Lord Haskel
Main Page: Lord Haskel (Labour - Life peer)Department Debates - View all Lord Haskel's debates with the HM Treasury
(13 years, 5 months ago)
Lords ChamberMy Lords, the noble Viscount, Lord Eccles, is very fortunate indeed. Early on in my business career, I remember visiting an official overseas in a very protected market to obtain permission to sell some of our technology to a company there. In a bookcase behind his desk were the complete works of Shakespeare, the Oxford Shorter English Dictionary and the works of Dickens. I thought I would compliment the official on his interest in and knowledge of English literature. He looked at me in rather a peculiar way and handed me a copy of Dombey and Son. I opened it, and in the centre was a cut-out that exactly fitted US dollar bills. I would say to the noble Baroness, Lady Wheatcroft, that there was absolutely nothing nuanced about that. I am not sure if it was my distaste for corruption, my concern for the law or my love of books, but I never did conclude that deal because I wanted to preserve our reputation, and there were lots more deals to be done.
In another country, corruption was explained to me by the fact that because the laws and institutions were weak, largesse should be shared with those with whom you have ties of dependence, and therefore it was not corrupt to pay off somebody’s cousin. This is why we must not undermine our strong and independent institutions—institutions such as the police. I think that the proposed legislation to make the police accountable to political commissioners can lead to undermining their independence. They have that kind of arrangement in the United States, and their experience is not good. Instead, we should be strengthening our institutions: our free press, our freedom of information and of speech. Legal tricks such as super-injunctions and unaffordable libel actions weaken our defences against corruption, and this is where our laws need strengthening. I welcome the proposed although rather timid Defamation Bill, but I wonder why it does not go a lot further.
Where I do think we have institutionalised corruption is in the world of tax avoidance. There are armies of bankers, lawyers and accountants who ensure that even though the letter of the law is respected, increasingly immoral ways are found of perverting the spirit of the law to ensure that tax is avoided. This has been justified to me by quoting my noble friend Lord Mandelson. He has said that he does not mind people being filthy rich, but people forget the rest of his sentence. He does not mind people being filthy rich as long as they pay their taxes. To hide its true purpose, the tax avoidance industry adopts the language of real business, so technical innovation and reinventing your business model do not mean finding new products, services and markets, and new ways of supplying them. No, they mean registering your business in a tax haven and becoming a non dom to avoid tax while still enjoying the, admittedly decreasing, benefits and services which make this country the civilised place that it is.
Business leaders rely on the Government to regulate, to educate, to create a skilled workforce, to do research in science and to build the infrastructure, and they are quick to complain when there is not enough. Yet they use dubious means of avoiding the taxation necessary to pay for it all. As my noble friend Lord Eatwell put it, that is financial artifice. They make it very difficult to find out how much corporation tax is actually being paid by large firms because tax planning is a cat and mouse game played all over the world. For instance, we will never know about Cadbury because Kraft has moved its domicile to Switzerland. Most studies show that 28 per cent corporation tax is budgeted for, but is rarely the amount actually paid.
Caroline Lucas MP is today introducing in another place a Presentation Bill about disclosing the amount of corporation tax paid and the profits made. Will the Government support her?
The noble Baroness, Lady Williams, explained that the tax avoidance industry also ensures that we are a wonderful tax haven for those who are resident elsewhere, irrespective of how their wealth was earned. We now know that the Home Secretary plans to give immigration priority to those who want to participate in it. Is this wise?
All this poisons our politics. However much the Government talk about us all being in this together, as my noble friend Lord McFall said, there will be very little sense of shared pain until tax avoidance is tackled. Economic morality is an ethical issue, so I congratulate the noble Baroness on introducing this debate and on raising this ethical matter.