Let’s all support the Tax Dodging bill

26 April 2015
By Jennie Formby, Unite political director

One of the scandals deserving our attention recently was the admission by former Tory minister, David Maclean (Baron Blencathra to his pals), that Cameron's G8 push for better transparency of the global tax system was a 'purely political gesture' to head off attempts to curb the excesses of the City. This revelation was the latest proof that the Tories have never been serious about addressing the fundamental problems in our financial system. It's not surprising then that the coalition's apparent attempts to address tax avoidance have been big on style and weak on actual substance.

By contrast Labour's ten-point plan to tackle the scandal of tax avoidance, published on the day before their election manifesto launch, is a bold and ambitious programme that would recoup at least £7.5 billion a year, cash desperately needed for vital public services.

Among the proposals are meaty reforms such as forcing UK-linked tax havens like the Cayman Islands and Jersey to publish lists of who owns shell companies registered in their countries. The plan also closes scandalous loopholes that allow private equity managers to pay less tax than normal working people. Importantly the reforms also look beyond the UK - pushing for reform of the international tax system in a way that would crack down on tax avoidance in countries poorer than our own, where the money is needed, as it is here, to build hospitals and homes.

And it comes just in time. The numerous high profile tax avoidance scandals in the last few months, with the LuxLeaks and HSBC cases dominating the front pages, has led to justifiable public anger directed squarely at politicians – widely regarded as not doing enough to tackle the issue [PDF]. That's despite concerted efforts by the coalition to be seen to address tax avoidance in each budget and each Autumn Statement, and despite big showpiece policies like the Google Tax.

The fact is unless we give tax dodging its moment in the sun where the shady deals can be fully exposed, we won't convince the public that the job is done. It's not just about perception either. The recent campaign for a properly comprehensive Tax Dodging bill [PDF] supported by the likes of Oxfam, Christian Aid, and Action Aid, argues that what is needed are even more fundamental reforms. They argue that for too long, politicians have been tinkering around the edges of the tax avoidance problem, fixing one loophole only to open another, and another. All of this, let’s not forget, with the help of PWC and others who so generously ‘donate’ their time and expertise to all the political parties.

They say light is the best disinfectant, and it’s clear that the tax dodging industry thrives in the dark. As a party that stands for fairness, equality and fiscal responsibility, a Labour government should give those who don’t contribute to society absolutely nowhere to hide.

Whatever happens, it is clear that only the Labour party has what it takes to tackle the tax avoidance scandal with the necessary courage and conviction. But let’s use Labour's plan as the start of the conversation, not the end. Let’s introduce the Tax Dodging bill and use that bill to introduce even more radical reforms like preventing tax dodgers from taking on public sector contracts. And we shouldn’t just focus on the UK. Workers in developing countries face even bigger struggles than we do to build and maintain public services that ultimately save people's lives.