Here's what 300 top economists told the UK about tax havens

Lynsey Barber
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The UK is best placed to act, economists say (Source: Getty)

So-called rock star economist Thomas Piketty and Nobel prize-winner Angus Deaton are among 300 top economists from around the world calling for an end to tax havens, ahead of a meeting of world leaders this week.

Economists from several of the world's elite universities, including Oxford, the London School of Economics, Harvard and the Sorbonne are among the signatories saying that there is "no economic justification" for offshore havens, which undermine countries' ability to collect taxes and affects poorer countries more, they say.

The letter, organised by Oxfam, calls for the UK to take the lead on the issue as it is best placed to do so, and comes ahead of the the international anti-corruption summit due to be held in London, at which leaders are expected to sign up to coordinated efforts to tackle the issue.

Read more: Cameron promises to fight global corruption in wake of Panama Papers

The UK has sovereignty over around a third of the world's tax havens such as the British Virgin Islands, the economists say.

"Tax havens do not just happen," said Jeffrey Sachs, an economist at the Earth Institute of Columbia University.

"The British Virgin Islands did not become a tax and secrecy haven through its own efforts. These havens are the deliberate choice of major governments, especially the United Kingdom and the United States, in partnership with major financial, accounting, and legal institutions that move the money."

He continued: "The abuses are not only shocking, but staring us directly in the face. We didn't need the Panama Papers to know that global tax corruption through the havens is rampant, but we can say that this abusive global system needs to be brought to a rapid end. That is what is meant by good governance under the global commitment to sustainable development."

The US secretary of state John Kerry is expected to attend the summit this week, along with Ashraf Ghani of Afghanistan, Juan Manuel Santos of Colombia and Muhammadu Buhari of Nigeria, and Norwegian prime minister Erna Solberg. Speakers will include World Bank president Jim Yong Kim and International Monetary Fund boss Christine Lagarde.

Read more: What you need to know about the Panama Papers database

The issue of tax havens has been thrown into the spotlight by the thousands of documents revealed in the Panama Papers leak. That is likely to be renewed ahead of Thursday's summit by the database of information on more than 200,000 companies, trusts, foundations and funds being made public on Monday.

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