Panama Papers

Monday 11th April 2016 Commons Chamber

15:04

[The Prime Minister (Mr David Cameron)]

With permission, I would like to make a statement on the Panama papers.

Dealing with my own circumstances first, yesterday I published all the information in my tax returns not just for the last year, but for the last six years. I have also given additional information about money inherited and given to me by my family, so people can see the sources of income I have: my salary, the benefit in kind of living in No. 10 Downing Street, the support my wife and I have received as Leader of the Conservative party, the renting out of our home and the interest on the savings that I have. Since 2010, I have not owned any shares or any investments.

The publication of a Prime Minister’s tax information in this way is unprecedented, but I think it is the right thing to do. But let me be clear: I am not suggesting that this should apply to all MPs. The Chancellor has today published information on his tax return, in a similar way to the shadow Chancellor and the First Minister for Scotland. This begs the question of how far the publication of tax information should go. I think there is a strong case for the Prime Minister and the Leader of the Opposition, and for the Chancellor and the shadow Chancellor, because they are people who are or who wish to be responsible for the nation’s finances. As for MPs, we already have robust rules on Members’ interests and their declaration, and I believe that is the model we should follow.

We should think carefully before abandoning completely all taxpayer confidentiality in this House, as some have suggested. If this were to come in for MPs, people would also ask for a similar approach for those who ask us questions, those who run large public services or lead local government, or indeed those who edit news programmes or newspapers. I think this would be a very big step for our country. It certainly should not take place without a long and thoughtful debate, and it is not the approach that I would recommend.

Let me deal specifically with the shares my wife and I held in an investment fund or unit trust called Blairmore Holdings, set up by my late father. The fund was registered with the UK’s Inland Revenue from the beginning. It was properly audited, and an annual return was submitted to the Inland Revenue every year. Its share price was listed in the Financial Times. It was not a family trust; it was a commercial investment fund for any investor to buy units in. UK investors paid all the same taxes as with any other share, including income tax on the dividends every year.

There have been some deeply hurtful and profoundly untrue allegations made against my father, and if the House will let me, I want to put the record straight. This investment fund was set up overseas in the first place because it was going to be trading predominantly in dollar securities, so like very many other commercial investment funds, it made sense to be set up inside one of the main centres of dollar trading.

There are thousands of these investment funds and many millions of people in Britain own shares, many of whom hold them through investment funds or unit trusts. Such funds, including those listed outside the UK, are included in the pension funds of local government, most of Britain’s largest companies and, indeed, even some trade unions. Even a quick look shows that the BBC, the Mirror Group, Guardian Newspapers and—to pick one council entirely at random—Islington all have these sorts of overseas investments. To give one further example, Trade Union Fund Managers Ltd, based in Congress House, has a portfolio of over £50 million of investment in the trade union unit trust, with 3% of its net assets based in Jersey. This is not to criticise what it does; it is to make the point that this an entirely standard practice, and it is not to avoid tax.

One of the country’s leading tax lawyers, Graham Aaronson, QC, has stated unequivocally that this was

“a perfectly normal type of collective investment fund”.

This is the man who led the expert study group that developed the general anti-abuse rule—so much debated and demanded in this House—which Parliament finally enacted in 2013. He also chaired the 1997 examination of tax avoidance by the Tax Law Review Committee. He has said that it would be

“quite wrong to describe the establishment of such funds as ‘tax avoidance’”

and, further, that

“it would be utterly ridiculous to suggest that establishing or investing in such funds would involve abusive tax avoidance”.

That is why getting rid of unit trusts and other such investment funds that are listed overseas has not been part of any Labour policy review, any Conservative party policy review or any sensible proposals for addressing tax evasion or aggressive tax avoidance.

Surely, it is said, investors in these funds benefit from their being set up in jurisdictions with low or no taxes. Again, this is a misunderstanding. Unit trusts do not exist to make profit for themselves; they exist to make a profit for the holders of the units. Those holders pay tax, and if they are UK citizens, they pay full UK taxes.

It is right to tighten the law and change the culture around investment to further outlaw tax evasion and discourage aggressive tax avoidance, but as we do so, we should differentiate between schemes designed to artificially reduce tax and those that are encouraging investment. This is a Government—and this should be a country—who believe in aspiration and wealth creation. We should defend the right of every British citizen to make money lawfully. Aspiration and wealth creation are not somehow dirty words. They are the key engines of growth and prosperity in our country and we must always support those who want to own shares and make investments to support their families.

Some people have asked, “If this trust was legitimate, why did you sell your shares in January 2010?” I sold all the shares in my portfolio that year because I did not want any issues about conflicts of interest—I did not want anyone to be able to suggest that, as Prime Minister, I had any other agendas or vested interests. Selling all my shares was the simplest and clearest way that I could achieve that.

There are strict rules in this House for the registration of shareholdings. I have followed them in full. The Labour party has said it will refer me to the Parliamentary Commissioner for Standards. I have already given her the relevant information, and if there is more she believes I should say, I am very happy to say it.

I accept all of the criticisms for not responding more quickly to these issues last week, but, as I have said, I was angry about the way my father’s memory was being traduced. I know he was a hard-working man and a wonderful dad, and I am proud of everything he did to build a business and provide for his family.

On the issue of inheritance tax, there is an established system in this country. I believe that, far from people being embarrassed about passing things to their children—for example, wanting to keep a family home within the family—it is a natural human instinct to do so, and is something that should be encouraged. As for parents passing money to their children while they are still alive, that is something that the tax rules fully recognise. Many parents want to help their children when they buy their first car, get a deposit for their first home or face the costs of starting a family. It is entirely natural that parents should want to do those things, and, again, something that we should not just defend but proudly support.

Let me turn to the Panama papers and the actions that this Government are taking to deal with tax evasion, aggressive tax avoidance and international corruption more broadly. When we came into office, there were foreigners not paying capital gains tax when selling their UK homes, private equity managers paying a lower rate of tax than the people who cleaned their offices, and rich homebuyers getting away without paying stamp duty because houses were enveloped within companies. We have put an end to all those things. In the last Parliament alone we made an unprecedented 40 tax changes to close loopholes, raising £12 billion. In this Parliament we will legislate for more than 25 further measures, forecast to raise £16 billion by 2021. No British Government, Labour or Conservative, have ever taken so much robust action in this area.

Through my chairmanship of the G8 at the summit at Lough Erne in 2013, I put tax, trade and transparency on the global agenda, and sought agreement on a global standard for the automatic exchange of information over who pays taxes and where. Many said it would never happen, but today 129 jurisdictions have committed to implementing the international standard for exchange of tax information on request, and over 95 jurisdictions have committed to implementing the new global common reporting standard on tax transparency. Under that new standard, we will receive information on accounts of UK taxpayers in all those jurisdictions. In June this year, Britain will become the first country in the G20 to have a public register of beneficial ownership, so everyone can see who really owns and controls each company. This Government are also consulting on requiring foreign companies that own property or bid on public contracts to provide their beneficial ownership information, and we are happy to offer technical support and assistance to any of the devolved Administrations also considering such measures.

As the revelations in the Panama papers have made clear, we need to go even further. So we are taking three additional measures, to make it harder for people to hide the proceeds of corruption offshore, to make sure that those who smooth the way can no longer get away with it and to investigate wrongdoing.

First, let me deal with our Crown dependencies and overseas territories that function as financial centres. They have already agreed to exchange taxpayer financial account information automatically, and will begin doing so from this September. That never happened before I became Prime Minister and got them round the Cabinet table and said, “This must happen.” We need to go further, however, and today I can tell the House that we have now agreed that they will provide UK law enforcement and tax agencies with full access to information on the beneficial ownership of companies. We have finalised arrangements with all of them except for Anguilla and Guernsey, both of which we believe will follow in the coming days and months. For the first time, UK police and law enforcement agencies will be able to see exactly who really owns and controls every company incorporated in those territories: the Cayman Islands, British Virgin Islands, Bermuda, the Isle of Man, Jersey—the lot. That is the result of a sustained campaign, building on the progress that we made at the G8, and I welcome the commitment of the Governments of those territories to work with us and implement those arrangements.

