the financial sector is also vital.
“In the mid-1980s, the government began offering offshore registration to companies wishing to incorporate in the islands, and incorporation fees now generate substantial revenues. Roughly 400,000 companies were on the offshore registry by yearend 2000.,” the World Factbook says.
“The adoption of a comprehensive insurance law in late 1994, which provides a blanket of confidentiality with regulated statutory gateways for investigation of criminal offenses, made the British Virgin Islands even more attractive to international business.”
If the UK wanted to rid itself of the BVI, as it has with most of its other colonies in the Caribbean and elsewhere, it would probably create a situation that would enhance the territory’s tax haven status.
It would also create a country that would be one of the smallest in the world, comparable to San Marino with a population of about 35,000 people or Liechtenstein with a population of 39,000 people. It is ranked 213th on the World Factbooks list of 237 countries – with China first with a population of 1,397,897,720 people (an estimate) and the Pitcairn Islands last, with a population of 50 people (also an estimate).
If it became independent, the BVI would be the smallest independent country in the Caribbean.
How would such a country try to maintain its high standard of living without the influence of the UK. It’s a safe bet that it would rely more on its financial sector and expand it wherever possible.
Given that the BVI is still British, is it to the advantage of the UK to not have one of its own MPs guiding the territory on the issue of corruption?
Unlike some former Prime Ministers, such as Tony Blair and David Cameron, Cox has not been dealing with unattractive clients such as Kazakhstan or Greensill Capital. He has been dealing with a British Overseas Territory, which should be seen as completely above board.
The end result is that trying to stretch the story of wrong doing over Owen Paterson to Cox, takes away from the strength of the original story.
But in all likelihood, the electorate will not give any of this much thought when they go to the polls in 2023 or 2024.