Labour leader demands Jersey, Guernsey and the Isle of Man reveal identities of those with money hidden on islands
Ed Miliband, the Labour leader, is to demand that the government forces Jersey, Guernsey and the Isle of Man to reveal the identity of British tax evaders with money hidden on the islands.
The tax havens, which are crown dependencies, are costing the government billions every year as the rich protect their money from Revenue and Customs probes through front companies and trusts.
Miliband will this week call for negotiations to begin with the governments on the three islands. He will also demand ministers follow up the talks with threats to shame the islands on the international stage by placing them on a globally recognised blacklist drawn up the Organisation for Economic Co-operation and Development (OECD)..
The move is part of the Labour leader's attempt to define himself as the foremost campaigner in British politics against the excesses of capitalism. He will claim that every ?1m raised by his policy on tax havens is equivalent to a year's salary for 50 newly qualified teachers.
UK residents with money abroad are required to pay tax in Britain on the income they receive, but many do not declare that they have money stashed away.
Jersey, Guernsey and the Isle of Man have not been co-operating with UK authorities' requests for the identity of people with money on the islands. Richard Murphy, of Tax Research UK, said the country could recoup ?2.4bn.
The OECD has previously been criticised for not blacklisting the three islands amid speculation that the explanation was their status as UK-owned. The US state of Delaware is also not on the list despite its lack of co-operation with tax officials. The G20 countries have threatened the use of sanctions against OECD- blacklisted tax havens that have not lived up to demanded levels of transparency.
Potential sanctions for transgressors include extra audits of those who are found to use tax havens and curbs on tax deductions claimed by businesses using the territories. Such sanctions would be hugely damaging to Guernsey, the Isle of Man and Jersey, which would be concerned that the super-rich on the islands would take their wealth elsewhere.