At Prime Minister's Questions yesterday, Phil Wilson MP asked the Prime Minister whether he had discussed allegations of tax avoidance with the former HSBC boss and trade minister Stephen Green. The Prime Minister failed to answer, despite being asked a further three times by other Labour MPs.
His question came after Labour set out the measures it will take to tackle tax avoidance in the first months of a Labour Government.
With campaigners and NGOs backing calls for a “Tax Dodging Bill”, Labour’s first Finance Bill will act to tackle tax avoidance. Labour set out the measures in an Opposition Day Debate yesterday.
Labour’s motion noted that just one out of 1,100 people who have avoided or evaded tax have been prosecuted following the revelations of malpractice at HSBC bank, which were first given to the government in May 2010.
It also called upon Lord Green and the Prime Minister to make a full statement about his role at HSBC and his appointment as a Minister in 2011.
Labour will act in our first Finance Bill to:
· Introduce penalties for those who are caught by the General Anti-Abuse Rule
· Close loopholes used by hedge funds to avoid stamp duty
· Close loopholes like the Eurobonds loophole which allow some large companies to move profits out of the UK and avoid Corporation Tax
· Stop umbrella companies exploiting tax reliefs
· Scrapping the “Shares for Rights” scheme, which the OBR has warned could enable avoidance and cost £1bn and is administered by HMRC, and so ensure HMRC can better focus on tackling tax avoidance
· Tackle disguised self-employment by introducing strict deeming criteria
· Tackle the use of dormant companies to avoid tax by requiring them to report more frequently
Labour’s measures to tackle tax avoidance will also include:
· Ensuring stronger independent scrutiny of the tax system, including reliefs, and the government’s efforts to tackle tax avoidance
· Forcing the UK’s Overseas Territories and Crown Dependencies to produce publicly available registries of beneficial ownership
· Making country-by-country reporting information publicly available
· Ensuring developing countries are properly engaged in the drawing up of global tax rules
Phil said: "It is of the utmost important to me and to a future Labour Government to tackle the immoral practice of tax avoidance.
Life is getting harder for many people in this country under the Conservatives. They have broken their promise to reduce the deficit, borrowing £219 billion more than they planned. Despite on-going investigations into tax avoidance, the current government has failed to tackle it. Without radical reform of our economy, the future will only belong to the few. A Labour government is therefore essential to ensure these vital reforms are implemented.
In 2015, Labour will lay the foundations of a new economy, reforming institutions from energy to the banks, to deal with the causes of our economic problems.
A key building block for this reform is to root out and tackle tax avoidance. Within the first month of a Labour government, Labour will set out measures to tackle this."
Ed Balls MP, Labour’s Shadow Chancellor, said:
“David Cameron and George Osborne have totally failed to tackle tax avoidance in the last five years.
“They have failed to close the loopholes we have highlighted. And the amount of uncollected tax has risen under this government.
“I am determined that the next Labour Government will act where the Tories have failed.
“We will close loopholes that cost the exchequer billions of pounds a year, increase transparency and toughen up penalties. And we will act in our first Finance Bill.”