The Government has withdrawn their plans for a new Financial Services Bill on transparency after local council leaders from Jersey, Guernsey, and the Isle of Man warned of backlash should the deal be passed in Parliament.
The Bill was originally designed to protect financial services in the event of a no-deal Brexit, but a new amendment tabled by both members of the Labour Party and Conservative Party included added transparency laws directed towards British Overseas Territories to avoid money laundering and tax avoidance.
The proposed amendment would call for British overseas territories and dependencies to publish all registered company owners by the end of 2020, which the UK itself has already established.
The bill has been aimed at forcing areas under UK jurisdiction to be more open about assets held there out of fears that British Overseas Territories could become tax havens for European businesses after Brexit.
However, local leaders in the Islands surrounding the UK have warned that they will travel to Westminster before the vote to personally warn Parliament on the ramifications should the Bill be passed with its current amendments.
The amendment to the bill was considered to be vital should the UK leave the European Union in late March without a deal, as it was believed that overseas territories would lead to financial deregulation which would be facilitated by more lax financial transparency laws.
The Labour Party has criticised the Government for withdrawing the plans, and the Labour Party’s Junior Finance Spokesman has stated that Labour had planned to support the bill if it reached a vote in Parliament.
The amendment to the Financial Services Bill was tabled by Labour MP Margaret Hodge, and was a cross-party motion. Hodge has called the withdrawal of the Bill as “outrageous” and has mentioned that she will continue to campaign for publicised corporate registers in all UK territories.
Shadow Chancellor John McDonnell has stated that the withdrawal is “evidence” that the May’s government is “incapable of getting its business through parliament” and accused the government of being “a friend to tax avoiders for too long.”
The requirement for British Overseas Territories and Crown Dependencies to produce a register of all company owners operating within their jurisdiction is now due to be published by 2023.