Tax dodging

Tax dodging is what happens when governments capitulate to the forces of global finance and business and don't force businesses to pay their taxes. This is usually presented to the public as strong government promoting economic growth, private enterprise and international competitiveness, as it was by New Labour's ideologue Peter Mandelson with his comment about being "intensely relaxed about people getting filthy rich" (although he did add, "as long as they pay their taxes").

However, in truth it is the result of compromised governments turning a blind eye, in a desperate bid to attract the most powerful global companies and finance houses to the UK. Their motivation—at best—must be the belief that this is good for our economy, and at worst, that it is good for their own careers and ability to make money. That would explain the revolving door between company boardrooms and senior politicians and officials, e.g. former Inland Revenue boss Dave Hartnett's move to international tax advisers Deloitte.

It was at a New College dinner here in Oxford that Mr Hartnett was presented by activists from UK Uncut with a spoof "Golden Handshake award" from Vodafone and Goldman Sachs for his help in saving those companies billions of pounds in taxes during the Labour Party's tenure in office. It was Mr Hartnett who, whilst HMRC boss, negotiated a tax deal that granted HSBC’s bankers virtually guaranteed immunity from prosecution for any crimes they might have committed relating to tax fraud in Switzerland. It was no surprise when, in January 2013, he moved on to work at HSBC. Recent revelations concerning HSBC's 'private bank' in Switzerland demonstrate the lengths to which some individuals will go to avoid making a fair contribution towards the common good.

Global corporations, some of which have greater assets than many entire countries, use their clout to play governments off against one another; and with many among the élite believing that the UK economy is strongly dependent on the financial services industry in London, UK governments have turned a blind eye to their tax-avoiding schemes—which are, anyway, very difficult to tackle without international political cooperation.

The tax unpaid on their operations represents a massive subsidy—we estimate around £13bn—to transnational business at the expense of the UK taxpayer and our own home-based businesses and enterprises. Labour, Liberal Democrat and Conservative governments alike have considered these massive subsidies good value for the British economy. The Green Party doesn't. We do not consider it wise economic policy to allow government to be held hostage by predatory outside forces, and would prefer to encourage genuine economic growth from within.

Large companies are welcome here if they bring genuine economic benefit, but if they use their weight to undercut local enterprise, export their profits and avoid tax on profits made from our citizens then they should expect government to act. The culture needs to change, but to be effective the UK government needs to be collaborating with other governments world-wide until global corporations can no longer hold whole countries to ransom.

The present government has shown little recognition of the problem, to say nothing of any determination to address it; this may be partly because so many of its own members inhabit that same world, and their own parties draw their funding from the same corporations.

Our Green MP Caroline Lucas presented the UK Corporate and Individual Tax and Financial Transparency Bill to the House of Commons in June 2013. It made its second reading in September 2013 but was 'talked out' by government ministers and failed to complete its passage through Parliament before the end of the session. This means the Bill will make no further progress. In February last year Caroline sponsored an Early Day Motion in the House of Commons calling for the introduction of a Fair Tax Mark. This would be awarded to companies that pay the tax they owe, at the right time and in the right place—allowing consumers to make an ethical choice about where to spend their money. Andrew Smith didn't sign it. It is clear that the present political establishment, for all its (occasional) bluster, has no serious intention of acting.

However, we are clear that legislation is needed, preferably at the international or EU level, but if necessary just in the UK. We believe that a crack-down on tax havens and other methods of tax evasion and avoidance could raise as much as £13bn annually. In particular we want to press for a transparent international accounting standard that requires companies operating in more than one country to report on a country-by-country basis so that their profits can be located and taxed.

I support Caroline Lucas' UK Corporate and Individual Tax and Financial Transparency Bill, and the Fair Tax Mark.

Will you sign?


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