Oral Answers to Questions

Andy Sawford Excerpts

Wednesday 17th December 2014 Commons Chamber

[Nick Smith (Blaenau Gwent) (Lab)]

4. What estimate she has made of the loss of tax receipts to developing countries by the use of tax havens by multinational companies operating in those countries in the last three years.

[Andy Sawford (Corby) (Lab/Co-op)]

6. What estimate she has made of the loss of tax receipts to developing countries by the use of tax havens by multinational companies operating in those countries in the last three years.

[The Secretary of State for International Development (Justine Greening)]

Tax avoidance is a significant challenge for developing countries, which is why the UK has led international action at Lough Erne and, more recently, in the G20 to help tackle the problem through capacity-building projects and through the implementation of international initiatives.

--- Later in debate ---

[Justine Greening]

The hon. Gentleman is talking about G20 progress that was instigated by this Government when we held the G8 presidency. I am tempted to make the point that the Labour Government had 13 years in which to take steps in this direction, and entirely failed to do so. We took some important steps during our G8 presidency, and, as he will know, that involved the overseas territories. We are not saying that we have gone all the way down the path, but we are starting to move down it for the first time, and I think that the hon. Gentleman should welcome that. I assure him that we will continue to work to ensure that we bring the rest of the international community with us.

[Andy Sawford]

According to analysis by the ONE campaign, $1 trillion is siphoned from developing countries each year as a result of corruption, money laundering and illicit financial flows. What analysis have the United Kingdom Government conducted of the role of UK companies in that activity?

[Justine Greening]

As the hon. Gentleman will know, there are various estimates of how much this kind of activity costs developing countries, which is one of the reasons why we put it on our G8 agenda. I mentioned the work that is being done to reform international rules. My Department is also engaged in significant work to build capacity in developing countries, so that when the progress that we are starting to see becomes international, they will be in a position to take advantage of it. The HMRC capacity building unit, which I helped to set up along with colleagues in HMRC, will work directly with tax revenue authorities such as the one in Pakistan to help them to improve their tax collection. As for corruption, DFID will continue to increase its efforts, through the Met police unit that it funds, to ensure that we can take action if money laundering and the corrupt obtaining of assets are associated with United Kingdom institutions.