Tax: Church Action for Tax Justice Reports

Lord Harries of Pentregarth Excerpts

Thursday 21st January 2021 Grand Committee

[Lord Harries of Pentregarth (CB) [V]]

My Lords, I congratulate the right reverend Prelate on his excellent opening speech. Most people recognise that a system of incentives is both inevitable and right. If a person works hard, they should be rewarded for that work. If they work over many years to obtain qualifications, it should be reflected in their salary. Most people also recognise that there is an element of sheer luck in human life which cannot be eliminated. But what people deeply resent at the moment is not inequality as such, but the gross and growing inequality that is such a sharp feature of the modern world.

When someone gets a bonus that is more than an average person’s lifetime earnings; when they get that bonus even when their company has failed; when they employ a battery of lawyers to find a way of not paying their taxes; when they quickly switch their money from one tax haven to another, people feel that there is something fundamentally wrong and unfair. Over 80% of the British public believe that legal tax avoidance is morally wrong. I shall put it in a sentence: it undermines social solidarity. Let us be clear: a tax system that works depends on that sense of solidarity.

The amount of money hidden away is absolutely enormous. Between $8 trillion and $35 trillion sits offshore, enabling its wealthy owners to avoid paying tax. Developing countries, which face problems from Covid-19 on a scale unimaginable in the richer nations, are deprived of up to $200 billion every year by tax avoidance. The Danish, Polish and French Governments have refused corporate bailouts for corporations registered in tax havens. Could the Minister say whether Her Majesty’s Government have taken, or are contemplating, any similar steps?

Following on from that, will the Government commit themselves, working with the new US Government, to prioritise low-income countries in the base erosion and profit shifting, or BEPS, initiative of the OECD/G20 countries to reform global tax rules? At the moment, low-income countries are the biggest losers of tax revenue as a result of profit shifting by multinational corporations, losing 9% of total revenue as opposed to only 3% for high and middle-income countries. Will the Government commit themselves to a stance at the BEPS discussions which would prioritise low-income countries and encourage the new US Administration to do so? To that end, would they be prepared to offer technical assistance to those low-income countries in the analysis of their income and tax data to explore approaches that might best help them? I know that the Tax Justice Network stands ready to undertake such work if commissioned to do so. Would the Minister at least be prepared to look at what it proposes?