The government has agreed to make offshore tax havens more transparent, after more than 20 Tory rebels threatened to embarrass Theresa May in another parliamentary defeat.

A cross-party amendment to the Sanctions and Money Laundering Bill – proposed by veteran Labour MP Margaret Hodge, but backed by numerous high profile Tories including Tom Tugendhat, Ken Clarke and Andrew Mitchell – will force British overseas territories to set up "registers of beneficial ownership".

This will create a public trail showing who ultimately owns companies based there, making it more difficult for “crooks, kleptocrats and corrupt individuals who engage in financial skulduggery”, Hodge said.

The matter was not straightforward, with the British Virgin Islands government yesterday saying "we vehemently reject the idea that our democratically elected government should be superseded by the UK Parliament, especially in an area which has been entrusted to the people of the BVI.

"This flies in the face of constitutional arrangements made with the UK when our new constitution was approved in 2007," the statement added. "It also begs the question of how can the UK parliament act so casually with a constitution when an entire economy is at stake."

Their qualms were acknowledged by Foreign Office minister Sir Alan Duncan today telling MPs that overseas territories were democratic bodies and "not represented in this parliament".

He noted that the government would have preferred to work "consensually" with those territories, noting that "legislating for them without their consent effectively disenfranchises their elected representatives" and may "risk damaging our long-standing constitutional arrangements, which respect their autonomy".

"However, weve listened to the strength of feeling in this House on this issue, and accept that it is without a doubt the majority view of this House that the overseas territories should have public registers, ahead of it becoming international standard," Duncan added. "We will accordingly respect the will of the House and will not vote against [Hodge's amendment].

"Unless she seeks the leave of the House to withdraw it, we accept that this amendment will become part of the bill."

Hodge thanked cross-party MPs for their support, particularly former chief whip Andrew Mitchell who had co-signed it.

"When it is passed, this simple measure of requiring British overseas territories, our tax havens, to publish public registers of beneficial ownership will transform the landscape," Hodge said. "It will stop [criminals] exploiting our secret regime, hiding their toxic wealth and laundering money into the legitimate system, often for nefarious purposes."

Mitchell told MPs: "This is evidence in a hung parliament that power moves from the Cabinet room to the floor of the House of Commons."

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CityAM

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The government has agreed to make offshore tax havens more transparent, after more than 20 Tory rebels threatened to embarrass Theresa May in another parliamentary defeat.

A cross-party amendment to the Sanctions and Money Laundering Bill – proposed by veteran Labour MP Margaret Hodge, but backed by numerous high profile Tories including Tom Tugendhat, Ken Clarke and Andrew Mitchell – will force British overseas territories to set up "registers of beneficial ownership".

This will create a public trail showing who ultimately owns companies based there, making it more difficult for “crooks, kleptocrats and corrupt individuals who engage in financial skulduggery”, Hodge said.

The matter was not straightforward, with the British Virgin Islands government yesterday saying "we vehemently reject the idea that our democratically elected government should be superseded by the UK Parliament, especially in an area which has been entrusted to the people of the BVI.

"This flies in the face of constitutional arrangements made with the UK when our new constitution was approved in 2007," the statement added. "It also begs the question of how can the UK parliament act so casually with a constitution when an entire economy is at stake."

Their qualms were acknowledged by Foreign Office minister Sir Alan Duncan today telling MPs that overseas territories were democratic bodies and "not represented in this parliament".

He noted that the government would have preferred to work "consensually" with those territories, noting that "legislating for them without their consent effectively disenfranchises their elected representatives" and may "risk damaging our long-standing constitutional arrangements, which respect their autonomy". (more…)