All 1 Lord Haskel contributions to the Finance Act 2020

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Fri 17th Jul 2020
Finance Bill
Lords Chamber

2nd reading & Committee negatived & 2nd reading (Hansard) & Committee negatived (Hansard) & 3rd reading (Hansard) & 3rd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords & 3rd reading (Hansard) & 3rd reading (Hansard): House of Lords & Committee negatived (Hansard) & Committee negatived (Hansard): House of Lords

Finance Bill Debate

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Department: Cabinet Office

Finance Bill

Lord Haskel Excerpts
2nd reading & Committee negatived & 3rd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords & 3rd reading (Hansard) & 3rd reading (Hansard): House of Lords & Committee negatived (Hansard) & Committee negatived (Hansard): House of Lords
Friday 17th July 2020

(3 years, 8 months ago)

Lords Chamber
Read Full debate Finance Act 2020 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 2 July 2020 - (2 Jul 2020)
Lord Haskel Portrait Lord Haskel (Lab) [V]
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The Minister has talked about the digital services tax. That is a small step on the long road to properly taxing the digital economy, as called for by the noble Lord, Lord Blencathra. The noble Lord, Lord Bruce, told us that in this financial year, the digital services tax will raise £279 million. That is a small but welcome step in the right direction. In directing this tax at large companies, the Government are rightly aiming it at those which have long practised so-called “tax optimisation”, which, translated, means choosing where you pay tax. The IMF is constantly pointing out the revenues lost through these activities, so the Government are right to separate out these multinationals from domestic companies which have much less opportunity to optimise their tax.

The 2% tax will be paid by businesses that provide online marketplaces, search facilities or social media services in the UK to residents and other users. The definitions are fairly detailed, but some companies operate both online and offline. Are the Government satisfied that these can be properly identified? Part of tax optimisation can mean that digital and non-digital activities are separated, and the digital element located outside the UK. A study by Oxford University in 2019 showed that more than 50% of the subsidiaries of foreign multinational companies active here reported no taxable profits in the UK. Yet a third of the companies that received coronavirus loans under England’s largest scheme are substantially owned in a tax haven. Some of these companies have also been in receipt of job retention funds, grants and emergency loans. This is perceived by the public as unfair and is yet another example of the unfairness brought to our attention by the pandemic. Surely the quid pro quo must be a commitment to better behaviour in matters regarding tax.

I do see a glimmer of hope. There has been quite a shift—companies are acknowledging that public opinion requires them to recognise that they also have a social purpose. Indeed, only last week, HSBC reported some evidence to show that companies which focus on these strategies are weathering the consequences of the pandemic better. I welcome the digital services tax, but it is only an early step. Do the Government have further steps in mind?