Virgin Islanders living here won’t get to cast a ballot in the United Kingdom election next Thursday, but some experts expect the territory to face major repercussions if the British Labour Party sweeps to power as widely predicted.
The UK governing party has changed only three times during the past 50 years, and the Conservative Party has held the reins of power since 2010. But after a string of Tory controversies, Labour is expected to take control of Downing Street next week with a thundering majority.
Here in the VI, the situation is raising eyebrows in part because Labour has long been seen as unfriendly to the financial services industry that brings in most of the government’s revenue each year. Though both UK parties’ election manifestos call for a crackdown on financial crime in the UK and the OTs alike, Labour leaders have angered VI leaders by repeatedly accusing the territory of falling short in this arena in recent years.
One major flashpoint between an incoming Labour government and the VI could be over the issue of a public register of beneficial ownership. Deputy Premier Lorna Smith has promised to bring in the transparency measure by mid-2025, but in April senior Labour veteran Dame Margaret Hodge accused the VI of “dragging its feet” on the issue.
Although Dame Margaret — a long-time critic of the offshore financial industry — is not running again for a seat in Parliament, she remains an influential figure in the party and could well be awarded a new platform in the unelected House of Lords after the poll. In her most recent attack on the VI, Dame Margaret wrote in The Times of London in April that the UK government should “force” the territory to open a public company register.
‘Much more scrutiny’
Tom Keatinge, director of the Royal United Services Institute’s Centre for Financial Crime and Security Studies, predicted this week that a Labour administration would pay much more attention to the situation in the VI.
“If Labour win the election, the BVI should expect to be under much more scrutiny than it has been in the past few years by the Conservatives,” Mr. Keatinge told the Beacon. “The register was meant to be in place by the end of 2023, but the Conservative government didn’t pull any of the nuclear levers it has to do that, such as an order in council. Shadow Foreign Secretary David Lammy has talked quite a lot about tackling dirty money.”
Dr. Peter Clegg, a professor at the University of the West of England who specialises in the OTs, also said he expects movement on the issue, particularly after a Labour manifesto pledge to work with allies and “international financial centres to tackle corruption and money laundering” in Britain and its crown dependencies and overseas territories.
“The fact the manifesto has focused on that rather than say, the environment, suggests it is a significant issue,” Dr. Clegg told the Beacon. “It suggests that there will be that pressure to ensure the [public company] register happens. I know that Labour shadow cabinet members have been liaising quite a lot with the OTs in the run-up to the election.”

VI perspective
However, Robert Briant, partner and head of VI corporate practice at Conyers, expressed a different view.
“The BVI has made a commitment to comply with international standards and has already begun setting out a framework for accessibility to beneficial owner information by those persons with a legitimate interest,” Mr. Briant told the Beacon. “As such, I do not foresee any significant impact on financial services or the accessibility of beneficial owner information in the event of a Labour government.
“Rather, it will continue to be business as usual albeit as BVI amends its legislation to comply with the recent Caribbean Financial Action Task Force report and moves forward on accessibility of beneficial owner information for those persons with a legitimate interest.”
Premier’s views
Premier Dr. Natalio “Sowande” Wheatley would not be drawn on the implications of a Labour win.
“I would not comment on a pending election,” he told the Beacon on Tuesday. “I wish the people of the United Kingdom a successful, free and fair election.”
However, the premier’s brother and special envoy, Benito Wheatley, downplayed the possibility of conflict with a Labour administration in the UK.
“The government of the Virgin Islands has an ongoing relationship with the Labour Party via the BVI All Party Parliamentary Group at Westminster in London and engagement with other members of parliament, including the shadow minister for the overseas territories,” Mr. Wheatley told the Beacon. “So the relationship would not be starting from scratch.”
He added that the VI government has a “good idea” of Labour’s position on the OTs.
“Of course the Virgin Islands wants to build a truly modern partnership with the UK in which our autonomy is respected and the UK provides support where needed in terms of climate change, sustainable development and security,” he stated. “This position will obtain regardless of who comes to power [next Thursday].”
Ms. Smith, the deputy premier, said she hopes the winning party will be “respectful of the self-determination” of all OTs.
“Our objective is an established modern partnership with the UK,” she told the Beacon. “I hope that the new government, of whatever political colour, intends the same.”
Global Minimum Tax
Another bone of fiscal contention with a Labour administration could come with the Global Minimum Tax introduced by the Organisation of Economic Cooperation and Development, which seeks to prevent a race to the bottom on tax manipulation by multinational giants by making them pay a base rate of at least 15 percent wherever they operate in the world. The VI has been slow on addressing the issue while rival regional finance hubs have acted, with the Cayman Islands rejecting the move and Bermuda signing on.
The Tory administration previously made it clear it had no intention of intervening in the matter.
Baroness Vere of Norbiton, parliamentary secretary to the UK Treasury, said in a Feb. 26 House of Lords debate that the OTs “set out their own tax legislation within their own legal structures, and it is certainly not for the UK government or parliament to drive a coach and horses through that.”
Labour could take a very different stance since Britain and the European Union are committed to the GMT regime and a key Labour policy will be strengthening economic and fiscal ties with Brussels after eight years of financial trauma following the shock Brexit referendum.
Accountability
Democratic accountability will also be in the mix as the VI emerges from corruption scandals.
Currently, Governor Daniel Pruce and the territory’s elected administration have reached an uneasy peace over the remaining Commission of Inquiry reforms, but the threat of direct rule from London remains as the tight new deadline of Aug. 31 looms ever closer on the horizon.
When the Tories floated the idea of taking much greater control of the VI two years ago, the suggestion was met with strong backlash, and the UK ultimately adopted a different strategy. And while Mr. Pruce has struck a far more conciliatory tone since taking over the role in January, he made it clear in his May quarterly report that he reserved the right to take sweeping new authority if reform progress is still lacking by September.
With traditionally strong backing among black British voters and the British Asian community, Labour has often been described as more sensitive to issues of race and neo-colonialism than the Tories.
However, when it last took power with a large majority under Tony Blair in 1997, Labour’s much vaunted “ethical” foreign and development policy stance soon came under fire. Within months of victory, it faced accusations of adopting a condescending and imperialist attitude to Montserrat after a massive volcanic eruption at Soufriere Hills.
Then-International Development Secretary Clare Short — the most left-wing member of the UK cabinet at the time — was widely condemned when she responded to calls from islanders for compensation with the dismissive comment that “they will be wanting golden elephants next.”
Ms. Short then doubled down against the ensuing criticism by stating, “It is not a help that the people and government of Montserrat shout at Britain for more and more.”
With Dr. Wheatley warning of a very active hurricane season ahead, it is likely an incoming Labour administration would be wary of making such mistakes again.
Halted probes
Other aspects of UK-OT relations have been set back by the election itself.
When British Prime Minister Rishi Sunak gambled on a July 4snap election despite being consistently 20 points behind in the polls, his move meant that two top level parliamentary probes into Britain’s future relationship with the VI and other OTs had to be halted.
Both committees would now be steered by a Labour chairperson should the party return to power next week.