Premier Alden McLaughlin has expressed relief at the U.K. general election result, claiming a Labour victory would have had “dire consequences” for the Cayman Islands.
David Cameron’s Conservative party defied the polls in a decisive victory that puts it as the sole party of government in the U.K.
Mr. Cameron has put pressure on overseas territories, including Cayman, to create public registers of beneficial ownership for offshore companies.
But the territory’s leaders reason that he remains a better option than Labour leader Ed Miliband, who was even more strident in his rhetoric about offshore financial centers during the campaign. Mr. Miliband resigned on Friday after Labour’s electoral defeat.
Financial Services Minister Wayne Panton joined the Premier in welcoming the Conservative victory as good news for the Cayman Islands.
Anthony Travers, chairman of the Cayman Islands Stock Exchange, cautioned that the issue of beneficial ownership, viewed by U.K. politicians as a way of preventing tax avoidance, was not going away under a Tory government. But he agreed that the Conservatives were more likely to be persuaded by a “reasoned approach.”
In a statement on Friday, Premier McLaughlin gave a resounding message of support to Mr. Cameron.
“It is not without relief that we have learned that the Conservatives won the majority of the national vote in yesterday’s United Kingdom elections and that David Cameron has returned to Number 10 Downing Street…,” he said.
“We believe that a win by the Labour Party would have had dire consequences for the Cayman Islands and other Overseas Territories, especially in the area of beneficial ownership of companies based in their jurisdictions.
“We have vehemently opposed forced beneficial ownership, which Labour proposed, because it could damage our very important financial services industry.”
He said Mr. Miliband had made the issue a major election topic in the U.K. when he told overseas territories in February that they would have six months to create public registers or be added to a tax haven blacklist.
“This would happen under his government if Labour was successful in the polls. Thankfully, they were not,” Mr. McLaughlin said.
“I again congratulate Mr. Cameron and the U.K. It is a comfort to know that we will be working with a U.K. government with which we are familiar.” Mr. Panton echoed those sentiments, saying the Conservative party had earned its victory by being good stewards of the country and the economy.
“The result should also certainly be indicative that a significant majority of the U.K. voters are more supportive of reasoned and balanced approaches to matters such as beneficial ownership, rather than irrational and draconian policies.”
Prior to the election, observers – including Tim Ridley, the former chairman of the Cayman Islands Monetary Authority – warned that whatever the result, offshore financial centers were likely to face more pressure from the U.K. Speaking after the result on Friday, Mr. Travers noted, “The question of the need for the public register of beneficial ownership remains on the table.”
He has previously dismissed calls for the register from British politicians of all stripes as hypocritical and out of touch.
“There has been extensive consultation between the government and the private sector, the results of which confirm that any such proposals are firstly unnecessary in the light of the extensive provisions of disclosure of beneficial ownership to tax authorities and law enforcement that already exist; secondly, would be harmful for the Cayman Islands financial services industry; and thirdly, far exceed any standard of transparency introduced in competitor offshore jurisdictions or indeed, in the onshore financial centers,” he told the Cayman Compass on Thursday.