The House should note that that will place our overseas territories and Crown dependencies well ahead of many other similar jurisdictions, and also—crucially—ahead of many of our major international partners, including some states in the United States of America. Next month we will seek to go further still, using our anti-corruption summit to encourage consensus not just on exchanging information, but on publishing such information and putting it into the public domain, as we are doing in the UK. We want everyone with a stake in fighting corruption—from law enforcement, to civil society and the media—to be able to use those data and help us to root out and deter wrongdoing.

Next, we will take another major step forward in dealing with those who facilitate corruption. Under current legislation it is difficult to prosecute a company that assists with tax evasion, but we are going to change that. We will legislate this year for a new criminal offence to apply to corporations that fail to prevent their representatives from criminally facilitating tax evasion. Finally, we are providing initial new funding of up to £10 million for a new cross-agency taskforce to swiftly analyse all the information that has been made available from Panama, and to take rapid action. That taskforce will include analysts, compliance specialists, and investigators from across HMRC, the National Crime Agency, the Serious Fraud Office, and the Financial Conduct Authority.

This Government will continue to lead the international agenda to crack down on tax evasion and aggressive tax avoidance. That battle is important and must be combined with the approach that we take in this country—low tax rates, but taxes that people and businesses pay. That is how we will tackle these issues and build a strong economy that can fund the public services we need. That strong economy, creating jobs and rewarding aspiration is the true focus of this Government—something that would never be safe under the Labour party—and I commend this statement to the House.

15:04

[Jeremy Corbyn (Islington North) (Lab)]

I thank the Prime Minister for advance sight of his statement—it is absolutely a master class in the art of distraction. I am sure that he will join me in welcoming the outstanding journalism that went into exposing the scandal of destructive global tax avoidance that was revealed by the Panama papers. Those papers have driven home what many people have increasingly felt: that there is now one rule for the super-rich, and another for the rest. I am honestly not sure that the Prime Minister fully appreciates the anger that is out there over this injustice. How can it be right that street cleaners, teaching assistants and nurses work and pay their taxes, yet some at the top think that the rules simply do not apply to them?

What has been revealed in the past week goes far beyond what the Prime Minister has called his “private matters”, and today he needs to answer six questions to the House, and—perhaps equally importantly—to the public as a whole. First, why did he choose not to declare his offshore tax haven investment in the House of Commons Register of Members’ Financial Interests, given that there is a requirement to

“provide information of any pecuniary interest”

that might reasonably be thought to influence a Member’s actions? The Prime Minister said that he thinks he mishandled the events of the past week. Does he now realise how he mishandled his own non-declaration six years ago, when he decided not to register an offshore tax haven investment from which he has personally benefited?

Secondly, can he clarify to the House and to the public that when he sold his stake in Blairmore Holdings in 2010, he also disposed of another offshore investment at that time? In particular, were any of the £72,000 of shares that he sold held in offshore tax havens?

The “Ministerial Code” states that

“Ministers must ensure that no conflict arises, or could reasonably be perceived to arise, between their public duties and their private interests, financial or otherwise,”

and that all Ministers

“must provide…a full list…of all interests which might be thought to give rise to a conflict,”

including close family interests. So did the Prime Minister provide the permanent secretary with an account of his offshore interests and if not, did he not realise that he had a clear obligation to do so, when part of his personal wealth was tied up in offshore tax havens and he was now making policy decisions that had a direct bearing on their operation? For example, in 2013 the Prime Minister wrote to the President of the European Council opposing central public registers of beneficial ownership of offshore trusts. So, thirdly, does the Prime Minister now accept that transparency of beneficial ownership must be extended to offshore trusts?

The Panama-based law firm Mossack Fonseca registered more than 100,000 secret firms in the British Virgin Islands. It is a scandal that UK overseas territories registered over half the shell companies set up by Mossack Fonseca. The truth is that the UK is at the heart of the global tax avoidance industry. It is a national scandal and it has got to end. Last year, this Government opposed the EU Tax Commissioner Pierre Moscovici’s blacklist of 30 un-co-operative tax havens. That blacklist included the Cayman Islands and the British Virgin Islands. So my fourth question is: will the Prime Minister now stop blocking European Commission plans for a blacklist of tax havens? It turns out that Lord Blencathra, the former Conservative Home Office Minister, was absolutely right when he wrote to the Cayman Islands Government in 2014 to reassure them that our Prime Minister was making a “purely political gesture” about cracking down on tax havens at the G8. It was designed, he said, to be

“a false initiative which will divert other member states from pursuing their agenda.”

Last June, Treasury officials lobbied Brussels not to take action against Bermuda’s tax secrecy. According to the European Union’s transparency register, the tech giant Google has no fewer than 10 employees lobbying Brussels. Bermuda is the tax haven favoured by Google to channel billions in profits. Conservative MEPs have been instructed on six occasions since the beginning of last year to vote against action to clamp down on aggressive tax avoidance. This is a party incapable of taking serious, internationally co-ordinated action to tackle tax dodging. Across the country and on the Opposition side of the House, there is a thirst for decisive action against global tax avoidance scams that suck revenues out of our public services, while ordinary taxpayers have to foot the bill. It undermines public trust in business, politics and public life. It can and must be brought to an end.

We welcome the Prime Minister’s announcement today about new measures to make companies liable for employees who facilitate tax cheating, but it is also too little, too late. In fact, it was announced by the former Chief Secretary to the Treasury a year ago. People want a Government who act on behalf of those who pay their taxes, not those who dodge their taxes in offshore tax havens. Yesterday, my hon Friend the shadow Chancellor set out a clear plan for transparency. He is a Member of this House who has spent all his time in Parliament exposing tax havens and tax avoidance. His paper included a call for an immediate public inquiry into the Panama papers revelations to establish the harm done to our tax revenues and to bring forward serious proposals for reform.

I say gently to the Prime Minister that a tax taskforce reporting to the Chancellor and the Home Secretary, both members of a party funded by donors implicated in the Panama leaks, will be neither independent nor credible. So will the Prime Minister back a credible and independent public inquiry into the abuses revealed by the leaks?

Our task transparency plan called for a specialised tax enforcement unit to be properly resourced, which is key. Since 2010, there have been only 11 prosecutions over offshore tax evasion—a situation that the Public Accounts Committee described as “woefully inadequate”. Having slashed resources and cut 14,000 staff since 2010, will the Prime Minister today guarantee that resourcing to Her Majesty’s Revenue and Customs will increase in this Parliament?

We support real action to end the abuses that allow the wealthy to dodge the rules that the rest of us have to follow. We need to ensure that trust and fairness are restored to our tax system and our politics and to end the sense and the reality that there is one rule for the richest and another for everybody else. The Prime Minister has attacked tax dodging as immoral, but he clearly failed to give a full account of his own involvement in offshore tax havens until this week and to take essential action to clean up the system, while at the same time blocking wider efforts to do so. There are clear steps that can be taken to bring tax havens and tax dodging under control—[Interruption.]

[Mr Speaker]

Order. There is a Minister standing at the Bar shrieking in an absurd manner. He must calm himself and either take a medicament if required or leave the Chamber.

[Jeremy Corbyn]

Thank you, Mr Speaker.

I suggest that the Prime Minister’s record, particularly over the past week, shows that the public no longer have the trust in him to deal with these matters. Do he and Conservative Members realise why people are so angry? We have gone through six years—yes, six years—of crushing austerity, with families lining up at food banks to feed their children, disabled people losing their benefits, elderly care cut and slashed and living standards going down. Much of that could have been avoided if our country had not been ripped off by the super-rich refusing to pay their taxes.

Let me say this to the Prime Minister: ordinary people in the country will simply not stand for this any more: they want real justice; they want the wealthy to pay their share of tax just as they have to pay when they work hard all the time.

[The Prime Minister]

Let me first join the right hon. Gentleman in congratulating the journalists who have broken this story about this huge cache of information from the Panama papers. What matters now is that that information is shared with the tax authorities, including here in the United Kingdom, so that action can be taken.

