Panama Papers

John Redwood Excerpts

Monday 11th April 2016 Commons Chamber

[The Prime Minister]

First of all, let me agree with the right hon. Gentleman that there is no doubt that some bad things are happening in some of these jurisdictions and countries in terms of the hiding of assets and wealth and the avoidance of tax. That is why we want our authorities to go through everything that they can to recover that money. However, just because those bad things are happening, we should not condemn the unit trusts that many investors, such as, as I have said, local government pension funds, trade union pension funds and—who knows—even the pension fund of this House, might well use as a totally legitimate way of investing and then paying tax. I want to make that point.

The right hon. Gentleman also said that we need as many criminal charges as possible. I of course agree with that, but we should not do down the civil action and civil penalties that Revenue and Customs can use. It has 1,100 cases going through and can charge up to 300% of the money.

On whether we have taken this agenda far enough, I would say that this is the first country in the G8 or the G20 to make tax and transparency the No. 1 issue at a G8 or a G20 summit. No one had done it before. We have now done it and it is permanently on the agenda and we see permanent improvements.

I do not think that the right hon. Gentleman is being fair on the Crown dependencies and the overseas territories. For years, there was a reputational and potentially real problem. They have done a huge amount to address that. They are now better placed than other similar jurisdictions. As I said, there are states in the United States of America that have less disclosure and transparency. Let us not be unfair on the Crown dependencies and overseas territories, which we—certainly on this side of the House—are proud to have as part of our family of nations.

As for Scottish trusts and transparency, we are happy to work with and help the devolved Administrations in every way we can. We are also happy to work with and are working with European partners on trusts. My point is that we would not have made any progress on beneficial ownership if we had included trusts in that debate in the G8, but we did make progress for the reason that we gave.

The right hon. Gentleman asked to whom the information about beneficial ownership in the Crown dependencies and overseas territories will be available. It will initially be available to law enforcement agencies, including, crucially, our own. These places are not producing public registers yet. I want them to, but let us be frank: only about three countries in the world, including Britain now, have these public ownership registers. If we had tried to push that on to the Crown dependencies straightaway, we would not have got nearly as far as we have got today. On tax treaties, I am keen that we sign as many as possible. On Cabinet Ministers, I think that the current rules for registering Members’ interests are right, but, as I have said, in the case of Prime Ministers and Chancellors we are going further.

[John Redwood (Wokingham) (Con)]

According to the official Office for Budget Responsibility forecasts, we are likely to lose £7.3 billion of tax revenue to multinational companies over the ensuing five years because they will sue us in court and get the European Court of Justice to overturn the taxes we wish to impose, and there is another £35 billion at risk. What can we do here to make sure those companies pay their fair amounts, which this Parliament wants but the ECJ does not?

[The Prime Minister]

We took a whole series of actions in the Budget, and of course we have the diverted profits tax, which is a tremendous weapon for making sure these companies pay their tax in the jurisdictions where they are rightly earning the money. This tool of being able to exchange tax information and having a common reporting standard, which is what we set in train in 2013, will make the biggest difference.