Taxation: Avoidance

Debate between Lord Collins of Highbury and Lord Newby

Thursday 14th March 2013 Lords Chamber

[Lord Collins of Highbury]

To ask Her Majesty’s Government whether they will consider new measures to force British companies to disclose any tax avoidance schemes that could be detrimental to poorer countries, and to support them in taking corrective action.

[Lord Newby]

My Lords, the UK plays a leading role on tax transparency internationally, but it is not possible to extend UK disclosure rules to other countries. Parliament has limited powers to legislate for territories outside the UK. The Government have other policies to assist developing countries more directly by, for example, building their capacity to establish and maintain effective tax systems of their own.

[Lord Collins of Highbury]

I thank the Minister for that response. David Cameron’s pledge to tackle tax avoidance as part of the UK presidency of the G8 needs to move from words to deeds. We cannot use the need for international action as an excuse for going at the pace of the slowest country. The UK should be a global leader, so will the Minister confirm that the Government will use their position at the G8 to make serious proposals that will make a substantial difference to the revenues of the poorest countries in the world?

[Lord Newby]

My Lords, I think the Government are a global leader in this area. We are taking a lead at the G8, and have taken the lead in the OECD to get the international tax rules changed. However, the other component that we are also taking a lead in is helping poorer countries to develop their own tax collection abilities. For example, work that HMRC has done in Ethiopia resulted in a sevenfold rise in the amount of tax collected in that country in the nine years from 2002.