Public Country-by-country Reporting

Rupa Huq Excerpts

Wednesday 22nd November 2017 Westminster Hall

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

I congratulate the hon. Member for Amber Valley (Nigel Mills), my trusty co-chair on the all-party parliamentary group on anti-corruption, on securing this highly relevant and timely debate, given that it is Budget day. I also congratulate him on his thoughtful opening speech.

With last year’s Panama papers and then the Paradise papers the other week, there is a sense that systems of international finance and taxation seem to be working for the benefit of individuals with access to vast wealth and an army of lawyers, rather than—to coin a phrase—for the many, not the few. We are in the grip of a culture of secrecy and silence in our overseas territories and Crown dependencies, enabling tax avoidance and evasion on an industrial scale. It looks suspiciously like there is one rule for the super-rich and another for the rest of us.

Lord Sugar has blamed “bad advice” for the fact that these sitcom celebrities, sports stars, pop stars, the Duchy of Lancaster and all those other people have been caught up in the latest whirlwind. Lord Sugar said that tax avoidance is un-British and that we are blessed to be

“in a country that has a police force, a National Health Service, an army…and all the good things we get here.”

To the delight of Transparency International, Christian Aid and Global Witness, we were promised Government action by David Cameron in the flurry of the 2016 anti-corruption summit, but the Government seem to have fallen disappointingly short. Country-by-country reporting, which we are addressing in particular today, is an issue that I first came across as a candidate in 2015. Before I was elected, I experienced my first mass email petition from potential constituents. It was called, “What will you do to crack down on tax dodging?” I assured them I would insist that multinational companies are required to publish details of the amounts of tax they pay in their countries of operation.

As soon as I was elected, I was happy to back the “show us the money” amendment tabled by my right hon. Friend the Member for Don Valley (Caroline Flint). When the Criminal Finances Bill came before the House, I spoke from the Opposition Front Bench on the need for public registers of beneficial ownership. Then we had the snap election and the legislative provisions were swirled into the vortex of wash-up. For this Government, “could do better” is perhaps an understatement. In 2012, David Cameron declared that organisations investing in complicated schemes

“to just minimise their tax rates is not morally acceptable. Some of these schemes…are quite frankly morally wrong.”

Even if he acted within the letter of the law, the behaviour of Bono of U2 was close to the edge.

Financial secrecy feeds into legal and illegal approaches to not paying a fair share. Last year the Conservative Government said that all countries needed to reach a gold standard of public registers of beneficial ownership, yet there has been a palpable rowing back. Now the Foreign Office only expects UK tax havens to go down that road when it becomes a global standard. Montserrat has already committed to put in place a public register. We have a duty to justify our claims to be a global leader on transparency and anti-corruption by facilitating that, rather than ducking the challenge in a dereliction of duty. The tax abuse in the Paradise papers and the corruption in the Panama papers are two sides of the same coin of financial secrecy. In both cases the Government’s stated intentions are undermined by their willingness to tolerate offshore financial secrecy.

The Cameron Government at least made the right noises. I have to see the detail of what was announced in the Budget statement, but I am cheered by the idea of extending offshore time limits. Until now, however, the Prime Minister—who is often responding to events rather than mastering them, being in office but not in power, and all that stuff—seems to have had a comparatively lackadaisical attitude.

[Luke Graham]

Will the hon. Lady give way?

--- Later in debate ---

[Dr Huq]

I will not, because I only have a couple of seconds left and I have more to say.

We were promised an anti-corruption strategy by 2016, and now we are hearing it will be 2018. The other day, in one of the many debates of my right hon. Friend the Member for Barking (Dame Margaret Hodge), a question was asked about the anti-corruption tsar. It used to be Eric Pickles, but the Government seem to have forgotten that the post even exists.

As a London MP, I am acutely aware of the housing crisis in our capital. The UK property market seems to be skewed by the apparently uncontrolled flow of anonymous and potentially laundered money from those secrecy jurisdictions. I know a stamp duty exemption has been announced, but the Office for Budget Responsibility is already saying that it will only inflate prices rather than address the real problem.

Mandatory disclosure of payments and operations on a country-by-country basis mitigates political, legal and reputational risks and generates timely, disaggregated and easily comparable data. Companies should ensure high levels of corporate transparency since that also allows citizens to hold them accountable for the impact that they have on communities. One international tax avoidance scandal might look careless; two starts to look like something of a habit.

Rather than hiding behind the jargon of the written answers we have had up to now, the Minister must tell us today what is being done concretely by the international community to reach agreements on multinational firms filing public reports on their dealings, country by country. When does he expect to reach a multilateral agreement under which the UK may adopt public country-by-country reporting? I thank the media for exposing this stuff by shining a light into murky corners—not necessarily leaking, but turning on the tap in this instance. Warm words are not enough; we need action now.