Britain should help its offshore tax havens develop alternative industries such as tourism in exchange for greater financial transparency, according to the UK government’s anti-corruption champion. Baroness Margaret Hodge, speaking to the Financial Times, argued for gentle persuasion rather than compulsion, saying the UK bears a responsibility to help British overseas territories adapt to demands that they publish registers of company ownership.
A crackdown on dirty money
Hodge’s comments came as the UK government promised a tough crackdown on illicit finance in an anti-corruption strategy published on Monday. Deputy Prime Minister David Lammy said corruption from graft and organized crime spreads across borders and that its trail often leads to London.
Campaign groups have praised the strategy’s ambition while arguing that the UK’s pledges are weakened by limited transparency in Britain’s overseas territories. All 14 UK overseas territories have promised registers of beneficial ownership — listings of the person who ultimately owns or controls an asset — but the investigative think-tank TaxWatch says only Gibraltar and Montserrat have made theirs fully public. Ministers have expressed disappointment with the British Virgin Islands, which plans to provide only limited access next year for people with a “legitimate interest,” a category that in other jurisdictions can include journalists investigating financial crime and businesses conducting due diligence.
Persuasion over compulsion
Hodge, a former Labour MP and veteran anti-corruption campaigner appointed to the advisory role last year, has consistently urged a conciliatory approach, arguing that compromise produces healthier outcomes than confrontation.
Her core argument is historical: the territories were, in earlier generations, encouraged to develop into secrecy jurisdictions — so Britain now shares responsibility for helping them build different economic foundations. She pointed to efforts to build an airport in the British Virgin Islands capable of receiving direct flights from the US and Europe, noting the islands’ tourism potential is constrained by the lack of runways for international flights. Ministers, however, are understood to have promised no specific aid in return for transparency commitments.
Hodge also signaled that patience has limits: if territories miss their commitments to provide legitimate-interest access to ownership registers by next summer, tougher action would be needed — a point on which she says there is support across government.
Trusts, property and cultural institutions
Tax-haven transparency is only one strand of the strategy. Hodge’s review will also examine UK asset ownership and money-laundering channels — land, property, trusts and other corporate structures open to exploitation. She indicated that recommendations are likely to include greater transparency around trusts in particular, describing them as a significant conduit for illicit wealth.
The strategy further says the government will encourage cultural and civic organizations to strengthen their resilience to corruption risks from high-value donations. Whether this becomes mandatory is unresolved, but Hodge argued that know-your-customer checks of the kind required of banks should extend to universities, private schools and museums, because corrupt actors frequently launder reputations through donations to educational and cultural institutions. The UK Overseas Territories Association was contacted for comment on the original reporting.
Why this matters beyond Westminster
Two aspects of this story travel well beyond UK politics. First, beneficial-ownership transparency is becoming a global compliance baseline — businesses that operate across borders should expect due-diligence obligations to keep expanding, and those with structures in overseas territories may face new disclosure requirements within a year. Second, the proposal to extend KYC-style checks to universities and museums signals a broader trend: anti-money-laundering expectations migrating from banks into sectors that have never run such programs. Organizations that accept large donations or payments would be prudent to watch whether “encouraged” becomes “required.” It is worth noting that the detailed claims above reflect the Financial Times’ reporting and the UK government’s own strategy document; the territories themselves dispute characterizations of their registers, and implementation timelines in this area have slipped repeatedly before.
