Ed Miliband adopts tax justice

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Ed Miliband has adopted the tax justice agenda. According to the Observer this morning:

Ed Miliband has vowed to rip up the rule book as prime minister and go it alone if there is no international consensus to tackle multinationals engaging in massive tax avoidance.

In an interview with the Observer, the Labour leader urged David Cameron to find agreement at the G8 summit of leaders next month around an ambitious agenda forcing corporate giants to pay their fair share.

He said that, if Cameron fails, he himself as prime minister would unilaterally act to make multinationals operating in the UK more transparent about the money they make here, the movement of cash around their corporate structures, and the justifications for the tax they pay.

That is the message the UK wants to hear. He's specifically committed to:

â–  Pursue a new global system where multinationals must publish their revenues, profits and other key corporate information useful to revenue authorities in each country in which they operate.

â–  Force multinationals to publish such information in the UK even if international agreement cannot be found on the issue, as they do in Denmark.

â–  Make it a legal requirement for multinationals operating in the UK to disclose details of any tax avoidance schemes they are using globally.

â–  Seek reforms to "transfer pricing" rules to stop companies from shuffling money to other parts of their firm based in tax havens in return for spurious services.

â–  Open up the ownership of companies sited in Britain's tax havens to the UK revenue authorities, but also seek to allow developing countries access to such information.

The first is, of course, country-by-country reporting, which has for so long been campaigned for by me and the Tax Justice Network. The third comes from Christian Aid and Action Aid; the fourth is an area where I think it fair to say Tax Justice Network also leads and on tax havens I don't think anyone can be in doubt where I stand on the need for transparency and accountability.

This is, then, a good morning for Tax Justice since when Labour is still making few commitments on specifics these are clear dividing lines between them and the Coalition and I welcome that as this puts this whole issue centre stage  where it deserves to be.

It is not, however, just the announcements that do that. So do the comments that surround them. I warmly welcome this:

He would also increase the resources of HM Revenue and Customs to strike at tax cheats.

And this:

Miliband said: "Now, what is the politicians' responsibility: change the law. But it is also to talk about the kind of society we want to create and what the responsibilities of a company like Google are. I don't think they are living up to their responsibilities at the moment, and I will be very clear about that on Wednesday.

"It is part of a culture of irresponsibility. If everyone approaches their tax affairs as some of these companies have approached their tax affairs we wouldn't have a health service, we wouldn't have an education system. And actually the point I will make at Google is that will undermine Google."

And he got it right to say:

Miliband said the government was "dragging its feet" on the issue of tax avoidance. "They have got to act. If they don't act, we will act in government. This is an absolutely massive and serious issue.

He's spot on to say that. But perhaps as importantly, he got the economics right:

"I think it is a pro-business agenda to say that people should pay their fair share at the top. The head of a big British retailer came to me recently who was outraged by some of the things going on. He was saying he pays his taxes. The business world feels strongly about this.

"This has an impact on people in their daily lives. The less the big companies pay their fair share of tax, the higher tax others will have to pay, the worse the services they will receive."

People know that. Saying it will help his cause.


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