Budget Resolutions and Economic Situation — House of Commons, 2016-03-16
Topic: Macroeconomics
Pat Glass (Labour, Centre-left): Yes, and I doubt whether he even sees the irony. I watched that session of the Select Committee. What I recall is that he could not even tell us what his salary was—it was so large, and it was made up of so many different kinds of dividends and so on, that he had no idea what his salary was There are 62 individuals who now have the same wealth as the poorest 3.5 billion people in the world. Those same 62 people have seen their wealth increase by $542 billion since 2010, while the poorest 3.5 billion people have seen their wealth fall by $l trillion over the same period. Those in the poorest 10% of the world’s population have seen their income rise by just $3 a year over five years, whereas 62 of the world’s richest people have seen their income rise by $500 billion over the same period. As is always the case when we are talking about who is rich or poor, it is women who are at the bottom. Some 53 of the world’s richest people are men, and the countries with the largest inequalities have seen the gender gap widen in terms of not only income, but health, education, labour market participation and representation The current system of tax havens, with what has become an industry of tax avoidance across the globe, damages our economy in this country and economies across the world, and it needs to be addressed and closed down. It is absolutely clear that trickle-down economics does not work, except for the richest 1%, in which case it works beautifully for them and their mega-rich pals The Government’s view that low taxes for the richest individuals and for companies are somehow good for the rest of us is just plain wrong. If the Googles of this world, and the Vodafones, Starbucks, Amazons and the rest, paid their taxes properly, like the millions of hard-working people who understand that paying taxes is the cost of living in a civilised society, we could wipe out the deficit in the UK, and the poorest across the world could begin to see improvements in their grindingly poor lives Channel 4 revealed this year that Barclays, which had signed up to the banking code on taxation and therefore promised not to engage in tax avoidance, actually employed a range of tax avoidance schemes to dodge an estimated half a billion pounds in tax in the UK alone last year. That is the worst kind of hypocrisy When the bank’s tax avoidance practices were reported on by Channel 4, Barclays responded that it had "voluntarily disclosed to HMRC in a spirit of…transparency that it had repurchased some of its debt in a tax efficient manner." Will the Chancellor’s announcements today change that? Without transparency in the system, I doubt it. Presumably, Barclays made that declaration fully understanding that its actions would result in fewer doctors, fewer nurses, fewer teachers and cuts for the poorest and most vulnerable in this country Boots the chemist, which earns every penny of its income in the UK, moved its headquarters from Nottingham to Zurich to avoid paying any tax in this country. Quite frankly, that should be illegal. I doubt very much whether, without transparency in the system, anything the Chancellor said today will change that, bring the Boots headquarters back to this country or make Boots pay its tax here Companies that are household names in the UK now routinely use a technique called transfer pricing, trading goods and services internally—within a network of the same multinational company’s subsidiaries, each of which is in a different jurisdiction—to avoid paying tax. Without transparency and routine, mandatory reporting, that will not change, even after what we have seen in today’s Budget When companies are caught out and their practices are highlighted, as happened recently with Facebook, they simply reach a sweetheart deal with HMRC, paying a tiny, tiny proportion of the tax they owe, while announcing to the world what good citizens they are because they now pay their tax Yesterday, Oxfam published a report called "Ending the Era of Tax Havens: Why the UK government must lead the way", which pointed out that tax havens are at the heart of the inequality crisis, enabling corporations and wealthy individuals to dodge paying their share of tax. Oxfam analysed 200 of the world’s biggest companies and found that nine out of 10 have a presence in at least one tax haven, with corporate investment in those tax havens in 2014 almost four times bigger than it was 10 years ago. Tax avoidance in our largest companies has become routine and obscene, and it is growing Tax havens are estimated to cost poor countries at least $170 billion in lost tax revenues every year. They fuel the inequality crisis, leaving poor countries without the funds they need and effectively wiping out the benefits of any international development funding those countries receive. If we are to address that, the Government must require multinational companies to make country-by-country reports publicly available for each country in which they operate. The Government must also support efforts at European and international level to achieve that standard globally. That has not happened in today’s Budget.