Two prominent Tory MPs were under a great deal of scrutiny last month after the news arose that they praised a tax haven after receiving a free trip to visit it.
The Basics of the Situation
The Cayman Islands government invited Sir Michael Fallon and Sir Graham Brady on a trip to the British Overseas Territory. This trip was worth nearly £17,000. In interviews during and after the visit, the two Tory MPs praised the Cayman Islands.
Sir Fallon referred to the territory as a “success story.” He told reporters there that it adds value to the British pensions and is a “well-regulated financial center.” Sir Brady told interviewers that he favors a “sensible balance” that includes the rights of those who would be on public registers. He argued that creating public registers could expose certain individuals to danger. He also wanted to recognize the Cayman Islands’ “genuine spirit of engagement.”
The two MPs in question are in the all-party parliamentary group that focuses on the Cayman Islands. Their free trip coincided with the territory’s 60th anniversary of its constitution, from June 27 to July 1. The Cayman Islands Government Office located in the United Kingdom funded the trip.
Sir Brady received accommodation and flights for his wife and himself valued at £10,459. This figure includes a bill of £4,241 to rearrange the travel. The accommodation and flights that Sir Fallon accepted are worth £6,218.
Why It Matters
There is a clear conflict of interest with Sir Fallon and Sir Brady accepting this lavish trip free of charge and defending the Cayman Islands’ tax haven status afterward.
Those who are against tax havens say that the secrecy laws currently in place in the Cayman Islands and the other British Overseas Territories allow criminals to easily launder money and hide “toxic wealth.”
Last year, MPs decided they would require the British Overseas Territories to create beneficial ownership registers that clarify ownership of assets.
Those against tax havens are clear in their belief that the only reason that the Cayman Islands gave the free trip to the MPs was to try to get them to oppose the stricter regulations on tax havens.
The MPs would not comment on the controversy when the story broke. There is obvious potential that their comments were influenced by the trip. Time will tell the future of the tax haven controversy in the British Overseas Territories.
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