A long-time critic of the Virgin Islands’ financial services sector has been appointed as the United Kingdom’s new “Anti-Corruption Champion.”
Baroness Margaret Hodge has pledged to end “dither and delay” as she seeks to combat financial wrongdoing in Britain and the overseas territories.
The appointment — which charges her with working with Parliament, the private sector and civil society to further anti-corruption goals — comes at a time of tension between London and the UK overseas territories over how far the OTs must expand access to their company ownership registers.
Baroness Hodge has been an outspoken proponent of fully public registers, while VI leaders have argued that access should be limited to people with a “legitimate interest.”
She was appointed to the role on Monday by British Foreign Secretary David Lammy, who has long stressed the need to root out what he calls “dirty money” in the UK, overseas territories and crown dependencies.
“After years of campaigning on the issue, I feel privileged and delighted to be able to work as the government’s champion, combating corruption and the illicit finance that flows from it, both at home and abroad,” Baroness Hodge said.
The veteran Labour politician stressed that action is needed urgently.
“The time has now come to put an end to dither and delay,” she said. “We must take determined and effective action, and I look forward to playing my part in that work.”
Transparency
Tom Keatinge, director of the Royal United Services Institute’s Centre for Finance and Security, said he expected Baroness Hodge to make transparency a key issue of her remit.
“She has been a longstanding proponent of open company registers, and I would expect this to be a key plank of her future plans,” he told the Beacon.
VI-based asset-recovery lawyer Martin Kenney said he had previously engaged in an online debate with Baroness Hodge and accused her of not listening to opposing views and engaging in “noisy rhetoric.”
“I do not believe Margaret will get any further traction than what she has obtained previously through her visceral attacks against overseas territories’ financial services sectors,” Mr. Kenney told the Beacon. “Margaret comes to the table of analysis with noisy rhetoric and very little by way of robust evidence in support of her position.”
‘No surprise’
Former deputy premier and financial services minister Lorna Smith, who has sat as opposition member since Premier Natalio “Sowande” Wheatley fired her in October, said the VI has nothing to fear from the new appointment.
“This is no surprise,” Ms. Smith told the Beacon. “But the BVI will continue to be fully transparent in adhering to all of the financial requirements in the financial services sphere. Baroness Hodge will do her job — as will we.”
The premier told the Beacon that he had “no reaction” to Baroness Hodge’s appointment.
‘A real threat’
In a statement announcing the appointment, Mr. Lammy said corruption “poses a real threat” to the UK.
“It enables the activities of dictators, smugglers and organised criminals around the world,” he stated. “I welcome Baroness Hodge as the UK’s Anti-Corruption Champion to bear down on this menace.”
UK Security Minister Dan Jarvis stressed that Baroness Hodge’s role would extend beyond Britain.
“Margaret brings decades of experience and expertise to this important role, and I know she is the right person to help drive forward our ambition to tackle corruption in all its forms — both at home and overseas,” he stated.
Peter Clegg, a professor at the University of the West of England who specialises in the relationships between the UK and OTs, said the VI government may find allies in crown dependencies such as the Channel Islands.
“If attempts are made to tighten up regulation in the OTs, including public registers, will the crown dependencies be included as well?” Mr. Clegg told the Beacon. “In the past you’ve had the OTs but not CDs. It might be more difficult going forward not to include them together, but if that’s the case then the lobbying effort against certain changes might be stronger — and more effective.”
The non-profit organisation Transparency International UK, which has long pushed for fully public company registers in the OTs, welcomed Baroness Hodge’s appointment.
“The UK has been without an Anti-Corruption Champion since John Penrose, MP, resigned in June 2022 in protest to Prime Minister Boris Johnson breaking his own ministerial code during the ‘party gate’ scandals,” the group said in a statement.
Previous criticism
Before being elevated to the House of Lords after the Labour Party’s landslide election victory in July, Baroness Hodge served as a member of the UK Parliament for 30 years, and she was chair of the influential House of Commons Public Accounts Committee from 2010 to 2015.
Last month she signed a letter to the left-leaning Guardian newspaper along with Tory former deputy foreign secretary Andrew Mitchell calling for financial reform in the OTs
“We know all too well that the overseas territories and crown dependencies play a pivotal role in helping crooks and tax dodgers launder their dirty money,” she stated.
Baroness Hodge has long advocated for OTs like the VI to be more transparent on beneficial ownership in part by fully opening their company registers to public scrutiny.
Future unclear
The issue came to the fore last month at the Joint Ministerial Council, a meeting of OTs and the British government in London. But that gathering left the way forward unclear.
Mr. Wheatley insisted afterwards that only people with a “legitimate interest” will be permitted to access the VI’s expanded register of beneficial ownership, which is due to be in place by June next year.
“The UK recognised the OTs’ commitment to implementing accessible registers of beneficial ownership information on a legitimate-interest basis and the need for this to maintain the necessary safeguards to protect the right to privacy in line with our constitutions,” he said after the JMC.
But a joint communiqué issued by the UK and the OTs after the meeting suggested that the UK wants the OTs to go further.
“We commit to improving our corporate transparency by completing plans to implement accessible registers of beneficial ownership, with some territories implementing registers with legitimate interest access and others implementing fully publicly accessible registers,” the communiqué stated. “We note the UK government’s ambition that Publicly Accessible Registers of Beneficial Ownership (PARBOs) become a global norm and its expectation that overseas territories and crown dependencies implement full PARBOs.”
Despite noting this UK ambition, the communiqué also mentioned commitments by the VI, Anguilla, Bermuda, the Cayman Islands and the Turks and Caicos Islands to implement “Legitimate Interest Access Registers of Beneficial Ownership” that provide maximum possible access and transparency while also protecting the right to privacy in line with their constitutions.