Double Taxation Treaties (Developing Countries) Bill

Debate between Philippa Whitford and Roger Mullin

2nd reading: House of Commons
Friday 16th December 2016 Commons Chamber

[Roger Mullin]

If memory serves me correctly—I go back much further than 1955—the treaty with Malawi does not include goods such as televisions, because they did not even exist in Malawi in those times. The treaty is so out of date that it does not capture the nature of modern commerce. The UK Government have been making moves in recent times to renegotiate the treaty, and that is very welcome, but it remains the fact that there is still a place for that 1955 treaty today, and it is by no means the only such treaty.

Research has been undertaken by, for example, ActionAid, and I compliment it on the campaigns it has been running and thank it for the assistance it has given me in constructing this small Bill. That research looked at more than 500 double taxation treaties throughout the world and suggests that despite all the good work the UK Government have done over the last 10 years or so, the United Kingdom and Italy still have more restrictive treaties than any other country—around 13 are still in place.

What are taxation treaties about? They are about how much tax should be paid. Some restrictive treaties actually prevent Governments from imposing taxes—say, some types of corporation tax—that they may wish to impose, so they remove democratic responsibility in terms of countries putting together their tax.

The second thing taxation treaties typically deal with is where the tax is actually paid. In a bilateral relationship, the treaty often favours the country where the company is headquartered. Why are companies in advanced western societies—not just the UK, but the US, Germany, Italy and the like—engaged with developing countries?

I do not know of any international corporation that wants to move its headquarters from London, Edinburgh, New York or Berlin to site them in some poor country in central Africa, but they do want to operate there. Why is that? The typical type of operation is to exploit the country’s natural resources—minerals and the like. In another country I am very familiar with—Namibia—there is diamond mining, which is exploited by some large Australian corporations, among others, and uranium mining. Other types of natural resources are found in the Benguela current, which has some of richest fishery grounds in the world.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

I have had an association with Zambia through fundraising, and on a trip there I became aware of almost a new form of colonialism. There are many Chinese companies where not only the leaders but the entire workforce are Chinese, so copper is being mined, the profit is being taken away and there are no jobs at all going into the local economy.

[Roger Mullin]

I was unaware of that case, but there is a parallel. When I was first asked to go to Namibia shortly after its independence to meet members of the Government in the large fishing port of Walvis Bay, they asked me and the others who were there to do a study on how they could Namibianise, as they called it, the fisheries sector. We asked why that was a priority, and they said, “We have one of the richest fishing grounds in Africa, but we’ve been under the apartheid regime of South Africa and that form of colonialism for years. There isn’t a single company in Walvis Bay owned by Namibians, and more than 90% of the people employed in the whole sector are non-Namibians.” The Namibian Government eventually took control and Namibianised the entire fisheries sector within 10 years, and it was more productive afterwards. It was a great success. Perhaps we tend not to hear about the successes where Governments in Africa and elsewhere take control and make a real difference for themselves.

I passionately believe that if we could liberate these countries to have more control of their own economies and taxation systems, that would move them away from any culture of dependency that some people say they have. It would be more liberating for them and better for everyone all round. I could be wrong, but I believe that it would be a better way, in the longer run, to achieve everyone’s objective of removing the scourge of the type of poverty that exists in these countries, with which we are entirely unfamiliar in the United Kingdom.

HMRC Office Closures

Debate between Philippa Whitford and Roger Mullin

Tuesday 24th November 2015 Commons Chamber

[Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)]

The debate has been very enlightening, and I thank every Member who has participated in it. I was going to begin by saying that the House was clearly divided on the matter, but I shall have to change that to “clearly not divided”, given the many fine contributions that we have heard from Conservative Members.

I was reminded that, many years ago, a sociologist called Georg Simmel had said that the most worrying thing was not people debating or arguing, because at least they were motivated enough to address the issue in question; the biggest problem arose, he said, when there was apathy and people did not participate. We have heard some tremendous contributions today, and witnessed some tremendous engagement. There is certainly no apathy in the House of Commons when it comes to this important issue. I remain of the view that the UK Government have made a serious error with their closure plans, and I think that the majority of those who have contributed to the debate would agree with that.

My hon. Friend the Member for Livingston (Hannah Bardell) pointed out that although some £34 billion was being lost through inefficient tax collection, the Government’s great idea was to close offices and make redundant the very staff we need to collect those taxes. She shone a light on a range of shortcomings in the Government’s plans, including the scale of office and personnel cuts.

In my summing up, I want to refer to everyone who has made a contribution today, as all the contributions have been important. I shall start with the Minister, who, with his usual calm and attempted reason, gave us a fine tour de force. I would like to pick him up on one or two points, however. I was particularly aggrieved when he used the Scottish Government as an example, saying, “Look at what they have done by bringing all those colleges together”, as though that were an example of the downsizing of an entire estate in Scotland. Nothing could be further from the truth. Let me give the Minister an example. There is now only one college in Ayrshire—Ayrshire college—but it retains not only its Ayrshire college campus but the campus that was James Watt college in Kilwinning. It has also retained the campus that was Kilmarnock college, and the Scottish Government are now investing £50 million to expand that campus.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

I have met representatives of businesses in Ayrshire, and they have been nothing but complimentary about the courses at Ayrshire college and the students that come out of it. The college has just won three categories in the Scottish Qualifications Authority awards last week.