The right hon. Gentleman accused me of a distraction, but I have to say that the biggest distraction today has been waiting for the right hon. Gentleman’s tax returns, which we finally got published at about 3.35 pm, after this statement had begun. How incredibly convenient that no one can scrutinise them.

Let me answer each and every one of the questions that the right hon. Gentleman asked. First, he asked whether we would resource HMRC with the right amount of money. We have put £1.8 billion into various initiatives since 2010 to make sure that it has the resources to find this money. That is the first point. Secondly, the right hon. Gentleman asked me about my entry in the Register of Members’ Financial Interests. I have complied with every aspect of that Register, and even before the Labour party’s complaint arrived at the commissioner’s door, I provided her with all the necessary information.

Thirdly, the right hon. Gentleman asked when I made the sale of these shares. I sold the Blairmore shares in January, and I sold everything else in June. Next, he asked me whether I shared a list of these shares with the Cabinet Secretary. It was quite difficult because I had sold them, but I sat down with the Cabinet Secretary and went through all my interests, all my connections, all my friendships and all my family, as all Ministers are advised to do. This was a proper conversation with the Cabinet Secretary that I conducted in that way.

Fourthly, the right hon. Gentleman asked why we were not extending the arrangements relating to the beneficial ownership of companies to the beneficial ownership of trusts. The reason is that we want international action to take place, and the very clear advice that I received was that if we included trusts in our initiative, we would not get any international action. This Government have done more than any other to lead the world and make co-operation happen.

The right hon. Gentleman asked about the tax taskforce. HMRC, the National Crime Agency and others will investigate all the information coming out of Panama, and they have operational independence. If they find people to prosecute, they prosecute them; if they find information of illegality, they act on it. They are independent operationally, and that is exactly what they will do. They will report to the Home Secretary and the Chancellor because we want to make sure that radical action is taken, but they have total operational independence. If the right hon. Gentleman is questioning the professionalism of the Inland Revenue, the National Crime Agency and the Serious Fraud Office, he should not be doing so.

Let me now answer the right hon. Gentleman’s last question, which concerned the action that we have taken in respect of the overseas territories and the Crown dependencies. No Government have done more to encourage them to take part in exchanging information, reporting tax information, and making sure that they give us the information on beneficial ownership. The leader of the Labour party has suggested that we should force them. How is he going to force them? What is he going to do? Have we finally found a potential Prime Minister who wants to give the Falkland Islands back to Argentina and invade Gibraltar? Is that what it has come to?

What we have seen are the Labour party’s true colours when it comes to inheritance tax. If you want to pass your home to your children, Labour will tax it. If you want to help your children, Labour will tax that. We have seen Labour’s true colours. It is the enemy of aspiration and the enemy of families who want to support each other, and that is the real lesson of today.

[Several hon. Members rose—]

[Mr Speaker]

I was going to call the Chair of the Treasury Committee, but he is toddling out of the Chamber.

[Mr Andrew Tyrie (Chichester) (Con)]

Well, if you would like to call me, Mr Speaker—

[Mr Speaker]

Let us hear from Mr Tyrie. Get in there, man.

[Mr Tyrie]

Thank you very much, Mr Speaker. [Interruption.]

[Mr Speaker]

Order. I am sure that it will be worth waiting for.

[Mr Tyrie]

It is very good of you to give me the floor, Mr Speaker.

I do not think that the Prime Minister has done anything wrong, except, possibly, to comment on the Jimmy Carr case. Tax evasion is illegal and should be very vigorously pursued, if necessary with criminal prosecution and imprisonment. Tax avoidance is not illegal. If the Government or Parliament do not like it, there is no point in moralising. Does the Prime Minister agree that to deal with tax avoidance we need reform to close the loopholes, and vigorous tax simplification to ensure that there are fewer of them?

[The Prime Minister]

I am very glad that my right hon. Friend was detained before leaving the Chamber. I think that he is absolutely right. Tax evasion is illegal, and tax avoidance, if the Government disapprove of it, should be legislated against. That is the approach that we have taken. However, as I have said before and am happy to say again, there are some practices of very aggressive tax avoidance that I think do merit proper questions and then legislative action. To be fair to Jimmy Carr, as soon as it was pointed out that he was in a scheme to reduce his income artificially, he immediately changed his arrangements. He made that very clear, and I pay tribute to him for doing it.

[Angus Robertson (Moray) (SNP)]

Let me begin by welcoming the Prime Minister’s statement and the new measures that he has announced to deal with tax evasion and aggressive tax avoidance. I also welcome the publication of his tax information, and, indeed, his apology for the way in which he has handled it.

It is estimated that between $21 trillion and $32 trillion of private financial wealth is located, untaxed or lightly taxed, in tax havens around the world. Illicit cross-border financial flows are estimated at more than $1 trillion per year, which is 10 times more than the global foreign aid budgets combined. The Panama papers leak is so large that if one printed the files, the final document would be 650 million pages long. It is right that a special taskforce has been set up to go through the leaked information, and the Prime Minister was right to say that charges will hopefully follow if criminality can be proven.

The public are indignant here and around the world. People are rightly angered by the rules for normal taxpayers being different from those for a small ultra-rich elite, but we must ask ourselves whether the scale of the problem has been taken seriously, because it has quite patently not been thus far, domestically or internationally. The UK bears a particular responsibility given that the UK and its overseas territories and dependencies collectively sit at the top of the Tax Justice Network’s financial secrecy index.

In Scotland, we are confronted by the reality of a small number of landowners owning huge swathes of the country, many through tax havens. From Perthshire to Jura and across Scotland, land is owned through non-transparent firms based in tax havens such as Panama and the British Virgin Islands.

I want to ask the Prime Minister the following specific questions. Will he please revisit his decision not to co-operate fully with European Union partners on overseas trusts? To whom will the welcome register of beneficial owners across all British Crown dependencies and overseas territories be available and when? Will it be publicly available? If not, why not? Will the Prime Minister prioritise bilateral tax treaties with Panama and other tax havens as part of global efforts towards better co-ordination against tax avoidance, and will he regularly update this House on progress? Lastly, given that the UK Cabinet agrees Government policy on tax rules, potential loopholes and arrangements with tax havens, will he ensure that all his Cabinet colleagues confirm whether they have ever benefited through offshore financial dealings?

[The Prime Minister]

First of all, let me agree with the right hon. Gentleman that there is no doubt that some bad things are happening in some of these jurisdictions and countries in terms of the hiding of assets and wealth and the avoidance of tax. That is why we want our authorities to go through everything that they can to recover that money. However, just because those bad things are happening, we should not condemn the unit trusts that many investors, such as, as I have said, local government pension funds, trade union pension funds and—who knows—even the pension fund of this House, might well use as a totally legitimate way of investing and then paying tax. I want to make that point.

The right hon. Gentleman also said that we need as many criminal charges as possible. I of course agree with that, but we should not do down the civil action and civil penalties that Revenue and Customs can use. It has 1,100 cases going through and can charge up to 300% of the money.

On whether we have taken this agenda far enough, I would say that this is the first country in the G8 or the G20 to make tax and transparency the No. 1 issue at a G8 or a G20 summit. No one had done it before. We have now done it and it is permanently on the agenda and we see permanent improvements.

I do not think that the right hon. Gentleman is being fair on the Crown dependencies and the overseas territories. For years, there was a reputational and potentially real problem. They have done a huge amount to address that. They are now better placed than other similar jurisdictions. As I said, there are states in the United States of America that have less disclosure and transparency. Let us not be unfair on the Crown dependencies and overseas territories, which we—certainly on this side of the House—are proud to have as part of our family of nations.

As for Scottish trusts and transparency, we are happy to work with and help the devolved Administrations in every way we can. We are also happy to work with and are working with European partners on trusts. My point is that we would not have made any progress on beneficial ownership if we had included trusts in that debate in the G8, but we did make progress for the reason that we gave.

