MEPs voted this week in support of tough measures to tackle tax dodging, which is estimated to cost the EU economy €1 trillion every year.
According to HMRC figures, the UK economy loses £9 billion a year due to companies and individuals not paying their taxes; that’s enough to pay for 600 new schools or 50 new hospitals. At a time when ordinary people are suffering under public spending cuts and rising unemployment, making sure companies who make billions in profit pay their fair share should be one of the first actions of government.
Many companies devote considerable resources to ensure that they minimise their tax liability. There is a large market for advising companies on how to take advantage of international tax law, and UKIP MEP, Godfrey Bloom, boasted this week that he used to do just that. The four largest accountancy firms (Deloitte, Ernst and Young, KPMG, and PwC) employ nearly 9,000 people and earn £2 billion from their tax work in the UK alone.
Tax avoidance – where companies use legal loopholes to reduce the tax they pay – and tax evasion – operating outside the law – are global problems not just confined to Europe. Every year developing countries lose more income to tax dodging than they receive in foreign aid. This is money that could be used to eliminate hunger or ensure 72 million children have access to education.
It’s the kind of behaviour that recently led the Chair of the UK’s Public Accounts Committee, Margaret Hodge, to accuse Google’s northern Europe boss of being part of a company that does “do evil”.
However, it now looks as if European leaders are waking up to the problem. German Chancellor, Angela Merkel, raised the question of tax havens with David Cameron when he visited Berlin last month, as the UK has responsibility for a number of territories throughout the world where banking rules are minimal and where taxes are low or even non-existent.
At a summit of the European Council on 22 May, tax policy was top of the agenda. EU leaders reportedly agreed on the need for tougher rules on banking transparency and action against the sort of aggressive tax planning that sees companies exploit legal loopholes in order to minimise their tax bill. Cameron has also promised that he will make the issue a top priority when the G8 meet in Northern Ireland next month.
But we’re not exactly ahead of the game on this; the US has already introduced the Foreign Account Tax Compliance Act forcing financial institutions to reveal savings of clients abroad, and there have been moves in Switzerland to force greater transparency in the banks.
In the European Parliament on Tuesday, we voted on a report calling for strong action against tax fraud. Measures in the report include establishing an EU-wide blacklist of tax havens, more resources for tax authorities to tackle tax fraud, and an obligation for companies to publish a single figure for the amount of tax paid in each EU country. We’d also like to see companies that avoid tax barred from being awarded public contracts.
But a number of Tory MEPs refused to support proposals for greater transparency in multinationals’ tax affairs, showing that while Cameron may talk big, his words aren’t always backed up by action.
Meanwhile, Ed Miliband made it clear in a speech to Google this week that he sees cracking down on tax avoidance as a major priority for a future Labour government.
It’s to be hoped that this week’s summit will be a real starting point for getting to grips with tax dodging across the EU. MEPs have made it clear that, like the people we represent, we want to see tough rules that ensure companies pay their fair share in tax. We’ll need to keep up the pressure to make sure our leaders follow their strong words with genuinely effective action.
Labour MEPs have welcomed moves by the European Commission to reverse a decision made to ban reusable and refillable olive oil containers in restaurants after EU ministers could not agree on the issue.
After pressure from Labour MEPs the European Commission announced they would not be adopting the legislation which was due to come into force from January 2014.
In a statement today the EU Commissioner for Agriculture Dacian Ciolos confirmed that the Commission would not adopt the rules as it was clear the moves did not have widespread support from consumers.
Labour MEPs had written to the Commission earlier in the week saying that the initial decision represented a completely disproportionate response to the problem of fraud in the marketing of olive oil, and asked what the Commission planned to do to rectify the situation.
Labour’s leader in the European Parliament, Glenis Willmott MEP said: “Today’s announcement from the Commission answers the questions we put before them at the beginning of the week.”
“This was clearly an ill-thought through decision, and today’s u-turn is definitely a victory for common sense.”
Glenis added “The decision made last week was clearly a bad one, so the Commission decision today is very welcome.”
“However, questions do need to be asked as to why the UK government abstained on this legislation when the issue first arose.”
“Labour MEPs have worked hard to put pressure on the Commission and block these disproportionate measures, if only UK government ministers had been more alert to the problem then we wouldn’t have had to rectify the problem.”
Victims of stalking, harassment or gender-based violence who are granted protection in one EU member state will get the same protection if they move to another EU country under new rules to be approved by Euro MPs in Strasbourg TODAY (Wednesday 22nd May).
Glenis Willmott, Leader of Labour MEPs said: “We are all too familiar with the statistics on domestic abuse in the UK. One in four women will be a victim of domestic violence in their lifetime. One incident of domestic violence is reported to the police every minute and on average, two women a week are killed by a current or former male partner.”
“Behind these statistics are real women and children suffering the huge impacts of domestic abuse.”
“With over 1million British citizens living in other European countries it is vital that we are able to respond to the threat of domestic abuse across European borders.”
Glenis added: “This new multilingual certificate available online and easily transferrable between European countries will be a life saving measure for some victims of domestic abuse.”
“Victims of stalking, harassment or domestic abuse will also be guaranteed information and support in their own language.”
“This law is an example of the European Union working at its best to protect citizens.”
Labour MEPs have criticised the government’s decision to remove new laws on standardised tobacco packaging from the Queen’s speech.
Glenis Willmott, Leader of Labour MEPs and spokesperson on health, said, “We have to call the government’s commitment to public health into question. They are willing to forge ahead with their disastrous reorganisation of the NHS, but will not take the simple measure of standardising tobacco packaging, which will greatly reduce the attractiveness of tobacco for the next generation.”
“Tobacco kills half of all its regular users, and the pack itself is the last place the industry has left to advertise its wares. Some packaging designs are clearly aimed at young people, with young girls targeted by thin, pink, flowery boxes that look more like lipsticks. Standardised packs would put an end to these marketing tactics.”
Linda McAvan MEP, the European Parliament’s Rapporteur on the Tobacco Products Directive said, “The EU is revising its rules on tobacco and Labour MEPs want to introduce standardised packaging across Europe. We are also pushing for large pictorial health warnings and a ban on flavourings.”
“Tobacco is the leading cause of preventable disease and death in the UK, the EU and across the world. Australia, one of the world leaders in tobacco control, has already implemented standardised packaging and the UK is falling behind in the fight against tobacco. We are disappointed the UK government has backed down, but Labour MEPs will continue to push for standardised packaging at EU level.”