Tory Government puts the interests of multinational corporations at top of their priorities
The Government continues to say that the ONLY alternatives are spending cuts or tax increases. They always ignore the tax dodgers who never pay their whack – and they continue to put the interests of big business first over the British working people. Possibly if everyone paid their dues, there would be no need for any austerity.
The UK economy is in trouble as we well know – otherwise why the austerity – Government debt is increasing at about 3 per cent of GDP each year. To get that under control we need the corporations who avoid paying tax to pay what they are due not reach secret agreements with HMRC behind closed doors to pay trivial amounts of tax. The tax system probably needs complete overhaul, but that will not happen until we get a Labour Government. Until then the least we can push for is that the Government stops paying lip service to dealing with multinational corporations.
It is not just the UK that is losing out, but France and other EU countries that these corporations operate in. For example Netflix paid absolutely no UK corporation tax in 2014 despite being estimated to have around 4.5m UK subscribers. However, it did pay tax in Luxembourg, but at an equivalent rate of about 5 per cent. Vodafone made £1.97bn of profits in the year to March 31, 2015 but confirmed that it paid no UK corporation tax in 2014/15. Of the top 10 companies on the London Stock Exchange, six paid no UK corporation tax in the period covered by their latest annual accounts.
The EU has for far too long, been dragging it’s feet on this issue, but Labour MEPs together with other Socialist and Democrats in the European Parliament have been backing measures to combat corporate tax dodging. Needless to say the Tory MEPs have consistently voted against any measures of this type while paying lip service to the need for them.
The European Commission announced on 28 January 2016 proposals for new laws to tackle tax avoidance and evasion in the EU, which echo the recommendations of Labour MEP Anneliese Dodds’s recent report.
The plans include making more companies report, country-by-country, where they make their profits and where they pay their taxes. Other proposals include applying sanctions to tax havens and companies using them. The new legislation will mean EU countries will need to take a common approach to preventing tax avoidance and tackling tax havens. It’s no wonder that David Cameron wants the UK to be able to ignore EU directives, but still be a member of the EU.
John McDonnell said: “The mask has finally slipped. The Tories have been saying they want to clamp down on tax avoidance to the British people, but when they think our backs are turned they are telling their MEPs to oppose any measures to make it happen. The truth is they run a ‘don’t know, don’t care’ approach to tax avoidance.”
John McDonnell, Shadow Chancellor, has written to George Osborne, Chancellor, to ask him for full disclosure and transparency of the Treasury’s tax deal with Google. See the letter in full [Here]. John has published his own tax return in the Sunday Mirror and has called on George Osborne to follow suit.