Public Country-by-country Reporting
Debate between Caroline Flint and Anne Main(7 years ago)
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Caroline Flint (Don Valley) (Lab)
I am delighted to serve under your chairmanship, Mrs Main. I thank the hon. Member for Amber Valley (Nigel Mills), my colleague and friend, for securing and introducing this debate. I will focus on the case that investors are now making for public country-by-country reporting; an interesting development is that more and more investors are concerned about the behaviour of the companies they invest in, including whether they are paying their fair share of tax on their economic activity around the world.
Principles for Responsible Investment is a United Nations-backed organisation with more than 1,860 signatories —asset owners, investment managers and service providers. It is trying to develop a dialogue with firms about responsible tax strategies. Its website defines its mission as follows:
“Responsible investment is an approach to investing that aims to incorporate environmental, social and governance (ESG) factors into investment decisions, to better manage risk and generate sustainable, long-term returns.”
Its guidance for dialogue with firms includes the following observation:
“An aggressive corporate approach to tax planning should be a concern to investors as it can create earnings risk and lead to governance problems; damage reputation and brand value; cause macroeconomic and societal distortions.”
Under the subheading “Why now?”, it further observes:
“Stronger enforcement around the world and increased media and civil society scrutiny have made multinational companies much more vulnerable to unexpected tax assessments and increases in tax liability and reputational damage.”
In a section headed “Transparency on tax strategies, tax-related risks and country-by-country activities”, PRI’s working group on tax disclosure makes the following recommendation:
“Detailed reporting would provide an overview of…country-by-country reporting details, including a list of all subsidiaries and their business nature…as required by the appropriate OECD-BEPS templates”.
That would be helpful. The welcome dialogue encouraged by PRI is a sign that awareness of the implications of aggressive tax avoidance is growing and that investors want to know more about company tax strategies.
Last night, I was at a dinner organised by Fair Tax Mark and SSE to discuss approaches to tax transparency with other companies, including investment organisations. It was interesting to hear from a number of firms that increased openness about how much tax they pay and why has become an important part of boards’ discussions and has benefited how boards approach the issues. A number of representatives also pointed out how positively their own workforce had responded to increased openness, because it made them feel good about what their employers were doing—not only creating jobs, but putting something back for the wider good of the communities where they work and create wealth.
As MPs, we often receive information from companies in our constituencies and elsewhere about how much they contribute to the public good in the United Kingdom. They should be praised not only for the jobs and wealth they create, but for what they put back into communities. Firms put money into the environment, encourage their employees to be volunteers, and make efforts in many important areas; a number of children’s football teams local to me have benefited from football strips funded by corporate concerns. However, what I want to hear more than anything else from companies in my constituency and multinational companies in London or our big cities is how transparent they are about the tax they pay. That needs to be the headline, because any doubt that they are paying their fair share of tax undermines all their good work for the public and the community.
I believe the world is moving towards greater transparency. I would be interested to hear the Minister explain, when he replies to this debate, why companies in the extractive and financial sectors already have to put this information into the public domain and why they do not see that as a risk in terms of competition. They have accepted that it is something they have to do. Why is it okay for the companies in those sectors to provide this information, but somehow there is a barrier to other companies in other sectors joining forces and providing this information?
When the Minister sums up, I would love to know what level of multilateral co-operation is necessary. How many other countries does it take to form a critical mass and enable the UK to move forward? Should this be through the EU or through the UN? It would be really interesting to know what threshold we are working towards to bring into being the enabling power already contained in the Finance Act 2016—because the Government adopted my amendment, which was a cross-party amendment—to introduce country-by-country reporting.
I really believe that the world is moving towards greater transparency, and the Government have a choice, as my friend the hon. Member for Amber Valley said. Is the UK going to be a leader or will we just follow the pack?
Mrs Anne Main (in the Chair)
Before I call the next hon. Member, let me say that there are three Members who wish to speak, and I will begin calling the Front Benchers at 5.10 pm.
