Tax Avoidance and Multinational Companies

John McNally Excerpts

Wednesday 3rd February 2016 Commons Chamber

[Chris Stephens (Glasgow South West) (SNP)]

Let me first declare that this morning I was elected chair of the all-party Public and Commercial Services Union group, succeeding the shadow Chancellor, who of course will be a hard act to follow. I will be referring to HMRC staff.

Such is the widespread scepticism and lack of public confidence following this deal that the term “to google it” now has a new meaning on the streets of the UK. No longer does it mean logging on to a computer and exploring a search engine; “to google it” now means something else. When members of the public grab their self-assessment forms, they might ask themselves, “Should I google it?”

The Minister had four opportunities—four tests, in my view—to address that widespread scepticism and lack of public confidence. The issue is about the messages that this sends. First, there was no real answer on what methodology was used to make the calculation. More worryingly, although the Minister praised HMRC staff, he did not address why 120 compulsory redundancies were issued to HMRC staff on 28 January. Worse still, there has been no explanation for why the chief executive of HMRC has refused to meet the PCS to try to help mitigate those job losses. That is a message that will be sent to multinational companies. They will wonder why HMRC offices are closing in towns, in many of which it is the largest employer, and why there are staff reductions. They will wonder whether the UK Government are serious about dealing with tax avoidance and tax evasion.

[John Mc Nally (Falkirk) (SNP)]

Does my hon. Friend agree that taxes are the price we pay for a civilised society and that these multinational companies should be paying their taxes willingly?

[Chris Stephens]

I agree. In such debates we usually hear Government Members praise the self-appointed TaxPayers’ Alliance. Interestingly, it has not been mentioned today. I agree that taxes are the price we pay for a civilised society.

We heard nothing from the Minister about a financial transactions tax. I support such a tax, particularly a global financial transactions tax, which could bring in £250 billion for national Governments. Surely the UK Government could take a lead in introducing such a tax.

The Minister made no mention of tax havens in UK overseas territories such as the Cayman Islands, which my hon. Friend the Member for Kirkcaldy and Cowdenbeath (Roger Mullin) mentioned. Research by the Tax Justice Network rates the Cayman Islands as the second most significant tax haven in the world. Of the 279 banks registered there, only 19 are licensed to operate domestically; the other 260 are there to shuffle money from country to country. The Cayman Islands have a population of 56,000, but there are 100,000 registered companies. My hon. Friend mentioned Ugland house. As President Obama has said:

“That’s either the biggest building or the biggest tax scam on record.”

I believe it is the latter. Where is the action to tackle this? The Government made no mention of that. The Tax Justice Network has said that the UK and its dependent territories and Crown dependencies remain

“by far the most important part of the global offshore system of tax havens and secrecy jurisdictions”.

The fact is that the widespread scepticism means that the public have no confidence in the Government’s handling of this affair or in their ability to deal with tax avoidance and tax evasion. That is why I will be supporting the motion today.