Stephen McPartland MP: My campaign to stop big companies dodging tax
Stephen McPartland is Member of Parliament for Stevenage and has written to the Chief Executives of all the FTSE 100 companies to ask them individually if they are willing to pledge their support for corporate tax transparency and if they will support a new international accountancy standard for country-by-country reporting. The responses are being published at www.taxchallenge.co.uk so that the general public know which FTSE 100 companies are willing to sign up to tax transparency and which are not. Follow Stephen on Twitter.
I took up the initiative after meeting Christian Aid supporters when the Tax Justice Bus visited Stevenage. The tax justice campaigners believe that tax dodging by international companies costs the UK around £35 billion and developing countries an estimated $160billion per year. Just imagine the dramatic difference such a huge sum of money would make if it was available to invest in public services, infrastructure and other vital services essential for economic growth.
I know that Governments from all around the world will agree with the sentiment of greater tax transparency, but they will struggle to introduce it as every nation competes in the global race. Despite the best of intentions, I believe that in the end it will be up to the companies themselves to lead the way and they will only do that if their customers-the British public-drag them kicking and screaming towards tax transparency and a fairer tax system for us all.
The responses from the FTSE100 companies have been wide-ranging but generally disappointing. HSBC has offered to help design a tax transparency standard, BT and others have welcomed the transparency initiative - although not the new accounting standard - and Hargreaves Lansdown has questioned the value that it receives for the taxes that it pays. On a more positive note the Chief Executive of Sainsbury's agreed that consumers are best placed to encourage companies to pay the tax they are supposed to, as they can vote with their wallets if they do not think the company is making a fair contribution to society. Capita stated they were both interested and supportive of establishing a new international accounting standard. Morrisions suggested that the Government should force all companies to disclose their corporation tax payments in the UK. The refreshingly honest response from Aggreko summed up what many other companies felt, that they were paying lots of tax and probably more than needed but felt greater tax transparency was a 'lousy idea'.
I could go on, but the general thrust is pretty simple - the biggest companies in Britain believe they all honestly pay their taxes and make a huge contribution to the economy by employing people who have to pay taxes. The majority of responses so far clearly show that they are not prepared to be proactive and will only comply with the laws as they stand. Unfortunately, fancy corporate lawyers can blur the lines between tax avoidance and tax evasion, but it is clearly wrong, illegal and unfair to the rest of society.
I will keep publishing the responses at www.taxchallenge.co.uk and let the public decide individually whether the biggest companies in Britain really care about the poorest in our society, at home and abroad. From the responses I have received so far, I am not convinced they do care.