Tax Avoidance and Evasion

Stewart Malcolm McDonald Excerpts

Wednesday 13th April 2016 Commons Chamber

[Mr Gauke]

The hon. Gentleman raises an important point, and I think there is scope for going further on it. What we have agreed is to ensure that we have access to those central registers. That is clearly very helpful but I think more progress can be made in that area and it is something to return to in the future.

Panama is one of the very few financial centres that has not yet fully committed to these international standards. We are clear that it should do so, and we continue to press for Panama to join the club of responsible nations. Of course, there is more international work to be done, particularly on tackling money laundering. That is why we are hosting an anti-corruption summit in May, with the aim of encouraging consensus not just on exchanging information, but on publishing such information and putting it into the public domain, as we are doing in the UK. Once again, Britain is leading the world on transparency, accountability and responsibility.

[Stewart Malcolm McDonald (Glasgow South) (SNP)]

rose—

[Mr Gauke]

There are a few more points that I want to make, if the hon. Gentleman will forgive me.

Let me address the subject of the UK’s Crown dependencies and overseas territories. Reform of the regimes of the overseas territories and Crown dependencies has been a key objective for the UK, and the reforms that we have secured have been considerable. All the UK Crown dependencies and overseas territories with financial centres are signed up as early adopters of the common reporting standard, reporting annually from 2017 in respect of data that have already been collected. The Crown dependencies and overseas territories will share information with the UK from this year, one year earlier than the rest of the world. All the UK Crown dependencies and overseas territories with a financial centre have committed to transparency on company ownership.

Last Monday the Prime Minister announced that our overseas territories and Crown dependencies have agreed that they will provide UK law enforcement and tax agencies with full access to information on the beneficial ownership of companies. For the first time, UK police and law enforcement agencies will be able to see exactly who owns and controls every company incorporated in those territories. This is a major step forward in transparency, the result of the Government’s sustained work in this area.

It is right that we expect the overseas territories and Crown dependencies to meet international standards, and indeed they do. Yes, we want them to move towards a public central register. That is not yet the international standard. If, as the Leader of the Opposition suggests, every former colony that does not have a public register should be recolonised, where would we begin? Is he proposing that we invade Delaware? [Interruption.] Now we come to mention it, says the hon. Member for Wolverhampton South West (Rob Marris).

The reality is—and this is the point that my hon. Friend the Member for Newark (Robert Jenrick) was right to raise—that the UK is in favour of a public register. We are implementing a public register in June for the first time. We have never had one before. We want other countries to do it, but very few of our European Union colleagues do so. It is not the case that the US does it. We want to ensure that it becomes the new international standard, but Orders in Council condemning overseas territories for failing to do what most of our EU colleagues do not do would not be fair or effective. The approach that we have taken has brought the overseas territories and Crown dependencies a long way. I fear that the approach advocated by the Labour party would fail to work.

--- Later in debate ---

[Stewart Malcolm McDonald (Glasgow South) (SNP)]

Well, it is some scandal, is it not, that has been leaked to us? Criminals, politicians and dictators have been hiding billions and billions of pounds in offshore accounts under the names of companies that do not actually exist. In fact, it is the scale and nature of the scandal that causes me to be so depressed about the nature of the debate we have had both in the Chamber this afternoon and in the run-up to this afternoon. It has taken us almost two weeks to actually start debating the issue. I did not quite buy everything that the hon. Member for Newark (Robert Jenrick) had to say, but I thought he at least gave one of the most incisive speeches among this afternoon’s contributions.

It is obvious that this issue is such a major hot potato for the two main parties in this Chamber: so hot that they seem to prefer to kick it back and forward—“You’re worse than us.” “We’re better than you.” Meanwhile, the public want us to debate the issues raised by the leaks. Forget the Twitter hashtags. Forget what has been written in the newspapers. Forget the sneering snobbery on one side and the braying mobs on the other. Let us actually deal with the issue. The issue is not about class; we can have an academic discussion about class later on. This is about criminality. That is what the motion seeks to address and what I think all of us in the Chamber really want to address.

It strikes me that there are two key ways in which we can tackle the problem: through the resources made available to the public agencies and through changes to legislation. As a lot of Members have mentioned, we can also look at beefing up international co-operation. I genuinely welcome the measures the Prime Minister announced in his statement to the House on Monday. The cross-agency taskforce and the funding that will come with it, and the other measures relating to legislation, are extremely important and to be welcomed. I would like the Minister, in summing up, to say whether Interpol will have a role to play. I have not heard anything about that at all. In fact, no public statement has been made on this issue on Interpol’s website. I would therefore like to know whether Interpol will be invited to the corruption summit the Prime Minister will be hosting.

I am concerned about the pattern that forms when big scandals break, whether it is this one, the Volkswagen scandal or the Google scandal. This is a very British pattern—a pattern of only ever responding to events. I had hoped to hear more about how the Government intend to beef up the resources of HMRC to deal with this, because it is clearly not working. We have had some back and forth about more money, fewer staff and more staff, and fewer centres. It is clearly not working, so somebody really needs to step back and look at the problem within the context that actually exists. I had also hoped to hear more about how we would be trying to recoup some of the tax we are owed. I go back to the point made earlier: this is about criminality. I can only hope that some of this will be getting talked about in the Paris talks today, at which, I understand, the UK Government are represented.

The Government made a lot of their ambition to secure economic security for Britain. They are absolutely right to mention that. The threats we face in terms of financial security are not to be taken lightly. In my view, they should be up there with the threats we face from terrorist organisations. There are different consequences, but both are absolutely serious. Just as the Prime Minister announced the recruitment of additional staff for agencies such as MI5 in the aftermath of attacks on our doorstep in Europe, he should seek to do the exact same thing for the public agencies dealing with criminal finance.

I do not have much time to go into the detail, but I would like the Government to reflect more about what happens in Australia with unexplained wealth orders. I shall not throw my full weight and support behind them, because I am hesitant about what they mean for the presumption of innocence and the right to silence. We should, however, look at the issue. Such orders are also being used successfully in Italy against gangs such as the Mafia.

The public require us to act and to stop the politicking that we have seen in some contributions today. This is a big challenge, and what we need to deal with it are the fine minds of this House—there are some, such as the right hon. Member for Barking (Dame Margaret Hodge), the former Chair of the Public Accounts Committee—coming together on a cross-party or perhaps even a cross-parliamentary basis. We could tap in to some of the devolved Parliaments as well, and start to take the issue seriously. We should ignore all those who operate under a cloud of anonymity, who tell us, “You wouldn’t understand it; it is too difficult”. That just allows them to carry on doing what has got us to this point. Failure to act will keep on feeding the cancerous way in which our politics is conducted. That will be to the detriment of us all.