UK by far the biggest enabler of global corporate tax dodging, groundbreaking research finds

The UK is by far the world’s biggest enabler of corporate tax dodging, helping funnel hundreds of billions of dollars away from state coffers, according to an international investigation.

www.independent.co.uk 

Of the top 10 countries allowing multinationals to avoid paying billions in tax on their profits, four are British overseas territories.

Chancellor Philip Hammond has pledged to crack down on multinationals like Google and Amazon that boost profits by shifting huge sums through low-tax jurisdictions.

But an index published today by the Tax Justice Network found that the UK has “single-handedly” done the most to break down the global corporate tax system which loses an estimated $500bn (£395bn) to avoidance.

The amount dodged globally each year is more than three times the NHS budget or roughly equivalent to the entire Gross Domestic Product (GDP) of Belgium. Tax haven territories linked to Britain are responsible for around a third of the world’s corporate tax avoidance risk – more than four times the next greatest contributor, the Netherlands.

Topping the list was the British Virgin Islands, followed by Bermuda and the Cayman Islands – all British overseas territories. Jersey, a Crown dependency, was seventh while the UK itself comes in thirteenth.

Alex Cobham, chief executive at the Tax Justice Network, described the hypocrisy of rich nations which enable tax avoidance as “sickening”.

“A handful of the richest countries have waged a world tax war so corrosive, they’ve broken down the global corporate tax system beyond repair,” Mr Cobham said.

“The UK, Netherlands, Switzerland and Luxembourg – the Axis of Avoidance – line their own pockets at the expense of a crucial funding stream for sustainable human progress.

“The ability of governments across the world to tax multinational corporations in order to pay teachers’ wages, build hospitals and ensure a level playing field for local businesses has been deliberately and ruthlessly undermined.”

The index, which is the first-ever study of its size and scope, scores each country’s system based on the degree to which it allows companies to avoid tax. This is then combined with the scale of its corporate activity to determine the share of global taxes put at risk.

It covers 64 jurisdictions and is based on a score reflecting how aggressively they use tax cuts, loopholes, secrecy and other mechanisms to attract multinational activity.

Other countries in the UK network, including Turks and Caicos Islands, Anguilla, the Isle of Man, and Guernsey, also scored highly for allowing corporate tax dodging.

Such countries have prompted a “race to the bottom” that has depleted tax revenues and has particularly harmed poorer nations, the Tax Justice Network said.

While many of the top 10 tax haven territories are tiny, they are home to trillions of dollars of foreign direct investment – suggesting that many of these flows may be motivated by reducing tax bills rather than genuine economic activity.

Labour’s shadow chancellor, John McDonnell, said, “The Tories’ record on tax avoidance is embarrassing and shameful.

“The only way the UK stands out internationally on tax is in leading a race to the bottom in creating tax loopholes, and dismantling the tax systems of countries in the Global South.

Angela Eagle asks about Google tax

“The rot has to stop. While Tory leadership hopefuls promise tax giveaways for the rich, a Labour government will implement the most comprehensive plan ever seen in the UK to tackle tax avoidance and evasion.”

Mr Cobham added: “To curtail the corporate tax avoidance that costs hundreds of billions of dollars every year, governments must finally deliver international rules that ensure profits are declared, and tax paid, in the places where real economic activity takes place.

“Corporations should be taxed where their employees work, not where their ledgers hide.”

Christian Aid condemned the UK for “turning a blind eye” to large-scale tax avoidance and contributing to a lack of vital services across the globe.

The charity’s global lead on economic justice, Toby Quantrill, said: “The Corporate Tax Haven Index is a critical piece of work that deepens our understanding of just how broken the global economic system really is.

“It highlights the role of the UK and its network of Overseas Territories and Crown Dependencies in undermining the ability of other countries, including some of the poorest in the world, to provide for the most basic rights of their citizens.”

He added: “This is a problem that Christian Aid first highlighted more than 10 years ago, and which has been widely acknowledged, yet remains fundamentally unsolved.”

A spokesperson for the Treasury said tackling tax avoidance was a priority for the government.

The spokesperson added: “We’ve been at the forefront of international action to reform global tax rules, using our presidency of the G8 in 2013 to initiate the first substantial renovation of international tax standards in almost a century.

“We also introduced the Diverted Profits Tax to counter aggressive tax planning techniques used by multinationals, and we’ve secured and protected £200bn in tax revenues since 2010 from compliance activities which would otherwise have gone unpaid.”

 

Exclusive: UK trade minister reverses decision to remove think tank meetings from public register

LONDON (Reuters) – British trade minister Liz Truss has reversed a decision to remove meetings she held with an influential free-market think tank from the public record, a move the opposition Labour Party said raised questions about lobbying in government.

