I agree with my hon. Friend. In fact, a problem that underlines our productivity gap is the worryingly low levels of private investment in our economy, which is reducing efficiency and places Britain outside the sphere of many comparable nations on investment. Sadly, the Government did not grasp that problem in the Budget.
The Opposition are calling for a review in the absence of the ability to call for more wide-ranging changes to the Bill given the Government’s unwillingness to table a general amendment to the law as part of this Finance Bill. That is unfortunate given the lack of new measures in the Bill, the limitations of the measures that are included, and the fact that much of the Bill represents a cleaning-up of previously announced but ill-thought-through measures. I will deal with each of those matters in turn.
It is, to say the least, regrettable that Members from across this House are unable to introduce new measures to the Bill. Labour’s tax transparency and enforcement programme sets out several areas where the Government should be taking action to tighten up our leaky ship, but we see no such ambition from the current Administration. Again, there is an unwillingness to engage with those who do have the energy and expertise to promote new measures.
When it has been possible for Members to amend Finance Bills, they have often done so to good effect. So it was that my right hon. Friend the Member for Don Valley (Caroline Flint) amended what became the Finance Act 2016, giving the Government the power to introduce public country-by-country reporting and requiring multinational firms to indicate their profits, staff and tax paid in the different jurisdictions in which they operate.
The measure is already in practice in the banking and extractive industries, where it has effectively promoted tax transparency and has offered a lot of evidence and information that has been very helpful to investors in those fields, but Members on both sides of the House who are keen to see the Government use the powers already available under the 2016 Act to make country-by-country reporting public, and who believe the Government should be playing a leadership role in this area, are sadly emasculated by the Government’s unwillingness to allow colleagues to table proper amendments to this Bill.
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In this case, the Government are flying in the face of public opinion, with more than three quarters of the public reportedly stating that multinational firms with a significant presence in the UK should report publicly, per country, on the size of their profits and on the tax they pay.
The same frustrations about the inability to amend the Bill apply to the Government’s limited willingness to promote transparency on beneficial ownership. By excluding Companies House from the coverage of anti-money laundering regulations, there is little to no oversight of the more than 600,000 companies formed every year in the UK, many of which then seem to sink without trace. There is little point in creating a register of beneficial ownership if no due diligence is exercised to ensure that the information is accurate.
Additionally, I can reveal today that the Government are yet again behind the curve of other European nations in continuing to fail to subject trusts to coverage in registers of beneficial ownership. Of course, as we know, David Cameron himself intervened personally to prevent the European Council from agreeing to the measure back in April 2016, but the Council’s negotiators recently appeared to have overcome those objections. I can reveal that, as of Friday afternoon, there is now agreement at European level to include business-like trusts on registers of beneficial ownership, so I hope the Minister will inform us today of whether and when he will act to include business-like trusts on the British register of beneficial ownership, or whether our Government will continue to act as a drag on international co-operation in this area.
If colleagues had the power to amend this Bill, I imagine they would also want to promote measures to stem the haemorrhage of Her Majesty’s Revenue and Customs staff, as ably argued in this House by my hon. Friends the Members for Coventry South (Mr Cunningham), for Stockton South (Dr Williams) and for Coatbridge, Chryston and Bellshill (Hugh Gaffney), and by Members for many other constituencies affected by the cuts to HMRC. They are concerned that their constituencies face the prospect of losing thousands of skilled jobs to HMRC restructuring, which is reducing HMRC’s resources at the very time the demands being placed on it are heavier than ever before, not least due to the additional burden of post-Brexit arrangements for customs and for taxing highly mobile profits.
I find it astonishing that we still have no indication from the Government of how they will deal with the competition challenge that small and medium-sized companies will face once the UK leaves the EU and its competition-regulating powers. Just this week, the European Commission announced that it is to investigate the tax
affairs of Ikea under state aid regulations, which are intended to prevent multinational companies from making use of tax arrangements that are not available to small and medium-sized companies, yet it is unclear whether our Government intend merely to increase the number of their sweetheart tax rulings on multinationals after Brexit, or whether they intend to adopt a more muscular, effective approach to tackling profit shifting and, if the latter, how they will co-ordinate that with other countries.
The initial signs are worrying. Only last week, Conservative Members of the European Parliament abstained on a crucial vote on the European Parliament’s investigative report on the Panama papers. Appallingly, we have still not heard whether our Government will back those whistleblowers and investigative journalists who allowed the world to see what was hidden in the Paradise papers.
Will the Minister inform us today of whose side this Government are on—those who promoted the public interest in revealing how some are profiting from mismatches and secrecy in the international tax system, or those who profit from such obfuscatory arrangements?