David Cameron has indicated for the first time that Britain is now open to supporting a European Union-wide blacklist of tax havens, a proposal his government had strongly opposed.
During Prime Minister's Questions on Wednesday, Cameron said: “We are happy to support blacklists, but we do not think a blacklist should be drawn up solely on the basis of a territory raising a low tax rate. We do not think that is the right approach. It is the approach the French have sometimes taken in the past."
Current European Commission proposals – first published in January and reiterated this week – go beyond looking at a jurisdiction's tax rate. The commission said the list would be based on "clear and internationally justifiable” criteria: "transparency and exchange of information; global standards agreed by the G20 and/or the OECD and fair tax competition".
Support for a blacklist would represent a significant change of heart by the British government, and follows last week's damaging headlines over the revelations from the Panama Papers and Cameron's personal tax affairs.
The UK has been against the policy since it was first aired last year. BuzzFeed News has seen a note sent by the Treasury to the commission last June in which the UK government described the blacklist as deeply unhelpful and misleading, and said it “strongly opposed” the suggestion that the commission might coordinate member state blacklists and a range of other counter-measures.
That was still the British position as recently as Friday evening, the Treasury confirmed to BuzzFeed News, but since then the government had refused to say whether Britain would support the EU proposals, prompting criticism by deputy Labour leader Tom Watson.
France has been one of the strongest proponents of an EU-wide blacklist. Earlier this week, the country's finance minister Michel Sapin called for the G20 to agree on the creation of a blacklist of non-cooperative tax jurisdictions. An EU-wide list is also supported by the eurozone’s largest economy, Germany.