The right hon. Gentleman asked to whom the information about beneficial ownership in the Crown dependencies and overseas territories will be available. It will initially be available to law enforcement agencies, including, crucially, our own. These places are not producing public registers yet. I want them to, but let us be frank: only about three countries in the world, including Britain now, have these public ownership registers. If we had tried to push that on to the Crown dependencies straightaway, we would not have got nearly as far as we have got today. On tax treaties, I am keen that we sign as many as possible. On Cabinet Ministers, I think that the current rules for registering Members’ interests are right, but, as I have said, in the case of Prime Ministers and Chancellors we are going further.

[John Redwood (Wokingham) (Con)]

According to the official Office for Budget Responsibility forecasts, we are likely to lose £7.3 billion of tax revenue to multinational companies over the ensuing five years because they will sue us in court and get the European Court of Justice to overturn the taxes we wish to impose, and there is another £35 billion at risk. What can we do here to make sure those companies pay their fair amounts, which this Parliament wants but the ECJ does not?

[The Prime Minister]

We took a whole series of actions in the Budget, and of course we have the diverted profits tax, which is a tremendous weapon for making sure these companies pay their tax in the jurisdictions where they are rightly earning the money. This tool of being able to exchange tax information and having a common reporting standard, which is what we set in train in 2013, will make the biggest difference.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

One of the main benefits of the journalism that uncovered the Panama papers was that it shone sunlight on areas where some people did not want it to go. The Prime Minister makes great play of saying that his Government have done a great deal to improve corporate tax transparency, but this is nowhere near enough. When is he going to step up and make sure that corporates publish their tax information so that everybody—the public—can see where tax is being paid?

[The Prime Minister]

I am not saying that we have a perfect record, but this Government have done more than any previous Government to make this happen. I will answer the hon. Lady very directly: of course our system is based on full disclosure by companies to the Revenue but with a basic deal of taxpayer confidentiality between companies and the Revenue. That is the way our system and most other systems work. That is why the common reporting standards and the exchange of information between tax jurisdictions is so important, to make sure that these companies are telling the truth to us and to other jurisdictions. Only when that happens will we be able to recover the money.

[Sir Eric Pickles (Brentwood and Ongar) (Con)]

The beneficial ownership register that comes into place in just over six weeks’ time, plus the announcement the Prime Minister has made on Crown dependencies and the new criminal act, will do much to deal with tax evasion. If the House will forgive me, let me say that it will do far more to ensure that the proceeds of crime and of terrorism cannot be laundered through this jurisdiction, which is to be welcomed. I think I should do a little ticking off here, because I know, personally, that we would not have got the agreement with the Crown dependencies without his personal intervention and without his being very tough, and he should be congratulated on that. Just fancy, it was actually delivered without a single shot being fired or the Leader of the Opposition putting boots on the ground!

[The Prime Minister]

What my right hon. Friend will remember from his time in government—he is doing a brilliant job as my anti-corruption lead—was that we got the Crown dependencies and the overseas territories around the table in the Cabinet room, on the same day as the trooping of the Colour, I believe, and said, “We have to make these changes. You don’t have to go all the way to publishing registers, although that is what we would like, but you have got to make this information available.” As he says, that will mean not only more tax paid, but greater ability to uncover corruption.

[Dame Margaret Hodge (Barking) (Lab)]

May I ask the Prime Minister some questions about his welcome announcement on Crown dependencies? First, have the British Virgin Islands, Bermuda and the Cayman Islands agreed to compile a register of beneficial ownership? Secondly, will HMRC have access to that register? Thirdly, if he does not succeed in getting those territories to publicly publish those registers, will he use his powers, through the Privy Council, to order the tax havens to publish them?

[The Prime Minister]

Basically, we have been asking the Crown dependencies to do three things: one is to exchange tax information, the second is to have a common reporting standard, and the third is to establish registers of beneficial ownership. They have now done all three, so the answer to the right hon. Lady’s first question—have they agreed?—is yes. We still need agreement from Guernsey and from Anguilla, but we hope that that will come in the coming days. The answer to her second question—will our Revenue have access to their register?—is yes, it will. The answer to her third question—will we force them to have public registers?—is we think they should; we think that that is the right way to go. But let us be clear: very few countries in the world—I think Spain, Britain and possibly one or two others—have public registers of beneficial ownership. Our Crown dependencies and overseas territories will now be far in advance of most other countries, so instead of attacking them, we ought to praise them and thank them for what they have done.

[Sir Alan Duncan (Rutland and Melton) (Con)]

Should not the Prime Minister’s critics just snap out of their synthetic indignation and admit that their real point is that they hate anyone who has even a hint of wealth in their life? May I support the Prime Minister in fending off those who are attacking him, thinking particularly of this place, because if he does not, we risk seeing a House of Commons that is stuffed full of low achievers who hate enterprise and hate people who look after their own family and who know absolutely nothing about the outside world?

[The Prime Minister]

I am grateful for my right hon. Friend’s support. We have a system for Members’ interests which was put in place at the end of 13 years of Labour Government. I think we should maintain that system. I do not want us to discourage people who have had a successful career in business or anything else from coming into this House and making a contribution. That is why I have said that for Prime Ministers and Chancellors, shadow Prime Ministers and shadow Chancellors, it is a different set of arrangements.

[Mr Dennis Skinner (Bolsover) (Lab)]

Does the Prime Minister recall that in the time after he became Prime Minister in the coalition, when he was dividing the nation between strivers and scroungers, I asked him a very important question about the windfall he received when he wrote off the mortgage of the premises in Notting Hill and did not write of the mortgage of the premises the taxpayers were helping to pay for in Oxford? I did not receive a proper answer then. Maybe “Dodgy Dave” will answer it now—[Interruption]—and by the way—[Hon. Members: “Withdraw!”]

[Mr Speaker]

Order. I must ask the hon. Gentleman—[Interruption.] I do not require any assistance from some junior Minister—an absurd proposition! I invite the hon. Gentleman to withdraw the adjective he used a moment ago. He is perfectly capable of asking his question without using that word. It is up to him, but if he does not wish to withdraw it, I cannot reasonably ask the Prime Minister to answer the question. All he has to do is withdraw that word and think of another.

[Mr Skinner]

Which word?

[Mr Speaker]

I think he knows—the word beginning with D and ending in Y that he used inappropriately. Withdraw—it is very simple.

[Mr Skinner]

I know what you are talking about, Mr Speaker. This man has done more to divide this nation than anybody else, and he has looked after his own pocket. I still refer to him as “Dodgy Dave”—[Interruption.] Do what you like! [Interruption.]

[Mr Speaker]

Order. I am sorry, I must ask the hon. Gentleman to withdraw the word—

[Mr Skinner]

Not a chance!

[Mr Speaker]

Very well.

The Speaker ordered Mr Skinner, Member for Bolsover, to withdraw immediately from the House during the remainder of the day’s sitting (Standing Order No. 43), and the Member withdrew accordingly.

[Mr Speaker]

Needless to say, no reply is required to that question.

[Sir Edward Leigh (Gainsborough) (Con)]

Well, it is a shocking scandal: we now know that the Prime Minister divested himself of all his shareholdings before he became Prime Minister and has paid his taxes in full.

[Alok Sharma (Reading West) (Con)]

Exactly—shocking.

[Sir Edward Leigh]

Shocking. However, there is a wider question that I would like to put to the Prime Minister, and it follows the question from the Chair of the Treasury Committee. As long as we have the longest tax code in the world after India, will not hard-working families always use legitimate ways to try to minimise their tax bill? Some of us have been arguing for years for a flatter tax system to merge rates. Let me give the Prime Minister a suggestion. The best way to stop people avoiding the payment of inheritance tax—that iniquitous tax—it is to abide by our manifesto commitment and abolish it.

[The Prime Minister]

I am grateful to my hon. Friend for his support. We met our manifesto commitment on inheritance tax, which was to exempt the family home. My hon. Friend is right that we need to simplify, but there are things moving in different directions. We want to simplify taxes, but when we see abuses occurring, we sometimes need to write new tax code to make sure that those abuses cannot be used, which can lead to complications. However, I am well aware of his general point, and I think he is right.

