Tax Avoidance and Multinational Companies

Debate between John McDonnell and Sheryll Murray

Wednesday 3rd February 2016 Commons Chamber

[John McDonnell]

Let me press on, because time is short.

At the end of last week, the UK joined 30 OECD partner countries in signing up to the multilateral competence co-operation agreement. We supported that. That is the kind of international co-operation, albeit limited, that will help close the loopholes and ultimately close down the tax havens. It is the kind of agreement that we have backed for years and that we support the Chancellor in undertaking, but last week, by allowing the special treatment of one company, the Government drove a coach and horses through the entire international approach. As the EU’s Competition Commissioner suggested, that could amount to unlawful state aid. The UK is now being depicted across Europe as a tax haven. It risks establishing a race to the bottom in which all countries seek to outbid each other to offer the lowest possible taxation. We have written to the Competition Commissioner to request a formal investigation of the deal.

[Mrs Sheryll Murray (South East Cornwall) (Con)]

Does the hon. Gentleman not accept that this Government have done more than the previous Labour Government to close those loopholes? He says that he did not agree with the previous Labour Government, so will he tell us what he did to oppose those measures and raise the matter when he was in Parliament?

[John McDonnell]

I know that the hon. Lady was not here at the time, so perhaps she should check my voting record throughout my 18 years in this House. I do not want to keep on repeating this. I wanted both Governments to go further, but an independent assessment has shown that the legislation introduced by the previous Labour Government will drag in 10 times more in tax than the current Government’s legislation, and even then I wanted to go further. We should at least accept the independent assessment that has been made.