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Intervention on Tax Avoidance & Evasion

Mike Kane, Wythenshawe and Sale East) (Lab)
The hon. Gentleman is, as usual, making a powerful speech. Christian Aid noted recently that an oil company in Uganda had approached Mossack Fonseca in an attempt to avoid paying £400 million worth of taxes there. That is equivalent to the budget of the entire Ugandan healthcare service. Does the hon. Gentleman agree that the avoidance of such taxes is not a victimless crime?

Mark Durkan

Absolutely. That example amplifies the point that I was making. I want to acknowledge the work of not just Christian Aid, but Oxfam, ActionAid, Global Witness and Transparency International. Those organisations have worked with many Members of Parliament for years to make us more aware of these issues. Not least, I want to acknowledge the work of the all-party parliamentary group on anti-corruption, including the contributions of the hon. Member for Newcastle upon Tyne North (Catherine McKinnell), and the hon. Member for Amber Valley (Nigel Mills). The hon. Gentleman cannot be with us today, but he has taken a keen interest in many of the issues that have now surfaced in an even more dramatic form in the Panama papers.

It would have been interesting to hear from the Minister whether the Government were actually shocked by the Panama papers. We know about all the attention and fuss about the Prime Minister, but did the Government regard the other issues as par for the course? Did they know they were going on? Were they therefore informing their various measures against corruption, or did the revelations tell them that the issue was bigger than they were aware of? Given that Mossack Fonseca is not the biggest firm in Panama, what worries have they about what else is going on there?

We heard the Prime Minister say earlier, “The agencies that deal with this are independent and we cannot deal with them.” Someone somewhere should be asking them, “Is this what you knew? Has this shocked you? Are you doing anything more in response?” Journalists are being asked to provide the information. Is anyone else being pursued for the information? Is anyone having their door knocked or collar felt? It seems not. That seems odd.

As the Prime Minister is hosting a global anti-corruption summit, he should be showing himself to be much more active in response to the papers. Now that he has perhaps in his own mind dealt with the issues that arose about himself, he can address the wider issues. Perhaps if he had addressed the wider issues last week, people would have thought that that was misdirection and that he was trying to avoid the issue on his part. However, he needs to address those issues now if the summit is to be worth while.

It is particularly disappointing to hear the Prime Minister being the spin doctor for the Crown territories and their role. I cannot believe they are not a tax haven. He is trying to say that, because they have moved a bit following what he said in 2013 about what he was going to compel and ask them to do, that is enough. There has been progress. There are indications of possible progress, but he should not be lessening the pressure on the Crown dependencies in the lead-up to the summit. He should be ratcheting up the pressure on them and everyone else. He should be doing so by showing a stronger response here in relation to our own agencies.

In the debate, there has been much discussion by Members about the difference between avoidance and evasion. Let us be clear. A syndicated effort has gone into the artifice that is involved in some of these shells, shams, scams and schemes. We know that the architecture of avoidance is fitted with the engineering of evasion. Therefore, there is not that much of a difference. Therefore, we need stronger global action.

That is why I again ask the Government to consider their attitude to some global measures. In the past, when they said they wanted to lead against corruption ​and were putting taxation central stage at the UN summit and beyond, they also set their face against any notion of a financial transaction tax. If there were a financial transaction tax at a global level, it would at least ensure that there was more marking of what was going on in all these different schemes and moves, where companies appear to trade with shadow versions of themselves and shells are registered in different places. The very existence of a uniform global transaction tax would bring some tracking and tracing to some of those schemes and bring more transparency, which people say is needed.

The Panama papers represent discovering what has been done in terms of the recovery of tax. The Government seem to have a pretty pedestrian attitude to that at this stage. They seem to be more concerned about the media flap last week about the Prime Minister being embroiled in some of this. They think that that is over, but they seem to be taking a fairly pedestrian approach to an issue that is scandalising many still and is burdening people in poor countries.

 

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