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

Will the Prime Minister now answer a question that both he and the Chancellor refused to answer a few years ago, and confirm that they both benefited personally from their cut to the top rate of tax? On the day that universal credit cuts mean that part-timers could be over £1,000 a year worse off, does he think that the several thousand pounds a year from which they both benefited is fair?

[The Prime Minister]

The information is contained in my tax return, which is in the House of Commons Library, and everyone can go and look at it. The key point is not only that since we reduced the top rate of tax from 50p to 45p we have not only raised more revenue, which we can spend on the public services that the right hon. Lady supports, but that the richest 1% in the country pay a higher overall percentage of income tax at 27%.

[Sir Nicholas Soames (Mid Sussex) (Con)]

Will my right hon. Friend clarify again the fact that tens of millions of our fellow citizens benefit from tax-exempt investments, as most pension schemes do not pay tax on their investment income, which directly benefits hard-working people saving for, and receiving, pensions?

[The Prime Minister]

My right hon. Friend is absolutely right about that. I would reinforce the point that many millions of our fellow citizens own shares, and many people choose to make their investments through unit trusts, which are a relatively safe form of investment because they share the risk. Many unit trusts are listed in other countries—many of them now in Dublin—and they are set up in that way not to avoid tax but to make sure that the revenues are returned to the unit trust holder who then pays tax, which is the key point.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Does the Prime Minister accept that the revelations last week that he intervened personally in 2013 to water down the effects of EU transparency rules on trusts damages his efforts to portray himself as some kind of champion of fair tax? Will he now commit to fully supporting EU transparency rules, including country-by-country reporting by corporations showing exactly how much profit they make and where?

[The Prime Minister]

Let me be absolutely clear with the hon. Lady. There were no EU proposals—the whole thing was based on a British proposal or initiative to encourage all countries to have registers of beneficial ownership. The EU then joined in and suggested extending it to trusts, and we pointed out that if that happened no one would take it up because trusts, as she knows, are set up for all sorts of reasons: the care of a disabled child, support for a local school—any number of things that are perfectly reasonable under English common law. The advice I had was that if we went for beneficial ownership of companies and trusts, the move that we have made, which is genuinely helping to change the world in that regard, would have completely failed.

[Mr Dominic Grieve (Beaconsfield) (Con)]

Will my right hon. Friend encourage the Leader of the Opposition to write to him to set out in detail the allegations he makes against him, either of breaking the law of propriety or the rules of this House? Having listened carefully to the Leader of the Opposition, I fail entirely to comprehend what he is going on about.

On a separate issue, I am glad to see my right hon. Friend stand up for the overseas territories. He will know that when I was Attorney General, I had quite a lot of dealings with the Attorneys General of the overseas territories in encouraging them to change their transparency rules. In fact, they showed themselves to be properly responsive to those representations. He may also agree with me that the overseas territories are entitled to provide financial services and not to be damned for trying to ensure the wellbeing of their own citizens.

[The Prime Minister]

My right hon. and learned Friend is absolutely right. What we have tried to do with the overseas territories is to say that there is a perfectly legitimate business of providing financial service, but they, like us, should be doing it on the basis of high standards, not low standards. I think that is an argument that they now accept and are carrying out, and we should thank them for it. As for the first half of my right hon. and learned Friend’s question, I listened to the right hon. Gentleman, and I am not sure I want to read all about it again in a letter because I do not think there is much to answer.

[Gavin Robinson (Belfast East) (DUP)]

One could be forgiven for believing that the only virtue was transparency, but privacy and equality are both important virtues that we value in this country. Does the Prime Minister agree that given the many thousands of opinion formers, policy formers and decision makers in this country paid publicly through private service companies, if we are to set any principle, it should be that with public finance comes public transparency—who is paid what by us, the taxpayers? If we can establish that principle first, we can have a wider discussion about transparency.

[The Prime Minister]

I agree with the first half of the hon. Gentleman’s question: there is a value in privacy. That is why I think we need a balance between what is disclosed and what is not disclosed. I have tried to set out the way forward today. On the hon. Gentleman’s point about private service companies, the Chancellor had something to say about that in the Budget. There is a case, particularly where public money is involved, for making sure that people declare these arrangements in the proper way. The changes that the Chancellor has spoken about will make sure that whether someone chooses to have a private service company or chooses to be self-employed, the amount of tax that they pay will be much more similar.

[Sir Edward Garnier (Harborough) (Con)]

I welcome the Prime Minister’s announcement that there will be a new criminal offence applying to corporations that fail to prevent their representatives from criminally facilitating tax evasion. That reflects the failure to prevent bribery offence which already exists under the Bribery Act 2010. There are nearly 40 other economic crimes listed in the Crime and Courts Act 2013, which are susceptible to deferred prosecution agreements. Will my right hon. Friend have discussions with the Ministry of Justice and the Law Officers to make sure that we can add not only the tax offence that he refers to but those other economic crimes, so that they can be dealt with under the “failure to prevent” system?

[The Prime Minister]

My right hon. and learned Friend has much expertise in this area. I think the point he is making is that as we set out these economic crimes—the Home Secretary has led the charge to ensure that we address this issue properly—we make sure that they are properly publicised, properly understood and then properly prosecuted. We need to make sure that the National Crime Agency and the Serious Fraud Office work together in the way that I know he was keen to see when he was doing that job.

[Rachel Reeves (Leeds West) (Lab)]

The Prime Minister says that he is leading on international efforts to crack down on tax evasion, so can he explain why he wrote to the then European Council President Herman Van Rompuy in 2013 and asked him to water down the impact of EU transparency rules by treating trusts differently from companies in anti-money laundering rules, despite warnings that such a move could create loopholes for tax dodgers?

[The Prime Minister]

With great respect to the hon. Lady, I have answered that question several times, most recently to the leader of the Green party. We were keen to get progress on the beneficial ownership of companies, and if we had accepted proposals to include trusts, that would have got completely bogged down and would not have made nearly the progress that we have made. We have got every G7 country and most G20 countries signing up to having action plans on beneficial ownership of companies. If we did that with trusts, my advice was that the whole thing would have slowed down to a trickle and we would not have got all the international co-operation and all the extra money that we are going to raise.

[Philip Davies (Shipley) (Con)]

As far as I am concerned, it is perfectly clear that neither the Prime Minister nor his father has done anything wrong at all. In his statement my right hon. Friend said that we must defend the right of every British citizen to make money lawfully. That is something that I agree with wholeheartedly, but it is slightly at variance with the description of people who have done just that as morally repugnant. Will the Prime Minister give us a promise that from now on he will uphold the rule of law and the view that the rule of law is what is important in this country, and not question the morality of people who act lawfully with regard to their tax arrangements?

[The Prime Minister]

I am grateful to my hon. Friend for his support, and I agree with what he says about the importance of enabling people to make money within the law; he is completely right that the rule of law is what matters overall. The simple point that I have often made, and which I will continue to make, is that of course it is tax evasion that is illegal, not tax avoidance. There are many ways that people avoid taxation, not least by putting money into a pension or an ISA, or by other perfectly legitimate ways of planning for their future, that of their family and all the rest of it. However, we have sometimes seen very aggressive measures—I mentioned some of them in my statement—such as putting properties in company envelopes in order to avoid paying stamp duty, where it is sometimes difficult for the Government to catch up quickly enough with the huge changes taking place. I think that a bit of leeway on that is necessary, but my hon. Friend is right: it is the rule of law that matters.

[Mr David Winnick (Walsall North) (Lab)]

Does the Prime Minister not realise that there is a world of difference between the vast majority of our constituents who pay their tax in the usual way, it being deducted at source or by other means, and the very rich tax spivs who use tax havens for obvious reasons? That is why the accusation is made about them and the people I have referred to.

