EU-UK Trade and Cooperation Agreement

Lord Sikka Excerpts

Friday 8th January 2021 Lords Chamber

[Lord Sikka (Lab) [V]]

My Lords, despite commitments to fair competition and level playing fields, the TCA says little about tax policies. We had no debate and no ministerial clarification on the matter. The issues are likely to be problematic, especially as the UK is well on the way to becoming a tax haven for big corporations and the rich. Here, taxes have been shifted from capital to workers and consumers, unearned income is taxed at a lower rate than earned income, non-dom millionaires enjoy special privileges, and many companies pay little or no corporation tax. Despite numerous court cases, no big accounting firm has been investigated, fined or prosecuted for peddling unlawful tax avoidance schemes.

Outside the EU, the impulse of the Government is to turn the UK and its Crown dependencies into harmful tax havens. Inevitably, this will invite disputes about what fair competition, level playing fields and state aid mean. Last Sunday, the Prime Minister told the BBC’s “The Andrew Marr Show”, “You can use tax systems and subsidies to drive investment.” In this race to the bottom, the Prime Minister made no mention of the social costs. There is a failure to understand that businesses thrive on good social infrastructure, and this requires transparent and responsible tax policies. Will the Minister provide assurances that the Government will not turn the UK into a shabby tax haven for the rich and for footloose capital?