Tax Havens

Debate between Lord Young of Cookham and Lord McConnell of Glenscorrodale

Thursday 6th April 2017 Lords Chamber

[Lord Young of Cookham]

My Lords, we had an extensive debate on this subject on Monday on the Criminal Finances Bill, and I suspect that we will be returning to exactly the same subject on Report on, I believe, 25 April. In that debate, the Minister at the Home Office explained why we had encouraged the Commonwealth dependencies and overseas territories to produce central registers, and they will be doing that by June this year. We are not prepared to use the powers that the noble Lord has referred to, which we believe should be used in exceptional circumstances such as the abolition of capital punishment and rules relating to homosexuality. We do not believe it is appropriate to use those powers in this case.

[Lord McConnell of Glenscorrodale (Lab)]

My Lords, many of us were willing to give the previous Prime Minister and Chancellor the benefit of the doubt on this issue because they were legislating in the UK and were engaged in international negotiations. However, given that we are now leaving the top table of the European Union, where much of this action could have taken place, would it not be appropriate in the brave new world of new trade agreements and Britain becoming more global for this country to lead the way on this issue by legislating to ensure that all British companies operating around the world report on a country-by-country basis to ensure that countries across the world can tax those companies where they make their profits?

[Lord Young of Cookham]

We already have country-by-country reporting in this country, and multinationals based in this country have to report to HMRC how much profit they make and how much tax they pay in each country. We are encouraging other countries to do this, so we have a multilateral approach, and the Chancellor raises this issue at the G20. In response to the first part of the noble Lord’s question, we have taken the lead on this as a result of our presidency of the G8, and more than 90 countries have agreed automatically to exchange taxpayer information under the common reporting standard. We are also taking initiatives on beneficial ownership and some of the other issues that we have already discussed.