[The Prime Minister]

Of course there is bad practice, not least in some of these jurisdictions, and that needs to be dealt with. That is what tax transparency, the sharing of information, the registers of beneficial ownership and all the rest of it are about. The other thing to recognise that happened last week is that the £11,000 personal allowance came in, so people can now earn £11,000 before having to pay any income tax at all. That completed our work of taking 4 million of the lowest paid people in our country out of income tax altogether.

[Alok Sharma (Reading West) (Con)]

The Prime Minister has paid his taxes and behaved perfectly properly, and I commend him for standing up to those who have sought to besmirch his father’s reputation and memory. Will he remind us how much extra money has come into the Exchequer as a result of his Government’s closing the loopholes that were set up under 13 years of Labour government?

[The Prime Minister]

The point is that we raised an extra £12 billion in the last Parliament, and we want to raise another £16 billion in this Parliament, stretching out to 2021 the figures that I gave. Also, by having a lower rate of corporation tax, we have actually seen more corporation tax come in. Low tax rates, but tax rates that people pay—those are our watch words.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

We have heard that the rule of law is paramount. The Government control what is legal and illegal in tax law. Can the Prime Minister guarantee that the law will make offshore tax dodging in all its forms illegal?

[The Prime Minister]

Evading tax is already illegal, whether it is done in the UK or elsewhere. The point that I have been making is that we need to have this information sharing and the ability to look at information in these jurisdictions, in order to see whether people have been evading tax, and that is what we are now getting. But we should not use that to say that it is wrong for people, trade unions, companies or pension schemes to invest in unit trusts listed in other countries, because that is a perfectly normal way of investing.

[Jake Berry (Rossendale and Darwen) (Con)]

May I congratulate my right hon. Friend the Prime Minister on bringing transparency to the office of Prime Minister by publishing his own tax return? Does he have any thoughts on whether that should be extended to former Prime Ministers, many of whom still receive public money? Personally, I would be very interested to see a tax return of one Mr T. Blair.

[The Prime Minister]

I have no proposals to make in that regard. I am not claiming to have some perfect record, but on becoming Prime Minister I cut the Prime Minister’s pay by 5% and froze it for the Parliament, I rejected the Prime Minister’s tax allowance of £20,000 a year, and I reformed the Prime Minister’s pension so that it is now contributory for the first time. As Mr Speaker knows, the Speaker, the Lord Chancellor and the Prime Minister have all given up the great offices of state pension that used to give half their salary in perpetuity—[Interruption.] Opposition Front Benchers say that that was done by the Labour party, but it was not actually brought in until I became Prime Minister. I did it. All those steps have been taken, which I think was the right thing to do.

[Margaret Ferrier (Rutherglen and Hamilton West) (SNP)]

Will the Chancellor of the Exchequer be clarifying the tax situation of his family company, Osborne and Little, which he holds shares in, but which has paid no UK corporation tax in seven years?

[The Prime Minister]

The Chancellor’s family firm is exactly the sort of manufacturing small firm we want to encourage in our country. For many years, I gather, it has not been making a profit, but I am glad that the company is doing well and now paying a dividend—that is something we should welcome. Its tax matters are entirely a matter between the company and the Inland Revenue, and that is the way it should be.

[Wendy Morton (Aldridge-Brownhills) (Con)]

I join other Conservative Members in welcoming the Prime Minister’s statement this afternoon. When he meets world leaders in London this May for the first global anti-corruption summit, will he press them to agree actions to expose corruption, wherever it exists?

[The Prime Minister]

It is good that we are having this summit. As I am writing in a document that will be released before the summit, no country, no politician—no one—can claim that they have a perfect and unblemished record in this regard; all countries are battling against these problems, as we did in the House of Commons with the problems of expenses and all the rest of it. However, I want to encourage people, and the Prime Minister of Afghanistan and the President of Nigeria are contributing, and they are admitting that their countries are rife with corruption and it needs to be dealt with. The problem is that, if nobody actually stands up and talks about these issues and sets out the action plans for delivering on these issues, nothing will get done.

[Mr David Lammy (Tottenham) (Lab)]

At the last count, 36,364 properties in London were owned by offshore companies—that is one in 10 in one London borough and 7% in another London borough. We should know who owns those properties. Many believe that this is about dirty money from countries such as Russia and from the middle east. This is driving up costs, with a 50% increase since 2007. What is the Prime Minister going to do about dirty money propping up the London property market?

[The Prime Minister]

The first thing, which we have already done and which has had a huge impact, is to say that, if a company owns a property in a so-called envelope structure, so that we cannot get to the name of the person who owns that property, they have to pay an annual stamp duty charge of something like 15%. That has been a massive money raiser, providing money to spend on public services, and a huge disincentive for that sort of behaviour. However, I want to go further; as I said in my speech in Singapore, we need to have more information about who owns what in our country.

[Pauline Latham (Mid Derbyshire) (Con)]

May I thank the Prime Minister for his very clear statement? This afternoon, I received a furious email from Martin in my constituency, who said he watched the “Murnaghan” show on Sky News yesterday. He was shocked that the shadow Chancellor

“deliberately misled viewers...His ignorance, whether deliberate or not, should be exposed in Parliament. For a Shadow Chancellor to be so blatantly misleading is not acceptable. The Marxist Moron’s political motivations are obvious but not an excuse.”

He adds that the Prime Minister

“could not have paid inheritance tax even if he wished to as the tax is levied on the estate”—

[Mr Speaker]

Order. I am extremely grateful to the hon. Lady. As the Clerk has just pointed out to me, however, this is all very well, but it is nothing to do with the responsibility of the Prime Minister. [Interruption.] Order. Do not argue with the Chair—that is not a wise course of action. The Prime Minister is not responsible for what the shadow Chancellor has said. I say that to the hon. Lady kindly but with some authority in these matters, believe me.

[Alison McGovern (Wirral South) (Lab)]

No one in this House should have to feel that family members are being attacked unfairly, and, in that, the Prime Minister is absolutely correct. May I tell him, though, that it is not clear to me what he believes about holding shares in offshore trusts in tax havens? Does he think that that is perfectly okay, in which case, why would his holding them have been a conflict of interest, or does he think that tax havens are a problem that needs fixing, in which case, why did he have such shares in the first place?

[The Prime Minister]

That is a very good question. Let me answer it in full, because I think it is very important. Do I think it is okay to own shares in a unit trust that is registered in another country, whether it is in Dublin, Guernsey or elsewhere? Yes, I do. That is why trade unions, companies and pension funds hold such shares. Many people in our country hold unit trusts because—here is the key point—the unit trust does not exist to make money for itself; it makes money for the unit holders, and if the unit holders live in Britain they pay British tax, British income tax, British capital gains tax and all the rest of it. That is why these arrangements have been in place for many years and no Labour Government, Labour policy review or Conservative policy review has ever thought of getting rid of them. It is important that they are administered and run in the proper way. That is my answer to the hon. Lady’s first question.

The hon. Lady’s second question was why, if I thought there was nothing wrong with a holding like that, did I sell my shares because there might be a conflict of interest. I sold shares in every company that I owned, because I thought there were two options: you can either put things into a blind trust, as Ministers in Labour and Conservative Governments have done. There is nothing wrong with that—it is a very good way to go about it—but I thought it may be even simpler and more straightforward to just sell everything, because then I would not own any shares. So, if any of the companies in which I had previously had a shareholding had any dealings with the Government, there was no way that, even if somebody could look inside a blind trust, they could find any conflict of interest. That is why I sold the shares. I happen to think it was quite a sensible thing to do.

[Oliver Dowden (Hertsmere) (Con)]

Will the Prime Minister confirm that the only irregular thing about the summary of his tax return is the fact that he voluntarily and privately forsook the £20,000 prime ministerial tax-free allowance, which was enjoyed by many of his predecessors, including those from the Labour party? Instead, he rightly focused on increasing the personal allowance so that millions of low-income earners could avoid paying tax altogether. Will he pledge to continue that policy?

