Premier Michael Dunkley has fired back at Ed Miliband in the wake of the British Opposition leader’s threat to target Bermuda in a tax avoidance clampdown.

Mr Miliband said over the weekend that a Labour Government would give overseas territories such as Bermuda six months to compile a public register of beneficial owners of offshore firms or face being put on an Organisation for Economic Co-operation and Development list of “tax havens”, thus incurring sanctions.

With Labour running the Conservatives close in recent polls — Prime Minister David Cameron now heads a coalition government — Mr Miliband has written to the overseas territories outlining his plans should Labour become the next Government after May’s General Election. As well as Bermuda, letters went to Anguilla, British Virgin Islands, Cayman Islands, Turks and Caicos Islands, Gibraltar, Montserrat and the crown dependencies of Jersey, Guernsey and the Isle of Man.

But Mr Dunkley took exception to this and he was not alone, as Jersey and Guernsey voiced their disapproval, while the Chief Minister of Gibraltar, Fabian Picardo, was most vociferous of all, rebuking Mr Miliband for putting his letter into the public domain before it had reached its destinations.

Mr Dunkley, who spent last week on the One Bermuda Alliance Government’s first official visit to Washington, said that he is “surprised and disappointed” for Bermuda to be included on a list of places that Labour would target, especially since the Island has operated a central registry of companies since the 1940s and views itself as an international leader in this area.

“The Government of Bermuda remains open to continuing dialogue with the UK Government, the UK Opposition, and all other interested parties, in sharing best practice across borders in areas of corporate transparency, and the fight against fraud and crime,” Mr Dunkley said in a government statement.

“We would also remind Mr Miliband of Bermuda’s strategic economic contribution to the UK, which includes direct and indirect employment in the UK of 100,000 people, as well as our role as a global hub for the reinsurance and insurance industries, providing the critical underwriting required for damage arising from natural disasters and terrorist events.”

British Chancellor George Osborne dismissed the Labour leader’s plans, saying that he was “unfit to be Prime Minister” because he did not understand the present system.

“If you actually look at what he’s saying, he wants to blacklist every country of the OECD that doesn’t have these central registers,” Mr Osborne said.

“Britain is leading by example: it is having new central registers, it is insisting that its overseas territories transparently share information with us.

“But the Labour leader is simply not fit for office because he does not think through the consequences of his anti-business, anti-enterprise and anti-our partners abroad policies.”

At the G8 summit in June 2013, the Prime Minister announced plans to tackle tax avoidance and has encouraged the UK’s Overseas Territories and Crown Dependencies to implement their own public central register.

The overseas territories last met as a group in December at the Joint Ministerial Council (JMC) in London, where Bermuda was represented by Bob Richards, in his capacity as Deputy Premier, while Mr Dunkley was in New York overseeing the securing of the America’s Cup bid.

Mr Richards noted that 10 Downing Street was “apparently comfortable” with Bermuda’s position on beneficial ownership.

“The defining issue for most of us, particularly those with economies anchored in financial services, was beneficial ownership,” Mr Richards said. “I must commend my fellow OT leaders for their resolve to not agree even in the face of concerted UK pressure. This issue is so critical, leaders were prepared to leave without agreement rather than concede to the position of the UK.”

Certainly not one for conceding ground was Mr Picardo, whose response to Mr Miliband was picked up on social media. “Please forgive me for writing to you at the weekend but you will be disappointed as I am that I have had to read in the newspapers about a letter you have purportedly sent to me (and other Overseas Territories leaders) in relation to the above-captioned issue,” Mr Picardo wrote.

“I have no doubt that you will not have wanted the discourtesy of seeing the said letter published before OT leaders have received it, as I certainly have not.”

Mr Picardo added that the Overseas Territories’ leaders had attempted to meet Mr Miliband on the very same issue while in London for the JMC meetings, but “we are unfortunately still awaiting a response”.

Labour policy detail

1, A publicly accessible central register of beneficial ownership is a register you can go to which tells you who is the actual owner of a company — in the sense of who benefits financially when that company makes money. Such a registry is already being set up in mainland UK.

2, Registers in Overseas Territories and Crown Dependencies would help stop or stem tax avoidance by showing the tax authorities who is diverting money into companies in these havens and where the money of UK taxpayers is going. At the moment, they can’t even check whether someone has set up a company in the tax havens, let alone whether any money is being diverted into that company.

3, The OECD is the guardian body for international tax rules. It has a list of uncooperative tax havens which low tax jurisdictions can be placed on depending on the transparency of their tax affairs. Rather than protecting UK Overseas Territories and Crown Dependencies as we do now, we would act as whistle-blowers, making a formal request to the OECD that they should be added to the blacklist.

4, The UK tax gap — the difference between what HMRC thinks it should collect and what it gets — has risen under David Cameron to £34 billion.

5, Overseas Territories and Crown Dependencies are under the jurisdiction and sovereignty of the UK, but are largely autonomous. The G20 has produced a list of potential measures that could be taken against blacklisted countries which could include reviewing tax treaties with them, increasing disclosure, and even withholding taxes on finance flowing there.