Tax Avoidance and Evasion — House of Commons, 2016-04-13
Topic: Macroeconomics
Seema Malhotra-Saluja (Labour, Centre-left): I thank the many organisations that have been involved in supporting the inquiry on the issue of the Panama papers. They include Oxfam, Tax Justice Network, Global Witness, Transparency International and Christian Aid. They have played an invaluable role. I also thank all Members for their contributions to the debate. They include the hon. Members for Dundee East (Stewart Hosie), for Torbay (Kevin Foster), for South Suffolk (James Cartlidge), for Newark (Robert Jenrick), for East Antrim (Sammy Wilson) and for Glasgow South (Stewart Malcolm McDonald), and my hon. Friends the Members for Blaydon (Mr Anderson), for Newcastle upon Tyne North (Catherine McKinnell) and for Oldham East and Saddleworth (Debbie Abrahams), all of whom have raised important issues We have heard about tax being not a donation but a legal requirement, and about the need to take the non-payment of tax incredibly seriously. We have also heard that the work of the Public Accounts Committee is vital in this area. My hon. Friend the Member for Newcastle upon Tyne North said that this was a pivotal moment that the Government must not squander. We have also heard about the challenges relating to prosecutions owing to the complexity of the structures of multinational companies, and about the need to extend the law further to tackle the wider issues of economic crime This is a moment that we must seize. The public and the media have not always been engaged with this issue, but they can now see the scale of the injustice not only in the UK but across the world. The Panama papers have lifted the lid, and there is no going back. These revelations have provided concrete examples of what we have all suspected; they have exposed details of the worst excesses of our international financial system At the heart of the issue is the matter of public trust and confidence in the fairness of our tax system. People rightly say, "I pay my fair share towards the cost of vital public services. I can’t dodge or negotiate with the tax authorities, so why should wealthy individuals and companies get away with not paying their fair share?" Despite all the claims that we have heard from the Government, people do not think that they have done enough to tackle the problem, either here or in the overseas territories and Crown dependencies for which we have responsibility This is a global issue and it needs a global response. Today’s debate reflects the widespread public view that individuals and companies should pay their fair share, and we are calling on the Government to implement Labour’s tax transparency enforcement programme. Labour has a strong record on tax evasion and avoidance. The measures that we introduced while we were in power will still raise 10 times as much over the coming years as those introduced by the Tories in the last Parliament. That is the conclusion of analysis carried out by the Financial Times Over the past week, the Government have had the chance to step up and take a strong lead. It is disappointing that they have failed to do so. The Government’s taskforce and other measures represent a missed opportunity to end the secrecy ahead of next month’s anti-corruption summit. In 2013, the Prime Minister wrote to overseas territories and Crown dependencies calling for greater transparency and for fully resourced and properly managed centralised registries. He wrote again on this subject. We have had written questions and oral questions, but we can now see that it is not the Government’s intention to push the issue of public registers further. Instead, the information that has been agreed on will be available only to UK law enforcement and tax authorities The beneficial ownership agreement with the Cayman Islands allows only designated Cayman Islands officials directly to obtain and provide to the UK details of beneficial ownership of companies incorporated in the Cayman Islands. Furthermore, the UK’s Swiss tax agreement announced in 2011 has raised just a fraction of the promised £5.3 billion. So the Government are very good at spin, but their record does not stand up to scrutiny. What is particularly stark about the Panama revelations is that more than half the companies named in the papers were registered in UK-governed tax havens. That is something of which we should be ashamed. We believe that the UK should be leading the global campaign to fight against aggressive tax avoidance and evasion; instead, we are lagging behind There are a number of other vital issues. We have talked about the need for an independent inquiry. While there have been moves across the world, including an important meeting in Paris today organised by the Joint International Tax Shelter Information & Collaboration network, our officials have not yet managed to make it to Hitchin to undertake their own inquiries into the Panama papers The issue is effectively one of theft. Every year, about $200 billion of untaxed income is taken out of poor countries by international corporations that are avoiding paying tax. Speed is another issue, as was highlighted by the chair of the JITSIC network, who emphasised today the need for immediate information exchange. Far from seeing the Government heed that call, they continue to slow down, not accelerate, their action to tackle tax avoidance We have a lot more to do. We need greater parliamentary scrutiny, a specialised tax enforcement unit, greater public sector transparency, including having companies that want to bid for public sector contracts make public their beneficial owners. We need greater co-operation with our European partners, country-by-country reporting and protection for whistleblowers. The issue also highlights the importance of our membership of the European Union in tackling complex problems that do not stop at national borders. We have called on the Government to take much more action and fast. We have called for stricter minimum standards for Crown dependencies and overseas territories, but the lack of stronger international standards was cited by the Financial Secretary today as a reason for not pushing for public registers of beneficial owners Let me add one more point in conclusion. On Monday, the right hon. Member for Rutland and Melton (Sir Alan Duncan) said that the Opposition should "snap out of their synthetic indignation" and that we risk having a House "stuffed full of low achievers who hate enterprise".—[Official Report, 11 April 2016; Vol. 608, c. 34.] Sadly, the Financial Secretary seemed to back him up. This is not about begrudging entrepreneurs and those who succeed in business their success; it is about basic fairness in our society. This is an issue on which the rich and poor who believe in fairness are united. When we shirk our responsibility to crack down on tax havens, we let down our country and our constituents. That is why I urge the House to join us in voting in support of Labour’s proposed measures today.