Fuel Poverty and Energy Efficiency
Debate between Caroline Flint and Anne Main(11 years, 10 months ago)
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Caroline Flint
I will make a little progress. A great political myth of our age is that there are no alternatives to the choices that the Government have made, but the truth is that if they can find £3 billion for a tax cut for the highest earners in the country—worth on average £107,000 a year for 8,000 people earning more than £1 million a year—they could have found some money to have kept Warm Front going, to have not cut winter fuel payments, or even to have invested in the green deal to keep interest rates down. However, they did not.
If the Minister wants to compare records I would be happy to do so. Time and again we have heard Ministers claim that fuel poverty went up under the previous Labour Government, which is just not true. Let me lay the myth to rest with a few facts.
Caroline Flint
No.
The simplest test of any Government’s record is to compare the number of people in fuel poverty when they left office with the number when they took office.
Caroline Flint
If the hon. Lady would like to listen to some facts she might learn something. Figures published not by Labour but by the Minister’s Department paint a very different picture to the one the Government try to portray. In 1996, the year before Labour entered office, 6.5 million households were in fuel poverty. In 2010, the year we left office, that number had fallen to 4.75 million—nearly 2 million fewer households in fuel poverty. That can be spun however people like, but those are the facts. Under Labour, fuel poverty went down, not up. That happened because of choices we made—choices to introduce winter fuel payments, to invest in energy efficiency through Warm Front and the decent homes programme, and to ensure that all new homes for the future will be energy efficient and zero carbon. We made a choice to invest in our health services, hospitals and communities to protect the ill, the elderly and the poor from the cold—[Interruption.] The hon. Member for St Albans (Mrs Main) asks from the Government Benches what that has to do with it, but as she should know, a good health service helps to prevent cold-related deaths.
Those are policies for which the Labour party fought and argued, often in the face of opposition. They are policies that Conservative Members pretended to support and pledged to protect when they knocked on doors seeking people’s votes, but which they quickly dumped as soon as they agreed to trade with their coalition partners.
Mrs Anne Main (St Albans) (Con)
It is a shame that the shadow Secretary of State took such a combative and shrill tone at the beginning of this important debate, because no one has a handle on caring about their constituents. I was privileged to serve on the Energy Bill Committee in the previous Parliament, and I noticed that the then Government took no measures to tackle the complexity of tariffs or the issue of those who are fuel poor and who use metered fuel, although the Labour party is raising those issues today. I encourage the Minister to keep up his good work, because we do not have money to throw around as the previous Government did. In all the comments from the right hon. Member for Don Valley (Caroline Flint), including from a sedentary position, I have yet to hear whether Labour would continue Warm Front in some form after 2016 or introduce another scheme. Perhaps she will enlighten us in the winding-up speeches.
Mrs Main
I will not, because she did not give way to me when she was being particularly vociferous on how good Labour was on fuel poverty.
As I said in a debate on fuel poverty in the previous Parliament, my constituency is usually regarded as an affluent one, but it does have areas of multiple deprivation needs. In 2006, St Albans had 2,400 households in fuel poverty; in 2008, it had 3,500; in 2010, according to the latest figures available, there were even more. A degree of humility about such calculations is, therefore, important. It should also be recognised that in constituencies such as mine, a higher amount of family income is spent on rent and mortgages, so many people feel fuel-poor, whether or not they are technically in fuel poverty. I welcome the fact that under this coalition Government most families will be put on the best tariff that suits them if that is possible.
We have very little time to debate the matter today, but the green deal will be an affordable way of tackling fuel poverty. I believe we would be casual with taxpayers’ money if we simply splashed out the dosh—the right hon. Lady said that it was £50 million, but the correct figure is £30 million, which will be reinvested. The Labour party would have continued the Warm Front deal, which, as Members on both sides of the House have said, was fraught with difficulties. When elderly constituents of mine were told how intrusive the Warm Front deal would be in terms of where the boilers would be located, and how they had to go along with what they were being offered, rather than having it tailored to suit their needs, they backed out of it, and were left with nothing. Rather than imposing something, the green deal gives people choices to tailor a system to suit their household.