Nevertheless, the clear winner to emerge from the chaos of the campaign is, in a sense, the status quo – in the form of U.K. Prime Minister David Cameron, whose Conservative Party won a surprise majority of parliamentary seats and whose chief rival Ed Miliband has already resigned following even more shocking losses by the Labour Party throughout Scotland and England.
That’s not to say that the status quo in the U.K. is one defined by stability. In his second stint as prime minister, Mr. Cameron won’t be burdened with the inconveniences of guiding a coalition government, but he will be faced with pressure from within his own party by fellow Tories who have adopted a strong anti-European Union stance, and also from opposition members in the newly empowered Scottish National Party, which, as the name implies, has as its main priority the furtherance of greater autonomy of Scotland.
Those “divisive” forces guided much political conversation before the election, the results of which have, if anything, crystallized those questions of identity – of the U.K.’s relationship with Europe, and Scotland’s relationship with the rest of Britain – as primary themes for the next government to ponder.
While U.K. leaders can be expected in the near future to redouble their existential omphaloskepsis, what should we be expecting from London, in relation to positions and policies that will affect the colonial vestiges of the Empire, such as the Cayman Islands?
Premier Alden McLaughlin reacted to the Tory victory with a written sigh of “relief,” saying, “I congratulate Mr. Cameron on a well-fought battle … 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.”
Mr. McLaughlin referred to the Labour leader Mr. Miliband’s campaign promise that, if elected to power, his government would compel U.K. overseas territories, including Cayman, to create public registers of beneficial ownership of shell companies and other entities within six months or face being blacklisted by the Organisation for Economic Co-operation and Development.
We tend to place Mr. Miliband’s vow in the same class as U.S. President Barack Obama’s critical quip about Ugland House being “the biggest tax scam on record.” The importance lies not in the execution of that specific threat, but in the overall attitude expressed toward the industry or territory at hand, as an indication of where, and how forcefully, future winds may blow. (Witness, for example, the Obama administration’s subsequent implementation of the Foreign Account Tax Compliance Act.)
Anthony Travers, chairman of the Cayman Islands Stock Exchange, said, “Although we have seen very little in the way of support for the Cayman Islands financial services industry from the current coalition government led by Mr. Cameron, we can safely conclude that a Labour government led by Mr. Miliband would be more, not less, hostile to the offshore financial centers.”
Others did not perceive as much daylight between the Tory and Labour positions on Cayman.
Former Premier McKeeva Bush said, “Whoever wins, Cayman is going to be in the same boat policy-wise. Between the U.S. and the U.K., they are going to put a lot of pressure on Cayman’s financial industry.”
In other words, those of Tim Ridley, former chairman of the Cayman Islands Monetary Authority: “Whatever the face of the [ruling U.K. government], none of the possible members have any love for offshore financial centers generally, so I think it will be just more of the same.”