Cable warns head of offshore review not to be 'seduced' by lobbyists

Vince Cable, Liberal Democrat shadow chancellor, has urged the head of a government-commissioned inquiry into offshore tax havens to consider recommending radical reforms to crackdown on tax avoidance.

Cable, one of the UK's most respected economic observers, told Accountancy Age that Michael Foot, the head of the recently announced offshore inquiry, should work closely with US President elect, Barack Obama, to reform tax havens.

'I would hope this inquiry looks at the problems in a proactive way to find
solutions, in particular working with the incoming Obama administration
to look at how to deal with issues of tax avoidance and lack of transparency,' Cable said.

He added: 'The tax havens are very good at lobbying and Foot will be in danger of being seduced into some anodyne restatement of the status quo.'

Governments are considering introducing tougher regulations on offshore tax havens such as the Isle of Man, Jersey and Bermuda, who they accuse of costing them tens of billions of pounds in lost tax revenues.

The UK offshore review, announced in last month's pre-Budget report, will examine issues including whether offshore financial centres are transparent enough, regulation and tax.

Earlier this week Foot, a former managing director of the Financial Services Authority, dismissed claims that regulation of offshore tax havens had failed.

In an interview with Accountancy Age he suggested that closer co-operation between global regulators was the best way to hold offshore centres to account.

Foot has previously worked at offshore tax centre Bermuda, where he was an inspector of banks and trusts companies at the Central Bank of the Bahamas. He said last week that he had no preconceived ideas about the review’s findings.