Panama Papers April 2016
Thank you for contacting me recently regarding the Panama papers and tax havens.
I agree that much more needs to be done to tackle tax avoidance, and I know from the many letters and emails I have received in the past few days on this issue that there is real anger and frustration at the allegations that some banks, corporations and wealthy or influential individuals may have been engaged in aggressive tax avoidance and, in some cases, tax evasion.
I agree that there needs to be decisive action against global tax avoidance. At a time when the Government are proposing deep cuts to our public services and when households up and down the country are seeing their incomes squeezed, it is vital that we clamp down on tax avoidance and ensure that corporations, businesses and individuals pay their fair share of tax. I share the Shadow Frontbench's determination to press the Government for stronger action, particularly at a time when we need to safeguard revenues for our public services.
The 2015 Conservative manifesto pledged to close £5billion of tax loopholes by 2017, yet I was disappointed that the Chancellor's Summer Budget delayed this target to the end of the current Parliament in 2020. It is also important to acknowledge that the current Government has failed to tackle tax avoidance over the last five years and that they lack a credible plan to do so now. Indeed, the amount of uncollected tax (the 'tax gap') has risen year on year under this Government and has now increased to £34 billion.
I believe there needs be far greater transparency and enforcement in relation to those who try to hide their wealth and profits in tax havens. There should be an immediate public inquiry into the revelations in the Panama papers, to establish the harm done to the UK's tax revenue and consider detailed proposals for reform. There should be strict minimum standards on transparency for crown dependencies and overseas territories like the British Virgin Islands - where more than 100,000 Panama papers firms were based. This should include a public register of owners, directors, major shareholders and beneficial owners. I also believe HMRC should be properly resourced to investigate tax avoidance and evasion and there should be a new specialised tax enforcement unit.
Earlier this month I voted in the House of Commons for an Opposition motion which called for a public inquiry on the Panama papers and set out a range of necessary steps against avoidance and towards openness and transparency. I was disappointed that the Government opposed this motion, and I will continue to support the action necessary to restore fairness to our tax system.
Thank you once again for writing to me about this important issue.