Tax Avoidance and Multinational Companies

Debate between Graham Stuart and John McDonnell

Wednesday 3rd February 2016 Commons Chamber

[John McDonnell]

I am going to press on, because time is short.

I have written to the Competition Commissioner to request a formal investigation of this deal. There was a visible flicker of life from the Chancellor a few days ago. In the pages of Monday’s Financial Times he let it be known that he might, after all, favour country-by-country reporting for multinational corporations. Tax experts and campaigners and I have long argued that this is a vital step towards transparency, and therefore towards fair collection. By revealing in their accounts in which tax jurisdiction their revenues were earned, a proper rate of tax can be applied to multinational companies. If the Chancellor now supports country-by-country reporting, I welcome that. However, the impression was given that even without international agreement the Government would act. Is this the case, or was it just a publicity stunt that has now been dropped?

My hon. Friend the Member for Leeds West (Rachel Reeves) referred to Bermuda. On the “Andrew Marr Show” on Sunday a senior Google representative revealed that the company has £30 billion of profits resting in Bermuda, a British overseas territory. This is in order to avoid US tax rates. We now know that the Chancellor has been lobbying the EU and instructing his MPs to vote against anti-avoidance measures against Bermuda. It is a disgrace.

It was also revealed last week that Government Ministers have met Google 25 times over the past 18 months. I note that the Prime Minister himself has spoken at Google’s conference not once, but twice. If Ministers are to meet anyone, my advice is that they go and meet the trade union representatives of HMRC staff. With almost half the workforce having been laid off, and with offices having been closed across the country, it is widely known that morale is at rock-bottom, especially with the loss of highly experienced and expert staff. [Interruption.] Madam Deputy Speaker, a reference has just been made to declaring an interest. I have no interest to declare. I think that was a reference to the Public and Commercial Services Union and part of its trade union group. It does not fund the Labour party or my constituency. There is no interest to be declared.

We cannot allow the Government to go on like this. Trust and confidence in our tax system is being undermined. Every pound in tax avoided by these large corporations is a pound taken from the pockets of honest taxpayers. It is also a pound not spent on our schools, our NHS and our police. We need a real tax reform agenda, based on the principle of complete openness and transparency. First, that means, as a start, the publication of the details of this deal in full, so that we and our constituents can judge whether it is fair enough. Secondly, we need real country-by-country reporting of a company’s activities, and not just a secret exchange of information between tax authorities, but full publication so that we can all judge.

[Graham Stuart (Beverley and Holderness) (Con)]

The shadow Chancellor said that he would set out his ideas, and I had hoped that he would talk about a more revolutionary change to the methods of taxation. With the massed ranks of corporate lawyers put up against national tax jurisdictions, it is an uneven battle, so perhaps we need some more radical thinking altogether.

[John McDonnell]

The hon. Gentleman has taken an interest in this matter over many years and has regularly been in debates with me in this Chamber. I fully agree that we need a more radical approach.

Let me complete the recommendations briefly, because I think that they will open up a much wider debate. Thirdly, we need an end to mates’ rates and sweetheart deals with major corporations. Tax law should be applied fairly whatever the size of the company. Fourthly, we need full transparency in the relationship between Ministers and companies, so I want to see publication of all the minutes of all such meetings. Fifthly, we need firmer action to curb the tax avoidance industry, so action should be taken against the advisers when the tax avoidance schemes they designed are found to be unlawful by tax tribunals and courts. The same advisers advise Her Majesty’s Treasury and help write our tax laws. That is unhealthy and unacceptable.

Public Forest Estate (England)

Debate between Graham Stuart and John McDonnell

Wednesday 2nd February 2011 Commons Chamber

[John McDonnell]

As I have said, we need to recognise that these forests have been preserved for us by staff who have worked for us for generations over the last century. In my view, failure to discuss the staff undermines the Government’s duty of care to those people who have served us so well.

[Mr Graham Stuart]

Will the hon. Gentleman give way?

[John McDonnell]

Will the hon. Gentleman allow me to continue? Other Members wish to speak.

The consultation document contains only one paragraph that deals with staff. It states that the Transfer of Undertakings (Protection of Employment) Regulations will apply to the transfer of any of them. However, as we know from other privatisations and sell-offs, TUPE does not prevent a new employer from laying off staff in due course. It does not protect pay and terms and conditions in the long term.

[Mr Stuart]

Will the hon. Gentleman give way on that point?

[John McDonnell]

No, I will not.

TUPE does not even protect pensions. There is nothing to prevent a new employer from laying off staff while also undermining their conditions and pensions. I urge the Government to address the issue of their future. When I looked at the impact assessment to see whether there was any reference to it, I found that the only reference in the first seven pages related to redundancy costs. It reads as follows:

“Transition costs of redundancy, TUPE and possible further professional fees have not been quantified.”

That is repeated six times. It appears on each of the first seven pages of the document.

There are real anxieties among this group of expert staff about their future. There are anxieties about a transfer to the voluntary sector. Most Members have been involved with charities—most of us have served on their boards—and we know how difficult it is to maintain a charity. In any charitable or voluntary organisation, about 30% of the time is spent on trying to find funds for future years.