Panama Papers

John Bercow Excerpts

Monday 11th April 2016 Commons Chamber

[Jeremy Corbyn (Islington North) (Lab)]

I thank the Prime Minister for advance sight of his statement—it is absolutely a master class in the art of distraction. I am sure that he will join me in welcoming the outstanding journalism that went into exposing the scandal of destructive global tax avoidance that was revealed by the Panama papers. Those papers have driven home what many people have increasingly felt: that there is now one rule for the super-rich, and another for the rest. I am honestly not sure that the Prime Minister fully appreciates the anger that is out there over this injustice. How can it be right that street cleaners, teaching assistants and nurses work and pay their taxes, yet some at the top think that the rules simply do not apply to them?

What has been revealed in the past week goes far beyond what the Prime Minister has called his “private matters”, and today he needs to answer six questions to the House, and—perhaps equally importantly—to the public as a whole. First, why did he choose not to declare his offshore tax haven investment in the House of Commons Register of Members’ Financial Interests, given that there is a requirement to

“provide information of any pecuniary interest”

that might reasonably be thought to influence a Member’s actions? The Prime Minister said that he thinks he mishandled the events of the past week. Does he now realise how he mishandled his own non-declaration six years ago, when he decided not to register an offshore tax haven investment from which he has personally benefited?

Secondly, can he clarify to the House and to the public that when he sold his stake in Blairmore Holdings in 2010, he also disposed of another offshore investment at that time? In particular, were any of the £72,000 of shares that he sold held in offshore tax havens?

The “Ministerial Code” states that

“Ministers must ensure that no conflict arises, or could reasonably be perceived to arise, between their public duties and their private interests, financial or otherwise,”

and that all Ministers

“must provide…a full list…of all interests which might be thought to give rise to a conflict,”

including close family interests. So did the Prime Minister provide the permanent secretary with an account of his offshore interests and if not, did he not realise that he had a clear obligation to do so, when part of his personal wealth was tied up in offshore tax havens and he was now making policy decisions that had a direct bearing on their operation? For example, in 2013 the Prime Minister wrote to the President of the European Council opposing central public registers of beneficial ownership of offshore trusts. So, thirdly, does the Prime Minister now accept that transparency of beneficial ownership must be extended to offshore trusts?

The Panama-based law firm Mossack Fonseca registered more than 100,000 secret firms in the British Virgin Islands. It is a scandal that UK overseas territories registered over half the shell companies set up by Mossack Fonseca. The truth is that the UK is at the heart of the global tax avoidance industry. It is a national scandal and it has got to end. Last year, this Government opposed the EU Tax Commissioner Pierre Moscovici’s blacklist of 30 un-co-operative tax havens. That blacklist included the Cayman Islands and the British Virgin Islands. So my fourth question is: will the Prime Minister now stop blocking European Commission plans for a blacklist of tax havens? It turns out that Lord Blencathra, the former Conservative Home Office Minister, was absolutely right when he wrote to the Cayman Islands Government in 2014 to reassure them that our Prime Minister was making a “purely political gesture” about cracking down on tax havens at the G8. It was designed, he said, to be

“a false initiative which will divert other member states from pursuing their agenda.”

Last June, Treasury officials lobbied Brussels not to take action against Bermuda’s tax secrecy. According to the European Union’s transparency register, the tech giant Google has no fewer than 10 employees lobbying Brussels. Bermuda is the tax haven favoured by Google to channel billions in profits. Conservative MEPs have been instructed on six occasions since the beginning of last year to vote against action to clamp down on aggressive tax avoidance. This is a party incapable of taking serious, internationally co-ordinated action to tackle tax dodging. Across the country and on the Opposition side of the House, there is a thirst for decisive action against global tax avoidance scams that suck revenues out of our public services, while ordinary taxpayers have to foot the bill. It undermines public trust in business, politics and public life. It can and must be brought to an end.

