Financial Transparency: Overseas Territories

Rebecca Long Bailey Excerpts

Wednesday 5th November 2025 Westminster Hall

[Rebecca Long Bailey (Salford) (Lab)]

I thank my hon. Friend the Member for Bolton West (Phil Brickell) for securing the debate.

It is a simple principle: profits should be taxed where real economic activity takes place. Yet that simple principle is routinely violated, and multinational corporations move billions through paper subsidiaries, internal loans and royalty payments to places where little or no real business occurs. As we have heard today, the result is devastating. For the United Kingdom alone, it represents tens of billions lost—money that should be funding our hospitals, schools, transport and care.

Sadly, the UK’s current approach is still falling short, so what must we do? First, we need real transparency. Public country-by-country reporting must be mandatory. beneficial ownership registers must be complete, verified and accessible to all, and there must be comprehensive disclosure of cross-border affiliate transactions of intra-group pricing and payments in dividends flowing to low or zero-tax jurisdictions.

Secondly, HMRC must be properly equipped. The Department is dramatically under-resourced, so it needs resources, specialist expertise and the independence to pursue large-scale investigations without political constraint. The diverted profits tax should be strengthened, and penalties must actually bite.

Thirdly, we need structural reform at home. The UK must stop indulging secrecy within its own network of territories. It should require those jurisdictions to meet the same standards of transparency and accountability as the mainland. We must make domestic law fit for purpose by ensuring that multinationals cannot hide behind opaque structures, and that the UK does not act as a facilitator for profit shifting through low-tax dependencies.

Broadly, we must lead reform on the international stage. Britain should champion stronger global agreements—not merely a minimalist 15% tax floor, but a framework that stops profit shifting altogether. That means automatic exchange of tax information, higher global minimum rates, global minimum tax enforcement standards, pressure for jurisdictions that facilitate profit shifting to reform, and co-ordinated sanctions imposed against them if they refuse to co-operate. Fundamentally, this is about fairness, accountability and the very future of democracy itself.