How Britain Could Help Stamp Out Massive Global Corruption – Really Easily

Here is some good news about the multi-billion-dollar menace of international corruption: the UK has some very clear opportunities to make a difference, according to a new report by the cross-party influential International Development Committee of MPs.

That is partly because the UK itself is a significant part of the problem. "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," warn the MPs.

British charities Oxfam UK, Action Aid and Christian Aid used Trafalgar Square to raise awareness of the issue of tax dodging.Andy Hall/Oxfam

Their report paints a damning picture of how British companies and tax havens are helping the corrupt to steal vast sums from poor countries – and undermining the benefits of UK aid to those same countries.

The figures involved are astonishing – according to the ONE campaign, around one trillion dollars is lost by developing countries every year through bribery, tax evasion and money laundering. This is far more than they receive in aid.

Corruption hits people living in poverty very hard, because it diverts cash from education, healthcare, roads and so on. Oxfam has said that around a third of rich Africans' wealth sits outside the countries where they live, in tax havens. If this money was taxed properly in Africa, there would be enough money to fund enough teachers for every child in Africa.

Given the UK's major role in facilitating corruption around the world, it has a real responsibility to be at the forefront of tackling it. The most important recommendation in MPs' new report is that Theresa May's government should use the full weight of its influence to persuade UK tax havens to end the secrecy around who really owns the myriad companies they host.

These tax havens include exotic-sounding islands close to the Caribbean: the British Virgin Islands, the Caymans and Bermuda.

Although they are tiny, they play host to hundreds of thousands of companies whose owners are kept secret. That secrecy is, in turn, a boon for those with something to hide: for instance, politicians and officials who want to stash bribe money somewhere it is unlikely to be traced back to them.

In one particularly troubling case, British Virgin Islands companies are thought to have made huge profits from the sale of mines that had been owned by the people of the Democratic Republic of Congo – a painfully poor and troubled country. Global Witness has expressed fears that part of the profit could be used to influence the outcome of elections in the country – and called for the companies' true owners to be revealed.

And as the MPs' report on corruption notes, almost half the roughly 113,000 companies which featured in the Panama Papers were registered in the British Virgin Islands.

Christian Aid welcomes MPs' new recommendation for the UK government to use all its influence to make UK tax havens more transparent. But we would go further and require the islands to end their secrecy. The evidence of the last few years is that lobbying the likes of the British Virgin Islands (BVI) simply does not work, even if you are the British Prime Minister.

David Cameron tried in vain for several years but still failed to achieve the reform he wanted in the UK's constitutional backyard. Overseas Territories like the BVI have consistently delayed and obfuscated at every step.

Can Theresa May do more? Encouragingly, she has had a lot to say against tax evaders and those who help them. She's also spoken out about how tax is the price for living in a civilised society – and how no company can be above paying its fair share. Now it is time to turn that rhetoric into reality – and this week's report provides a ready-made action plan.

Another opportunity is the Government's recently published draft law which seeks to tackle criminal financing. At present it includes nothing on the UK's tax havens but Christian Aid will work with MPs and peers over the coming months to try to change this, in a way that will have a major impact in the real world.

A further reason to be hopeful about Mrs May taking tough action against corruption and tax dodging is that she has public opinion overwhelmingly on her side. Two-thirds of British adults believe the UK government has a responsibility to make its tax havens more transparent, according to a recent poll for Oxfam. Large majorities of people also want multinationals to play fairer on tax.

Other countries, too, will applaud if the UK does the right thing on tax and corruption. In recent years this country has rightly sought to lead global reforms against the two scouges – but fine words are not enough. It's time for more action.

Simon Kirkland is UK Parliamentary and Political Adviser at Christian Aid. Follow him on Twitter @simonpkirkland