We welcome the Prime Minister’s announcement today about new measures to make companies liable for employees who facilitate tax cheating, but it is also too little, too late. In fact, it was announced by the former Chief Secretary to the Treasury a year ago. People want a Government who act on behalf of those who pay their taxes, not those who dodge their taxes in offshore tax havens. Yesterday, my hon Friend the shadow Chancellor set out a clear plan for transparency. He is a Member of this House who has spent all his time in Parliament exposing tax havens and tax avoidance. His paper included a call for an immediate public inquiry into the Panama papers revelations to establish the harm done to our tax revenues and to bring forward serious proposals for reform.

I say gently to the Prime Minister that a tax taskforce reporting to the Chancellor and the Home Secretary, both members of a party funded by donors implicated in the Panama leaks, will be neither independent nor credible. So will the Prime Minister back a credible and independent public inquiry into the abuses revealed by the leaks?

Our task transparency plan called for a specialised tax enforcement unit to be properly resourced, which is key. Since 2010, there have been only 11 prosecutions over offshore tax evasion—a situation that the Public Accounts Committee described as “woefully inadequate”. Having slashed resources and cut 14,000 staff since 2010, will the Prime Minister today guarantee that resourcing to Her Majesty’s Revenue and Customs will increase in this Parliament?

We support real action to end the abuses that allow the wealthy to dodge the rules that the rest of us have to follow. We need to ensure that trust and fairness are restored to our tax system and our politics and to end the sense and the reality that there is one rule for the richest and another for everybody else. The Prime Minister has attacked tax dodging as immoral, but he clearly failed to give a full account of his own involvement in offshore tax havens until this week and to take essential action to clean up the system, while at the same time blocking wider efforts to do so. There are clear steps that can be taken to bring tax havens and tax dodging under control—[Interruption.]

[Mr Speaker]

Order. There is a Minister standing at the Bar shrieking in an absurd manner. He must calm himself and either take a medicament if required or leave the Chamber.

[Jeremy Corbyn]

Thank you, Mr Speaker.

I suggest that the Prime Minister’s record, particularly over the past week, shows that the public no longer have the trust in him to deal with these matters. Do he and Conservative Members realise why people are so angry? We have gone through six years—yes, six years—of crushing austerity, with families lining up at food banks to feed their children, disabled people losing their benefits, elderly care cut and slashed and living standards going down. Much of that could have been avoided if our country had not been ripped off by the super-rich refusing to pay their taxes.

Let me say this to the Prime Minister: ordinary people in the country will simply not stand for this any more: they want real justice; they want the wealthy to pay their share of tax just as they have to pay when they work hard all the time.

[Several hon. Members rose—]

[Mr Speaker]

I was going to call the Chair of the Treasury Committee, but he is toddling out of the Chamber.

[Mr Andrew Tyrie (Chichester) (Con)]

Well, if you would like to call me, Mr Speaker—

[Mr Speaker]

Let us hear from Mr Tyrie. Get in there, man.

[Mr Tyrie]

Thank you very much, Mr Speaker. [Interruption.]

[Mr Speaker]

Order. I am sure that it will be worth waiting for.

[Mr Tyrie]

It is very good of you to give me the floor, Mr Speaker.

I do not think that the Prime Minister has done anything wrong, except, possibly, to comment on the Jimmy Carr case. Tax evasion is illegal and should be very vigorously pursued, if necessary with criminal prosecution and imprisonment. Tax avoidance is not illegal. If the Government or Parliament do not like it, there is no point in moralising. Does the Prime Minister agree that to deal with tax avoidance we need reform to close the loopholes, and vigorous tax simplification to ensure that there are fewer of them?

--- Later in debate ---

[Mr Dennis Skinner (Bolsover) (Lab)]

Does the Prime Minister recall that in the time after he became Prime Minister in the coalition, when he was dividing the nation between strivers and scroungers, I asked him a very important question about the windfall he received when he wrote off the mortgage of the premises in Notting Hill and did not write of the mortgage of the premises the taxpayers were helping to pay for in Oxford? I did not receive a proper answer then. Maybe “Dodgy Dave” will answer it now—[Interruption]—and by the way—[Hon. Members: “Withdraw!”]

