My hon. Friend gives a powerful example of how ludicrous the failure to act on this issue is.
At a stroke, statements would give people, whether they are experts or not, the information they need to assess the amount of tax that multinationals pay. That would give British consumers the power to take such matters into consideration when they decide who to buy from. It would also give developing countries a vital boost to their resources so that they could tackle hunger and invest in the infrastructure that they so desperately need.
As the Minister is all too well aware, the Opposition have backed the calls of the IF campaign for a convention on tax transparency. We saw the UK’s presidency of the G8 as a prime opportunity to take international leadership on the issue by launching a convention at the G8 summit to establish a global standard of public registration for the ownership of companies and trusts. As the House knows, the G8 nations took a step in that direction; we have acknowledged that steps have been made in the right direction.
The G8 stated in “Common principles on misuse of companies and legal arrangements”:
“Beneficial ownership information on companies should be accessible onshore to law enforcement, tax administrations and other relevant authorities including, as appropriate, financial intelligence units. This could be achieved through central registries of company beneficial ownership and basic information at national or state level. Countries should consider measures to facilitate access to company beneficial ownership information by financial institutions and other regulated businesses.”
At the end of the day, there was a statement about what could or should be achieved or considered by G8 nations, and the UK promised to establish a register at Companies House on beneficial ownership of companies in the UK, but to make it available only to HMRC, not the public. That was a step in the right direction, but
the Opposition feel that it did not go far enough. We believe that we need proper transparency about who is holding their wealth behind shell companies and trusts in tax havens, not just secret lists at Companies House.
My hon. Friend the Member for Bassetlaw (John Mann) put to the Minister doubts about the effectiveness of the UK’s proposed arrangements. Those doubts have been well articulated recently. Private Eye commented:
“Those with knowledge of the Companies House reality would take a great deal of convincing that it is about to become a tough enforcer able to scare global or even home-grown tax evaders—any more than it has ever deterred conmen the world over.
Companies House is merely a receiver and filer of documents. It is not set up to be reactive, never mind proactive. ‘We do not have the statutory power or capability to verify the accuracy of the information that companies send to us,’ a Companies House official candidly admitted to the Mail on Sunday last month when the newspaper wanted to know if a foreign currency investment company director actually existed. Hardly surprising when it is considered that there are 3 million ‘live’ companies on the UK register.”
Aware of the Government’s steadfast opposition to our proposals on country-by-country reporting and a global standard of public registration of company ownership, we have tabled new clause 12 to ask HMRC and the Government to at least review the possible effect of those measures. It is eminently reasonable and perfectly sensible for Government Members to support it. Crucially, on the subject of abusive tax arrangements, it calls on the Government to consider what steps they could take when working alongside the Governments of developing countries—not should, but could—to assess how UK companies could report their use of tax schemes that might have an impact on those countries, and how the UK could then assist in the recovery of that tax.
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The Exchequer Secretary has already responded to us on these issues, and it is disappointing that the Government take such a negative approach. They need to acknowledge that rather than saying what they cannot do, they should say what they could do. We are not asking for any commitment other than a commitment to review what might be possible, using the resources of HMRC, to achieve the aims to which the Government state they are fully committed.
With the exception of a relatively small pot of money for capacity-building work, to which the Exchequer Secretary has referred, the measures in the Bill to combat tax avoidance will do absolutely nothing to assist poorer countries. We know from the IF campaign that dealing with developing countries’ corporation tax gap alone could raise enough public money to save the lives of 230 children under the age of five every day. That is a powerful statistic that no Member should take lightly. We have heard from the Exchequer Secretary on several occasions throughout our consideration of the Bill, including today, how difficult and impractical—indeed, how impossible—it would be for the Government even to consider how they could assist in that regard. In the light of that statistic, however, I sincerely urge him to rethink his position. I ask him not to put the matter into the “too difficult” pile but to concede that there may be something that the Government can do to improve the situation.