William James uk.reuters.com 

Two meetings and a dinner with the Institute of Economic Affairs will be added back to government transparency data after the department deleted them in August, arguing at the time that they were held in a personal capacity, not in her role as trade minister.

Labour has accused Truss of trying to hide the meetings and described the latest u-turn as “shambolic farce”, saying she appeared to have been caught trying to circumvent rules designed to stop “secret lobbying” of ministers.

On Thursday, one of Truss’s junior ministers wrote to Labour to say that the meetings would now be reinstated on the public record, according to a copy of the letter seen by Reuters.

“The Secretary of State (Truss) was not immediately aware of these changes made at the end of August, and has now carefully considered the appropriate Cabinet Office guidelines,” Graham Stuart wrote in the letter.

“Sometimes it is not entirely clear-cut whether an event is ‘political’ or is independent of a Minister’s official responsibilities. However, in the interests of full transparency, she has asked that these entries are to be reinstated as per the original departmental publication.”

Stuart said senior Labour figures had not published transparency information about their meetings with the media since 2016.

The IEA is widely regarded as one of Britain’s most influential right-leaning think tanks. It promotes free-markets and its research has argued for a clean break from the European Union since the 2016 Brexit referendum.

The trade department originally said the IEA’s meetings with Truss were included on the transparency register due to an administrative error. The subsequent removal was the first in the department’s history. The department did not respond to a request for comment on Thursday.

Labour’s trade policy chief Emily Thornberry said there were further questions to be answered about the meetings, including who Truss met and what was discussed.

“Behind this shambolic farce, there is a serious issue,” Thornberry told Reuters.

“The Cabinet Office rules exist to stop secret lobbying, dodgy dealing, and favors for cronies. Those rules are an important part of our democracy, and not for the first time, Liz Truss has been caught out apparently trying to get around them.”

Reporting by William James and Andy Bruce; editing by Guy Faulconbridge, William Maclean

 

Petition: Order an official probe into potential Russian interference in the EU referendum

petition.parliament.uk /petitions/332293

They must take on the formal demand from the Parliament’s Intelligence and Security Committee to write a full assessment of potential Russian interference in the EU referendum and publish an unclassified summary.

The long awaited Russia Report has been released and the The ISC said the UK Intelligence Community should now write an assessment of “potential Russian interference in the EU referendum” and publish an “unclassified summary”, “to establish whether a hostile state took deliberate action with with the aim of influencing a UK democratic process.”This must be done to uphold our democracy.

Sign this petition

This petition has already exceeded 10,000 signatures, triggering the government to respond. Next trigger point at 100,000 signatures would force a debate in parliament.

 

Older people without children can’t rely on unpaid, informal care 

More and more people are ageing with no one to look after them in later life. These are the findings of a recent report released by the Office for National Statistics. This is, of course, the inevitable consequence of two demographic changes in Britain since the second world war: increased life expectancy and declining fertility. But it is also a reality that few are willing to face, and one for which our society is woefully unprepared.

Zeynep Gurtin www.theguardian.com 

The ONS report projects that by 2045 there will be a threefold increase in the number of women who reach the age of 80 without children. This is deeply concerning, since our society relies heavily on adult children to provide informal care for older people, and since there is already a staggering unmet care need among today’s older population. At present, 41% of those aged 80 and over are not receiving the help and support they need with at least one daily activity, a figure that is set to skyrocket unless we proactively change how we think about ageing, childlessness and care responsibilities.

One of the major problems in our current thinking is an implicit and pervasive gender bias. Not only does the burden of unpaid care work fall mostly on women’s shoulders – a fact that was thrust into the limelight with women’s plummeting productivity during lockdown – but it is also women who bear the brunt of criticism when their lives diverge from normative expectations. Jody Day, founder of Gateway Women – a global organisation supporting involuntarily childless women – notes that the ONS does not even collect data on men’s childlessness, “fuelling the sexist notion that this is exclusively a women’s issue”, when similar numbers of men are impacted.

She says: “There is an assumption that childless women have been selfish, left it too late, or prioritised their careers, and therefore the sense that it’s somehow their own fault if there is no one to look after them.” This, of course, is a stigmatising myth that is far from the truth. Childless women are not a uniform entity, and though some choose childfree living, many are “childless by circumstance” – meaning they wanted children but never had them. This may be either because they were not in a suitable relationship, or because their partners did not want any.

These women’s stories are a testament to the need to recognise the ways in which rising rates of childlessness are also tied to men’s preferences and lifestyles, and the changing nature of intimate relationships, at least as much as they are to women’s greater education and participation in the labour market.