[Mr Speaker]

Order. I must ask the hon. Gentleman—[Interruption.] I do not require any assistance from some junior Minister—an absurd proposition! I invite the hon. Gentleman to withdraw the adjective he used a moment ago. He is perfectly capable of asking his question without using that word. It is up to him, but if he does not wish to withdraw it, I cannot reasonably ask the Prime Minister to answer the question. All he has to do is withdraw that word and think of another.

[Mr Skinner]

Which word?

[Mr Speaker]

I think he knows—the word beginning with D and ending in Y that he used inappropriately. Withdraw—it is very simple.

[Mr Skinner]

I know what you are talking about, Mr Speaker. This man has done more to divide this nation than anybody else, and he has looked after his own pocket. I still refer to him as “Dodgy Dave”—[Interruption.] Do what you like! [Interruption.]

[Mr Speaker]

Order. I am sorry, I must ask the hon. Gentleman to withdraw the word—

[Mr Skinner]

Not a chance!

[Mr Speaker]

Very well.

The Speaker ordered Mr Skinner, Member for Bolsover, to withdraw immediately from the House during the remainder of the day’s sitting (Standing Order No. 43), and the Member withdrew accordingly.

[Mr Speaker]

Needless to say, no reply is required to that question.

[Sir Edward Leigh (Gainsborough) (Con)]

Well, it is a shocking scandal: we now know that the Prime Minister divested himself of all his shareholdings before he became Prime Minister and has paid his taxes in full.

--- Later in debate ---

[Pauline Latham (Mid Derbyshire) (Con)]

May I thank the Prime Minister for his very clear statement? This afternoon, I received a furious email from Martin in my constituency, who said he watched the “Murnaghan” show on Sky News yesterday. He was shocked that the shadow Chancellor

“deliberately misled viewers...His ignorance, whether deliberate or not, should be exposed in Parliament. For a Shadow Chancellor to be so blatantly misleading is not acceptable. The Marxist Moron’s political motivations are obvious but not an excuse.”

He adds that the Prime Minister

“could not have paid inheritance tax even if he wished to as the tax is levied on the estate”—

[Mr Speaker]

Order. I am extremely grateful to the hon. Lady. As the Clerk has just pointed out to me, however, this is all very well, but it is nothing to do with the responsibility of the Prime Minister. [Interruption.] Order. Do not argue with the Chair—that is not a wise course of action. The Prime Minister is not responsible for what the shadow Chancellor has said. I say that to the hon. Lady kindly but with some authority in these matters, believe me.

[Alison McGovern (Wirral South) (Lab)]

No one in this House should have to feel that family members are being attacked unfairly, and, in that, the Prime Minister is absolutely correct. May I tell him, though, that it is not clear to me what he believes about holding shares in offshore trusts in tax havens? Does he think that that is perfectly okay, in which case, why would his holding them have been a conflict of interest, or does he think that tax havens are a problem that needs fixing, in which case, why did he have such shares in the first place?

--- Later in debate ---

[Mike Gapes (Ilford South) (Lab/Co-op)]

The Prime Minister referred to his anti-corruption summit. Will he tell us which countries will be represented there? Will an invitation be extended to either President Putin or some of his corrupt cronies, and those who fund the RT propaganda channel, to explain the $2 billion held in Panama by that corrupt regime?

[Mr Speaker]

The hon. Gentleman has been restored to rude health. I welcomed him earlier, and I know that the Prime Minister will welcome him.

[The Prime Minister]

I am glad to see the hon. Gentleman back in his familiar place. It is fair to say that the guest list for the anti-corruption summit is still being worked on. The point is that we will ask people not on the basis that they run perfect countries or perfect Governments but on the basis of whether they will commit to public declarations on things like open beneficial ownership registration, sharing tax information, and making sure that when assets are looted we can confiscate them and restore them to the people they belong to. If countries want to sign up to that, we will be encouraging them to come and do just that, however imperfect their record may have been in the past.

--- Later in debate ---

[Several hon. Members rose—]

[Mr Speaker]

Order. I am sorry to disappoint remaining colleagues, but we have had a full exchange and must now move on to the second statement.