[The Prime Minister]

I am very glad to give my hon. Friend that reassurance. We have the target in our manifesto of a £12,500 personal tax allowance and we want to meet that. What I did as Prime Minister was the right thing, not least because, as it says in the information from my tax return, there is support for me and my wife from the Conservative party in terms of some of the costs and issues of travel and other things that you have to deal with as the leader of a party. I thought that was a better way of doing it—not taxpayers’ money, but party money, on which I pay a tax charge.

[John Mann (Bassetlaw) (Lab)]

Is it the right thing to do to claim expenses to live in a grace and favour apartment while at the same time making a big profit out of your own main home?

[The Prime Minister]

I am a little bit baffled by the hon. Gentleman, because he announced over the weekend that he was going to refer me to the Parliamentary Commissioner for Standards, so one of my office pitched up there this morning with all the information necessary, only to hear that the hon. Gentleman has not actually yet made a complaint. I hope he will find the time later to do what he said he was going to do.

I think the hon. Gentleman has misunderstood. I am very lucky to live in No. 10 Downing Street—actually, Nos. 11 and 12 Downing Street, to be precise. As a result, I receive a benefit in kind, which is calculated at, I think, some £7,000, and I pay a tax on that benefit in kind for living in the house. It is not a subsidy I am getting; it is a benefit, which I am very grateful for, and I give the taxman money in respect of it.

[Michael Fabricant (Lichfield) (Con)]

May I tell the Prime Minister that he should not be ashamed that he had the good fortune to be born into a well-off family, and that it is not a sin for his parents, quite naturally, to want their savings to be cascaded down through the generations? He has nothing to be ashamed about, but may I warn him that, no matter how much information he wants to divulge, nothing will satisfy some of those on the Labour Front Bench?

[The Prime Minister]

I am very grateful for what my hon. Friend says. I think there is a point at which you have to say that I have published the information that I think is relevant—I have gone back over the last six years —and that is the limit of what I am going to release. Some people say, “Well, what about your wife’s tax return and your mother’s financial affairs?” I really think that there comes a time when we should say that we have a register of Members’ interests. Prime Ministers and Chancellors and Opposition leaders and shadow Chancellors have done more than that, and we should rely on the register of Members’ interests to police the rest of our affairs.

[Wes Streeting (Ilford North) (Lab)]

Given that more than half of the companies implicated in the Panama leaks are registered in UK overseas territories and Crown dependencies, does the Prime Minister regret telling this House in 2013:

“I do not think it is fair any longer to refer to any of the overseas territories or Crown dependencies as tax havens”?—[Official Report, 9 September 2013; Vol. 567, c. 700.]

Could he try to rebuild some of the public trust he has lost in the last week by making sure that, particularly in terms of publishing information about beneficial ownership, Crown dependencies and overseas territories follow the UK’s example, and will he take concrete action by putting that at the centre of his own anti-corruption summit next month?

[The Prime Minister]

The reason why I made that statement in 2013 was that we had got the Crown dependencies and the overseas territories, for the first time, to share automatically tax information with the United Kingdom Government. That is something that did not happen under the last Labour Government. It is something that we achieved. It was a different approach. Now—the hon. Gentleman is right—we want to go further, and the announcement today set out that not only will they share that information and follow the common reporting standard, but they will give us access to their information about beneficial ownership.

Just so the hon. Gentleman knows how different things were under the last Government, the then Financial Secretary to the Treasury, in response to questions about the overseas territories, said this:

“The negotiation of tax information exchange agreements with other jurisdictions, including the UK, is essentially a matter for the Crown Dependencies themselves.”—[Official Report, 19 May 2009; Vol. 492, c. 1370W.]

He was saying, “Nothing to do with me, guv; it’s up to them.” That is the Government that we replaced. We took a different approach, and we have made a lot of progress.

[Richard Drax (South Dorset) (Con)]

Forgive my lack of voice. May I say that I totally understand the Prime Minister’s predicament and his instinct to protect his father? I would have done exactly the same. His father did nothing wrong whatsoever.

The Prime Minister mentioned the long and thoughtful debate that is to come. May I say most gently that, when public figures get into trouble, there should be no more knee-jerk reactions, and that a long and thoughtful debate should be had to avoid unnecessary consequences for everybody else?

[The Prime Minister]

I thank my hon. Friend for his support. He makes an important point, which is that we should try to make decisions about these things calmly and rationally after debate. I felt, after all the questions that I was being asked, that the right thing to do was to publish the information, but I could not have made it clearer today that I do not want to see that as some precedent that every Member of this House, or indeed every member of my Cabinet, has to follow. We should think very carefully. We have always had a system in this country based on full disclosure to the Revenue but taxpayer confidentiality. Some other countries have complete publication of all tax returns and all tax information. That has not been our way. We have had a different system, and I do not think that we should give it up lightly.

[Caroline Flint (Don Valley) (Lab)]

It saddened me that the right hon. Member for Rutland and Melton (Sir Alan Duncan) seemed to suggest that, if someone was not a millionaire, they were a low achiever. Speaking as a low achiever—[Laughter.] The biggest multinational company earns more in a single week than the incomes of all MPs combined. The Prime Minister has spoken before about transparency, and he did so again today. Many of us across the House, from all parties, want to make sure that the country-by-country information that multinationals will be obliged to provide to HMRC will be put in the public domain. Will he or a Minister meet me and other members of the Public Accounts Committee to discuss that proposal?

[The Prime Minister]

I have always thought of the right hon. Lady as a high achiever. She certainly put the boot into my predecessor more effectively than I ever did. I remember that very well.

[Chris Bryant (Rhondda) (Lab)]

Michael Howard?

[The Prime Minister]

No, not that one. The point about country-to-country reporting is that what we are trying to achieve, as I said in my opening statement, is a common reporting standard, so that companies report to tax authorities in the same way; and the sharing of that information, so that we can see whether company A is paying x amount of tax in one jurisdiction and y amount in the other, and if that is not right, we can do something about it. That, at the moment, is the most powerful way of achieving what we want to achieve. There are those who say that we need to go even further in public declarations of tax. That is a very interesting argument, but let us not make the best the enemy of the good. We have got a very solid way now of making sure that these companies pay tax properly, and I want to see that completed.

[Mr David Nuttall (Bury North) (Con)]

Does my right hon. Friend agree that any course of action designed to reduce tax that does not constitute tax evasion must, by definition, be legal, even if some may regard it as aggressive tax avoidance? It is up to this Parliament to legislate to make such courses of action illegal.

[The Prime Minister]

My hon. Friend is absolutely right. Where there is aggressive avoidance taking place that is clearly against the spirit of the law, Parliament should act. As I have said many times, that is what the Chancellor has done, and that is what HMRC advises us about. I think that sometimes there are occasions when the tax avoidance is so aggressive that it is right to warn those taking part in it that legislation will follow, and therefore they should not take part in the scheme in the first place. That often happens.

[Stuart Blair Donaldson (West Aberdeenshire and Kincardine) (SNP)]

The Prime Minister has described the tax arrangements being discussed today as standard practice and normal. Assuming we are still all in this together, will he issue guidance—perhaps in the form of a leaflet to every UK household—so ordinary taxpayers can find out how they, too, can benefit from offshore tax havens?

[The Prime Minister]

The point is that there are many people in our country—I think there are now over 12.5 million shareholders—who hold shares in things such as unit trusts. There is plenty of information about them, and they do not need any from me. The point is that, if you invest in one of those and you are a UK resident, you must pay UK income tax and UK capital gains tax, just as you would if you buy a share in any other organisation.

[Robert Jenrick (Newark) (Con)]

I would not recommend doing this, but, having read back through Hansard over the 13 years of the previous Labour Government, I could not find a single occasion on which the right hon. Member for Islington North (Jeremy Corbyn) raised any of these issues. The closest he came was when he described the Labour Government’s decision to use Orders in Council to take control of the Turks and Caicos Islands as “mediaeval” and “extremely undemocratic”, but he now advocates that policy for all territories. Is it not fortunate that after 2010 we had a Government who actually took up this agenda?

[The Prime Minister]

I am interested to see that the right hon. Gentleman has conducted a U-turn because recently he has been suggesting taking control of these territories. I can now see a use for the nuclear submarines as they head off towards the Isle of Man, and as the Corbyn invasion force begins to mass to take over this territory. It is much more sensible to get them to do the things they ought to be doing.

