(11 years, 10 months ago)
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I agree. My hon. Friend makes a valuable point, and has a wonderful legal mind. Many of the companies believe that they have a responsibility to their shareholders, but shareholders, to push up their returns, are interested only in the overall amount of tax that they have to pay globally. In their responses, some companies claimed that their overall tax rate is more than 45%, while others claim that it is about 25% to 28%. Although they all believe that they are as transparent as possible, it is perfectly clear that they are not being as transparent as the general public would like to see and understand.
We must move to a simpler tax system, in which it is much easier to see what is going on, and what companies have to pay in tax. I do not want this debate to appear to be anti-business or anti-FTSE 100. I am a Conservative Member of Parliament who is going to end up in the Morning Star as a result of this debate—probably the first one to do so—but the reality is that FTSE 100 companies make a huge contribution to Britain, including through the whole range of taxes that they pay. I understand that the FTSE 100 are responsible for almost 10% of the tax take in the UK, including the income tax and employer’s national insurance contributions that they collect on behalf of the Treasury.
The FTSE 100 are therefore massively good companies for the UK, and I am delighted that we have them in our country, but I want them to be a little more transparent, so that we can all have a bit more faith. As I have said, I believe that we have to lead the way in forcing them to accept the idea of tax transparency. Aggreko has said that it pays lots of tax and probably more than is needed, but that greater tax transparency was “a lousy idea” because it sees that as 500 new pages of the tax code and a great load of regulations that it does not want.
I could go on about the responses—I will if hon. Members wish—but the general thrust is pretty simple: the biggest companies in Britain believe that they all pay their taxes honestly and make a huge contribution to the economy by employing people who pay taxes. So far, most responses clearly show that they are not prepared to be proactive, and will comply only with current laws. Unfortunately, fancy corporate lawyers can blur the lines between tax avoidance and tax evasion, but that is clearly wrong, illegal and unfair to the rest of society, as I have mentioned.
I firmly believe that most employees in most of the FTSE 100, the FTSE 250 and other companies in the United Kingdom would expect their employers to pay their fair share of tax in the UK. We must start thinking about tax and tax transparency as a measure of corporate social responsibility.
I apologise for missing the first few sentences of my hon. Friend’s speech, but he knows that I am very much with him in this campaign. Has he thought of using his website to encourage shareholders of each of the top companies to raise the issue at their annual meetings and to force the issue internally, in the way that many green and environmental issues have been raised from within as well as through pressure from outside?
My right hon. Friend makes a wonderful point, as he often does about tax transparency. I genuinely believe that that is an excellent way of moving forward. Many of the companies have offered to meet me, and I know that they have meetings with Christian Aid and ActionAid. Those companies are huge organisations that struggle to understand the complexity of what is going on within them.
I had a very positive response from the chief executive officer of AstraZeneca, who explained in great detail how he holds each member of his staff personally responsible for conducting its business, how he considers them to be ambassadors, and how he wants to help in any way he can to create tax transparency. There is, however, a fear that greater tax transparency will lead to greater regulation. He believes that many of the issues we are raising are already covered in the company’s accounting reports—the information is already collected—and that the question is how to go about demonstrating and sharing that information.
If we can demonstrate that there is great political will, shareholders will show great will to move the idea forward, saying, “Yes, this is important to us. It is like being green. Tax is part of our corporate social responsibility.” We will then be able to make progress. I very much take on board my right hon. Friend’s suggestion and will try to promote it.
The companies that I was referring to have a very devolved and developed sense of corporate social responsibility. British customers, employees and consumers want them to create greater tax transparency. There has been a huge hoo-hah about some large, non-British companies moving their profits overseas. Those companies have had difficulty in interacting with their own customers, and one of them has volunteered to pay tax. It should not be a voluntary option; it should be a legal requirement.
My new website—www.taxchallenge.co.uk—gives hon. Members’ constituents an opportunity to sign a petition calling for greater tax transparency, so that everyone will know which FTSE 100 companies are willing to sign up for that and which are not. Every one of us can then decide individually whether the biggest companies in Britain really care about the poorest in our society, at home and abroad.