Theresa May refuses to commit to public inquiry or open registers, as impact of revelations is felt around the world

This article is more than 2 years old

This article is more than 2 years old

Britain has come under mounting pressure to launch a crackdown on tax avoidance and reform its network of offshore havens, amid international outrage at the activities of multinationals and billionaires revealed by the Paradise Papers.



During urgent questions in the House of Commons on Monday, the disclosures from the leak were described as the “biggest tax scandal of this generation” by the shadow chancellor, John McDonnell, who demanded a full public inquiry.

A wave of condemnation ripped through Washington, Westminster and Brussels, as the world responded to details of how the UK’s tax havens have been used by figures including the Queen, Donald Trump’s commerce secretary, Wilbur Ross, and the closest political allies of the Canadian prime minister, Justin Trudeau.



During a day of frantic political activity:

Theresa May insisted she wanted “greater transparency” and said “we want people to pay the tax that’s due”. But she would not commit to a public inquiry, or agree to open registers for shell companies and secretive family trusts.

In Washington, Democrats called for an investigation into the business affairs of Ross after the revelations of his ties to Vladimir Putin’s son-in-law.

Bernie Sanders decried an “international oligarchy in which a handful of billionaires own and control a significant part of the global economy”. He demanded a halt to Trump’s tax changes pending a full investigation into the Paradise Papers.

In Brussels, the European commissioner for economic and financial affairs, Pierre Moscovici, promised to fast-track a blacklist of tax havens with which member states will be encouraged to avoid doing business.

In Canberra, the Australian tax office said it was ready to investigate and had been working with partner agencies across the world to prepare for the data release.

In India, the income tax department promised swift action and said many offshore entities were already under investigation.

Addressing the CBI conference in London, the Labour leader, Jeremy Corbyn, spoke of “public anger and consternation” at the scale of tax avoidance exposed by the leak of 13.4m files from two offshore firms and 19 secrecy jurisdictions.

The data was obtained by the German newspaper Süddeutsche Zeitung and shared by the International Consortium of Investigative Journalists with the Guardian, the New York Times, the BBC and media organisations in 67 countries.

“We are talking about tens of billions that are effectively being leached from our vital public services by a super-rich elite that holds the taxation system and the rest of us in contempt,” Corbyn said.



He initially appeared to call on the Queen to apologise for having offshore investments, including a small stake in the controversial high-street retailer BrightHouse.

But he later rowed back, with his office saying: “Anyone who puts money into a tax haven to avoid paying tax should acknowledge the damage it does to society.”

But the Queen’s private estate, the Duchy of Lancaster, came under sustained attack from MPs and campaign groups, who said the indirect investments should never have been approved.

It led to criticism in parliament of the Conservative party chairman, Patrick McLoughlin, who, in his role as chancellor of the Duchy of Lancaster, is ultimately responsible for the Queen’s investments.



The Paradise Papers revealed the duchy invested in a Bermuda offshore fund that pushed money into an array of ventures, including BrightHouse, which was ordered to repay £14.8m last month to 249,000 customers.

Buckingham Palace has yet to respond to the revelations, but the duchy insisted its investments were “fully audited and legitimate”.

Asked about the Queen’s investments, Rowan Williams, a former archbishop of Canterbury said “non-transparent investment practice is looking more and more questionable”.

“All institutions need ethical benchmarking for their investment policies, and (as a report published by Christian Aid last week underlined) public opinion is increasingly and surprisingly eager to see this happening, and to see more transparency about where income comes from,” he told the Guardian.

“The ‘black box’ style of non-transparent investment practice is looking more and more questionable.”

Labour tabled an urgent question on Monday afternoon, demanding answers as to the tax status of the Tory donor Lord Ashcroft, whose trust appears in the leak. McDonnell also asked whether McLoughlin would be “apologising to her majesty for the embarrassment this episode has caused her?”

Mel Stride, the financial secretary to the Treasury, responded by saying HMRC had asked the Guardian, the ICIJ and the BBC to share the leaked material, but they had “yet to respond to this request”.

A spokesman for the Guardian said: “The materials concerned are not in our control.”

Democrats on Capitol Hill called for an immediate halt to Trump’s proposed tax changes, which they claim will deliver for the rich but not the poor.

Sanders, who ran against Hilary Clinton for the Democratic presidential nomination last year, said: “The Paradise Papers show how billionaires and multinational corporations get richer by hiding their wealth and profits, and avoid paying their fair share of taxes. This is a major problem not just for the United States, but for governments throughout the world.”

Lloyd Doggett of Texas said Trump’s plan would “reward tax dodgers” and encourage more outsourcing.

“These reports raise questions about a number of Trump allies, his billionaire buddies, and multinational corporations worldwide that have so much to gain from this Republican tax bill,” he said in a statement.