G8 Summit

Lord McConnell of Glenscorrodale Excerpts

Thursday 13th June 2013 Lords Chamber

[Lord McConnell of Glenscorrodale]

I thank the noble Lord, Lord Trimble, for securing and opening this debate on the important events that will take place in Northern Ireland next week. I wish Northern Ireland well in hosting the summit, and I praise the Prime Minister for what I think was a brave decision to take the summit to that location. I wish not only the Prime Minister but the First Minister and Deputy First Minister well in maximising the benefits and outcomes of the 2013 G8 summit. I hope that it helps to entrench peace in Northern Ireland and that it is a success which signals that real change has taken place.

The summit at Gleneagles in 2005 was undoubtedly one of the highlights of my time as First Minister of Scotland. Many of us will remember the incredible events in advance of that summit: the 200,000-plus people who in Edinburgh the weekend previously called for making poverty history; the concerts that took place in all eight capitals, creating a global movement for change, perhaps for the first time ever; the work by UNICEF and others to involve young people in the G8 and its discussions in a way that had not happened before; the horrific violence that took place in Edinburgh in the two days before the summit; and the attempts to climb the fence in the fields of Gleneagles as the summit got under way.

However, inside that fence, the discussions involved, for the first time, leaders from Africa and around the world—not just the G8 leaders but others, too—who came together to try to solve one of the great problems and challenges of our age. The next morning saw the horrific bombings in London and Tony Blair’s departure from Gleneagles to come back here to take charge. However, in Gleneagles there was a resolve to finish the summit and make the decisions that were required, including the commitment to $50 billion of new money in aid, the hope of a new agreement on trade, perhaps not yet realised, and action on debt, education and health, all of which contributed to a great pride in Scotland that ultimately the summit had been a success, despite the bombers and those who tried to disrupt it.

The challenges of 2013 are perhaps new. The threats may be slightly different but, again, leadership is required. In my view, the agenda that has been set out to advance trade, to ensure tax compliance and to promote greater transparency, particularly in tax affairs, is the right one for our time. However, on trade, although it is vital that the EU-Japan discussions and the EU-US discussions get under way because they affect us all, it is also vital that we do not forget that agenda of fair trade and ensure that global trade agreements open access to markets fairly for all.

On tax, I want to talk briefly about Caroline Muchanga, who lives in Mazabuka in Zambia. She has two daughters and one son. On a good day, from the small market stall that she has in her village she earns $4, which is not always enough to feed her children or to pay the school fees for her daughters. One of the products that Caroline sells on her stall is White Spoon sugar, made by Associated British Foods. As estimated by ActionAid, ABF makes about $123 million in profits in Zambia alone every year, yet Caroline Muchanga pays more in cash in tax in Zambia than ABF. This is immoral. ABF is not alone, and it is perhaps wrong to single out one company, because there are companies and individuals doing this all over the world and not just in sub-Saharan Africa. However, that lost tax to countries such as Zambia is estimated to be about three times the total of international aid from the developed world to the developing world. That loss of revenue cripples economies, it affects public services and it costs lives. Therefore, when the G8 meets next week in Northern Ireland, it must act on these issues.

First, as the noble Lord, Lord Trimble, already said, the global sign-up to financial information sharing is a vital part of the agenda for this summit. The UK can take a lead in this by insisting both that all our European Union partners sign up to this financial information sharing, and that the UK dependencies and territories play their part, too. I would be interested to know what the Minister can tell us about the discussions with the dependencies and territories that will take place over these next few days.

Secondly, and I think absolutely crucially, a legal register of beneficial ownership is long, long overdue. To make progress on this agenda it is absolutely critical to understand who owns companies and corporations, understand who gets the profits, and understand who is moving them from the countries where they are made to the countries where they are held for tax purposes. I understand that some members of the G8—perhaps including Canada, as was reported in the Canadian press recently—may be hesitant about a legal register of beneficial ownership. The members of the G8 need to show global leadership on this agenda. They must be brave, be strong and ensure that such a register is in place. It must apply not only in the G8 countries but right across the world, so that those countries that are currently losing out on all that revenue have a chance to identify and chase it, and ensure that their economies can benefit more successfully in the future.

Thirdly, it is crucial that the UK’s leadership of the G8 next week does not deal with these issues in the context of Europe or of the strong economies of the world. The summit must also take action really to secure the opportunity for the weakest economies in the world, the poorest countries of the world, to make the most of any changes that are put in place. This includes capacity building, of the sort that Britain has supported over the years in Rwanda and elsewhere, in order to build successful revenue authorities that can create decent tax systems and consistently collect taxation revenues. That sort of action to build capacity in the developing world must go hand in hand with a new global regime for greater transparency, including registers of beneficial ownership.

It seems to me that this agenda, rightly, does not copy or try to replicate what happened at Gleneagles in 2005. Some of the promises made then have not been fulfilled. We should be disappointed by that, and we should continue to press those responsible to meet the commitments that they made back then. This agenda moves that a step forward. It talks about changing the rules, rather than just giving more. It is about making sure the rules are fairer, rather than just allocating more and more money from the developed world to the developing world.

Next week’s agenda could be a real turning point in a new global relationship. I wish the Government well and hope they will be successful. If they are, I hope that Northern Ireland will take as much pride in the 2013 summit as Scotland always will in the 2005 summit.