While most people don’t consciously have children just to secure their care in old age, many do step up to the responsibility of caring for their parents when required: most of the 6.5 million informal carers in the UK are looking after a parent or a parent-in-law. Unsurprisingly, then, planning for old age becomes a stark practical consideration for those who are childless, with some walking the tightrope of caring for their elderly parents without a safety net in place for themselves. Jessica Hepburn, a fertility education campaigner, says: “I look after my 88-year old mother, and I am aware that I am not going to have that.” She says that for many on the infertility journey “it can be impossible to think about the future when you are in a paralysed present”.

It is, of course, not just childless people who may have to face old age without family to look after them. Adult children may be too far away, too busy, or too disconnected to care for their parents. Or they may have needs of their own that preclude them from becoming carers. Kirsty Woodard, who leads the Ageing Without Children consultancy, notes that although care services in the UK rely heavily on family carers, there are already more older people needing care than family available to provide it. She argues that the solution lies in designing robust care systems that do not rely on family input, but which cater to “the population we have now and will in the future, not one from the past”.

As the gap widens between our assumptions of informal family care and our demographic structures, we are sleepwalking faster and faster into a severe care crisis. Those ageing without children are 25% more likely to go into residential care – but our care homes are already undervalued, underfunded and struggling to cope, and it will be impossible for them to meet the rising demand. This reality is particularly poignant in the wake of the catastrophic impact of the coronavirus pandemic on Britain’s care homes.

The ONS report also highlights an issue that Ageing Well Without Children has been campaigning to raise awareness of for years – the need to plan ahead for the growing numbers of ageing childless people. As well as the infertile and the “childless by circumstance”, these issues also have a heavy impact on the LGBTQ community (of whom about 90% are ageing without children), and those living with disabilities (85% without children), creating further burdens for groups already facing disproportionate hardship and discrimination.

Adding her perspective as a psychotherapist, Jody Day says: “People do not want to think about ageing without children because in a society that does not value its elders, it touches on all of our deepest fears about being old, alone and vulnerable.” There is, unfortunately, no easy solution: this is a pressing issue that requires ideological, social and economic commitment. We urgently need to develop more positive models for ageing, and invest in formal care systems that are comprehensive and accessible to all who need them.

But first of all, we need to question the erroneous assumptions on which our current care provision is founded: that we can rely on informal and unpaid labour to look after society’s vulnerable members, and that women can and will continue to shoulder this burden.

  • Zeynep Gurtin is a lecturer in the Institute for Women’s Health at UCL

 

 Rights watchdog backs Cathy Gardner’s court action over Covid deaths in English care homes

The human rights watchdog for England and Wales has backed a grieving daughter’s court action against the health secretary, Matt Hancock, over his handling of the coronavirus pandemic in care homes.

Robert Booth www.theguardian.com

Cathy Gardner, who lost her father, Michael Gibson, to Covid-19 in a care home that accepted hospital discharges, is seeking a judicial review of policies that she alleges “failed to take into account the vulnerability of care home residents and staff to infection and death, the inadequacy of testing and PPE availability”.

The government denies acting illegally over care homes in England, where more than 15,000 people have died with confirmed or suspected Covid-19.

But the Equalities and Human Rights Commission said the case “raises potentially important issues of public interest and concern as to the way in which the rights of care home residents have been and will be protected during the current coronavirus pandemic”.

Gardner is a member of the Covid-19 Bereaved Families for Justice UK group, which Boris Johnson this week declined to meet, having previously said he would. Johnson claimed he could not meet members because they were “in litigation against the government”. Aside from Gardner’s separate action, the group is sending pre-action letters to try to force a public inquiry, but denies this amounts to litigation.

“The bereaved families group isn’t backing down in its call for a public inquiry and I am not backing down in my call for a judicial review into policies I believe led to deaths in care homes,” Gardner said. ”I am delighted the EHRC have written to the court. This is a Human Rights Act case.”

The request for a judicial review of actions by Hancock, Public Health England and NHS England is being considered by a judge.

Arguments filed by Gardner claim decisions to prioritise NHS hospital capacity to deal with critically ill Covid-19 patients was “disproportionate, discriminatory and irrational”. She also alleges that the government breached the NHS Act 2006, which obliges the health secretary to take steps to protect the public in England “from disease or other dangers to health”.

The government strongly denies the claims and says it took extensive steps to protect staff and residents in care homes. It denies breaching obligations under the European convention on human rights to manage risks posed by the virus to care home staff and residents.

It said the convention must not be used to enforce an “impossible or disproportionate burden on the authorities”.