Labour Calls For Further Clampdowns On Tax Havens

'More Leadership' Needed On Tax Havens, Says Umunna
Shadow Business Secretary Chuka Umunna
Shadow Business Secretary Chuka Umunna
PA

Shadow business secretary Chuka Umunna has called on the government to clamp down further on British companies' tax avoidance overseas, after Prime Minister announced a new 'transparency' agreement with UK tax havens.

The Labour MP told the BBC One Andrew Marr Programme he had written to the Government to demand Companies House properly reports to HMRC about firms which do not properly report overseas subsidiaries.

He said: "HMRC works alongside Companies House to tackle these issues. Companies House works to ensure companies disclose the information that enables HMRC to act.

"That's why today I've written to the Government to find out exactly what they're going to do to ensure Companies House can actually do that job properly.

"In respect of the existing rules and transparency measures there are, Companies House is not actually enforcing them properly.

"It's no good the Prime Minister making new announcements about a new registry yesterday; if you're not actually enforcing the current regime, what hope is there in respect of the future?"

Shadow Treasury minister Catherine McKinnell said Cameron was failing to demonstrate the necessary leadership on tax avoidance.

"We need proper transparency about who is really holding their wealth behind both shell companies and trusts in tax havens - not secret lists in the UK, and vague promises of future action by the UK's overseas territories and Crown dependencies," she said.

"The Government should ensure that developing countries benefit from greater transparency. David Cameron should be tabling proposals for country-by-country reporting, and fundamental reform of the rules which allow multinational companies to shift their profits and avoid tax.

"Improving tax fairness in this way would benefit both developed and developing countries, but he is failing to do it."

Speaking later on the Marr programme, Deputy Prime Minister Nick Clegg said it was important companies abided by both the spirit and the letter of the rules - and highlighted the Governnment's General Anti-Abuse Rule.

He said: "The point I made to (Google Executive Chairman Eric Schmidt) is there are the rules but also public sentiment, not least the consumers and customers of Google, who want to see people playing by the rules but also playing fairly and providing the taxes in those areas where they operate and where they make significant profits."

The Prime Minister has hailed the agreement struck in talks in Downing Street with the leaders of the 10 offshore jurisdictions on the exchange of information between tax authorities as a "very positive step forward".

He said he hoped it would strengthen his hand in negotiations at this week's G8 summit at Lough Erne in Northern Ireland where he has placed tax transparency at the top of the agenda.

Earlier, in a further move to show that he was "getting our house in order", Cameron announced plans to establish a register of beneficial ownership in the UK - requiring opaque "shell" companies to declare who were the ultimate beneficiaries of their operations.

Anti-poverty campaigners welcomed the announcements but said they were only a first step in ensuring developing nations were able to collect the billions they were entitled to in tax revenues.

Melanie Ward, of the Enough Food for Everyone IF campaign, said: "David Cameron has today cleared a big obstacle to a clampdown on tax dodging, but a G8 agreement that will help the world's poorest is hanging in the balance.

"The acid test of the PM's efforts will be whether he delivers a G8 deal that clamps down on tax haven secrecy and phantom companies, and will help poor countries collect the money they need to end the scandal that sees one in eight people go to bed hungry."

Michael Elliott of the ONE campaign said: "We need to see more progress on these issues over the coming days. By taking these steps, the G8 can make sure that it not only puts its own house in order, but does so in ways that work for people beyond the G8 too."

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