Let’s take this chance to make corporate transparency the norm
Conservative MP Nigel Mills urges his colleagues to back an amendment requiring companies to publish information on how much tax they pay in each country.
Rarely has tax been so high up the public agenda as the past six months. When HMRC reached its settlement with Google, the news was splashed across headlines and featured heavily in my inbox. However, beyond the outrage and the cynicism, one big question remained: is this a good deal?
Many have suggested not. However, credit must be paid to HMRC for securing a deal in the first place. As a member of the Public Accounts Committee we questioned HMRC and Google at length, to try and unpick, understand, and analyse this deal on behalf of the taxpayer. Our greatest frustration was that due to the levels of secrecy and confidentiality that surround multinational businesses’ tax affairs, we couldn’t give an answer.
As a member of the PAC, as co-Chair of the Anti-Corruption All Party Parliamentary Group and as a former tax adviser, I am absolutely convinced that greater transparency is the best way that we can ensure companies pay their taxes fairly, fight corruption, and restore public confidence in a struggling system. I hope that by showing which multinationals are paying their taxes properly this will go some way to reducing the toxic atmosphere that has affected our investment climate with good companies being tarred with the same brush as those misbehaving.
That’s why on Tuesday I’ll be voting with PAC colleagues, and with MPs from across the House, in favour of a backbench amendment – the #showmethemoney amendment - to introduce public country-by-country reporting. This will require the biggest multinationals to publish headline information about their profits and taxes in each country that they work.
The amendment is backed by 12 of the 14 PAC members, including its current chair, former chairs Margaret Hodge and David Davis, and eight parliamentary parties. It seeks to move with the grain of Government policy, not against it, by taking existing measures a small yet natural step further.
Many companies such as Barclays are already publishing this information, and large extractives are required to do so already. This amendment would create a level playing field for UK businesses who can’t or don’t shift their profits around the globe. It would also be of huge benefit to developing countries – who lose more in tax avoidance by multinational companies than they receive in aid - around $200 billion a year. This information will empower them to improve their own tax collection – a hand up, rather than a hand out.
This Government has a proud record of fighting for increased tax transparency around the world. In 2013 the Prime Minister made these issues the centrepiece of his G8, calling for Governments to insist on transparency in terms of who really benefits from ownership of companies.
The Chancellor has also argued for more transparency. The 2015 Conservative manifesto said we would consider the case for getting companies to reveal their tax affairs, and following the Google and Panama Papers scandals he said he thought the case had been demonstrated. He has been pushing for action on this agenda across the EU – although the EU, though, has done a poor job of ensuring this transparency. Negotiations have watered down the proposals beyond recognition.
In light of last week’s vote to leave the EU, this amendment gives the UK Government the opportunity to seize the conversation on tax transparency once and for all, showing that an independent Britain is serious about transparency, ensuring our legislation is decisive.
This is in the very best tradition of Conservative values – only the publishing of this information will allow citizens to hold our companies to account for the taxes they pay in the UK and overseas. It will also allow citizens of developing countries to see the investment that British companies are making in ensuring economic growth in their countries.
The proposal already has a good number of Conservative MPs signed up, such as Anne-Marie Trevelyan, Stewart Jackson, David Davis, David Mowat, Richard Bacon, Sir Peter Bottomley and myself.
I now call on all my colleagues who want to empower people to better hold our companies to account to support the ‘#showmethemoney’ amendment.
By Nigel Mills MP, Co-Chair of the Anti-Corruption APPG, Member of the Public Accounts Committee and Member of Parliament for Amber Valley
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