[Liz Kendall (Leicester West) (Lab)]

Why does the Prime Minister think so many companies are registered in Panama in the first place, not in London or New York?

[The Prime Minister]

The reason why a lot of unit trusts register in different countries—a number of them have been named; right now, many of them are registering in Dublin—is that they want to be able to market their services not simply to UK residents, who pay UK taxes, but to other people. That is why, if we look at the Inland Revenue and the way it arranges this, it actually wants to make sure that UK fund managers can be involved and pay their taxes in the UK, and we can build the investment industry that this country can rightly be proud of.

[Andrew Bridgen (North West Leicestershire) (Con)]

May I thank my right hon. Friend for his open and frank statement today? In the mind of any reasonable person, he has completely exonerated himself. Will he confirm that, under HMRC rules, all supporting documentation for a tax return should be retained for seven years? Since the Leader of the Opposition was late supplying his tax return, should he be fined?

[The Prime Minister]

There is obviously no fine for the fact that the right hon. Gentleman did not come to the House having already published it, although it was disappointing that we got it at 3.35 pm, when I was on my feet. Obviously, the matter of fines for late production of tax returns is a matter for HMRC.

[Paul Flynn (Newport West) (Lab)]

In 2013, the Prime Minister’s colleague Lord Blencathra was found guilty of an egregious breach of the Commons and Lords rules for misleading a Committee of inquiry in 2011 and for taking £10,000 a month as payment for lobbying for the Cayman Islands. He had no punishment from his party, and was allowed to get away with it, with a brief apology to the House of Lords. Will the Prime Minister tell us whether, if in future any parliamentarian in his party uses and prostitutes his privileged position in order to make a private gain, he will act and discipline them?

[The Prime Minister]

The point is that we now have rules in the House for the declaration of Members’ interests; we have a policeman, as it were, in terms of making sure that they are properly carried out; and we do have punishments, including expulsion, for misdeclarations and misbehaviour. I am not as familiar with the situation in the House of Lords, but I think it has been moving in the same direction and that is all to the good.

[Ben Howlett (Bath) (Con)]

While the conversations about Panama are no doubt interesting to Opposition Front Benchers, one reality check is that most of my constituents who are struggling to get on to the property ladder actually benefit from inheritance as a result of a lot of the tax changes that happened during the previous Parliament. Does my right hon. Friend agree that now is the time to reform inheritance tax further to help more people, mainly those of my age, to get on to the property ladder?

[The Prime Minister]

There is a role for making sure that people can pass on the family home exempt from inheritance tax. That is why we have set out steps during this Parliament to make sure that can happen, completing what was set out in our manifesto.

[Clive Efford (Eltham) (Lab)]

The public would be more inclined to take the Prime Minister at his word when he says that he wants to clamp down on tax avoidance had his Government not appointed Edward Troup as executive chair of Her Majesty’s Revenue and Customs in 2012. This is someone who said:

“Taxation is legalised extortion and is valid only to the extent of the law.”

Will the Prime Minister say what source of money he got to pay Mr Troup? Does someone with those views belong in HMRC?

[The Prime Minister]

Edward Troup is a dedicated public servant who does a very good job for HMRC. As reports in the papers this morning pointed out, he had a commercial career at Simmons and Simmons, one of the most respected City legal practices there is. Frankly, it is a good thing if we can attract people from private practice into HMRC to make sure that we collect all the money we should.

[Mark Spencer (Sherwood) (Con)]

Will the Prime Minister assure the House that any future changes to taxation will do nothing to diminish the aspiration of working families, so that those families who want to do the right thing—provide for their future, save for their retirement and pass something on to their children—can continue to do so?

[The Prime Minister]

My hon. Friend is absolutely right. Our reforms to inheritance tax and pensions are enabling people to take and spend more of their own money as they choose. People are also able to pass that money on to their children and to help with those key purchases such as the first home or the first car, helping young people with their families. Having all of that wealth cascading down the generations, and helping people to do that, is absolutely part of our goal.

[Tom Brake (Carshalton and Wallington) (LD)]

I welcome, of course, the Prime Minister’s announcement that people will be criminalised if they assist with tax evasion, particularly as that was announced by the then Chief Secretary to the Treasury, Liberal Democrat Danny Alexander. Will the Prime Minister revisit other Liberal Democrat proposals put forward in coalition to see whether they can also play a significant role in dealing with the really difficult issue of tax evasion?

[The Prime Minister]

It is certainly true that the coalition Government achieved a lot in this area. That agenda was led and driven by myself and the Second Lord of the Treasury, in particular at the G8 and the G20, but at the time we had the full support of our coalition partners.

[Helen Whately (Faversham and Mid Kent) (Con)]

I welcome my right hon. Friend’s statement, and I listened carefully to the Leader of the Opposition. Does the Prime Minister share my concern that the Leader of the Opposition seemed to forget—possibly he is unaware—that aspiration, determination and the prospect of eventual financial reward are ingredients of our strong economy, leading to jobs and incomes for many? Does my right hon. Friend agree that we should condemn the politics of envy, and will he stick to the politics of opportunity and aspiration?

[The Prime Minister]

My hon. Friend is absolutely right. We want an aspiration and enterprise society, in which we set low tax rates and encourage people to make the best of themselves, for their families. That will build not just a stronger economy but, in my view, a stronger society.

[Mike Gapes (Ilford South) (Lab/Co-op)]

The Prime Minister referred to his anti-corruption summit. Will he tell us which countries will be represented there? Will an invitation be extended to either President Putin or some of his corrupt cronies, and those who fund the RT propaganda channel, to explain the $2 billion held in Panama by that corrupt regime?

[Mr Speaker]

The hon. Gentleman has been restored to rude health. I welcomed him earlier, and I know that the Prime Minister will welcome him.

[The Prime Minister]

I am glad to see the hon. Gentleman back in his familiar place. It is fair to say that the guest list for the anti-corruption summit is still being worked on. The point is that we will ask people not on the basis that they run perfect countries or perfect Governments but on the basis of whether they will commit to public declarations on things like open beneficial ownership registration, sharing tax information, and making sure that when assets are looted we can confiscate them and restore them to the people they belong to. If countries want to sign up to that, we will be encouraging them to come and do just that, however imperfect their record may have been in the past.

[Mark Menzies (Fylde) (Con)]

My mother spent 32 years working in an ICI factory. She is 81 and, like the Prime Minister’s mother, she has lost her husband and wants to hand some of that money down to the next generation. Some remarks from over the past few days must have been deeply hurtful to the Prime Minister, and I urge him to tell the House what message we want to send to millions of people in our constituencies who want to do the right thing by the next generation.

[The Prime Minister]

I am grateful for my hon. Friend’s remarks, and I am sure that my mother will be too. She said that like me, she is developing a thicker skin with every week that goes past. He is right to say that many people want to pass down wealth, assets and help their children in all the ways they can. That is not something we should be ashamed of; it is something that we should actively encourage, because it can help to build the strong society that we want in our country.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

The Prime Minister acknowledged in his statement that under current legislation it is difficult to prosecute companies that assist with tax evasion, and I and many others—including the right hon. and learned Member for Harborough (Sir Edward Garnier)—would add fraud and corruption to that list. The Government promised in their manifesto to extend the new corporate offence to deal with all economic crime, not just tax evasion. Will the Prime Minister commit today to reviewing urgently the current position, and to extend the offence of tax evasion to incorporate fraud and corruption?

[The Prime Minister]

The hon. Lady makes an interesting suggestion that I will consider carefully. We have announced our proposal, and identified an opportunity in the Gracious Speech to include that measure in a future Bill. At that time we can consider an extension and a tidying up of the offences so that they can be used in the same way, and I will look carefully at what she suggests.

[Several hon. Members rose—]

[Mr Speaker]

Order. I am sorry to disappoint remaining colleagues, but we have had a full exchange and must now move on to the second statement.