The Conservative party treasurer, Lord Fink, is calling for the UK to become more like a tax haven.
Fink has lobbied George Osborne for a cut in taxes on invisible earnings.
A Guardian investigation has revealed that “68 MPs and peers, who can influence Britain’s tax laws, are either directors or non-executive directors of firms linked to tax havens“.
It seems the rise in offshore jurisdictions are found even amongst the major public figures and the lawmakers.
Fink, who is the director of three firms that have parent companies or subsidiaries in the Cayman Islands, Luxembourg and Guernsey, said: “I don’t see why the UK should not compete for jobs that at present are going to the Cayman Islands. I have long felt that the British government loses jobs to tax havens by allowing the Revenue to have these rather archaic rules.”
Of the 68 parliament members who have links to offshore havens, 27 are Tories, 17 are Labour peers, and three are Liberal Democrats. Another 21 are either crossbenchers or non-affiliated peers.
“Parliamentarians claim most of the offshore firms are not being used for tax avoidance.”
The findings have prompted a national debate over loophole laws. George Osborne and David Cameron have been stirring the situation posturing for a clamp down on loopholes that allow “morally repugnant”, and aggressive tax avoidance.
According to the Treasury, legal tax avoidance represents nearly 14 per cent of the UK tax gap. Research by the Tax Justice Network exposed at least £13tn of wealth been hidden in offshore havens.
Parliamentarians claim most of the offshore firms are not being used for tax avoidance. Many of the companies are said to be making large tax contributions to the UK.
Margret Hodge, the chair of the Commons public house committee is conducting an inquiry into tax loopholes. She found the lack of transparency in offshore havens quite worrying.
“As MPs, these individuals should be voting for proper transparency so we can see that these companies pay proper tax in the UK. The number of peers involved is bad enough. But to find that Tory MPs are setting themselves up as non-executives on companies that are connected to these places where there is such a lack of scrutiny and probity is just reprehensible and beyond belief,” she said.
Many ministers have retorted, and others have avoided response to questions about involved companies.
The Tory defiance minister Nicholas Soames is chairmen of private security contractor Aegis, owned by a Swiss holding company said: “All trading profits of the group are either paid to or taxed as part of Aegis Defence Services Ltd’s own activities and that company is fully taxable in the UK.”